Welcome Guest [Log In] [Register]


Reply
Interest only property bunnies at greatest risk - 89% think they don't have to pay off capital
Topic Started: 9 Sep 2014, 06:35 PM (8,431 Views)
Stan
Unregistered

van
11 Sep 2014, 12:58 PM
In the 1980's my parents brought their house for $50,000 it is now worth $1,000,000

Would have been smarter just to use interest only loan and lived it up more back then. Over time, even a large amounts of money becomes inconsequential over time due to inflation.
That's a fair point and not an isolated case.

Do you believe that same house will be worth 20 million in 30 years though?
"REPLY WITH QUOTE" Go to top
 
John Frum
Member Avatar


van
11 Sep 2014, 09:43 PM
Yeah the real inflation is much faster than the CPI advertises, it is easy for governments to keep that down. CPI is heavily weighed by food, technology/computers etc. Food government provides subsidises to farmers to over produce and keep food cheap. Computers and technology get better over time and they use that improvement to say they are cheaper and disinflation.

Fact is Money supply since the start of this decade as on average run at over 10% PA, most of that printed money goes into property. Money supply has gone from 500 billion to 1.5 trillion from 2000 to 2014. So it has increased 3x and doesn't look to be slowing either, so there will be more of the same.

Why do people think property has to fall when it is priced in paper money which throughout history has always inflated away.



Inflation decimates the dynastic fortunes of the rich and powerful. That's a pretty big hornet's nest for a start.

Added to that it can also incite pitchforks, as ordinary poor people may begin to lose faith with a system that is supposed to provide them an opportunity, by forgoing instant gratification through hard work and saving, to secure a better future for themselves and their children.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Profile "REPLY WITH QUOTE" Go to top
 
herbie
Member Avatar


Bardon
11 Sep 2014, 01:00 PM
My advise to anyone especially the younger generation is to get yourselves into as much investment debt as safely as you can as early as you can and never ever pay it back.
Hmmm - So what further advice might you have for your valued clients when they are chatting to their banks and the ATO in the future Bardon?

(Aside from saying My very bright young personal investment and tax advisor was last seen scarpering for somewhere in South America where he reckoned health care was cheap whilst yelling loudly "I takes the 5th!!!" - So we'd very much appreciate it if you could just kindly take all such matters up with him going forward Ta very muchly please ? ... :) )
Edited by herbie, 11 Sep 2014, 10:35 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
Profile "REPLY WITH QUOTE" Go to top
 
Stan
Unregistered

Bardon
11 Sep 2014, 01:00 PM
My advise to anyone especially the younger generation is to get yourselves into as much investment debt as safely as you can as early as you can and never ever pay it back.
Even with full recourse loans and 23 years without a recession?
"REPLY WITH QUOTE" Go to top
 
Guest
Unregistered

Bardon
11 Sep 2014, 01:00 PM
My advise to anyone especially the younger generation is to get yourselves into as much investment debt as safely as you can as early as you can and never ever pay it back.
Is there any wonder why the whole western world is now screwed .

With the delusion shown in this post there is little hope here.

You buy shit in Queensland and think you have an investment.

How will you go when rents drop and interest rise in a few years time and you have paid off no capital in that time.

Anybody with half a brain would be using this record low period to pay off as much capital as they can.

You thinks prices can keep doubling like in previuos history. Just like they though in the US and euro and UK. You also think rents can keep increasing like they have.

But you simply don't understand that over previous history wages have always risen, and property and rents were coming from a low cost base forty years ago and have risen with this. But in previous history , we never had the debt levels of today, never had dirt cheap chinese labour on a scale we do now to deal with which is killing our jobs and wages and we never had to deal with the rise of computerised automation in the workplace like we do now.

So what has been going on over the last number of years is nothing at all like we have had to deal with before and is nothing at all like previous history.
"REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


herbie
11 Sep 2014, 10:30 PM
Hmmm - So what further advice might you have for your valued clients when they are chatting to their banks and the ATO in the future Bardon?

Okay I would tell them that I know how it feels when the ATO are on your back, I have similarly felt the terror of their stare but what I found when my objection to their assessment was upheld, is that tax law is not back and white and they are negotiable.

And by the way its Ecuador for me.
Stan
11 Sep 2014, 10:44 PM
Even with full recourse loans and 23 years without a recession?
Full recourse What What
Guest
14 Sep 2014, 09:45 AM
Is there any wonder why the whole western world is now screwed .

With the delusion shown in this post there is little hope here.

Those in the know have always looked on debt as a precursor to wealth creation, grasshopper. Also you need to try and guess a bit better than you currently are about my circumstances.
Edited by Bardon, 15 Sep 2014, 04:22 PM.
Profile "REPLY WITH QUOTE" Go to top
 
Guest
Unregistered

Bardon
15 Sep 2014, 03:01 PM

Those in the know have always looked on debt as a precursor to wealth creation, grasshopper. Also you need to try and guess a bit better than you currently are about my circumstances.
In the know....yeh right. :bl:

You have spelled out your circumstances loud and clear.
"REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


Guest
15 Sep 2014, 07:23 PM
In the know....yeh right. :bl:

You have spelled out your circumstances loud and clear.
You have to laugh at those unfortunate and feckless souls that for some reason claim to know of someones circumstances, on anonymous internet blog, when in fact they don't know the slightest detail of them. Especially when they also imply with conviction that you are going to hell in a hand cart. Fucking hilarious it is.

I wonder if the medical profession have given this modern affliction a medical term yet?
Profile "REPLY WITH QUOTE" Go to top
 
Guest
Unregistered

Bardon
15 Sep 2014, 10:56 PM
You have to laugh at those unfortunate and feckless souls that for some reason claim to know of someones circumstances, on anonymous internet blog, when in fact they don't know the slightest detail of them. Especially when they also imply with conviction that you are going to hell in a hand cart. Fucking hilarious it is.

I wonder if the medical profession have given this modern affliction a medical term yet?
Laugh all you like........now.....

Feel free to correct us on your circumstances.

You have leveraged up as much as possible on some brisbane or surrounding property or properties using as little deposit as possible. On top off this you pay interest only loans, you only ever plan on paying interestonly and never plan to pay them down. You are also under the complete delusion that property prices and rents can double at intervals of seven to ten years like they have over the last forty years or so which is clearly reflected in your never pay down your debt comment and paying interest only.

What about when rents fall and interest rates increase. How would you go with bank rates at 7% and 25% reduction in your rents ? Do you think this is just a fantasy and could never happen or that it is just unlikely and prices and rents will just keep doubling at say ten year intervals.

How old are you bardon, can you give us some idea, late twenties early thirties, anything ?
"REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


Guest
15 Sep 2014, 11:26 PM
Laugh all you like........now.....

Feel free to correct us on your circumstances.

You have leveraged up as much as possible on some brisbane or surrounding property or properties using as little deposit as possible. On top off this you pay interest only loans, you only ever plan on paying interestonly and never plan to pay them down. You are also under the complete delusion that property prices and rents can double at intervals of seven to ten years like they have over the last forty years or so which is clearly reflected in your never pay down your debt comment and paying interest only.

What about when rents fall and interest rates increase. How would you go with bank rates at 7% and 25% reduction in your rents ? Do you think this is just a fantasy and could never happen or that it is just unlikely and prices and rents will just keep doubling at say ten year intervals.

How old are you bardon, can you give us some idea, late twenties early thirties, anything ?
You aren't very bright are you?

You asked me my age before and I gave you an indication, so you don't pick up on something that is real, then you go into all of this fantasy description of my position and my investment reckonings. Your worst case scenario would be a doddle for me since you asked.

Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy