We got out of Sydney transferred to Brisbane And bought for much cheaper and have a small Mortgage, less stress. I think interest rates will have to go up Massively for a 15-20% crash in Sydney. I just can't See Sydney crashing, I sympathise with youngsters in Sydney Not being able to afford a shit box, but it's the same in London an other sought after main cities. The other thing is will The RBA raise the rates? looking at the world wide economy ie. debt, Austerity, job losses.. The rates could be low for a long time if Australia Follows the same route as Europe. Be interesting to see what happens in next 2 years.
What buys you a very ordinary house in an ordinary suburb in Sydney will buy you something very nice is a well situated area in Brisbane.
I hope that you enjoy your home and new city.
Any expressed market opinion is my own and is not to be taken as financial advice
This post by MMM (and posters like this) demonstrates exactly the sort of bear-crap that the OP was talking about.
Don't listen to fools like this guy (has been here with several persona's including Dave289, Ted Bullpit, Fulvada, and MMM both registered and unregisterd) - He has no idea what is actually going on in the market, or even any clue about economics in general for that matter. He simply rants on about collapsing economies and crashing empoyment, falling house prices and so on, despite all the actual evidence to the contrary.
To add even more proof of this (beyond the evidence provided in his own rambling posts and the content of those stupid "youtube-economics" video links), he sold his Sydney house in 2012 (at the bottom of the last trough) and piled into gold (when it was near the top of it's epic fear/doom/gloomer driven bubble) - Property since increased over 20% and gold crashed 40% - talk about the "dumb" move!
To all readers - as pointed out by ex-Sydney-Bear in the OP, listen to the "advice" of posters like this at your own financial peril. Make your own decisions based on your own circumstances and research, experience actually in the market and so on, and don't let the perma-doom-and-gloomers force you into inaction for no good reason. The perma-bears, ironically, completely ignore the risk that they could be wrong, or at least "far less right" than what they think, and they ignore the impact that could have on someone financially. Classic example of this are the MMMs, and the David Collyer's etc floating around internet forums like this one.
You should us just how little you knew about anything only a week or so ago when discussing banks and trading platforms, you accused me of all sorts of bullshit, you said that I should not be saying what I was on a public forum. You accused me of all sorts of things, including having inside Information , embarrassing . You clearly showed how little you know when you thought you did, others on that thread pointed out just how wrong you were on many things.
I sold the year before you all claim, and had two Sydney properties and have been in real estate for twenty years.You clowns have missed the boat, you own nothing and pay interest only loans . Sydney properties are up around 15% on 2010 highs , every other capital is down or has a gain of around 3% . So even Sydney barely covers Inflation over almost fours years. And what have we used to achieve very little, the lowest rates in history, bullshit free grants and stamp duty , leveredged super funds to mention a few.
You see , everybody else around the world thought their property was not in a bubble too, they thought that if they did not rush out now and leverage their life to the eyeballs, that they would be priced out forever..Guess what, about a billion bulls sooned turned into bears as what they thought could never happen happened. The reason they could not see what was going to happen was for a number of reasons. But the main being that they were unable to see the bigger picture of what mindless amoungs of debt can in an economy collapsing through not only mindless government ways and policies along with dirt cheap asain labour and rapid advance in modern technology.They were also unable to see it, because of the absolute bullshit that is fed to them by the government and vested interests, exactly the same as here.
I laugh at you bull clowns because you are so uncapable of seeing the obvious.
It boggles my mind, sometimes I ask myself, are these people really so stupid they cant see the blatant obvious here, or are they just pretending and acting the fool.
1) The Australian residential market is a Ponzi scheme not based on fundamentals, but rather it is based on an enormous pile of debt being sourced from other countries.
2) The Australian residential market has been pump primed with more Govt intervention than any other property market in history.
3) The bears did not expect that the Australian Govt would be so irresponsible and so unfair to younger Australians by bribing young Australians into debt and doing everything possible to sustain the housing bubble. Young Australians are no longer on the agenda for the Govt.
4) Due to the Australian Govt's intervention to avoid a housing correction, it has managed to pump the bubble back up even higher, and in the process has left Australian residential property as one of the world's worst investments right now. Currently averaging 4% gross rental yields that work out to be a 2.8% net yield. This is against a lending rate of 6.2% that will soon be above 7% again. Longer term it will average 7% if the Chinese bubble holds up. So we are talking about a market which is yielding just 40% of longer term funding. It is either the world's worst property investment right now (thanks to Govt) or it is the worlds biggest real estate bubble. You tell me ?
5) Current house prices (in real terms anyway) cannot be sustained without further Govt intervention. It is nigh on impossible.
6) The reality is the current Govt will try to keep the bubble going as long as it can even though it will eventually bust. No bubble in history has failed to bust.
7) Go buy yourself a house and straddle yourself with debt. Westpac and CBA can't help you anymore, but maybe you will have better luck with NAB or ANZ before they cut back further.
