Tuesday, December 21, 2010

Almost 2% WA Mortgages are Delinquent

For those that may be wondering what has been happening with this "mortgage stress" situation in WA, it seems that we are topping the nation in having delinquent mortgages - that is, where mortgage repayments are at least one month behind! In terms of specific areas, Western Sydney has the worst mortgage delinquency rate with Fairfield - Liverpool area averaging 2.81%. Closer to home, these are WA suburbs featuring prominently in the top 20 mortgage delinquent suburbs in Australia.

6. Mandurah 3.9 per cent delinquency

8. Casuarina 3.8 per cent
11. Marangaroo 3.6 per cent
17. Gosnells 3.4 per cent
18. Swan 3.3 per cent

Monday, December 13, 2010

Buyers Not Desperate in Perth Property Market

The property market has been described as the worst in ten years by an article today in WA Today. With around 17,000 houses on the market, experts have said that property prices have dropped by up to 15% in some areas that are cheaper.

David Evans who runs a real estate agency said "If you go somewhere like Butler and there's 80 homes on the market, they're all pretty similar. A buyer will make an offer $30,000 below the asking price, and if it's not accepted, they'll just move on to the next one. People are walking away from deals where the buyer and seller are only $5000 apart, and that just doesn't happen normally." 

The market will be interesting to watch in the coming year as the recent interest rate hikes take a toll on a very unpredictable market. Many people believe that the market will remain flat for another six months but my gut feeling is that some first home buyers will be going house hunting over the Christmas holidays. 

Thursday, December 2, 2010

Top 20 First Home Buyer Suburbs in WA

Another article recently published mentioned that first homebuyers are fleeing Perth with the last month showing Perth recorded the lowest number of first homebuyers being paid since April 2007. This was a 60% drop from the peak of first homebuyer payments in June 2009. I would think given the current housing market, the federal government would start reintroducing the first homebuyer grants. Personally, that would certainly help to get my attention. 
Here is a list of the top 20 suburbs that first homebuyers have been targeting over the past financial year to date.
Top first home owner grant suburbs 2010-11 to date:
  1. Canning Vale, 114 grants paid
  2. Baldivis, 113
  3. Banksia Grove, 78
  4. Ellenbrook, 77
  5. Butler, 71
  6. Bertram, 65
  7. Gosnells, 56
  8. Piara Waters, 53
  9. Byford, 50
  10. Nollamara, 49
  11. Girrawheen, 47
  12. Clarkson, 45
  13. Wanneroo, 43
  14. Dianella, 41
  15. Hammond Park, 40
  16. Thornlie, 40
  17. Aubin Grove, 39
  18. Success, 38
  19. Innaloo, 38
  20. Perth, 38
If you are a first homebuyer, which suburb did you finally buy into? leave a comment if you may.

Wednesday, December 1, 2010

We also had the top 4 Tips to Beat Bank Mortgages and the shocking revelation that we've gone two years without price growth and heard the  Australian housing bubble rumours circling the globe. 

Tuesday, November 30, 2010

Perth Houses drop 3.8% in three months

According to RP Data released today, Perth has received the wooden spoon amongst all the capital cities in Australia, with the real estate prices in last three months to October dropping by 3.8%. Canberra, Darwin, Sydney and Melbourne all recorded rises. These figures do not even factor in the following November rate rises which should put further downward pressure on housing prices in the coming figures. Perth unit prices have also dropped 3% in October.

So when do first homebuyers start to come back into the market? As a typical first homebuyer, these price drops have not inspired me to start looking just yet. What about you?

Tuesday, November 23, 2010

When Oprah says "Perth"

Today, Oprah has announced that next week, two of her lucky viewers will receive a free trip to Perth as part of the Oprah downunder tour. It all started when lobbyists trying to attract Oprah to Australia offered to rename the Sydney icon Sydney Oprah House for a day. Tourism ministers are always talking about the "Oprah impact" and how much of an impact the Oprah effect has on tourist dollars with estimates that already $33 million dollars worth of advertising has been generated by the upcoming visit. So, this little blog in Perth will put that to the test. If you have come here as a result of Oprah, leave a comment, anonymous even.

