Would there be national support for a class action lawsuit against the RBA for telling homeowners they wouldn’t raise interest rates until 2024. RBA would need to compensate mortgage holders for higher interest costs incurred with rates rising earlier than stated.
Class Action Against RBA
Comments
It is the generation of "I don't take any responsibility for my actions".
So Stoozer is a boomer then?
@brendanm: Can't be. Millennials have been priced out of the housing market so mortgage rates have no impact on them.
@moar bargains: I'm a millennial, I have a house, so do lots of others I know. Millennials are up to 42 years old at this point.
@brendanm: I know, just stirring. FWIW I'm a millennial with a house too, probably because I don't like avocado.
@brendanm: im a Milennial and just paid off my house when they announced the first rate hike, when i purchased my first house interest rates were 7% so I never expected them to stay low for ever and kept saving as much as I could (thanks to ozbargain of course)
Underrated post, moar bargains. Clearly a lot of boomers on here.
Stoozer is a stooge
Probably SlavOz
Lol as if.
It is the generation of "I don't take any responsibility for my actions".
Leaving Engine Running While Refueling
Confirmed
"I want the RBA to be responsible for claims they made in their capacity as an official institution which I used to make a decision"
"Shut up and be responsible millennial"
I don't get it why are boomers this stupid?
There is stupidity here, but it's not the people saying to take responsibility. To expect the RBA to "compensate" people is absurd.
Firstly, you must have a very naive outlook on the world if you think the RBA's comments are any sort of definitive guarantee (and for the record, they never guaranteed anything). The economy is fluid, things change - it may very well have been the intent for the RBA to not raise interest rate at the time the statement was made.
Secondly, who do you think the RBA is and where will they get the money to "compensate" everyone. They are a government entity that does not collect revenue - which means to compensate anyone, that money is coming from tax payers.
I want the RBA to be responsible for claims they made in their capacity as an official institution which I used to make a decision
No, what is actually being said here is - "I want everyone else, the Australian public, to cover the increase on my mortgage"
@Harold Halfprice: Whilst I wouldn't want a judge to rule in favour of those who bought homes because I am a taxpayer, I think it would be very reasonable to
1) sue an individual who abused his or her official position to provide what any person could reasonably construe to be "financial advice", provided they can demonstrate that the advice was a critical part of their decision making and they can demonstrate a significant loss as a result of that (e.g. people who actually lose their homes because they can no longer afford the repayments)
2) punish the organisation. Curbing inflation by punishing people with mortgages makes little sense.
Honestly, I'd very much like the government to use this opportunity to introduce the scary death tax, vacant property taxes, maybe even some luxury good taxes on imported goods, but obviously the RBA has acted well and truly out of line.
@Assburg: Perhaps a bigger crime is printing money like a suicidal madman, and no fiscal fortitude.
Every extra dollar printed/lent/quantitatively eased/issued as bonds, is a dollar of value withdrawn from the economy, less losses.
Making all the assets in that economy worth less, such as houses, products, plant and equipment, etc. and thus increasing inflationary pressures.
@Assburg: There is no other way to curb inflation than to raise interest rates and tighten the money supply, many have tried other ways and only achieved kicking the can down the road. Interest rates is a blunt force tool that works with lots of collatoral damage but thats where we are at due to incompetent money printing by the Fed and other CB's around the world. The only ones that will get bailed out of this are the 1% elite corporations that are too big to fail the rest of us will be cannon fodder. Buckle up things are going to get alot worse before they get better.
To be fair, they should not have said it. I was on the fence about a 12 month financial commitment 6 months ago, and the RBA's strong repeated claims was actually the reason I ended up going the way I did. Plenty of people will be (profanity) purely because of their claims
Yep….
"I don't take any responsibility for my actions".Thats what Stoozer says every night for prayers before going to bed
Equally, we need.
Class Action Against Home Buyers causing the house prices to rise!
You would not get much from the late entrants, they are already under-water on their equity and repayments are soaring.
I like the idea though - would be ironic if Dr Lowe was to announce that those poor buggers were the ones responsible for housing affordability crisis.
