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
This is too narrow minded, you need to expand the scope to include:
a) the Australian government for handing out free money, which gave inflation some legs
b) China, because you know - Coronavirus started there, and they totally didn't do the right thing.
c) the WHO, because only some of their music is good.
d) US Military, because they might have been in Wuhan at the time.
e) Donald trump, because he is a right cya next tuesday
f) your parents, for bringing you into this world.- 5G
- Vaccine makers
- Secret society trying to enslave people
- Chemtrails
Lol
China, because you know - Coronavirus started there, and they totally didn't do the right thing.
F THE CCP
🤣🤣🤣🤣🤣🤣🤣🤣🤣
Oh this is hilarious!
lol
you do realise there is no such thing as zero risk right? you decided to purchase a property, tough shit princess. that's on you if you can't afford a rate rise of a few percent, shouldn't have over extended yourself.
lol…
Any other speculators and crystal ball readers you want to class action? Maybe the casino, because the dealer said, "15 blacks in a row, next one should be red, surely?" Or how about one of those big, blue chip stocks, maybe sue one of them because their price went down…
The only people this hurts are mainly the people who over invested in their house or the mum and dad investors trying to milk a housing bubble and then crying when they cant afford their "interest only" investment loans that become unpayable. Hopefully this will start to make housing more affordable as the rates rise and these "landlords" that own 15+ investment properties have to start selling up.
I hope the class action goes through and the settlement is a tiny violin and a mug to catch all your tears in.
Assumed office
18 September 2016
Nominated by Scott MorrisonThat says it all about Phillip Lowe and his judgements.
What did Philip Lowe actually say?
https://www.abc.net.au/news/2021-07-06/reserve-bank-interest…
"The condition for an increase in the cash rate depends upon the data, not the date; it is based on inflation outcomes, not the calendar," he said.
"The central scenario remains that the condition for a lift in the cash rate will not be met until 2024."
"We're certainly not hinting at rate increases in 2023," he responded.
Basically he was having a bet each way. Like any good politician (yes I know he's strictly not a politician, but acts like one) he said two contradictory statements and lets the audience decide which one they want to hear.
Clearly did not see a Ukraine invasion coming.
Maybe OP should class action against Putin!
Everything was stuffed well before Ukraine.
Call it an education.
Thanks to I have no idea who believing RBA/FED/BOE I got 1.99% locked in until 2025. Also got 1.84% locked in until end of 2025.
You could point out that any reasonable person would expect RBA to be raising rates despite saying no rates to 2024 after they DOUBLED the amount of Australian money since covid started. The media/RBA are conveniently not mentioning this because their masters made HUGE BANK at expense of the general population. Instead they are blaming war, supply issues and wage rises for inflation.
IANAL. Good luck with the class
I imagine you would need to substantiate any loss. Eg. You withdrew your house from the sales market because you expected mortgage repayment prices to remain the same.
Anyone involved in such a class action should be publicly named and shamed.
national support for a class action lawsuit against the RBA for telling homeowners they wouldn’t raise interest rates until 2024
If they actually said that, then yes. However, they never said that. They only made a prediction
https://www.abc.net.au/news/2022-07-06/interest-rates-are-ri….
. The Board does not expect these conditions to be met until 2024 at the earliest."
If that's the quote you are relying on, you will use your case.
BAHAHAHHAAH thats solid gold
*lose
hahaha dumbest topic I have read in July, maybe I will go sue the OP
Ozbargain should have a top 50 list, there’ve been some gems over the years.
We do have a lot of stupid people in this country.
Dream on and who is going top pay for the exercise? Any legal house approached would laugh you out of their office's
I think we can be empathetic to people who are in financial stress while simultaneously saying suing the RAB is insane. It's just a shit sandwich we have to eat.
People did rely on those statements. For example, if a couple decided to have a baby (with the associated costs and reduced income during maternity leave) on the basis that their mortgage would be stable until 2024, they have every right to be pissed off that the RBA mislead (or misread) the market.
As it stands the Minister has put the RBA in review.
they have every right to be pissed off that the RBA mislead (or misread) the market.
No they don't, not at all. It is their decision to take on that debt, and anything that goes with it. Never, ever believe anything someone else is saying, that will affect you.
I think you completely missed what I was saying. There can be no blame on the RBA for needing to change tack. However, the RBA knew what it was doing went they made those comments. They were sending the message - go and spend, we have your back.
