Yes, but a 20% crash in market prices cannot happen, so the numbers are little more than a fantasy. It's much better to use Shadow's scenario to understand how much the buyer will lose if it doesn't act now.
Emmanuel,
Your name can be thrown in as another shill, paid or unpaid. This site is a joke at times, it becomes increasingly harder to see it as a genuine forum when characters like this a rolled out as the voice of the 'average' bloke next door who just worked hard and built wealth through property.
The psychology behind such characters is quite interesting. If you wre so inclined to believe this site was a mouth peice for vested interests then you need to consider their motives. Some would say it's a means to net those people, mainly 24-35 yrs old who are frustrated with the inequality in the market and are looking for answers for what they believe is a helpless situation.
Disillusioned they turn to the only place they get information, doctor Google. They search property forums to become more educated and what do they get? They get an education from a bunch of paid shills working on behalf of vested interests on multiple sites who tell them they are fucked if they don't buy now, that they will be poor for a life time and that buying is really easy and hesitation or contemplation is a sign of weakness and a sign that you will never be successful in life.
I used to laugh at people like BB from bubblepedia who talked at nausea about so called paid posters but Emmanuel might be swaying me, along with Bardon, Shadow, Skamy to name a few.
In reality I know two people who have been very successful with property, both laugh at the thought of posting on a forum about it and or arguing with ransoms about its pros and cons. You then have to question who are these people who come on here day in day out raging against any negative comments made against australian property.
Bears raging is logical but Bulls posting on here with such passion is really non sensical, then you need to consider why a site like bubblepedia was fire bombed?
Food for thought, might be just me but BB seems to of been onto something.
Not a fact, debatable. It depends whether the bank will give you a loan. If they tighten credit you might not get one at all and houses would be less affordable than they are now. Have you built up a good credit rating with the bank, a good history of taking out loans and paying them back on time? If not, then in a situation where credit is tightened substantially the bank may view you as being too inexperienced with credit and too risky to lend money too. Ironically, folk like Mike and Skamy would be in better positions than you as a result of their stronger credit history.
Mike and Skamy would be perceived as model customers by the bank. They have moved up on the scale of privilege within society through their own savvy thinking and smarts. In a previous time, they may have lived out mediocre existences, but because of how our country has evolved by granting them opportunity, they have been able to rise above their stations.
Chris
28 Oct 2014, 07:19 PM
Emmanuel,
Your name can be thrown in as another shill, paid or unpaid. This site is a joke at times, it becomes increasingly harder to see it as a genuine forum when characters like this a rolled out as the voice of the 'average' bloke next door who just worked hard and built wealth through property.
The psychology behind such characters is quite interesting. If you wre so inclined to believe this site was a mouth peice for vested interests then you need to consider their motives. Some would say it's a means to net those people, mainly 24-35 yrs old who are frustrated with the inequality in the market and are looking for answers for what they believe is a helpless situation.
Disillusioned they turn to the only place they get information, doctor Google. They search property forums to become more educated and what do they get? They get an education from a bunch of paid shills working on behalf of vested interests on multiple sites who tell them they are fucked if they don't buy now, that they will be poor for a life time and that buying is really easy and hesitation or contemplation is a sign of weakness and a sign that you will never be successful in life.
I used to laugh at people like BB from bubblepedia who talked at nausea about so called paid posters but Emmanuel might be swaying me, along with Bardon, Shadow, Skamy to name a few.
In reality I know two people who have been very successful with property, both laugh at the thought of posting on a forum about it and or arguing with ransoms about its pros and cons. You then have to question who are these people who come on here day in day out raging against any negative comments made against australian property.
Bears raging is logical but Bulls posting on here with such passion is really non sensical, then you need to consider why a site like bubblepedia was fire bombed?
Food for thought, might be just me but BB seems to of been onto something.
I think that we are an aggregate of averages, just trying to better ourselves. And its the Shadows, Strindbergs, etc who have done that. They are proud of their achievements and the Australian society that have given that opportunity. They fight hard to make sure that everyone understands how others can achieve those goals. We can hear their wisdom and experience for which we don't have to pay anything.
So you are closer to Shadow that your proposed 20% crash, which is unlikely to happen. a 20% crash may have occurred in the past, but it cannot happen again because we have the systems in place to prevent them.
