reason? people already carry huge debt, they cannot afford more debt even when bankers offer money to everyone ...
debt saturation of this scale (levels never recorded before) must lead to greatest recession that we remember
Debt saturation is an interesting point. To my mind, inflation is potentially the saviour of the borrower, but it takes a long time to work. The issue for many will be whether they can hold on until prices and incomes increase. If prices stagnate (or drop only a little) over the next few years, then the likelihood of a major crash gets much smaller.
Debt saturation is an interesting point. To my mind, inflation is potentially the saviour of the borrower, but it takes a long time to work. The issue for many will be whether they can hold on until prices and incomes increase. If prices stagnate (or drop only a little) over the next few years, then the likelihood of a major crash gets much smaller.
the problem is that inflation and debt are inversely correlated
for inflation to rise people (and businesses) must have extra money they can spend on rising prices - people with large debt do NOT have extra cash to spend on anything so inflation is just a dream
almost no government can print enough money to offset lack of newly created money by slowing commercial banks - deflationary spiral is almost inevitable
the only quick way out is debt forgiveness - unfortunately rich people (lenders) do not like that idea and they are the once who make decisions in "democratic" system of our presence
high inflation at this stage would just rise rates and crush many borrowers (and housing market) because they couldn't afford higher repayments. It is good to buy when inflation is high, it is not good inflation to rise when people already borrowed more than they can repay. it's too late
when I was telling my friend few years ago (2004-2005) that the best time to buy is when interest rates are high (not when rates are low) they were laughing on me - now they realize they will be stuck with large (relative to their income) repayments for next 10 or 20 years.
low rates enable people to borrow more, high rates enable people to repay quickly and easily
I think that it's great that Yossarian posted that blast from the past....now we can see how wrong you really are :lol:
Yeah... that 2009/2010 boom never really happened. It was all an illusion.
This IS a thread about Sydney. How's your prediction looking? Oh, that's right
Quote:
think prices will rise over the next 4-5 years, but not as far or fast as is shown on that chart. Sydney median house price to approach $1M by 2015 (based on Residex data) is my prediction. That would be approx 9% per annum for the next five years.
This IS a thread about Sydney. How's your prediction looking? Oh, that's right
Predictions are just a game to me - a bit of fun. I make lots of them, and while I get most right, I do get 10-20% of them wrong. As for the prediction you mentioned, we won't know the outcome until 2015. However I suspect by that time you'll still be renting, and my PPOR will be fully paid off (regardless of what direction house prices move in).
Anyway, this is Black Panther's day, so I don't want to steal his thunder by talking about my own 80-90% prediction success rate. The key news from today is that BP was 100% right with his Q3 tipping point call, and for that I congratulate him and proclaim BP as a prophet on this forum (second only to the mighty BearTrap).
Predictions are just a game to me - a bit of fun. I make lots of them, and while I get most right, I do get 10-20% of them wrong. As for the prediction you mentioned, we won't know the outcome until 2015.
Yes....and you'll now need Sydney house prices to rise in excess of 13% for the next three years for the prediction to be right. Good luck with that :lol:
Shadow
1 Feb 2012, 10:55 PM
However I suspect by that time you'll still be renting, and my PPOR will be fully paid off (regardless of what direction house prices move in).
What? You don't own your own home yet? LOL.... I could buy a PPOR tomorrow.
Shadow
1 Feb 2012, 10:55 PM
Anyway, this is Black Panther's day, so I don't want to steal his thunder by talking about my own 80-90% prediction success rate. The key news from today is that BP was 100% right with his Q3 tipping point call, and for that I congratulate him and proclaim BP as a prophet on this forum (second only to the mighty BearTrap).
No ... he was wrong. House prices were down in the 4th quarter. There's no need to take the piss out of blackie like that. He's already insecure.
Yes....and you'll now need Sydney house prices to rise in excess of 13% for the next three years for the prediction to be right. Good luck with that :lol:
No... 10% for the next 4 years.
Quote:
What? You don't own your own home yet? LOL.... I could buy a PPOR tomorrow.
I own my home and several IPs.
You could probably afford a unit, or a smaller house in the outer suburbs. But you won't - you'll still be renting in 2015, holdout.
I'll have my 5 bedroom Northern Beaches home with ocean views five minutes walk from the beach fully paid off.
I could pay it off tomorrow and then some if I sold some IPs. But I'm going to keep them for the coming Sydney boom.
Quote:
No ... he was wrong.
BP was right. Prices up in Perth, and nationally Q3 was the quarter of peak decline - the tipping point.
Predictions are just a game to me - a bit of fun. I make lots of them,
Predictions might be a game for you, but your area of interest is specifically Sydney.
based on your prediction 22 January 2010
Quote:
Sydney median house price to approach $1M by 2015 (based on Residex data) is my prediction. That would be approx 9% per annum for the next five years. It is currently $632,000 according to Residex.
What % do they need to increase per annum now to get your 1M mark by 2015 ? Care to have a guess @ the maths ?
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