Seems ta me that if Harry 'n Jack 'n Fred all buys 'emselves a home each at the same time for $250K 'n over tha next decade (or wotever) tha value of Harry's home goes ta $500K 'n Jack's stays at $250K 'n Fred's goes ta $125K, that (all other things bein' equal) Harry is wealthier than Jack 'n Jack is wealthier than Fred.
The exact point I was trying to make earlier!!
According to Chris - if person A lives in a 1 bed fibro shack in the flood zone out the-back-o-bourke, and person B lives in a 5 bedroom, 4 bathroom mansion on the Balmoral slopes, with a pool and harbour views, that regardless of the value of those PPOR houses, person B has no more wealth than person A??
According to Chris - if person A lives in a 1 bed fibro shack in the flood zone out the-back-o-bourke, and person B lives in a 5 bedroom, 4 bathroom mansion on the Balmoral slopes, with a pool and harbour views, that regardless of the value of those PPOR houses, person B has no more wealth than person A?? Nice!! (Both the car and the lady!).
Until they both cash out, based purely on their PPOR this is correct but my OP wasn't in reference to comparisons between home owners or related purely to an individual living in their own PPOR. You seem to have as little comprehension as all the other bulls, but here we go with another run down, please answer me this.
If person B lives in the 5 bedder 4 bath mansion in Balmoral slopes, they don't leverage off it, reverse mortgage, open a line of credit or use it in any other way other than pay the mortgage and live in it (as is the case for the MAJORITY of home owners) and it goes up $1m in 12 months how are they richer?
If person B lives in the 5 bedder 4 bath mansion in Balmoral slopes, they don't leverage off it, reverse mortgage, open a line of credit or use it in any other way other than pay the mortgage and live in it (as is the case for the MAJORITY of home owners) and it goes up $1m in 12 months how are they richer?
One way to assess wealth is in terms of the freedom or options that it provides. In this case, the owner has the option to leverage off the equity, retire early, reverse mortgage, sell it, take a line of credit, or use it in various other ways (even if they choose not to partake of these options at this point in time). If their house had not gone up in value (or if they were just renters) then they would not have so many options and would be less wealthy.
One way to assess wealth is in terms of the freedom or options that it provides. In this case, the owner has the option to leverage off the equity, retire early, reverse mortgage, sell it, take a line of credit, or use it in various other ways (even if they choose not to partake of these options at this point in time). If their house had not gone up in value (or if they were just renters) then they would not have so many options and would be less wealthy.
As we have established the vast MAJORITY of home owners do none of this even though they have the option to and therefore house price rises do not make them richer.
As we have established the vast MAJORITY of home owners do none of this even though they have the option to and therefore house price rises do not make them richer.
Chris your argument is just dumb, and you're now just arguing for the sake of it, you know you're wrong.
By your logic someone with a few million in the bank isn't a millionaire because they haven't "done" anything with it. It's all just assets waiting to be mobilized into something a person wants or needs, with differing levels of liquidity.
I do have some pity for you, reading between the lines here I can tell this is your way of trying to convince yourself (and your missus I bet) that you aren't poorer for having taken a bet on a house price crash.
I can tell this is your way of trying to convince yourself (and your missus I bet) that you aren't poorer for having taken a bet on a house price crash.
Nailed it. You can bet your life this is exactly the story Chris has been spinning to his missus while she looks down at him with contempt.
Nailed it. You can bet your life this is exactly the story Chris has been spinning to his missus while she looks down at him with contempt.
Nope, I still tell her it's better to own a home and we work very hard together in the hope we may achieve it. She is aware however that if we did have one it wouldn't necessarily make us richer fir the very reasons I've outlined in my OP.
You guys hate this conversation though because you know that my right, I love to see the penny drop for you blokes. Even better than that is the idea you will soon come to realise how much worse it is if house prices stagnate or fall, this adds a whole new dimension I don't think your ready for just yet 😄
... fir the very reasons I've outlined in my OP ...
Ya OP woz you bitchin' about existin' home owners who downsize bein' able outbid FBHs Chris - Wif tha existin' home owners wot's got all their existing equity obviously bein' able ta outbid tha FHB hopefuls (by 'n large) - Coz they's obviously got all that existin' equity. (Oh, that 'n a totally wrong hopelessly f***ed up bitch about how some change ta super favours boomers - Which it VERY obviously don't; 'N which I told ya - But which ya ignored - Coz ackowledgin' it wouldn't suit ya line of bullshit.)
She is aware however that if we did have one it wouldn't necessarily make us richer
LOL, I suppose she is aware of this 'fact' because you educated her. I'm sure that's very comforting when all her homeowning friends, whose property values have doubled, ask her if she's still renting.
Quote:
you will soon come to realise how much worse it is if house prices stagnate or fall, this adds a whole new dimension I don't think your ready for
Prices fall or stagnate every few years. Just part of the cycle. Sydney stagnated for a decade from 2003-2012 (prices fell in real terms, and fell massively vs incomes).
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