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A Property Market Crash Looms - Scott Pape - The Barefoot Investor; Pointing out the obvious to ignorant Aussie property zombies
Topic Started: 22 Oct 2013, 04:51 AM (14,477 Views)
Pig Iron
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Bogan scum

goldbug
25 Oct 2013, 01:15 PM
BTW my gold is still up over 40% since I bought it so all your talk of it crashing lower never amounted to anything.
40% over 5 years with no income?

what a SHIT investment :lol

who do you think you are kidding, gold has crashed you fool.

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I am the love child of Tony Abbott and Pauline Hanson
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Timo
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miw
25 Oct 2013, 01:14 AM
Can you give me the link to your web page of 1970s insults? I'm feeling kinda nostalgic.
Time to get your meds upped again then
Pig Iron
25 Oct 2013, 11:12 AM
yes, i feel stupider just reading your post.
That's rather an amazing feat, you, more stupid? How? Your pea brain holds so many surprises!
Edited by Timo, 25 Oct 2013, 11:46 PM.
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
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Admin
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Quote:
 
Barefoot Investor Scott Pape: Don’t get rushed into buying first home

Scott Pape, October 09, 2015 8:01PM

I met a fellow father in the hospital breakout room who must have recognised me by my feet.

“What’s the property market going to do?” he asked.

“I have no idea,” I told him (my standard response).

“We’re … renting,” he sighed, and looked down at his feet.

You’re not a loser for renting, says Scott Pape.

You’re not a loser for renting, says Scott Pape.

Let me have a crack at the thoughts that were going through his head:

“I’m taking my newborn home to a … rented home!

“I’m obviously a bad parent …

“And if my baby could talk he’d say, ‘Daddy why can’t we be like every other family and own our own home? Why don’t you have your finances sorted? When I grow up I’m getting a neck tattoo of Miley Cyrus’.”

This poor bastard was being hit by FOMO (fear of missing out), with both barrels.

Most renters in their twenties and thirties feel it when they drive past an auction, watch a renovation show or talk to their homeowning mates — but it reaches a peak when you hold your little baby in your arms.

Now I only spoke to this guy for all of 30 seconds (in retrospect my comment was perhaps a little dismissive).

But, thinking back to our conversation, this is what I should have said:

“Don’t listen to your mother-in-law …

“Don’t listen to your mortgaged-up mates ...

“And certainly don’t listen to most of what makes it into the media.”

Case in point: there was an article in the Fairfax newspapers last week entitled “First home buyers look to credit cards”.

It began:

“First home buyers are increasingly opting for credit card debt and personal loans to cover their home deposits, according to a new survey.

“Only 51 per cent of first home buyers are sourcing all of the money for their deposit from savings, down from 66 per cent in 2014, Lenders Mortgage Insurance provider Genworth’s Streets Ahead report found.”

Shocking, right?

Some context: this survey was paid for by Genworth, Australia’s largest Lenders Mortgage Insurance (LMI) provider.

Genworth has a vested interest in young people not following my Barefoot advice of saving up a 20 per cent deposit.

Why?

Because if you have less than a 20 per cent deposit, virtually every lender will make you take out LMI.

Genworth didn’t become a $2 billion behemoth by selling cheap insurance.

Get this:

If you buy a $500,000 home with a 5 per cent deposit, you’ll be forced to pay LMI of $15,722.

It gets worse: because you’re borrowing for the policy, it’ll likely end up costing you $30,000.

It gets worser: if you switch banks to get a better home loan rate, Genworth will collect another $15,722.

Remember, this insurance doesn’t protect you — it protects the lender.

Quick recap: LMI is a complete and utter rip off, and Genworth is the devil.

Got it? Right.

Back to the article.

Article says: “If an applicant was on a high enough income to pay for the loan but didn’t have the full savings needed then it could be acceptable to a bank in terms of serviceability,” says a mortgage broker from Dream Financial (yes, that’s really the name of the business).

Reader says: “Hmm. Everyone’s doing it, why don’t I give it a go?”

Barefoot says: Butchers will tell you to enjoy your sausages (just don’t ask what’s in them). Likewise, bankers will tell you to enjoy your mortgage (just don’t ask where it came from).

Article says: “Using other sources like a personal loan or credit card to get you over the line as a proportion of your deposit could be beneficial if it means getting into the property market now, as long as you’re not overstretching yourself,” says a spokeswoman for comparison website Finder.

Reader says: “Hmm. Everyone’s doing it, why don’t I give it a go?”

Barefoot says: This is the very definition of overstretching yourself. Stop it.

Article says: “If your property goes up 10 per cent in the first year, then it may pay for the debt,” says the Dream Financial dude, again.

Reader says: “Hmm. Everyone’s doing it, why don’t I give it a go?”

Barefoot says: This is utter crap. If you’re forced to take out LMI, it’s very, very unlikely the banks will refinance you in the first year.

Article says: “House prices are going up year on year, when you’re seeing house prices going up and the Australian dream of owning your home is still strong, people will find ways to bridge that gap,” says Genworth’s spinner.

“In this climate you can expect this trend to continue.”

Reader says: “Everyone is doing it. Why don’t I give it a go?”

Barefoot says: This Genworth report is a bunch of bulldust aimed at fanning the flames of FOMO to legitimise young people making desperate financial decisions to buy a house they can’t afford … which is how Genworth made a net profit after tax of $324.1 million last year.