Monday, November 22, 2010

Sellers Warned to Pull Out of Market

The Real Estate Institute of WA is warning property sellers to take their investments off the market or risk selling below their asking price.
REIWA figures show property sales in Western Australia are down 30 per cent compared to last year. The Institute's deputy president David Airey says there is a 40 per cent over-supply of property in Perth which has created a buyers market.
"There's around 17,500 residential properties on the market which is somewhere like 5,000 properties more than our normal long term average," he said.
"It's a fabulous time to buy, certainly not a good time to be selling if you don't have a reason to sell."
More here

Wednesday, November 17, 2010

Top 5 North and South of River

The Real Estate Institute of WA has released last week's top five performing suburbs in Perth. Canning Vale seems to have a blitz of a week with 24 properties changing hands. What were the factors affecting sales last week? 

Top Selling Suburbs
North of the River
Scarborough 17
Yokine 15
Dianella 14
East Perth 14
Wanneroo 13

South of the River
Canning Vale 24
Armadale 20
Gosnells 16
Como 15
Byford 14

Friday, November 12, 2010

Refinancing Mortgage Brokers - Who did you switch to and from?

OK so now Westpac and NAB have finally shown their hand. From highest to lowest, these are the standard variable rates: 

  • Westpac increased theirs by 0.35% to 7.86%
  • CBA started first with 0.45% increase to 7.81% 
  • ANZ recently increased 0.39% to 7.80%
  • NAB increased their standard variable rate by 0.43% to 7.67% 
There has been a lot of talk about getting mortgage brokers to help find a better deal so we'd like to hear where everyone has decided on moving their loans to and whether they have been successful in cutting a deal with one of the Big Four. 

Tuesday, November 9, 2010

Currrent standard variable rates

Commonwealth Bank's three friends have left standing alone in Bank wilderness after increasing their standard variable rates by 0.45% to 7.81% after the RBA increased the cash rate by only 0.25%. Currently, the three banks that have left their standard variable rates unchanged are
  • Westpac is 7.51%
  • ANZ is at 7.41%
  • NAB's is at 7.24%
Commonwealth Bank has had to bring in 40 extra staff to the Home Loans division in order to cope with the massive spike in customer enquiries with people wanting to switch to another bank following the interest rate hike. It has been reported that customers are waiting up to 10 days for assistance with their home loans. 

Monday, November 8, 2010

Best Mortgage Rate plus $1000?

ING Direct announced that they will give $1000 cash to anyone who moves their home loan to them by the end of November. One of their variable home loans is called the Mortgage Simplifier which has no ongoing fees, allows extra payments, home loan redraws, and a current interest rate of 6.74% (with a 0.06% discount if your loan is more than $300k). I am quite new to this game but that looks very competitive. What do veteran home loan experts think?

Friday, November 5, 2010

Top 4 Tips to Beat Bank Mortgages

With the mood turning completely against the banks this week, especially the Commonwealth Bank for raising more of their fair share of the rate rise, the Barefoot Investor recently shared four tips to beat banks at their game. 
1. Make sure you understand any potential exit fees that you may be charged if you choose to switch, and use this as a basis to compare any new loan.
2. If you’ve bought a home in the last three years, check to see that you’re not going to be recharged Lenders Mortgage Insurance (LMI). One of the dirty tricks of the industry is that if you switch banks, the new lender will hit you with LMI again – even if your bank uses the same insurer.
It’s like paying car insurance twice. And it can cost you thousands more than any exit penalty (are you listening Mister Swan?).
3. Make sure you go to a mortgage broker that rebates to you the dirty little kickbacks that the banks pay to grease the palms of the people who flog its products.
Ensure their policy is to rebate the entire trailing commission and that they apply it to your principle. Over the life of your loan, this can slash tens of thousands of dollars in interest and years off your mortgage.
4. A while back I had the opportunity to chat to Ken Fisher, a self-made billionaire, and one of the most influential money managers on the planet – here’s the gist of what was said.
Barefoot: “If you could only invest in one Australian company – what would it be?”
Fisher: “A bank. Buy any of them. Buy all of them – they’ve basically got a license to print money. There’s not much competition, they’re paying great returns to shareholders, and your nation’s prosperity is all but underwritten by China”.
He’s got a point. My mortgage went up this week, but hopefully so did the dividends on my bank shares. If you can’t beat them, join them!
In your dealings with the banks, what tips would you give a first homebuyer such as myself? 