The FHB/Vendor grants allowed people to get $50k more for their cheaper houses and units than they otherwise would have got. It was the first capital gains in half a decade. Just as well because most of them have been losing their pants for the past half decade paying double the amount of rent (in interest expense) for no capital gain. The bonus $50k they got (thanks to Rudd) allowed them to take out an additional $150k-$200k in loans. The banks are comfortable with lending to them as most of them are only taking out 60-70% LVR's, a level perceived to be safe by the banks. Pretty soon this 'excess' that you are seeing will be worked off and then the Ponzi scheme will be in trouble again.
1) The Australian residential market is a Ponzi scheme not based on fundamentals, but rather it is based on an enormous pile of debt being sourced from other countries.
2 3 4 5 Blablah blah...
I suppose it s a copy/paste from 2010 (at least it could be LOL)
I suppose it s a copy/paste from 2010 (at least it could be LOL)
Not a fast learner this padawan
They were a ponzi long before that, like all western societies, it took decades of building this ponzi using every trick it in the book. The only problem now, the book is near the end and so are the tricks.
When the tricks run out, the cracks start to appear and then it all begins to unfold. LOL
I suppose it s a copy/paste from 2010 (at least it could be LOL)
Not a fast learner this padawan
Indeed! It's a rubbish post fall of bear-myths, outright falsehoods, emotional diatribe, and it drips with envy of those who made better financial choices in their life.
Exactly the sort of bear-crap that the OP talks about, that the OP author wished he had never heeded over the past 5 or so years.
MMM
26 Jun 2014, 07:09 PM
You should us just how little you knew about anything only a week or so ago when discussing banks and trading platforms, you accused me of all sorts of bullshit, you said that I should not be saying what I was on a public forum. You accused me of all sorts of things, including having inside Information , embarrassing . You clearly showed how little you know when you thought you did, others on that thread pointed out just how wrong you were on many things.
I sold the year before you all claim, and had two Sydney properties and have been in real estate for twenty years.You clowns have missed the boat, you own nothing and pay interest only loans . Sydney properties are up around 15% on 2010 highs , every other capital is down or has a gain of around 3% . So even Sydney barely covers Inflation over almost fours years. And what have we used to achieve very little, the lowest rates in history, bullshit free grants and stamp duty , leveredged super funds to mention a few.
You see , everybody else around the world thought their property was not in a bubble too, they thought that if they did not rush out now and leverage their life to the eyeballs, that they would be priced out forever..Guess what, about a billion bulls sooned turned into bears as what they thought could never happen happened. The reason they could not see what was going to happen was for a number of reasons. But the main being that they were unable to see the bigger picture of what mindless amoungs of debt can in an economy collapsing through not only mindless government ways and policies along with dirt cheap asain labour and rapid advance in modern technology.They were also unable to see it, because of the absolute bullshit that is fed to them by the government and vested interests, exactly the same as here.
I laugh at you bull clowns because you are so uncapable of seeing the obvious.
It boggles my mind, sometimes I ask myself, are these people really so stupid they cant see the blatant obvious here, or are they just pretending and acting the fool.
QED - I rest my case.
EDIT: In fact I was just reading the other day about something called the "Dunning-Kruger Effect":
Quote:
Dunning Kruger Effect: cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the *metacognitive* ability to recognize these mistakes
Indeed! It's a rubbish post fall of bear-myths, outright falsehoods, emotional diatribe, and it drips with envy of those who made better financial choices in their life.
Exactly the sort of bear-crap that the OP talks about, that the OP author wished he had never heeded over the past 5 or so years. QED - I rest my case.
Myths, looks like the truth of the situation.
The last past fIve years, what about the next five years, when we have threads asking, who listened to the bulls and had their property dreams , turn into a nightmare.
And why do we associate buying property with dreams ? Wtf.
It's about time somebody asked this question. It's like the taboo subject around here.
I have now come full circle, after going through the GFC, watching Keen rise to prominence and following his views, and those of other bears such who reside here. I don't really understand everything Keen and co. say, I really don't and I'm not ashamed of that (I have an IQ of 135). They are clearly very very smart guys. Smarter than your average smart guy.
But I put it to you all that academic smarts don't always lead to real life success. Sometimes it comes down to politics and backdoor deals and factors that academic analysis may not be able to grasp as well as the man on the street. As well as the man whose gut tells him although the argument sounds right, it clearly isn't - for a reason unknown.
I wish I had more street smarts and less academic smarts, the older I get, the more I realise street smarts are far more valuable.
Look, I don't really care anymore, it's a hopeless situation. I've missed the boat and now it's either mortgage myself to the eyeballs or buy something I don't wanna buy. I'm going for the mortgage myself to the eyeballs route. What's the worst that can happen. Bankruptcy I guess. Not optimal, but it's a risk I'm going to take. I can honestly see this market steaming ahead for a long time to come. There is no respite out there on the streets. The desperation is tangible.
Tell me please, where are all these buyers going to go? The 100 or so who walk through a property with me every weekend. Where are they going to go?
Honestly, it has hit home hard since I've hit the Saturday inspection trail over the last couple of months.
It's hopeless. It's frustrating. It makes me hate this city I call home.
Now, I'm not blaming anyone for my extremely bad decision not to buy a home when prices were significantly cheaper. That was my bad decision. My decisions are my own. But I wish I never had of found this forum and others like it. I wish I had never seen Keen on "your money your call". Then I'd be like all the other ignorant buyers who dived in and are now on their way to the easy life. Ignorance really can be bliss.