Indeed it was their decision to take on the debt, and they will have to wear it. But most people make decisions based in the advice of experts. The RBA should have been more cautious about the statements they made, but they were predictions and there is no recurse. I standby that they have every right to be pissed off, but they just need to get on with it.
Never, ever believe anything someone else is saying, that will affect you.
Right. I have not idea how you make any decisions if you have completely ignored all data and opinions that have ever been published.
You (and other here) seem to be revealing in the misfortune of others. Very easy to say now how stupid people were and of course it was a bubble but families need a place to live. The uncertainty of renting is also not a great spot to be. It was a rock and a hard place.
There have been people saying the bubble is about to pop for 30 years but only now those people are jumping up and down saying 'I told you so' as if they are a messiah when they spent 29 years being wrong.
If the OP is in a tough spot I feel for them.
But most people make decisions based in the advice of experts.
The rba aren't experts.
Right. I have not idea how you make any decisions if you have completely ignored all data and opinions that have ever been published.
I never said to ignore data.
You (and other here) seem to be revealing in the misfortune of others. Very easy to say now how stupid people were and of course it was a bubble but families need a place to live
I'm not revelling in anything. I also haven't commented on any "bubble". Simply that with the way things have been for over 2 years now, the writing was well and truly on the wall for rates to go up
I completely agree with you. Half of the levers that the RBA uses to affect the economy are statements like the one they made. Just today they made statements about what could happen to the "general inflation psychology of households and firms" and the effect that could have on the economy. Those are affected in part by the statements they make.
Those who took out huge loans based on those statements made by the RBA ultimately need to wear it, but the RBA used them to get the economy started again after covid and because of bad forecasting left them in the lurch.
Beyond that, for the last few years there would be threads here about "Is the bubble about to pop?" and you would get all sorts who would say "They have been saying that for years but I bought and now I am a millionaire. Anyone who waits is an idiot and deserves not to own a home". Now the bubble looks to be bursting and it is all "It was obviously a bubble. Only an idiot would have trusted the RBA".
Not sure why its always the rush to take pleasure in the misfortune of others.
To be fair it was possible to fix very low rates to 2024 or even beyond until late last year. I did just that and am very glad I did. But yes, people would have relied on those statements and it was hugely irresponsible to make them given how quickly the landscape can change. These are supposedly our top economic minds.
What I would add is that the current interest rate forecasts are every bit as likely to be wrong, if not more so. But the media loves a scare headline and the clicks it generates for their advertisers.
My problem with the RBA is the simplistic view it is currently taking. Inflation and low headline unemployment rate equals interest rate rises because that's how it has always been. But when inflation is mostly from external forces and seemingly temporary how effective can this be? Consumer sentiment is already at rock bottom. Headline unemployment may be low but real wages are falling and underemployment is rife. Earning $200 a week with Deliveroo is not the same as having a steady full time income yet you are counted as "employed" in the stats.
Ultimately the RBA overdid the easing and are now overdoing the pace of rate increases in panic mode. The rate rises are only just starting to hit repayments and will bite harder than expected. I regularly hear that many borrowers are ahead on payments so will be fine. I very much doubt however they want to lose that advantage they worked hard to get and will just keep discretionary spending as is while it whittles away.
Next topic: OP wants to sue the BOM because it rained today against their 'promise'.
the fishing is so great in here today!
Isn't it the mortgage holder's problem for taking a risk with massive loans that they could barely pay back in the first place?
You gambled and you lost.Maybe don't get a mortgage if you can't afford it.
And an extra $100k for a shiny new Mercedes in the driveway.
RBA also said home (mortgage) owners are full of money, full of savings from Covid days so everything (higher rates, lower salaries) will be just fine.
Not sure if a Class Action against such stupidity can be made too.
Now, back to the OP perhaps the RBA answer will be: HOW COULD YOU POSSIBLE BELIEVE US … HOW STUPID COULD YOU BE !!!!!!
Is there a competition for the most stupid post of the day?
That's why this exists?
Litigate a forecast? Good luck!
Anyone paying attention knew that after the global covid stimulus, increased demand + an increase in money supply would cause inflation. What a lot of people didn't know is that hyperinflation doesn't happen overnight, it can happen over years. I don't believe we will see hyperinflation in any first world country but somewhere inbetween.
