What goes up, must go down.

boobook

Well-Known Member
Just had dinner with a Mortgage seller mate. We were discussing used car pricing. He said they are working with a bank stress testing home mortgages.

He said that the US has just done this, banks are running scared, and used car values are dropping like a rock. Same will happen here in August.

The number of Land Cruisers, Hiluxes, Amaroks and Ranger utes bolted onto home loans is out of control.

Imagine paying $250K for a used Landcruiser. Goodbye $120,000
 

cam04

Well-Known Member
Just had dinner with a Mortgage seller mate. We were discussing used car pricing. He said they are working with a bank stress testing home mortgages.

He said that the US has just done this, banks are running scared, and used car values are dropping like a rock. Same will happen here in August.

The number of Land Cruisers, Hiluxes, Amaroks and Ranger utes bolted onto home loans is out of control.

Imagine paying $250K for a used Landcruiser. Goodbye $120,000
The government is usually at the bottom of them. Most of the ‘suddenly a 79 driver’ tradies I’ve spoken to dipped straight into their super for them when the govt restrictions were eased during covid. I’d hate to think what the opportunity cost on $100k missing from super is going to cost them in the future.

Did they all access the instant equity in the last bubble and are about to get margin called as the equity ratios fall again?
 

Lost1?

Well-Known Member
With interest rates creeping up I agree some people will feel the pain. Using your morgate redraw to buy cars, boats and other toys is not good practice. You want to minimise the debt against your most important asset.

I heard the stories about people buying jet skis, cars and other stuff with thier super at the start of COVID. Not sure the car market will dive to sharply just yet. Manufacturing supply chains are still in poor shape. Hence car manufacturers cannot meet demand for now.

But if fuel prices remain high and as interest rates creep up the lack of available cash will progressively halt demand.
 

dabbler

Active Member
It's not new because some people see home loans as a cash source. They probably always live on the margin.

Idiot ex-BIL came close to bankruptcy by tying all sorts of crap to his home loan 20 years ago after a refinance deal. Most if these toys had no inherent dollar value and couldn't be liquidated when cash became tight.

He used to think his business was doing well when he carried a fat roll in his pocket. Until creditors came knocking.

I've just sold of the Gold Coast and moved to Central Qld (closer to family). Our sale was definitely affected by interest rate rises but they're still living in the bubble here because housing prices are so much lower anyway.
 
Top