That would be yet another "No sh@t, Sherlock" moment after this one - https://www.skynews.com.au/business/finance/reserve-bank-gov…
Jesus but the people still haven't gotten their money from suing people for covid…
Anyone buying a property and taking out a loan do so at thier own risk
The RBA does NOT provide personal financial advice
And they take no responsibility for thier actions
Bring on the RBA inquiry dear Labor
wow
yep, I'm certain this post's interest will be on the front page.
Mate I'm not paying for your mortgage, that is your issue - already seen enough free money handed out.
landlords be like : but i was 'promised' a risk free >100% gains investment ?
Double every 10 years!
Average house prices will be $2m by 2030, about the time we take our rightful place as an impoverished pacific island nation. Maybe China will pay us to put Uyghurs in our prisons…
This comment needs more likes
Average house prices in Sydneys Eastern Suburbs are like $4M already!
Im talking Bondi, Clovelly, Bronte, Coogee, MaroubraNot Vaucluse, Double bay, Rose Bay or Dover Heights
Time to dust off those bootstraps!
Show us where they guaranteed that rates wouldn't rise.
No he wasn't. He made one speech that said he didn't think interest rates would rise till 2024 - but that was well and truly hedged about with ifs, buts and maybes. And elsewhere he repeatedly warned about people paying "stupid money" for houses and how some were likely to come to grief. Naturally the media quoted him on the first (dropping all the caveats, of course) and ignored the second.
Really, if you took out a big mortgage to buy a massively overpriced property in the last two or three years you have no-one but yourself to blame - as always during a bubble the amber lights were flashing everywhere. This is true whether you were a millenial trying for your dream house or a boomer trying to negatively gear an investment property.
Phil Lowe specifically mentioned continuing low rates about 7 times over 5 months
@rits07: I’m sure you can’t or won’t post the exact instances where he said that, but I will eat my hat if the words ‘expected’, ‘may’, ‘if’, ‘potential for’ weren’t in the same sentence.
He probably didn’t go into too much detail about an impending global energy crisis caused by a war of aggression either, which occurred during a period of acute shortage of ammonia (which is made using natural gas), that raised fertiliser and diesel trucking prices. Nor did he mention anything about catastrophic floods.. that occurred within months of another catastrophic flood.
If he did know all those things were coming, then he’s basically a super villain. Super villains tend to be immune to class action lawsuits.
@Bedgrub: people hear what they want to hear, so the "ifs" "mays" and other warning signs would have went in one ear and out the other. I was in disbelief at house prices the last 6 months i was contemplating selling my own house which is paid off and move back in with my parents for a year to cash in on the bubble burst but my wife wasnt keen on the idea!
massively overpriced property in the last two or three years
I think you should revise that to the last 6 months. Most properties are up 20% from their 2020/2019 price (in sydney at least) - so I wouldn't lump recent purchases with those from 2021 and earlier who are still very likely to weather the storm quite well unless we see <30% reduction in prices. Possible, but unlikely.
Was repeatedly asked about whether that was still the view and said yes.
What the RBA said:
The Board is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest.
What the OP read:
The Board
is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. Itwill not increase the cash rateuntil actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to beuntil 2024at the earliest.The Board something something long words will not increase the cash rate until something something more long words, why can't they just get to the point already 2024 at the earliest.
FTFY
Hahaha, this is really funny. Well said!
I wish I could give you more than 1 vote… that's EXACTLY what's going on here!
with a username like that Im wondering if you were @ Westall in 1966 :P
Wording like "at the earliest" was irresponsible.
"For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently"
is wage growth materially higher?
https://www.abs.gov.au/statistics/economy/price-indexes-and-…
They didn't say rates wouldn't be raised, they said they thought the circumstances that would mean they would need to raise rates wouldn't occur until 2024, but they were wrong, they occurred earlier.
While I disagree with the idea of the class action, I feel like RBA could have been more professional when communicating with the general public. Giving dates in the future like year 2024 does not seem like a good idea for any central bank.
Banks can get money elsewhere. No one is holding a gun to their head.
The RBA statements were professional - the problem is that people interpret those statements through the media, which is unprofessional with how they characterise the RBA statements.
The RBA was professional and clear about it. You can read it In the notes.
