Yeah .. you are right satanoperca .. sunshine and lollipops for everyone in the property market as a noted professor used to say
Meanwhile back at the coal face ....
I wouldn't be expecting a repeat, why would you? What are the similarities? Its a bubble? All bubble are not alike....
I wouldn't be expecting a repeat, why would you? What are the similarities? Its a bubble? All bubble are not alike....
In all my years of investing I have never seen half price or 60% reductions of real estate in Sydney. It won't happen, it never has before and it won't in the future, good luck with hoping, wishing and praying for that.I think there is a massive overbuild in apartments. That's where the bubble is. Guess who's buying, Yep The Chinese I did have a chat with a Lend Lease guy the other day, he said it's all still going strong. I said, 'your selling everything to the yellow fellas aren't ya.' He said 'yep!' I said, 'you concerned about the slow down and clamp down on the funny money?,' he said, 'people don't get it' and 'it's still going like hot cakes.' I caught his eye a little later on, in the evening, he looked a little sheepish! Not sure why.
But it will end soon enough and we can all pick up $150,000 apartments that were sold for 300k or 400k.
Cash up
1) We don't have jingle key loans here. We have full recourse loans. Mortgage arrears are at 7 year lows
2) Sydney will be the market that will be corrected to be around 15% IMO. Mainly from the HIGH END market contracting which skewiff sales/pricing data. Rest of the country has already stagnated. Started about 3 years ago.
3) Nope ... I read somewhere money owing on housing loans taken out by households was equivalent to 29% of the value of residential land and dwellings owned by households. Pretty good shape really. Must mean there are a lot of people with huge equity in residential property !
4) Steady as she goes skipper.
1) The banks foreclose on the house and sells it for the current market achievable rate. Any losses incurred is the responsibility of the mortgagee. If there is LMI in place then the LMI underwrites the bank then pursues the mortgagee. If the house sells for LESS than what it is valued for then the bank and the LMI pursue the VALUER. Which is why they pay so much in indemnity insurance. End of the day the bank/LMI/valuer then will pursue the mortgagee for any losses. If they declare bankruptcy then the bank will look internally as to WHO approved the loan and pursue them (as in they get the sack)
2) Better than anywhere else in the world
3) Yes give or take 1%
4) Are you saying there will be a 40% correction? Are you Steven Keen? You can borrow up to 90% with LMI in a refinancing option under current bank guidelines. Therefore your 600k house you can borrow up to $540,000 depending on income and debt serviceability ratios etc etc. REMEMBER this ratio is over ALL residential property in Australia. Like I said there MUST be a lot of people who own houses outright or have huge equity in them. Most of the people I know are around the 20% equity mark and contributing over 35% of income to mortgage.
5) You have not accounted for the DEPOSIT you would have been required to place down on the property to borrow 1 million? Let's say you purchased a property for 1 million in Sydney and you placed a 20% deposit down. You do the math
Our money, somebody else's wealth. Awesome.
You need to quantify that, like where exactly, ...etc. I can tell you now, price drops like you are suggesting of 60% won't happen ever in this area, it never has. 400K won't even buy you a 1 bedroom unit in this high demand area.
I am talking specifically, Sydney and the Northern Beaches of Sydney, that is where most a my buying and selling has been done and 90% of all the real estate I bought there was apartments. There is no such thing as "high rise housing commission flats with lipstick" in that whole area. Most of it is 3 level apartments, those that are higher are all privately owned apartments. Manly to Palm Beach is some 40 kilometers in distance, it has never ever suffered a 50 to 60% drop in prices. I reckon a mass of bargain hunters would be out and about looking if only a 10% correction happened.
This is an area that Chinese buyers aren't interested in much, it's all the locals who are buying it up. People who love the Aussie beach lifestyle, people who wouldn't live anywhere else as their fathers and grandfathers all grew up there and will pay a little more to live there.
When you make statements like You need to quantify that, like where exactly, ...etc. I can tell you now, price drops like you are suggesting of 60% won't happen ever in this area, it never has. 400K won't even buy you a 1 bedroom unit in this high demand area.
My question to you is, do you really think that a nice 2 br apartment with views that is now selling on the Northern Beaches for $1M today, will one day be worth 400K?......... NEVER. There are people with serious money in these high demand beach areas, just a minor correction and they will be out in droves buying....... believe me I had no trouble selling my last property 14 Months ago and they are still selling easily now.
I am currently out of investment property, I've made my money. But if those 60% reductions ever came along I'd be buying 2 for the price of one with my ears pinned back, so yes it is only wishful thinking.
I note that it was passed in at 665K, means nothing. I had a property in Manly that went to auction that didn't even attract a bid. I ended up selling it 3 weeks later for a nice profit. Thanks for mentioning that each of those properties are worth $5 Million today, I wouldn't have sold at the throw away bid of 665K either.
Hello and welcome to Aussie Stock Forums!
To gain full access you must register. Registration is free and takes only a few seconds to complete.
Already a member? Log in here.
