{"id":18130,"date":"2016-02-23T12:14:40","date_gmt":"2016-02-23T17:14:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18130"},"modified":"2016-02-23T12:15:03","modified_gmt":"2016-02-23T17:15:03","slug":"signs-of-mortgage-meltdown-in-australia","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18130","title":{"rendered":"Signs of Mortgage Meltdown in Australia"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/02\/22\/signs-of-mortgage-house-price-meltdown-in-australia\/\" target=\"_blank\">Signs of Mortgage Meltdown in Australia<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<div class=\"ssba ssba-wrap\"><strong>\u201cNot a question of if but when there will be a mortgage crisis.\u201d<\/strong><\/div>\n<p>Real estate is local \u2013 until it isn\u2019t. Cities have their own housing bubbles that implode on their own time. But once contagion spreads to mortgages and banks and infects confidence of real estate investors and homebuyers alike, and once debt levels are so high that they have become unsustainable and can\u2019t be pushed higher, then a real estate bubble suddenly becomes a national economic issue with terrible consequences.<\/p>\n<p>In Australia, which has\u00a0the highest household debt in the world, \u201chomes are so expensive that nearly half of all mortgages are interest-only.\u201d They\u2019re offered by the biggest banks with loosey-goosey lending standards. And \u201cthat is a red flag for imminent disaster.\u201d<\/p>\n<p>\u201cIt\u2019s not a question of if but when there will be a mortgage crisis in Australia,\u201d explained Jonathan Tepper, CEO at research firm Variant Perception,\u00a0on the\u00a0local 60-Minutes segment,\u00a0<em>Home Groans,<\/em>\u00a0that aired in Australia on\u00a0Sunday.<\/p>\n<p>He\u2019d predicted the mortgage meltdowns in the US, Ireland, and Spain. And the one word that best describes the Australian housing market? \u201cInsane.\u201d<\/p>\n<p>The flood of interest-only mortgages with sky-high price-to-income ratios is \u201ca sign of Ponzi financing,\u201d he said. And banks are now heavily exposed to these mortgages and any downturn in prices.<\/p>\n<p>The video clip\u00a0also features a young investor who was named \u201cAustralian Property Investor of the Year\u201d in 2012 by a real-estate hype organ, and who now faces bankruptcy. She marveled at just how \u201ceasy to get\u201d money had been.<\/p>\n<p>\u201cBanks only look at the balance sheets and the numbers,\u201d she said. \u201cThey don\u2019t see the emotional toll they have on people, and they don\u2019t understand the social costs of their business practices.\u201d<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Signs of Mortgage Meltdown in Australia \u201cNot a question of if but when there will be a mortgage crisis.\u201d Real estate is local \u2013 until it isn\u2019t. Cities have their own housing bubbles that implode on their own time. But once contagion spreads to mortgages and banks and infects confidence of real estate investors and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[41,406,12557,2339,668,12558,4254],"class_list":["post-18130","post","type-post","status-publish","format-standard","hentry","category-economics","tag-australia","tag-housing-bubble","tag-jonathan-tepper","tag-mortgages","tag-real-estate","tag-variant-perception","tag-wolf-richter"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18130"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18130\/revisions"}],"predecessor-version":[{"id":18132,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18130\/revisions\/18132"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}