I at no stage proposed a 20% crash. I merely showed what would happen to financing in a 20% crash scenario, which is about half the size of crash that some bears are saying we are in for and which they are claiming will improve affordability. If you like, you can redo it for a 10% crash or a 30% crash - feel free.
There are no "systems in place" that can prevent a 20% crash. There is no floor price for housing. Hell, we just had a 15% crash in Brisbane at a time when the economy wasn't actually doing too badly.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
I at no stage proposed a 20% crash. I merely showed what would happen to financing in a 20% crash scenario, which is about half the size of crash that some bears are saying we are in for and which they are claiming will improve affordability. If you like, you can redo it for a 10% crash or a 30% crash - feel free.
There are no "systems in place" that can prevent a 20% crash. There is no floor price for housing. Hell, we just had a 15% crash in Brisbane at a time when the economy wasn't actually doing too badly.
Sure, I hear you. It's just a disaster scenario. No problem. It's an outlier for which the potential financial loss is quite minimal.
That suggests to me that the "systems are in place."
I used to laugh at people like BB from bubblepedia who talked at nausea about so called paid posters but Emmanuel might be swaying me, along with Bardon, Shadow, Skamy to name a few
Bulls posting on here with such passion is really non sensical
Another whinging tin-hatter bear conspiracy theorist, posting on a forum to complain about other people who post on a forum.
I'm guessing the real reason you're so pissed off is simply that the bulls have been right while you and your mates like 'The Bullion Baron' have been wrong for so many years.
For some maybe, but I don't follow her logic for most.
If prices crashed the buy in price would be cheaper. The deposit would be a greater percentage of the purchase price and any loan required would be less. Interest rates would be lower.
Of course finance would be more difficult to get and more people would be unemployed (but still, most people would be employed).
The only way they will crash is if there's a credit crunch, in which case it'll be impossible to get a mortgage.
If there's no money to buy, then there's no money to build too, so supply will dry up. You'll have a situation (like Ireland now) where rents are sky-high relative to price.
skamy
28 Oct 2014, 01:19 PM
What she is saying is that the salaries that underpinned the higher prices also drop.
What good is a cheap house price to an unemployed person?
The bear argument runs along the lines that house prices will drop and all the investors and home owners and bankers etc will become too impoverished to compete with renters for the newly cheap houses. It is a fantasy.
What happens is that the bankers, the investors and the equity rich owners buy the cheap homes from struggling people.
To the strugglers home affordability worsens in a crash even though prices may drop.
I guarantee that, as the economy recovers, you will see an increase in the uneven distribution of wealth in all the economies that suffered an extreme crash. You can go back in time and research Britain after the 90s crash if you want proof.
What happens is the bankers, investors, and equity rich owners sell to the struggling people first, giving them cheap credit, wait for the prices to drop, then buy them back from the struggling people.
Bears raging is logical but Bulls posting on here with such passion is really non sensical
i never understood this line from bears
bulls are in the majority in australia, the bullish position has mostly been correct and there are heaps of bullish journalists and economists writing for mainstream media and their own blogs
why is it so hard to believe some bullish members of the public might be interested in posting on a forum
why do bears find it so odd that property bulls would want to post on a property forum
frankly I'm surprised the number of bulls posting isnt a lot higher
I think you're far too paranoid and you can rest assured that you can't lose in most cases.
Depends on what you mean by "lose" doesn't it. If you mean "lose ground with respect to the market", then about half the deals out there at any given time are losing propositions. If you mean "lose your shirt", then I agree that it is hard to lose on real estate - as long as you follow a few simple principles, one of which is remembering that if you f^ck up badly, you can lose you shirt.
Emmanuel
28 Oct 2014, 07:59 PM
And like Shadow, you can make gains that you could never hope to make from your own labor.
I don't actually have any big disagreement with Shadow. He has a viable strategy that he has made work, and most of the time his view of what the market will do is pretty-much on the money. On the other hand I have never seen a post from Shadow saying that there is no possibility of a crash or even that the risks are so small they aren't worth considering.
Real estate has done very well for me, probably matching the fruits of my own labour. But my return on invested capital for equities has been quite a bit higher.
Some level of paranoia is an absolute necessity for any kind of successful investment. The world actually is out to get you.
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.
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