I see that FFF readers have reacted strongly to a stolen boat being found. People here obviously don't like thieves.

But howabout this greater wrong? One that is committed legally, and is happening to you right now.

Look at banks, governments and property prices. Only a few seem seem to notice or care, but banks worldwide have been handing out easy money over the past decade, sending property prices sky high as people use their easy loan money to bid house prices up.

Governments push it along with "home owner grants" which just make it worse, pushing prices higher, but of course a handout makes a government look good, albeit briefly.

People then become tied to life-long interest payments on what have become huge mortgages, while the bankers pay themselves multi-million bonuses, and when it all goes belly up - and this is the bit that is hardest to stomach - the taxpayer is forced to bail out the banks.

I see that easy loans are now being promised in the NT to buy some of the most expensive suburban real estate in the world.

Even if you are just paying rent, you are still being taken along for the ride when rent is $700 a week for a house.

Smells a bit like what happened in the USA before it all went belly up. The USA real estate crash smashed the world's biggest economy - and people are still suffering.

Just think how much fishing money is lost making mortgage interest payments - new boats, new cars, holidays - and all that extra time spent working to pay off the bank. It sucks money out of the economy that could keep a thousand small businesses alive, but instead, the banks win.

I am curious if having a new boat and 4WD (and more) taken from your back pocket by the banks and government policies makes you all feel as strongly as those amateurs who steal an occasional boat and paint it red ...

There is a partial answer for Darwin - release loads of land and keep real estate costs as low as possible, so the WHOLE economy can benefit, and not just a few speculators and banks.

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sounds good Matt,,More land release ,,But I live in the real world and it will never happen as long as the MAN can screw you just that little bit more

Sorry but just came home to a poop load of bills and a p..s,all tax return,,FARRKEM ALL

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You're right Matt, sounds scarily like what was happening in US prior to the big collapse. Many, many people lost their homes.

Unfortunately giving out non-deposit loans doesn't teach people good saving habits. Not many people that own a house haven't had to scrimp and save every cent for a few years to get their deposit together.

It doesn't help that the cost of living up here is so very high.

But the bills don't stop just because you buy a house instead of renting. If you are finding it hard to meet the rent each fortnight, rest assured you won't find it any easier finding the mortgage payments. And all the associated costs that come with home ownership, rates, water, sewerage, general maintenance and upkeep just to name a few. Mortgage stress is a very real thing, and should interest rates rise the stress rises with it.

Banks are going to win, poor buggers that are getting these loans are going to pay massive amounts of interest, probably for the rest of their lives and potentially still not own the home at the end of it all.

Quite sad I think.

Matt

Matt, I really wanted to return to Darwin, buy a house and settle down. Got myself a decent deposit and started looking. My god, what a unbelievably inflated market. No matter how much I want to return to the best place in the world, I cannot. I remember that in 2010 there were only three NT pollies that did not have investment properties n Darwin. One has a huge portfolio,so doesn't take much thought to understand how the release of large tracts of land for housing would hurt the real estate investors bottom line. Unlikely I think, and the NT just slips away from many people who love the place.

the people making the decisions about land releases would in the majority be doing ok for themselves with investments...so somehow I can't see them doing anything to affect the price of property in Darwin

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Any of you that say money being given away easily by the banks tried to apply for a house loan inthe last 5 years ???
Me and th mrs had to save $25k for our deposit for our house loan that was 4 years ago now wouldn't say it was easy by any means

Easiest way is to use your vote in the
upcoming election Matt. Fix
up this conspiracy ...theory.
Pretty happy if they dont devalue my property
that I bit the bullet stayed and have
nearly paid for, dont agree at all.

It's anything but a conspiracy theory AM, what has happened in the USA, Spain, Ireland is perfectly clear ...

And while it may inconvenience some to have property prices fall, it will hurt far more to have them pushed further above what average wages can support ...

Yes DOUG, banks tightened up loan requirements after the GFC when they could see that the market was no longer guaranteed to be going up. But they were just about giving it away before then.

The latest no-deposit loans look like a loosening up of credit.

itsinmeblood - you are on the money - that's why I always have a laugh when I hear the latest government plan for low-cost housing. It ain't going to happen. They are far more interested in making housing expensive.

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The global financial cris (GFC) started in the US and was indirectly related to housing although housing was the catalyst.

However , the reason it escalated was good, old-fashioned capitalist greed ( Gordon Gecko stuff).

The sub-prime mortgage scheme set it going by giving loans to people not meeting the repayment ability standards. It worked in that people who couldn't afford the loans were given them BUT at a higher interest rate than those that could afford.

It didn't matter what the interest was was (low or high) the borrower was going to default. The lender knew that.

The house was security. That would have been OK as the lender was taking the risk of default and was less likely to loan the money with that risk involved.

THEN the investment whizzkids came up with a scheme where the lender could sell the risk!! They sliced and diced the sub-prime market loans up into security investments so that somebody else could buy the risk.

Having a market for the risk was an open door to the lenders. They poured through.

The increase in volume of the risky securities market meant that the bubble grew and grew. Eventually it burst as there was no underpinning foundation. The mortgage securities were worthless.

Investment bankers were left holding worthless securities. Toxic assets they were called.

Home owners who had refincanced or had taken out second mortgages based on the apparent increased capital value were in deep trouble when the housing bubble burst. Hence unprecedened foreclosures.

US has some Govt Business Enterprises involved in the US housing industry providing competition to the commercial lenders. Fannie May its called. There's another called Freddie Mac. They were both under pressure to promote the sub-prime arrangements. They'd been under pressure to relax loan stardard for years by the Clinton administration. Slick Willy (as he was known) was a democrat which is a US version of the ALP with its social reform agenda.

Basically the govt regulators failed in their duties. The ratings agencies played their part also by not downgrading the risk ratings ofrthe banks involved in the mortgage securities debacle.

Governments look on failures like that as their fault (although they never can admit it). So they use govt (taxpayer) money to bail out those troubled institutions that are classed as too big to be allowed fail.

Some of the Aus banks were involved in the US sub-prime stuff but not to the stage of needing bailouts. Community confidence dropped though hence the Govt guarantees.

Those guarantees had to be bought! Banks in Aus had to pay for them to help Kevin and Wayne and later Juliar and Wayne get the budget out of the red.

Do we want our own version of the US sub-prime fiasco here in Aus? As long as the lender carries the risk its manageable. Make that risk a tradeable commodity like a security and there's a reciepe for trouble.

Say a lender decides to lend money to somebody to buy a house. The risk is that the borrower will not pay/default. The capital value of the home is security if that happens.

1 year/2 years/5 years later, heaps of residential land is released onto the housing market. What happens? The economic balance shifts and lender risk changes. That in turn ............... and so it goes.

Sometimes well intentioned macro actions can cause serious problems for the average joe-blow.

My thoughts anyway.

House prices are ridiculous here in Darwin. FHOG and the like only cause property to become more unaffordable. Over half a million for an ordinary 3 bedroom house is a sad joke really.