This is not demand side inflation though
It was at the beginning. The extra liquidity from the covid stimulus + lockdowns ending and borders reopening on a global scale and it was quite obvious we would see some high levels of inflation for a short while at the very least.
Everything I have been reading is that this is caused by supply chains from the war. If it was happening as you say inflation would of happened last year instead of when the war started
Duck all stimulus went to the poor what bit did went to replace lost income from pandemic which won't be inflation causing, the rest of the momey went to rich who don't spend it so don't cause inflation
Stimulus also happened in 2007 and didn't cause 9 percent inflation
What makes you think if you can't afford your mortgage in 2022 you would be able to afford it 2024?
Anyway if you didn't lie on your application the lender would have assessed you at 2.5% to 3.0% above the rate was when you got your mortgage so you should still be way under that at this stage.
Sounds to like a lot of financially iterate people drank the cool-aid that house prices will go up forever. I'm assuming these people thought this was their ticket to being rich and they bought in even though they couldn't afford it.
Dude the anz is predicting another 3% on current which means 3.75 more than six months ago, which is more than the test rates that you quote in the mortgages
That's like saying there should be a class action against meteorologists.
Economics is not a hard science.
Neither are weather predictions. Both are fallible.
Get a law firm to do it no win no fee and come back to us
What about a third category "Not an idiot"
Or buying within your means, knowing that the rates would go up.
When I bought my house pre covid, I added 2% buffer when borrowing, in case possible interest rate goes up, and I'm still under the projected amount. But some people like to live in a danger zone.
Anz is predicting another 2 percent still to come
https://www.dailymail.co.uk/news/article-11023321/ANZ-expect…
Or just good savers.
Yes, that must be the reason.
Maybe sell some of your euro cars, then you might be able to afford your mortgage.
The official rate is currently 1.35%. By the end of the year it'll probably be 3.35%, maybe 3.85%. That is not a high interest rate. In fact it's almost bang on the average rate over the past 30 years. Anybody who can't handle their loan at just an average interest rate like that shouldn't have taken it out in the first place.
But but, they let me do it therefore it’s their fault!
I demand c0MpenZaTi0n!And then the same people b!tch about lack of freedom.
As someone who bought at the end of 2021, the RBA's forecast of rates not rising until 2024 was definitely taken into consideration when we purchased. Obviously its a dumb idea for class action.
With that out of the way. The banks have a servicability buffer of only 3%. By the end of the year our mortgage repayments will be higher than even the buffer the bank took into consideration. I'm on a good income but even I may lose the home if the OCR hits 4.5-5% for a sustainable period of time.
Why would you calculate affordability on a cash rate of only 4.5-5?
@brendanm: Not sure what you mean? The bank calculated a serviceability buffer of 3%, which is what my income can service a loan with a 3% increase on it.
I think for a lot of people there comes a point where they can no longer service the loan - for me that will be 4.5-5% increase on when I took out the loan. For us that over triples the interest component of the loan from when I took it out.
@dmcneice: Why not use your own serviceability calculations, rather than relying on someone whose earnings are directly correlated to the amount of money you borrow?
@brendanm: I have, but they also have an interest in me being able to pay the money back, me defaulting on a loan in a falling market isnt good for them either. Given the forecast from "experts" was that there wouldnt be any increase for over 2 years, and that the previous 10+ years had all been fairly low, how much of a serviceability buffer would you have deemed reasonable?
Is it 5%, 10%, 20%?
At some point if your buffer is too high, we couldnt have bought anything. Therefore we went with the "expert" advice - which we also discussed with a financial advisor before
@dmcneice: They have at least a 20% buffer if they have to sell the house.
Between 1990- present, average home loan interest rates have apparently been around 7%, so that would be a decent starting point.
which we also discussed with a financial advisor before
Are they also getting paid?
Why not use your own serviceability calculations, rather than relying on someone whose earnings are directly correlated to the amount of money you borrow?
Didn't they just say they were doing this? The bank calculated 3%, they used their own calculations and came up with the 4.5-5% figure.
@idonotknowwhy: No, they said that 4.5-5% is when they literally can't service the loan. This is still lower than the historical average.
