New car sales flat, does it mean more bargain in the coming months?
New-car sales hit the brakes for the sixth month in a row in September
New-Car Sales Hit The Brakes for The Sixth Month in a Row in September
[Deactivated] on 04/10/2018 - 10:11
Last edited 04/10/2018 - 10:44 by 1 other user
Last edited 04/10/2018 - 10:44 by 1 other user
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it's actually half of it :P
Australians aren't getting into more debt and saving their income for rainy days. Very smart of them.
Hahaha !
More like already behind payments/bills, crying over NDH helpline.
only because I had to search for what "NDH helpline" was
https://en.wikipedia.org/wiki/RAS_syndrome
.
Sonnavuh I clicked on that link.
Maybe because already heavily indebted in properties?
More likely banks aren't lending money for cars due to credit tightening / not able to borrow against the house.
Someone's been watching the royal commission. :) I noticed some of the banks have started divesting themselves of non-banking operations recently. ANZ for e.g. sold their trading to CMC and divested some of their other operations too. The cases of outright and systemic fraud being revealed is quite the eye-opener. Expect further credit tightening and a subsequent retreat in house prices. :)
Westpac have been literally kicking out investment borrowers: https://www.afr.com/personal-finance/westpac-plans-to-dump-r…
Westpac Group, the nation's second largest lender, is giving risky property investors less than a month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply.
The bank is sending a single-page letter to investors warning it can "no longer support our commercial relationship with you", adding it will work with the borrower to help them find a new lender.
But I like this related piece, that confirms that it's the borrowers who're being idiots and not banks being dodgy:
https://www.afr.com/personal-finance/westpac-not-an-irrespon…
It appears Westpac did not engage in irresponsible lending, at least based on Federal Court justice Nye Perram's reading of the responsible lending laws. This case has also provided the first comprehensive empirical evidence revealing that droves of Aussies are indeed defrauding banks by lying on their home loan applications
Yeah - if you lie to get a loan, and the bank falls for your lie, that's YOUR FAULT and not the bank's.
@HighAndDry: heh, the information I have is the opposite, that the banks are the ones fiddling the figures. The AFR has always been the champion of the banks too so I'm not sure how unbiased or complete their reporting is.
" The bank apologists at the Australian Financial Review went down the rabbit hole on 21 September with Christopher Joye’s claim that “droves of Aussies are indeed defrauding banks by lying on their home loan applications”.
The complete opposite is true. Denise Brailey of the Banking and Finance Consumers Support Association (BFCSA) and others have exposed that the banks committed the fraud, not the borrowers. Mortgage fraud is a ticking time bomb under the housing bubble, set to detonate as borrowers default on loans they could never afford, and implode house prices that were never real, but were inflated by “demand” faked by the banks through mortgage fraud.
In September 2017 banking analysts at UBS estimated that $500 billion of the $1.7 trillion in Australian mortgage debt is from so-called “liar loans”, which were based on false estimates of the borrowers’ living expenses. As Denise Brailey has exposed, however, the liars were the banks, not the borrowers.
The banks deliberately estimated the living expenses of all borrowers against the benchmark poverty index. In a 26 August 2018 post, Digital Finance Analytics principal Martin North reported UBS’s figures that no matter the borrowers’ annual income, whether $80,000 or $500,000 or anywhere in between, the banks estimated the borrowers’ expenses to be the same—$32,400. This allowed the banks to lend far more than they should have. For borrowers on $80,000, for instance, estimating living expenses at $32,400 enabled the banks to lend 42 per cent more than if expenses were more realistically estimated at $50,000. The banks had to resort to this fraud, to feed the housing bubble. From 2000 to 2004, Australian house prices almost tripled as banks concentrated more and more of their lending into real estate. To continue lending for increasingly unaffordable houses, the banks changed their definition of affordable. The bank regulator APRA allowed the banks to lower their lending standards from an “affordability” criterion that repayments should not exceed 30 per cent of gross income, to “serviceability” criteria based on the assumption that borrowers should live on the equivalent of the poverty line in order to service their loans. The banks fraudulently lowered borrowers’ expenses to this poverty line benchmark, unbeknownst to most borrowers.
You can watch the presentation here if interested.
https://www.youtube.com/watch?v=hofV3Y1cGxI&t=412s
P.S. If the AFR article is correct about people lying about their income then that kind of tells me that the banks aren't checking the loan application and are probably just rubber-stamping them. If the banks actually rang the applicants employer and asked for their wage details (as they used to do)then the applicant couldn't really get away with it.
@EightImmortals: From the article I linked to, it's not the bank's conclusion. In fact, the banks caved (probably due to PR pressure) and agreed with ASIC they did something wrong; it's the Federal Judge in charge of the case who said:
In September Perram pointedly told ASIC's lawyers that "it's not really a case in which I'm being asked to penalise irresponsible lending…because there is no agreed fact about irresponsible lending in front of me". For the avoidance of doubt, he added that the laws' "fundamental prohibition is on the making of unsuitable loans, and…there's no fact before me that any unsuitable loans were made".
Just to be clear, this is NOT a common occurrence in courts. This is effectively someone on trial pleading guilty, and the judge saying: "No, I don't think there's enough here that I can let you plea guilty." That's extraordinary, and very often leads to findings of prosecutorial misconduct in obtaining that guilty plea.
@HighAndDry: "there's no fact before me that any unsuitable loans were made".
