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How to escape unscathed if Australia has a housing crash
Topic Started: 5 Aug 2017, 12:44 PM (2,627 Views)
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If disaster does strike, here’s how to get out unscathed

THIS story is about what you can do if Australia has a housing crash. Plenty has been written about whether we will or won’t. This is not one of those stories. This is an if-then scenario. A handbook of what to do in case of disaster, if you like.

If housing prices fall, say, 25 per cent, do you want to be stuck in the middle getting covered in blood and gore, or do you want to be off on one side, your hand covering your mouth in horror, saying ‘Ouch, that’s gotta hurt!’

PROPERTY

If you have an investment property during a housing crash, well, you will probably wish you didn’t. The decision is whether to discount it to secure a sale or hang on grimly. It’s the perennial dilemma of an investor in a falling market, but really, it’s a simple decision.

For owner-occupiers the decision will be more complicated. The value of a house to an owner-occupier is at least partly in the shelter, etc, that it provides, not the financial value. If your house is worth 25 per cent less suddenly, the value of the shelter hasn’t fallen. And if you want to sell and buy a new place to live in, the new place has probably fallen in value too, so you’re okay.

The main way a housing crash matters for an owner-occupier is if you’re planning to sell the house and use the money for something else, like a retirement. If that’s the case, trying to sell before the crash reaches its nadir might make sense.

Selling your assets in a crash sounds clever but is it easy? What if you finally decide/manage to sell the day before the market turns up again?

Read more: http://www.news.com.au/finance/economy/australian-economy/if-disaster-does-strike-heres-how-to-get-out-unscathed/news-story/a55ce00a6d47e22eee17207827ce7970
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Rat
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Filthy Rodent

Admin
5 Aug 2017, 12:44 PM
What if you finally decide/manage to sell the day before the market turns up again?
Indeed. Like Steve Keen selling his home in late 2008, or Crazy Ted selling his home in late 2011.

They panicked and sold right at the end of a correction, just before the market boomed. Whoops!

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Edited by Rat, 5 Aug 2017, 02:23 PM.
Consumer protection laws extended to small businesses. Banks not permitted to repossess due to non-monetary defaults (for example, a fall in the property value).
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Ex BP Golly
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Rat
5 Aug 2017, 02:21 PM
Whoops!

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I love it when you show me pictures of bubbles.

Ta.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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hidflect
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Rat
5 Aug 2017, 02:21 PM
Indeed. Like Steve Keen selling his home in late 2008, or Crazy Ted selling his home in late 2011.

They panicked and sold right at the end of a correction, just before the market boomed. Whoops!

Posted Image
I pick Applecross because it's a highly desired locale. No reason for it to go down unless the market is tanking...

http://www.ksouhouse.com/his_price.php?q=Applecross&sta=wa


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herbie
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How to escape unscathed if Australia has a housing crash???

Well, ole herbie would've thought it's obvious? : Don't be a highly leveraged property owner in Sydney or Melbourne who loses your job should such a crash occur - Wot wif 'Australia' being Sydvegas/Melvegas these days according to tha Sydbournian's 'n Melvegian's MSM it would seem - LOL

Jesus these 'Australian' MSM fools pump out some shit ... :)

Hey, I wonders wot tha 'productivity' factor/rating (?) of tha Sydvegas/Melvegas MSM is? - LOL LOL LOL

Hmmm - It simply must be a toss up as ta whether it's a smidgen higher or lower than that of tha nation's pollies I 'spose? ... :)
Edited by herbie, 6 Aug 2017, 02:38 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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stinkbug
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If the market were to crash 25%, that means some properties are likely to be discounted by up to 50%. If you have solid cashflow (from your job, investing or both) then that is the time to go bargain hunting.

The reason why the rich do well out of downturns is because it represents an huge opportunity for people who are already wealthy to increase their asset base at a big discount.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Foxy
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Zero is coming...

Have no debt....

You will be the king...
Edited by Foxy, 7 Aug 2017, 01:39 AM.
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Matthew
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hidflect
6 Aug 2017, 01:45 PM
I pick Applecross because it's a highly desired locale. No reason for it to go down unless the market is tanking...

http://www.ksouhouse.com/his_price.php?q=Applecross&sta=wa


Posted Image
To look at monthly data in a suburb like Applecross when an average of 7 properties transact and think it is meaningful you would need to be a special kind of stupid.

Although you are the guy who thinks Christmas Specials at BWS and rotating weekly specials at Coles are economic indicators so enough said.
Foxy
6 Aug 2017, 10:57 PM
Have no debt....

You will be the king...
Then bow before me Drunkbat, for I am your king.
stinkbug
6 Aug 2017, 08:46 PM
If the market were to crash 25%, that means some properties are likely to be discounted by up to 50%. If you have solid cashflow (from your job, investing or both) then that is the time to go bargain hunting.

The reason why the rich do well out of downturns is because it represents an huge opportunity for people who are already wealthy to increase their asset base at a big discount.
Bingo
Edited by Matthew, 7 Aug 2017, 01:18 PM.
My only hope for my three boys is that they turn out nothing at all like Chris.
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Simon_S
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stinkbug
6 Aug 2017, 08:46 PM

The reason why the rich do well out of downturns is
Do theses Rich People you speak of carry DEBT in a Downturn..... :lol

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Foxy
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Zero is coming...

Matthew
7 Aug 2017, 01:16 PM
To look at monthly data in a suburb like Applecross when an average of 7 properties transact and think it is meaningful you would need to be a special kind of stupid.

Although you are the guy who thinks Christmas Specials at BWS and rotating weekly specials at Coles are economic indicators so enough said.

Then bow before me Drunkbat, for I am your king.

Bingo
Well done Matthew on having no debt, well done.

Peter

I do have some debt and i know it will not help if there is a general downturn...
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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