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Hit The Bid! Australian property is intensely vulnerable. Why property is in trouble.; A housing bust is inevitable and cannot be avoided!
Topic Started: 22 Sep 2015, 03:56 PM (7,035 Views)
The Whole Truth
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50% or all home sales have been going to speculators since 2008 I believe and the percentage for the decade before was high too so it wouldn't surprise me how many each individual owns.
They all assume they will retire rich because of it but the more likely senareo is the government changes the rules on them and they find themselves providing subsidized housing for a generation of unemployed.

That is pattern of history, only the very wealthy or very lucky make it to the end in the way they imagined (were promised)
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Shadow
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Evil Mouzealot Specufestor

Jimbo
24 Sep 2015, 06:58 AM
My 13 year old son has told me how it works. All the other kids at school told him about their parents 15 rentals and how they were all multi millionaires. "Why don't we have any rentals dad?".

When your 13 year old kid is being peer pressured into an investment, it is one of two things.

Either you are totally out of touch, behind the times, aged demented.
Smart kid. Takes after his mum?
Edited by Shadow, 24 Sep 2015, 09:49 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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John F. Kennedy
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Reports from Scott Morrison this morning in AFR (which we know is a copyright journal and can't be posted here or at least its pointless with no subscription) that capital gains tax changes and negative gearing changes are back on table. Since the departure of Joe Hockey.
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GloomBoomDoom
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http://www.news.com.au/finance/economy/australias-housing-boom-has-peaked-at-an-awkward-time-morgan-stanley/story-fnu2pwk8-1227539818577
MSE
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The Whole Truth
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We are now calling the peak in the housing cycle, and expect further falls in auction clearance rates and house price momentum,...

Lol, if the past 7 year cycle in Brisbane has peaked there are going to be a lot of pissed off investors.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Sydneyite
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The Whole Truth
24 Sep 2015, 11:31 AM
We are now calling the peak in the housing cycle, and expect further falls in auction clearance rates and house price momentum,...
You are a bit slow with that call, I called it based on the finance data trend back in July:

http://australianpropertyforum.com/single/?p=8566088&t=10335705

having said that, given this cycle has been mainly about Sydney/Melbourne, Brisbane may still have a while to run yet, even against the finance aggregates and auction/price trends in the big smoke.
Edited by Sydneyite, 24 Sep 2015, 11:54 AM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Terry
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Sydneyite
24 Sep 2015, 11:54 AM
You are a bit slow with that call, I called it based on the finance data trend back in July:

http://australianpropertyforum.com/single/?p=8566088&t=10335705

having said that, given this cycle has been mainly about Sydney/Melbourne, Brisbane may still have a while to run yet, even against the finance aggregates and auction/price trends in the big smoke.
Oh, I see. Some suburbanite has the inside secret on how the impacts of "the cycle" are allocated. I see that is likely something you said because price movements have been less dramatic. Like sparkly marbles.
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zaph
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Sydneyite
24 Sep 2015, 11:54 AM
Brisbane may still have a while to run yet, even against the finance aggregates and auction/price trends in the big smoke.
I think so. Brisbane has ~10-20% gains left in this cycle.

The really dumb southern investors will soak up some of inner city unit oversupply. The slightly less dumb will buy up Logan/Ipswich. Cheap rents in the inner city and the outer city.

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Terry
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zaph
24 Sep 2015, 12:47 PM
I think so. Brisbane has ~10-20% gains left in this cycle.

The really dumb southern investors will soak up some of inner city unit oversupply. The slightly less dumb will buy up Logan/Ipswich. Cheap rents in the inner city and the outer city.
Do you have a gadget that allows you to know this or is this something you said because it sounds exciting?
zaph
24 Sep 2015, 12:47 PM
I think so. Brisbane has ~10-20% gains left in this cycle.

The really dumb southern investors will soak up some of inner city unit oversupply. The slightly less dumb will buy up Logan/Ipswich. Cheap rents in the inner city and the outer city.
Do you have a gadget that allows you to know this or is this something you said because it sounds exciting?
Edited by Terry, 24 Sep 2015, 01:33 PM.
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Sweetdish
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Prices have most likely peaked.
IF they fall they could fall a lot.
But if you are a first home buyer and eager to get into the market this probably help you at all - in fact it may make it even more difficult to purchase, even if prices fell 40%.
Unless you are paying cash, banks will simply make it a lot harder to borrow any money in the inevitable recession that follows a housing crash. Your borrowing capacity could even be relatively lower than it is now.

For example, picture the perfect house you have been dreaming of. Lets say that at the moment you earn $100K and it is now selling for $1.5M. Without a very good deposit ($500K) this is out of your range and as a result you rent while posting impotent rants on online message boards. Suddenly we have a recession and the price falls to say $900K. Without that huge deposit you are still highly unlikely to afford that loan since the bank would tighten their lending criteria (or even increase rates) to make up for the added risk of further falling prices and you loosing your job etc. You still can't afford it.

So the only ones who would benefit in the short from a house crash are those with serious cash deposits or very stable incomes, like Doctors or Dentists etc.
If you are hoping for a housing crash out of jealousy of your peers who managed to buy a property and you are hoping to enjoy some shadenfreude then you may also be in luck.
But you are also a dick.

For the rest of us, if prices crash, owners or not we are pretty screwed for a long time.
Australia would face a recession of biblical nature.
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