IIRC the woman in that presentation I linked talked about how lending criteria have been changed to 'lower the bar' as it were. So if the judge was merely making a 'letter of the law' judgement then that might be the explanation? Maybe. :)
@EightImmortals: No, read the rest of the article. Most relevant points:
This is no longer a matter of opinion. In ASIC and Westpac's statement of facts, they reveal that of the 261,987 applications Westpac conditionally approved (subject to a valuation of the collateral asset and verification of the application data), 81 per cent "declared living expenses that were below the applicable Household Expenditure Measure (HEM) benchmark".
The HEM is an industry agreed upon measure of expenditure that banks will use instead of relying on customer reported spending. Most complaints are that this figure is too low (leading to banks lending to people who can't repay), but the facts are that 81% of people actually UNDER-REPORT EXPENSES EVEN FURTHER.
Banks aren't supposed to be mind-readers. Again - this is consumers/borrowers lying to the banks and people wanting to penalise banks for falling for these lies.
@HighAndDry: OK so lying about expenses rather than income?
Fair enough. Obviously that's not all that's going on when you factor in the results from the RC and the info that I provided above. Looks like the whole world is dodgy. ;)
@EightImmortals: This article only deals with borrowers lying about their expenses, but I'm pretty sure a lot of applicants also lie about their income. Probably just happens less because payslips, etc make that harder.
@HighAndDry: Yeah well in those cases I guess the applicants get what's coming to them, in other cases, not so much. :)
Its more like they are over-indebted and cant borrow any more.
Oh so we're calling demos cyber cars now are we?
the article says cyber cars are made up figure, not real transactions.
I just find the term 'cyber cars' a bit… comical, although it is a news.com.au article…
It's not really much of a secret that new car dealers often sell cars to themselves at the end of a month in order to achieve their sales target. Sometimes, these vehicles will be allocated to staff but if there's nobody to drive it then the vehicle will just sit on the lot along with the rest of the stock.
That's what you're buying when you buy a 'dealer demonstrator' model.
thanks for explaining. recently been to a dealer looked at a used one, was told it was driven by staff.
I have a friend who worked for Audi in Sydney. They would "lease" new cars every 6 months. Audi Australia would report it to Audi HQ as a sale. After 6 months it was then sold to the public as ex-demo. He was then instructed to "lease" new cars every 3 months to keep the sales numbers up.
Credit crunch is real
Retails will get hit hard
The whole thing will crumbles along with $7 trillion housing sham
It's probably the wrong time to change to a retail job. The coming months could see job cuts in this industry.
Most politicians have massive housing investment portfolios. They will do whatever they can to avoid this happening.
By your logic, there shouldn't be any housing collapse in history of Australia or even any countries at all.
Or simply, you haven't live long enough to see it or experience depression/recession yourself.
Politicians are just chess pawns of ones that shall not be named.
there shouldn't be any housing collapse in history of Australia or even any countries at all.
Sometimes, the collapse is beyond salvage. Australia can still sell a lot of assets to prevent a collapse at the detriment of future Australians.
Sometimes, the collapse is favourable to those in power. Kinda like shorting your own company.
Sometimes, it is pure incompetence.
I think this round, option 1 is the likely scenario.
Cars are very good nowadays. Kia and Hyundai are good cars with excellent warranties, no one buys Taiwanese Holdens, a lot of Chinese cars don't meet Australian safety standards,maybe people are hanging on to cars longer?
Taiwanese Holden ? Is that a joke?
Like the rebadged Daewoos that aren't great cars
Daewoo is Korean.
Taiwan makes great graphics cards though
You mean China.
(Hides from Taiwanese nationals).
I think he means Thai Holden's
Not to mention the Thai Ford Rangers and Thai Toyota HiLuxs?
Dealers claim the figures are inflated and the real position is much worse.
Damn. Of all the people, dealers have no reason to be saying this unless this was desperately true - it'd only drive down their own bargaining power.
There will be a lot of factors in play here.
- Interests rates in mortgages are going up, coupled with the dreaded feeling prices are dropping.
- Wages are stagnant nor not growing at least with CPI.
- Costs of car ownership is increasing, fuel prices now + insurance + rego. Thank god there are no tolls in WA.
- Credit may be tightening.
I think the less new cars that are sold will increase the value of 2nd hand cars as there will be less of them. I'd prefer new car sales are increasing to make my 2nd hand purchases better value as opposed to new cars becoming cheaper to due to low sales.
With the news that fuel could be hitting up to $2/L in the next 12 months, I can only see this trend of poor car sales continuing. It will push people to keep their cars longer and use them less.
Added to this, people are getting smarter and buying better, so margins are smaller and people are pushing to spend less. Hopefully this will put pressure on manufacturers to sell direct and cut out stealerships.
Engineering in cars these days has come so far that they tend to run better for longer and are a lot more fuel efficient and less prone to break down, not saying cars are perfect now, but they are a a vast improvement over cars from 30+ years ago. With this better quality comes longer ownership and less purchasing of replacement cars.
So, yes, I can see there will be a gradual decline in new car sales. Dealers and manufacturers will be gutting each other just to sell their stock. If you're in the market for a new car, I would hold off until the bloodbath begins.
they are a a vast improvement over cars from 30+ years ago. With this better quality comes longer ownership and less purchasing of replacement cars.
True, but a lot of people just have to have the latest car. I can't see better quality manufacturing of cars changing this, particularly long term
Are sales of bicycles and running shoes booming?
Do we really need a paste of the entire article?