Thursday, November 4, 2010

Top Suburbs in Perth Last Week

Some more statistics from REIWA for last week's sales and top selling suburbs in Perth last week

Property Sales for Perth #
Last Week 1045
4 weeks ago^ 960
Same week last year 1155
# Contract Sales reported by REIWA members
^May have changed due to sales falling through

Top Selling Suburbs

North of the River
Scarborough 18
Cottesloe 13
Ellenbrook 13
Nollamara 13
Morley 12

South of the River
Como 23
Baldivis 19
Gosnells 19
Armadale 13
Byford 13

Properties listed for Sale
Total* 16 833
Houses 11 068
Units 3 322
Land 2 443
*Listed on reiwa.com and other sources

3 months to September 2010
Average Selling Days 63
Average discount* 6.0%
*Difference between original listing and selling price

Whilst we saw an increase in activity last week, this week's interest rate announcement is likely to send a shudder through the market. So where to from here? Probably more sideways and even some downward movement in prices until the burgeoning stock of listings subsides.

Wednesday, November 3, 2010

Two Years of No Property Price Growth?

There is also another article suggesting that Perth house prices will not recover for another 2 years thanks to the interest rate rise yesterday as well as other factors. Sluggish population growth and the continuing issue of housing affordability means that there are not as many buyers as there are sellers.  With an increase in interest rates, perhaps the more sensible thing to do is set up a saving account and work on building up a good deposit for a purchase in the coming years. What do you think about the housing market?

Everyone Except Australians Believes in Housing Bubble

I came across this interesting article today which indicates why Commonwealth Bank increased their interest rates by 0.45%, almost double the official 0.25% lift in the cash rate yesterday. The problem is that Australian banks get most of the money for your mortgage, from overseas sources. Due to the fallout from the global financial crisis borrowing money from those sources is not as cheap as before. And these sources need to believe that their investment in Australia is safe. Apparently they are not that convinced. 

The Australian Bankers' Association, the industry's main lobby group, today attributed worries about Australian house prices on overseas markets as part of the reason for any extra rate hikes by its members.

“Over the last few weeks, we've had a lot of international investors asking very detailed and probing questions about why it is Australia thinks it doesn't have a housing bubble,” said ABA's chief Steven Munchenberg.
"Bankers were grilled at length as to why investors should not be worried Australia has a housing bubble,” he said. Australia's banks remain “very conscious of the risks of international investors becoming nervous about investing in Australia. “ [via]
Keep that in mind as we enter 2011. 

RBA Shocks Experts with Rate Rise 0.25%

The Reserve Bank of Australia looks to continue the housing slump in the coming month as they lifted interest rates on Melbourne Cup day today by 25 basis points which was enough to send the Australian Dollar past the US Dollar a couple of times in the hours following the rate rise decision. 

Last week, there were various reports in WA about the slowing housing market and this will also play into buyers' decisions and may put added pressure on those trying to sell second properties. If it wasn't before, now seems to very much be a buyer's market. 

Here is what the Reserve Bank had to say about the decision to raise interest rates.

At its meeting today, the Board decided to raise the cash rate by 25 basis points to 4.75 per cent, effective 3 November 2010.
The global economy grew faster than trend over the year to mid 2010. Global growth will probably ease back to about trend pace over the coming year as strong recoveries in the emerging world give way to a more sustainable pace of expansion and growth remains subdued in the United States and Europe. At the same time, concerns about the possibility of a larger than expected slowing in Chinese growth have lessened recently and most commodity prices have firmed, after a fall earlier in the year. The prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s. The turmoil in financial markets earlier in the year has abated, though sentiment remains fragile.
Information on the Australian economy indicates growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening. While there has been a degree of caution in private spending behaviour thus far, the rise in the terms of trade, which is now boosting national income very substantially, is likely to lead to stronger private spending over the next couple of years, especially in business investment.
Asset values are not moving notably in either direction, and overall credit growth remains quite subdued at this stage notwithstanding evidence of some greater willingness to lend. The exchange rate has risen significantly this year, reflecting the high level of commodity prices and the respective outlooks for monetary policy in Australia and the major countries. This will assist, at the margin, in containing pressure on inflation.
The demand for labour has continued to firm. While the labour market is not as tight as in 2007 and 2008, some further strengthening would appear to be in prospect, judging by the trends in job vacancies. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year.
Given these conditions, the moderation in inflation that has been under way for the past two years is probably now close to ending. Recent information suggests underlying inflation running at about 2½ per cent, with the CPI inflation rate a little higher due mainly to increases in tobacco taxes. Both results were helped somewhat in the latest quarter by unusual softness in food prices. Inflation is likely to rise over the next few years. This outlook, which is largely unchanged from the Bank's earlier forecasts, assumes some tightening in monetary policy.
For some time, the Board has held the stance of monetary policy steady, which has resulted in interest rates to borrowers being close to their average of the past decade. This allowed some time to observe the early effects of previous policy changes and to monitor the uncertain global outlook. The Board is also cognisant of differences in the degree of economic strength by industry and by region.
However, the economy is now subject to a large expansionary shock from the high terms of trade and has relatively modest amounts of spare capacity. Looking ahead, notwithstanding recent good results on inflation, the risk of inflation rising again over the medium term remains. At today's meeting, the Board concluded that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent.

Thursday, October 28, 2010

Perth Housing Prices to Remain Flat

“This quarter’s results show the effect on prices of increased borrowing costs following the normalising of interest rates, together with falling auction clearance rates and lower levels of finance,” APM head of research Yvonne Chan said.
“In the short-term, with national house price growth at 6.1% for the nine months to September, and with expectations of rising interest rates, APM anticipates that prices will remain flat or fall slightly for the remainder of the year with this trend to continue into 2011.
“The outlook for property prices remain stable, supported by an undersupply of new housing, solid population growth, low unemployment and strong income growth.
“Rents are also predicted to increase, and coupled with softer house prices, rental yields will improve encouraging a return of investors to the market.”

APM results released today showed that house prices dropped 1.5% in the September quarter, which supports REIWA's reports for the same period which showed a 4% drop in median house prices.

The general conclusion for buyers seems to be, bargain hard and don't accept a price too easily. The average discount on property listed prices is 8% so at least try haggle down $40k for a $500k property.

Thursday, October 21, 2010

What happened last week in Perth Real Estate?

REIWA has just released some statistics from last week's property sales in Perth, showing a drop in sales from last year and an average period on the market of 63 days before a property is sold. The most popular suburbs which replaced For Sale signs last week were Morley, Como, Canning Vale, Thornlie, Wanneroo and Scarborough. The market continues to struggle with an increase in houses on the market. Personally, it hasn't encouraged me yet to actively look for my first home. For now, I am sitting on the sidelines until there are more positive signs for buyers. 

Property Sales for Perth #

Last Week 928
4 weeks ago^ 922
Same week last year 1072
# Contract Sales reported by REIWA members
^May have changed due to sales falling through

Top Selling Suburbs

North of the River
Morley 16
Wanneroo 13
Scarborough 13
Ellenbrook 12
East Perth 11

South of the River
Como 14
Canning Vale 13
Thornlie 13
Gosnells 12
St James 12

Properties listed for Sale
Total* 16 309
Houses 10 701
Units 3 241
Land 2 367
*Listed on reiwa.com and other sources

3 months to September 2010
Average Selling Days 63
Average discount* 6.0%
*Difference between original listing and selling price

Friday, October 8, 2010

Best Fixed and Variable Mortgages

According to the Barefoot Investor newsletter today, the following are the top value mortgages available in the market... know any better? leave a comment. 