I’m not paid by a bank, or by any financial flogger.

I’m fiercely independent and get to say whatever the hell I want.

So here’s my two bob’s worth for all the renters out there:

You’re not a loser for renting.

It’s not ‘dead money’.

In fact some of the most financially insecure people I deal with are those who’ve bought homes (and LMI insurance) they couldn’t afford.

Read more: http://www.heraldsun.com.au/business/barefoot-investor/barefoot-investor-scott-pape-dont-get-rushed-into-buying-first-home/story-fngu4eru-1227563864981
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peter fraser
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Clever people learn from past mistakes.
Any expressed market opinion is my own and is not to be taken as financial advice
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Rastus2
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peter fraser
12 Oct 2015, 08:25 AM
Clever people learn from past mistakes.

I think that can become part of the problem Peter.

The great depression had an entire generation learning from the mistakes that caused them pain... debt. My great grandmother owned a couple of acres right in the prime part of the city we grew up in, quite a spectacular home, so good that it was requisitioned in the war by the US air force with 270 degree views of ocean, Island and Mountain... Despite this wealth, she would watch every cent, waiting for the next depression.

I was brought up to believe in good debt and bad debt, however when people get into very very high good debt, it does not take much to go wrong for that good debt to go bad also.... somthing many learnt who lived through a credit crunch. I learnt from their mistakes.

Perhaps it's just your perspective in time lines as to who has learnt from the past mistake, and who has not and if they sometimes consider other's mistakes to not be relevant to themselves.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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peter fraser
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Rastus2
12 Oct 2015, 08:45 AM

I think that can become part of the problem Peter.

The great depression had an entire generation learning from the mistakes that caused them pain... debt. My great grandmother owned a couple of acres right in the prime part of the city we grew up in, quite a spectacular home, so good that it was requisitioned in the war by the US air force with 270 degree views of ocean, Island and Mountain... Despite this wealth, she would watch every cent, waiting for the next depression.

I was brought up to believe in good debt and bad debt, however when people get into very very high good debt, it does not take much to go wrong for that good debt to go bad also.... somthing many learnt who lived through a credit crunch. I learnt from their mistakes.

Perhaps it's just your perspective in time lines as to who has learnt from the past mistake, and who has not and if they sometimes consider other's mistakes to not be relevant to themselves.
There is no such thing as very very high good debt especially if it's on PPOR. There is also no such thing as a risk free life, everything must be in balance. If repayments are somewhere near what rent payments would be, and rent is manageable, then I would say that a reasonable balance has been achieved. If a buyer can't achieve that then they shouldn't buy a house, they are not yet ready.
Any expressed market opinion is my own and is not to be taken as financial advice
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Foxy
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Zero is coming...

Timo
22 Oct 2013, 04:51 AM
Read it, absorb it and take on some advice from someone who's not the vested scumbag real estate low life just aching to tell you want to hear.

http://barefootinvestor.com/property-market-crash-looms/
Foxbat told of this over 3 years ago.

Perth is flat as a tack.

Houses do not produce an income.

Peter

I have not paid a cent for the last 4 houses i have acquired.

Peter
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Shadow
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Evil Mouzealot Specufestor

foxbat
12 Oct 2015, 10:54 AM
Houses do not produce an income
Mine do.

You've been doing it wrong.
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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Shadow
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Evil Mouzealot Specufestor

Catweasel
23 Oct 2013, 11:08 AM
Quote:
 
At this stage my 2008 prediction that Sydney house prices would approach $1M by 2015 is looking increasingly safe.
It is quite telling how the bears used to mock my prediction every time I mentioned it, but now they are strangely silent on the matter.
I'm very disappointed in Earthsta... not sticking around to face the music. He did what he predicted the bulls would do... vanished without a trace. All talk, no balls.
Catweasel say a piece of the chewing the gum closer to the million dollar at a t+1.
So its predict is no more than taunt of sparring partner.
Further the more, mouzealot's revisionist in a rear view,
to explain a future,
is a easy for it to digest.
And it can even the build forecast the model,
based on framework of its belief system.
So it no more than sailing in ocean....
....in plastic bucket.
So mouzealot still firmly the entrench in glossy brochure mind.
Poor Terry. If you had listened to me you could have made a lot of money in those two years.
Edited by Shadow, 12 Oct 2015, 11:18 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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newjez
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Rastus2
12 Oct 2015, 08:45 AM

I think that can become part of the problem Peter.

The great depression had an entire generation learning from the mistakes that caused them pain... debt. My great grandmother owned a couple of acres right in the prime part of the city we grew up in, quite a spectacular home, so good that it was requisitioned in the war by the US air force with 270 degree views of ocean, Island and Mountain... Despite this wealth, she would watch every cent, waiting for the next depression.

I was brought up to believe in good debt and bad debt, however when people get into very very high good debt, it does not take much to go wrong for that good debt to go bad also.... somthing many learnt who lived through a credit crunch. I learnt from their mistakes.

Perhaps it's just your perspective in time lines as to who has learnt from the past mistake, and who has not and if they sometimes consider other's mistakes to not be relevant to themselves.
Not so much good debt and bad debt. But there are times when debt is good. And there are times when debt is bad.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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