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Suburbanites Infected by "Wealth Building"
Topic Started: 10 Oct 2016, 03:20 PM (1,427 Views)
Foxy
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Zero is coming...

Terry
10 Oct 2016, 03:20 PM
How Bloomie describes our suburbanites' behavior...

----------------

Beset by lending curbs and bubble-esque prices, first-time home buyers in Australia are turning to a rapidly growing source of finance: The Bank of Mom and Dad.

More parents are taking advantage of record-low interest rates to refinance their properties and help their grown-up kids onto the housing ladder amid sky-rocketing house values. Digital Finance Analytics estimates the number of Aussies getting help from their parents has soared to more than half of first-home buyers from just 3 percent six years ago.

Australia's housing rally has favored baby-boomers and locked out youth, compounding an inter-generational shift of wealth. As the number of bank loans to first-time buyers dwindles, the average slice of cash handed to them by parents has almost quadrupled in the past six years, DFA says. The downside: a market that the Reserve Bank of Australia is already wary of may get further inflated.

First-time buyers are "being infected by the notion that property is about wealth building, rather than somewhere to live,” said Martin North, Principal at DFA. That “may be tested if interest rates rise later, or property prices fall from their current illogical stratospheric levels.”

Posted Image

Sydney, where values have risen more than 90 percent since the end of 2008, remains the priciest city; it was last month named the world’s fourth bubbliest market by UBS Group AG.

The boom is turning some homes into cash dispensers. More than two thirds of owners that refinanced houses worth more than A$750,000 did so to extract capital for reasons including helping their kids. Near the start of 2010, the average helping hand from parents was about A$23,000; today, it's more than A$80,000.

Aussie first-time buyers had a somewhat easier time a decade ago, thanks to government grants to help them enter the market. The assistance has since been scaled back.

Posted Image

http://www.bloomberg.com/news/articles/2016-10-09/meet-mommy-and-daddy-australia-s-fastest-growing-mortgage-lenders
So let me get this straight,

Mom and dad being the super intelligence that they are, force up the price of houses by helping dumb Dick and dumb Dora pay more than they could for a house, so that they have to ask mom and dad for help so that they force the price of the house up more, so that they have to ask mom and dad for help because they asked mom and dad for help.
They forced the price of the house up.

I actually witnessed this when the Government sold the houses on Cocos and Christmas Islands.


I love it.

I f***in love it.

Just when you think it can not get better, it gets better.

Go Aussie...

http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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John Frum
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Khaderbhai
10 Oct 2016, 04:44 PM
It says Sydney prices are up 90% since 2008.
... which means if they fall by 40% over the next few years they'll be back to 2008 prices in real terms.

Think I'll stay with my cheap rent and wait for the crash thanks.
"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.
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Trollie
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John Frum
10 Oct 2016, 08:27 PM
... which means if they fall by 40% over the next few years they'll be back to 2008 prices in real terms.

Think I'll stay with my cheap rent and wait for the crash thanks.
Wait another 10 years, good plan John.
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John Frum
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Khaderbhai
10 Oct 2016, 05:54 PM
Well Roddy, I think the rise in house prices since 2008 is more interesting than your waffle about "suburbanites".

I don't. I think your waffle about steve keen and all the other "failed predictions" is even more tiring, as is your slavish devotion to a single metric.
Quote:
 
Ignored post by Trollie · View Post · End Ignoring

Cool story bro.
Edited by John Frum, 10 Oct 2016, 08:34 PM.
"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.
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Foxy
Member Avatar
Zero is coming...

foxbat
10 Oct 2016, 08:22 PM
So let me get this straight,

Mom and dad being the super intelligence that they are, force up the price of houses by helping dumb Dick and dumb Dora pay more than they could for a house, so that they have to ask mom and dad for help so that they force the price of the house up more, so that they have to ask mom and dad for help because they asked mom and dad for help.
They forced the price of the house up.

I actually witnessed this when the Government sold the houses on Cocos and Christmas Islands.


I love it.

I f***in love it.

Just when you think it can not get better, it gets better.

Go Aussie...
https://www.youtube.com/watch?v=sGUNPMPrxvA
How deep does this rabbit hole go??

https://www.youtube.com/watch?v=pibqo6Z4Cgo
Edited by Foxy, 10 Oct 2016, 08:58 PM.
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Khaderbhai
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Wealthy Suburbanite

John Frum
10 Oct 2016, 08:27 PM
... which means if they fall by 40% over the next few years they'll be back to 2008 prices in real terms.

Think I'll stay with my cheap rent and wait for the crash thanks.
What if they go up another 40%?
John Frum
10 Oct 2016, 08:31 PM
I think your waffle about steve keen and all the other "failed predictions" is even more tiring, as is your slavish devotion to a single metric.
Which metric am I slavishly devoted to?
Edited by Khaderbhai, 10 Oct 2016, 09:04 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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