It was the media that kept posting clickbait headlines saying rates won’t increase.
The RBA also made these comments in a once in a life time pandemic. You can’t blame them for not being able to predict the future.
Why try to predict it then, which is exactly what they did.
Guess this is what happens when you have business people at the helm of the RBA instead of economists. You get business answers without any practicality behind them.
That isn't a message directed at the masses. The RBA's stakeholders are the big 4 banks.
Maybe the useless lying media could have done some journalism for once and explained the RBA's statement.
Well the labour market did tighten quite a bit.
You had people in the country offering 6 figures for a barista.
Then you also had the min wage hike, which mean they had no chance but to be aggressive with their rates hike.
Double edge sword.
Heaven forbid circumstances change and man is fallible. Oh boy…
what next, class against against the government for 'broken promises'?
Maybe there should be classes for people who believe anything that politicians and bureaucrats say?
just throw the book at scomo
only scomo? c'mon, make this class action worthwhile, throw the book at all of 'em.
i agree, - let me clarify - the whole lot of them are scumbags only out to pad out their retirement with broken promises and tax payer funded cushy retirements
but ESPECIALLY scomo.
When you say "the book", do you mean the bible? I feel like he already holds a copy close to his chest.
class action against fortune tellers; class action for folks promoting ponzi scheme.
When these do happen… Guillotines are generally used instead of class actions.
The weatherman said it would rain yesterday but it didn't..
class action time!
Well I'd support it in principle but let's be serious, do you really think will machine will let you win against itself?
Have you contacted the ambulance chaser lawyers to see if you can flying like a turkey and get some new money wings?
i'll get dennis denuto on the speed dial
Humans make error?! More at 11.
I have already taken them to court privately and won, got my mortgage paid off.
sure you have.
This article points out that the RBA was stacked with businesspeople on the board, and only a few actually had any economic qualifications.
Lo and behold, when you stack a board with people who profit off cheap money and high consumer spending guess what they're going to push for…
You guessed it low rates, not exactly the unbiased approach most would assume.I'm firmly in the zone that
a) Loewe has cooked it, along with his board, ignoring everyone's calls to raise rates in line with international markets, now he's missed the boat.
b) Turf the board and get it run by actual economists, not businessmen inclined to leverage as much cheap debt as possible.A class action wouldn't really get you anywhere except for a huge legal bill and next to zero benefit. If you trusted the RBA then i'm afraid that's solely on you, even someone without economic qualifications could see the RBA was so out of kilter with the rest of the world. Buying into the hype was just that, a pump and dump driven by Murdoch media and the Real Estate lobbyists.
A commission however would.only a few actually had any economic qualifications
Pretty much right. In the 10 years after GFC inflation was very low, they have no idea why. Now that inflation is high they have no idea why.
If you look at the last quarter inflation is basically driven by fuel and cost of education (not sure why education) but if you take both of those out then inflation is more like 3%-4% based on their statistics.
So what can you do about fuel? In the 1970s oil shock industry got off cheap fuel and got more efficient and people started buying small fuel efficient Japanese cars. Now we need to move to renewable energy and people need to get it out of their heads that they are entitled to cheap fuel for their crappy decision on cars.
Thanks by the way, your stuff is a bit more insightful and worth a reply compared to some of the crap posted on here.
Right back at ya ;)
only a few actually had any economic qualifications
Problem is most people have no idea about what economists are capable of and the difficulties of forecasting (including you), nor the purpose of boards. You should not stack any board with a particular skill set (google company directors and the benefits of diversity). Boards govern; management run the business, not boards run the business.
Say the RBA board was full of economists…
A group of economists will come up with forecasts that cover a wide range of outcomes and then change their forecasts regularly (as the environment changes). See here and the charts for example re US GDP growth (hope you understand distributions).
https://www.philadelphiafed.org/surveys-and-data/real-time-d…
https://www.philadelphiafed.org/-/media/frbp/assets/surveys-…
Lowe has cooked it
I haven't really bothered to think about the why, like the board stuff you mentioned, but yes definitely think he's screwed over his own reputation. No nothing worthy or justifying a class action, but every time someone like Alan Kohler goes through the timeline of RBA statements it's pretty bad.