Variable rate:
Bank lender: NAB Tailor Choice, variable rate 6.54%, real interest rate 6.70%*
Mutual: Newcastle Permanent, variable rate 6.49%, real interest rate 6.63%

3-year fixed rate:
Bank lender: AMP Bank, fixed rate 7.14%, real interest rate 7.41%
Mutual: CUA, fixed rate 6.75%, real interest rate 6.88%

5-year fixed rate:
Bank lender: ING Direct, fixed rate 7.44%, real interest rate 7.07%
Mutual: Heritage Building Society, fixed rate 7.29%, real interest rate 7.20%

*Real interest rate (RIR) is a rate incorporating interest plus the lender’s fees and charges for establishing, maintaining and exiting a loan.

Wednesday, October 6, 2010

ABC News: Housing Industry Downturn predicted

A report into Australia's housing industry has warned of a downturn in supply as federal stimulus measures fade.
The Housing Industry Association's National Outlook says housing starts are forecast to fall by 4 per cent in the current financial year.
The report says last year's boost to the first home owner grant and lower interest rates helped drive a 26 per cent increase in the number of new homes built nationally.
But the HIA warns the country's housing shortage is set to get worse because not enough homes are being built to match demand.
The report also found the stimulus measures prompted a short-term recovery in new home building and helped Australia avoid a recession.
More here

Tuesday, October 5, 2010

RBA keeps rates at 4.5%

The Australian jumped the gun and pressed SEND, publishing an article that said the interest rates had actually risen. @melvinbuenate caught this and twitpic'd this image 

Here's the official statement from the RBA: 
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010, but will probably ease back to about trend pace over the coming year. Recent information is consistent with a more sustainable, but still strong, pace of growth in China and most of the Asian region. In Europe and the United States, growth prospects appear to be modest in the near term, a legacy of the financial crisis and its impact on private and public finances. Financial markets are still characterised by a degree of uncertainty, and are responding both to differences in growth outlooks between regions and evident strains on public finances and banking systems in several smaller countries in Europe. Most commodity prices have changed little over recent months, and those most important to Australia remain very high.
Information on the Australian economy shows growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening, while the prospects for private demand, and in particular business investment, have been improving. This is to be expected given the large rise in Australia’s terms of trade, which is now boosting national income very substantially.
Asset values are not moving notably in either direction, and overall credit growth is quite subdued at this stage, notwithstanding evidence of some greater willingness to lend. Inflation has moderated from the excessive pace of 2008. The effects of the rise in tobacco taxes aside, CPI inflation has been running at around 2¾ per cent over the past year. That looks likely to continue in the near term.
The current stance of monetary policy is delivering interest rates to borrowers close to their average of the past decade. The Board regards this as appropriate for the time being. If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target.

Monday, October 4, 2010

Aussie Dollar may reach Parity with USD Tomorrow

Tomorrow, the Reserve Bank will gather to decide and then announce whether the interest rates will go up another 25 basis points. More importantly, they will issue a statement which will be read very carefully by currency traders around the world. If the RBA indicates that the future looks good for Australia, the AUD may reach parity with the USD tomorrow. Of course, homeowners will not be looking forward to an increase in interest rates, making their mortgage repayments more expensive and more difficult for those looking for an affordable home. However, an interest rate rise may affect demand for real estate enough to bring down prices. Keep an eye out tomorrow for the RBA decision..

Thursday, September 30, 2010

Latest Perth real estate prices suffers 2.7% fall

RP Data has revealed today that Perth was the worst performing capital city with the value of homes falling 2.7 per cent in August. Nationally, house prices fell only by 0.2 per cent.

The median house price in Perth was $460,000.

The Australian Bureau of Statistics said building approvals fell by a seasonally adjusted 4.7 per cent in August to 13,049 units, after a downwardly revised 0.1 per cent rise in the previous month.

Friday, September 24, 2010

Rate rise "near certainty"

The upcoming review of interest rates by the Reserve Bank is seeming a near certainty that the rates will go up. The general feeling in the real estate market seems to be of some apprehension. Buyers are not rushing back into the game and sellers are struggling to close deals. One thing that may save homeowners from a rate rise may be the Australian dollar which has not stopped its advance on the USD and GBP in the last few weeks.The AUD has gone up 7c against the USD just in September.