But I think it needs to be pointed out that there are people on this forum and elsewhere, the proclaimed expert on the topic of home prices, who have got it FLAT OUT WRONG. I just want them to admit that (Keen did with his walk to some degree and I respect that a lot). I just want them to admit, that even though they are super duper smart and understand economics and markets and whatever to a level that us mere mortals could never dream, that their smarts may not be so "street smart".
I'm done following them. I am no longer a bear. I am not a bull. But I just don't believe these guys any more. Good luck to those who follow them into the future.
I would love to hear some other experience of FHBs on the street each Saturday. Maybe theirs is different to mine and there are properties within 10km of the Sydney CBD that are not in high demand. There may be opens without an air of desperation from the buy side. I'd like to hear it. I'd also like to hear where all these displaced buyers are going. I've upped the ante on my finance arrangements and willingness to pay. I suspect many others are doing the same.
All this may make the crash bigger, or it may set a floor under the market forever. No one really knows!
Thank you for having the guts to be honest for having some perspective in describing how it's been for you.
Can I just say some feedback that's quite straightforward yet realistic...for anyone in whatever socio-eonomic class.
I actually hate the Internet.. In that it can easily manipulate the extremes of information by so called professionals that do get paid fr some true crap..& I really don't know how some can sleep well at night.
It's not about this bear & bull stuff, as I've said before, it's really understanding how to invest & use the system that's in place. What happens with those house prices in the long term?
When it involves home ownership & investing there's no room for altruism ... (the truth is each to their own).
Each & every day people buy & sell houses...regardless of the economy..there's always something happening.. Each & every day people maintain their mortgages ..some fail ..some succeed .
Each & every day people maintain their IPs
What people can't bring back is time, but they can learn & move on to improve.
Don't let anyone tell you that no one has regrets..everyone has, I do wish I could change some things, but there's that saying ..things do happen for a reason ..& believe it or not it does work out in the end...you just don't sometimes realize it at the time.
You sound like a thoughtful person..I wish you all the best.
Investor888
26 Jun 2014, 02:33 PM
No they won't necessarily. Sydney may have maybe +2-3% left this year maybe, but that's it for this cyclic boom. No different to the 2003 frenzy.
The property cycles have times where prices fall as well. Don't BS that prices always go up. In a 7-10yrs period, yes, but within 2-3yr timelines, prices can correct and fall, go sideways for 5yrs, and then have a 2-3yr big boom. Anyone who tells you otherwise is a spruiker. People who understand property know that prices can come down as well, and we manage those risks, and diversify to other markets around the country, and hold to max 70% LVR's.
The mid-2013 to early 2014 15% price spike was purely driven by the latecomers into the market (such as the op) who think they have missed out, and are prepared to pay any price to get in. Not fundamentals. 20% increase since the start if 2013 is not healthy (but that's what happens in a market frenzy at the end of a boom). Like the 2003 boom, prices can and will correct in Sydney 2015-2017 (as interest rates increase). Just a normal cycle that overshoots, and then falls back to balance. I believe a drop of 15-20% by 2018, or back to 2012 prices is balance. (or all the market frenzy gains of the last 15mths). This is why investors are looking to other parts of the country for the time being.
If you are able to maintain the investing in all positive & negative situations, then it's cruising well.
Dr Watson
26 Jun 2014, 11:01 AM
My tips for saving money — sell your car. Use public transport instead. For the odd tricky destination, engage a taxi driver or hire a car. That's infrequent, and you'll still be well ahead. Stop travelling overseas — that's an indulgence for the truly well-off. Don't buy takeaway coffees, just get a spice grinder, grind your own beans and brew them in a plunger. Avoid cafes and restaurants. Try to cook one-pot dishes at home where you get plenty of freezer-friendly portions. You don't need to eat out to enjoy the pleasures of food if you gain some skill in the kitchen. Watch cooking videos and you can get better than many chefs. For your wine consumption, buy cleanskins — you can get a nice drop sometimes for as little as $5. Grow your own herbs, very handy for when you only need a tablespoon or two of something.
Oh you moron!
This might work for you but not everyone.
What .. See some scum bags do drug deals, listen to someones soap opera, what about the smell/BO of some morons? Or getting chatted up by some deluded old fart or drunk? fantastic to be wedged between people like a human sandwich...
Get stuffed. No thanks I'd rather get back in my insulated box of wheels & do what I like when & where I like. Happy to pay my insurance, rego & check out the cheapest fuel...
Fantastic.
zaph
26 Jun 2014, 03:26 PM
While the investors who post regularly here and at sites like SS are smart investors, most investors are dumb investors. Most investors own one, and perhaps two IPs. They buy something close to home, something they could live in themselves, something 'safe' and comfortable.
Don't criticize the safe & comfy types because I would have more respect for these people than those who are overconfident & guns blazing that they are infallible.
I've seen some fall down badly & it's not nice to see.
Those safe & comfy types most likely get full steam ahead than some who have been reckless.Ooohhh I was being nice
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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