@idonotknowwhy: I could service it for maybe a few months but not forever. I suppose if it got to 5% ocr I'd have to sell the home and declare bankruptcy, because if the ocr gets to 5% the house prices I assume will have fallen maybe 20%, so I'll be in negative equity as well. Scary times ahead. I'm just glad I borrowed 300k less than my Max because that would have been even worse.
Or perhaps they are smart enough not to rely on some "experts" words. Every single "experts" in this country got their predictions/hypothesis wrong. Every single one.
RBA is no exception. That is why a lot of people would have seen the train coming and fixed the interest yonks ago.
Stellar deduction skills.
I cannot imagine why you are thinking of a class action….
Well that’s a random uninformed assumption
Most people polling only want to pay for their own investment since they chose the risk and return.
No way they are paying for yours.
Living within means 101.
Nothing to do anything with mortgage.Some people never learn
Take accountability for your unclassy actions mate
Rates that low have nowhere to go but up. Nobody knows what’s going to happen in the world and it’s beyond the RBAs control. If rates weren’t increased there would be economic hell too pay down the line.
Rates that low have nowhere to go but up.
Especially so after a period of extremely loose fiscal policy in response to an economy-threatening pandemic. So much extra cash moving around the economy, coupled with supply side constraints (some of which came out of nowhere and were simply a result of sheer idiocy, e.g. Ever Given, the effects of which were said to be felt for months after it ran aground) will no doubt have upward pressure on inflation.
Not only that but in more recent years (i.e. end of 2019 onwards) we've experienced unprecedented climate catastrophes in this country. Fires that burned millions of hectares of land, and in the past couple of years, extreme flooding which has again impacted supply chains and destroyed crops. Invariably, when the supply of something becomes limited, the price will increase as a result.
To anyone who has studied economics and finance, the cumulative effect of all these variables would inevitably lead to high inflation, but not everyone has studied either at a tertiary or even secondary level.
Good points. I really don’t understand how people thought there weren’t going to go up. Writing has been on the wall for a while now. I’d never put trust in a spokesperson.
The signs of an overheating economy were there for anyone to see, but it seems like they didn't want to upset Scomo's reflection bid or something?
Wo wants to start a class action against people that randomly use the internet to claim they have a case for a class action?
Wow. I'm guessing you overextended yourself and are looking for a lifeline. Nobody wants to take responsibility for their actions these days and always look for somebody to blame.
Wouldn't the RBA say that if mortgage cannot be repaid then selling the dwelling is the way out of debt?
Simple.And if interest rates fell, these idiots would compensate the RBA?
What next, class action against the rise in Potato prices?
I don't even understand the outrage.
If it's a problem for you now, it most likely would've been a problem if their prediction was correct and the interest rates did raise in 2024. Mortgages are for 30 years.
Nuts…..
Can someone make a poll to ban this fool?
lol, interest rates are still far lower than inflation. Mortgage holders are cleaning up.
Someone missed the memo.
80% of all US dollars in existence were printed in the last 22 months (from $4 trillion in January 2020 to $20 trillion in October 2021).
The RBA has followed a simple route.
Some people argue that this shouldn't affect inflation/interest rates. I think historical data says it does.
Anything below 5% is a historical low rate so lock in your rates now if you can. Once they go above 7% within 2-3 years, then the pain will be real.Each rate raise is more than predicted in the months before, so expect the worst.
You Sir are correct. Thankyou, I'm still learning about this confusing financial system.
How about if we look at Monetary Base, which measures the supply of liquid money (circulating currency and bank reserves, which is a subset of M1: a smaller subset since 2020 than it used to be), and which didn't undergo such a redefinition, it increased by 52%, from 3.442 trillion in January 2020, to 5.248 trillion in January 2021. This is due directly to money creation during that year.
OP has just learned that hard truth that RBA is not God and so it can be wrong in its estimation AND the fact that "experts" are not real experts.
Strap yaself in, we're only halfway!
try quarter way. I'd like to see the Paul Keating's interest rates level.
Keating was <8%!! Let's get to Howard's! 21.4% in April 1982 as Treasurer in Fraser government!!
Only if we can see the equivalent house prices.
Property investors looking for more handouts to hedge their gamble. Disgusting.
You mean property inFestors…
You'd have to proof they acted in the wrong.
But if you read their minutes, they did explain if things did not change , they'd expect rates to stay the same.
But obviously things didn't stay the same. War,etcetc. So you can't blame them.
Blame the media maybe for, as usual, taking snippets of info out of context.