Tuesday, September 7, 2010

Rates left unchanged again as Gillard government scrapes into power

Here is the official announcement from the RBA unadulterated and unaltered:
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010, but will probably ease back to about trend pace over the coming year. Growth in China is moderating to a more sustainable rate as policies are now less accommodating. Similar adjustments to policies and growth rates are occurring in other countries in the Asian region. In Europe, output has improved significantly so far this year, but prospects for next year are probably for slower growth given planned fiscal contraction. US growth was solid in the first half of 2010 but the pace of expansion in the second half of the year is looking weaker.
Financial markets are functioning more smoothly than they were a few months ago, though caution persists, with equity prices soft and yields on sovereign bonds issued by major countries reaching unusually low levels. Commodity prices are also off their peaks, though those most important for Australia remain at very high levels, and the terms of trade have regained their peak of two years ago.
Recent information suggests that the Australian economy has been growing at around trend pace. This has been helped by high levels of public spending over the past year but private demand has also been firming. The high level of the terms of trade is boosting incomes, which will tend to add to demand over the year ahead, while the effects of earlier expansionary policy measures will be diminishing. Indications are that business investment in particular could increase strongly.
Domestic credit and asset markets present a more balanced picture than six months ago. Business credit has stabilised and while credit conditions for some sectors remain difficult, evidence is slowly emerging of more willingness to lend. Credit outstanding for housing has slowed a little over recent months, and the upward pressure on dwelling prices appears to have abated.
The demand for labour has firmed over the past year in line with improving growth. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Through to mid 2011, underlying inflation is likely to be in the top half of the target zone, while CPI inflation will probably be just above 3 per cent for a few quarters due to the impact of the tobacco tax changes.
The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth in the near term likely to be close to trend, inflation close to target and with the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate for the time being.

Thursday, August 26, 2010

Housing 40% overvalued - Morgan Stanley

The following article comes from The Australian which is an ominous warning to all potential real estate investors and those thinking of selling.

LOCAL property investors have become "Ponzi borrowers" in a market 40 per cent overvalued, according to a Morgan Stanley strategist.

In a bearish note to clients this morning, Morgan Stanley strategist chief strategist Gerard Minack warned Australia's housing "bubble" could be pricked should banks tighten credit or "loss-making" middle-class landlords start to sell.

He argues owner-occupiers are in too much debt and investors are riskily relying on capital gains to repay their loans and interest repayments. Compounding the problem is "ill-advised policy", such as the government's first home-buyers grant, which has combined to make Australian houses "40 per cent above fair value", Mr Minack says.

"Buying an asset that's over-priced never ends well," he said. "The real return on residential property over the next decade is likely to be negative, in my view."

"Owner-occupiers have played a game of financial chicken, competing for property by taking on increasingly imprudent amounts of debt. Investors have become Ponzi borrowers -- Hyman Minsky's term for borrowers who rely on capital gains to repay debt and interest -- in the belief that housing is a sure-fire long-term investment. History shows that it isn't."

Australian Bureau of Statistics figures show overall average house prices rose 18.4 per cent for the full year to June, with Sydney prices rising 21.4 per cent -- the largest since it began recording these figures in 2002.|
But the rate of growth has been slowing in recent months as rising interest rates feed through the economy.
Commonwealth Bank of Australia, the nation's largest bank by market value, also warned last week it could be forced to raise rates independent of the Reserve Bank. CBA's full-year results showed some key business units were struggling with higher costs.

On the positive side, Mr Minack said the most plausible trigger for a correction in the Australian housing market -- broad-based jobs losses -- doesn't appear likely in the near term. This means big price declines in the near term "seems low".

Australia's jobless rate rose to 5.3 per cent in July, from 5.1 per cent, as more people decided to look for work and as full-time employment fell for the first time in 11 months.
The RBA – one of the few central bank's in the developed world to raise rates since the global financial crisis -- has been on hold since May as six rate rises since October feed through the economy. The official cash rate stands at 4.5 per cent.

But Mr Minack said Australia dodging of the worst of the global financial crisis didn't demonstrate that there's no housing bubble.
"I'm not persuaded by arguments that houses are sustainably priced; I'm not persuaded by the view that debt is not a problem; and I'm not persuaded that policy-makers could prevent collateral damage to banks," he said.

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