And ever since then all these media interviews and speeches, like in full politician-style damage control mode. And yet he still can't explain how rising interest rates to take spending capacity out is going to reduce or stop these price rises including staples like milk.
every time someone like Alan Kohler goes through the timeline of RBA statements it's pretty bad
Anyone can be a brilliant hindsight Harry, but did Alan K make any comments in real time like Lowe & the RBA?
Yes, yes he did
Alan k was calling them out when other countries were lifting inflation and they were sitting on their hands saying "we shouldn't expect rate rises until 2024"
other countries were lifting inflation
Yes, there were small increases in inflation (which could be a fluctuation, so a wait and see situation was sensible without hindsight) and then there are the big kickers with China's Zero-Covid poilcy and the Ukraine war.
@ihbh: The other thing was Alan had already said spending was far to high to keep rates as low as they were given the average house price and investor activity, australias economy was in a better shape than they were alluding to.
It wasnt just international forces.
@Drakesy: true enough - and even before other countries were lifting inflation, Alan K was picking apart the RBA's commentary about rates, and explaining all of the reasons why rates could rise a lot earlier, and why the RBA's forecasts could change earlier than predicted. The forecasts were based on prevailing conditions - and once those conditions change, as they have, then forecasts also change. Listen to some of the Money Cafe podcasts from the late 2020s.
Hahahahahahahaha
You are responsible for your own decisions.
Say what now?
Get out of here with your logic and common sense!
Class Action Against RBA
hahahahaha, best of luck with that.
Same idiots that sue banks for giving them loans to gamble on investment properties and when they don't win they have a tantrum in the courts.
How are these morons not bankrupt or dead yet
because they need these kind of idiots to prop up this DISGRACE of a housing situation in Australia.
I'll sue crown casino for giving me chips to gamble with
Don’t you give OP ideas.
These class actions are getting ridiculous.
Practically every aspect of human existence requires individuals to accept risk. Whether or not that risk is insurable and/or can be avoided/mitigated is what every person needs to constantly assess either prior to or while engaging in a particular activity (presumably in this case their ongoing exposure to variable lending rates).
At any relevant point in time, those persons had a variety of options available to them to (at least) mitigate this risk, most simply by moving to a fixed rate arrangement. Of course, that choice comes at a cost, presents potential additional restrictions, and indeed presents an alternative set of risks. There is rarely a "perfect solution" that allows the combination of participating in a "risky" activity at no cost and with no risk.
There is a cohort of people who seem to believe they should be able to do "whatever they want" and then when it doesn't work out for them "someone else" needs to remediate that situation for them.
In other words, the cohort of people who want something for nothing seems to be growing and becoming more noisy.
"RBA would need to compensate mortgage holders for higher interest costs incurred with rates rising earlier than stated."
But if they didn't raise rates then inflation would continue to run out of control and everything you saved by the rates going up you would lost to inflation. Either way, you're not keeping that money.
Well, to be fair, we are yet to see inflation to stop running out of control after the rate increases.
There is a a good chance that the inflation coming from the increase in prices of materials/petrol/electricity is not actually related to the consumer demand (which can be tampered by raising interest rates) but mostly by external factors (current worldwide market prices).
That's true to a certain extent, but ultimately prices are set by both supply and demand. Prices are going up due to supply constraints (Ukraine war etc), but the only lever the RBA really has to pull there is interest rates to try and bring demand down to more closely track supply.
What might help would be if the government grew a pair and actually did something to reserve gas supplies for domestic use at a sensible price in order to insulate the Australian market from the international prices. That would keep gas and electricity prices lower, which would help keep inflation down, thus reducing the need for interest rate rises. But the RBA can't do anything about that, they'll keep pulling their interest rate lever because that's all they've got. It's up to governments to do more because they have a much wider set of powers.
The increases are only just starting to hit loan repayments, it is not an instant thing.
I don't have a mortgage just savings
I'm starting a new class action on mismanagement as well and not raising interest rates fast enough, meaning I got less interest earnedAlso the people who took the honourable doctors advice and took term deposits for 2 to 4 years at 1% or less and are now way out of pocket
What.
Oh cmon lol