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  1. #11811
    percy
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    Quote Originally Posted by boysy View Post
    The difference being those high lvr loans are P&I with people who have jobs. If they fail to pay the mortgage you can move in sell up so even if the LVR is 80% the bank can still walk away without loss.

    Quite different than interest capitalising loans where you cannot realise anything until the oldies Kark it.To call these loans lower risk is simply ignoring the different risk each type of borrower poses.
    Average length of loan on RELs is between 6.6 years and 7.5 years.
    It is not just a matter of waiting for oldies to die, as RELs are taken out for a great number of reasons,ie doing up a house for resale.
    No need to worry, ever, about them losing their jobs.! [or wanting mortgage repayment holidays].
    Last edited by percy; 06-01-2019 at 12:19 PM.

  2. #11812
    percy
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    Quote Originally Posted by iceman View Post
    Well said. HGH certainly does some lending that could be regarded as higher risk, such as Harmoney, car finance and business finance. But HGH's residential property portfolio most certainly is not high risk with the very low LVR REL's being as safe as any property lending by any bank, as you clearly lay out in your post. The "real" banks are MUCH more exposed to decline or crashes in property valuations.
    I can not comment on Harmoney,or business finance,however I know HGH's MARAC has done very well with vehicle lending for 30 to 50 years.Maybe longer.
    Well I certainly got that wrong.Marac originated in 1952.!!!!!
    Last edited by percy; 06-01-2019 at 12:04 PM.

  3. #11813
    ShareTrader Legend Beagle's Avatar
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    Default Australia's house price bloodbath

    https://www.oneroof.co.nz/news/35810

    What's not in dispute is this is the worst house price bloodbath for decades. Provided it doesn't go much lower and stay low for a very long time HGH should be okay with the vast majority of their lending.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  4. #11814
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    I am continuing to Buy HGH . The point being missed is that the Reserve bank proposed rules are over 5 years , give a level plasying field to the NZ banks at last on risk, and will result in AU banks doing asset sales in NZ. If you read what Cullen has to say about the AU banks in GFC you will agree with the reserve banks positions. I think HGH is cheap. Have a million shares roughly.

  5. #11815
    percy
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    Quote Originally Posted by Beagle View Post
    https://www.oneroof.co.nz/news/35810

    What's not in dispute is this is the worst house price bloodbath for decades. Provided it doesn't go much lower and stay low for a very long time HGH should be okay with the vast majority of their lending.
    Thanks for the link.
    Interesting to see Tasmanian prices are still rising.
    My brother, who lives in Hobart told me his house has increased a great deal in the past couple of years.
    Was not that many years ago,maybe 5 or 6, when you could not sell your house in Hobart.
    I expect the big Australian Banks look as though they may have a very big problem on their hands.
    I seem to remember warning of this ,on this thread and ANZ Bank thread ,a couple or three of years ago.
    Last edited by percy; 06-01-2019 at 04:05 PM.

  6. #11816
    ShareTrader Legend Beagle's Avatar
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    Another article I was reading has the Sydney house price average rate of decline accelerating most recently with a drop in the December 2018 average sale price of 1.3%, (annual rate of decline 15.6%). Down 9% already so just another 9 months of monthly declines at that rate and recent buyers putting in a 20% deposit will be in a negative equity position. I reckon some of those "real banks" could find themselves in an interesting situation with some of their customers in 2020.
    Last edited by Beagle; 06-01-2019 at 04:25 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #11817
    percy
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    Add to the mix cultural,funding,capital ratios,excessive executive pay,and branch closures, I think the Aussie banks will have a busy "interesting " year or two.What a bugger..!!..lol.
    Last edited by percy; 06-01-2019 at 04:40 PM.

  8. #11818
    Speedy Az winner69's Avatar
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    If these ‘real banks’ start getting into strife or even go broke I would hazard a guess that Heartland activities will be affected in some way.

    In these circumstances one thing for sure it’s share price will go down
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #11819
    percy
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    Quote Originally Posted by winner69 View Post
    If these ‘real banks’ start getting into strife or even go broke I would hazard a guess that Heartland activities will be affected in some way.

    In these circumstances one thing for sure it’s share price will go down
    HGH's share price has already been affected by association.
    I see the 'real banks' adapting to changing circumstances,as they always have done so..
    I remember 1990, or there abouts, when commercial real estate looked to just about break the Aussie Banks.Kerry Packer's "threat" to take over Westpac was the low point.Was it $2 per share or $3.00?.The rest is all history as they say.

  10. #11820
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by percy View Post
    Add to the mix cultural,funding,capital ratios,excessive executive pay,and branch closures, I think the Aussie banks will have a busy "interesting " year or two.What a bugger..!!..lol.
    Bet ya the boards of those Aussie banks are "absolutely thrilled" about the prospect of having to potentially meet 14% capital ratio's for their N.Z. operations lol.
    All HGH has to do is continue is DRP program and they're sweet
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

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