Mortgagee property sales happening already!!

[Realist]

Well thats not the case.

You could hypothesis endlessly.

The fact their house went down in value makes a huuuuuge difference, hence why it is in a property related article, and not just a shister warning article. Had it gone up alot they'd have been fine, or at least better off.


Obviously.

 

[Julia]

Very very sad that these people have been ripped off but one obvious question. From 1986 (when they were about 45 and 55 respectively) until 10-15 years later, what did they do with the funds previously directed to paying the mortgage?

Oh, for heaven's sake. No one got ripped off. I am so sick of people not taking responsibility for their own decisions. No one forced them to release some of the equity in their home. Why didn't they seek advice?

Tech - thank goodness for a realistic summary of what the article was actually about.

I can't believe how many people have such a capacity for reading into something whatever it is they want to believe. Realist et al, don't kid yourself. The next boom in property will be happening before you know it and you will be left out AGAIN!

Doctorj: I think it was you who suggested property was a non-productive asset? We simply can't think of everything in our lives as being productive or non-productive. You are ignoring the pleasure and satisfaction of having one's own home to do with what we want (no asking the landlord) and the sense of security it provides. Imo no gain in the share portfolio can equate to the sense of achievement I feel every time I come home.

Julia

 

[Freeballinginawetsuit]

Oh, for heaven's sake. No one got ripped off. I am so sick of people not taking responsibility for their own decisions. No one forced them to release some of the equity in their home. Why didn't they seek advice?

Tech - thank goodness for a realistic summary of what the article was actually about.

I can't believe how many people have such a capacity for reading into something whatever it is they want to believe. Realist et al, don't kid yourself. The next boom in property will be happening before you know it and you will be left out AGAIN!

Doctorj: I think it was you who suggested property was a non-productive asset? We simply can't think of everything in our lives as being productive or non-productive. You are ignoring the pleasure and satisfaction of having one's own home to do with what we want (no asking the landlord) and the sense of security it provides. Imo no gain in the share portfolio can equate to the sense of achievement I feel every time I come home.

Julia

Nice post and thoughts Julia.

Before the last thread on property prices, I wasn't aware of the extent of the drops in Sydney. Certainly I agree that if Fire sale auctions are at 40% below last years prices, then this seems like a good entry for the first home owner. Surely they are likely to rebound sooner, rather than later.

And definetly owning your own home and tinkering on it gives a bit of a buzz, its a basic/priority/goal in life.

 

[TjamesX]

Doctorj: I think it was you who suggested property was a non-productive asset? We simply can't think of everything in our lives as being productive or non-productive. You are ignoring the pleasure and satisfaction of having one's own home to do with what we want (no asking the landlord) and the sense of security it provides. Imo no gain in the share portfolio can equate to the sense of achievement I feel every time I come home.

In fairness, I don't think doctorj was commenting on peoples use of funds to purchase property as a primary place of residence.

The property boom wasn't an obsession of people buying their own homes - it was an obsession of owning as much property as you could... built on releasing housing equity, easy finance, negative gearing and paying 15k to go to property cheerleading seminars!

Thank god its over!!!!!

Unfortunately we still live in a situation where it is more economic to own an investment property and rent than it is to own your own home. hopefully the nails in the properties coffin will send everyone back to reality for a while....

And I agree that it was one of the biggest misallocation of free capital ever!!

TJ

 

[Realist]

Realist et al, don't kid yourself. The next boom in property will be happening before you know it and you will be left out AGAIN!

Yes Julia, it's only been a few months since property has doubled in value. If I don't get in now it could double again by christmas.

 

[Realist]

Unfortunately we still live in a situation where it is more economic to own an investment property and rent than it is to own your own home.

True, but owning an investment property is not a good investment. SHARES ARE!!

We live in a situation where it is more economic to rent and invest. That has usually been the case though, the ASX plus dividends have always and will always outdo property in the longterm. If you can get in and out of housing booms as well you'll kill it, but shares are the best investment.

If you wanna own property buy WDC shares...

 

[Realist]

this seems like a good entry for the first home owner. Surely they are likely to rebound sooner, rather than later.

People said the same about TLS shares 3 years ago, where the bottom is no-one knows. Fools jump in where Angels fear to tread.

And definetly owning your own home and tinkering on it gives a bit of a buzz, its a basic/priority/goal in life

Agreed, owning a house to live in should always be everyones aim.

Owning a house as an investment on the other hand needs to be treated with utmost caution at the moment.

 

[Realist]

You are ignoring the pleasure and satisfaction of having one's own home to do with what we want (no asking the landlord) and the sense of security it provides. Imo no gain in the share portfolio can equate to the sense of achievement I feel every time I come home.

And you are ignoring the great pleasure I get for living in a great apartment in a great area that I could not afford to buy, and do not have to pay for, maintain, repair, pay body corporate fees or insure. And the comfort that I can just move anywhere, anytime I want. I am free!!

And you are ignoring the great comfort I get not having a huge mortgage hanging over my head, the satisfaction of knowing interest rates are irrelevant to me, infact the higher the better, and the joy I get by seeing my bank balance and my share portfolio grow while house prices fall!!

 

[swingstar]

Some bearish talk on the US housing market:

http://www.europac.net/media/Schiff-Bloomberg-8-23-06.wmv (18.7mb, 6mins)

 

[doctorj]

Doctorj: I think it was you who suggested property was a non-productive asset? We simply can't think of everything in our lives as being productive or non-productive. You are ignoring the pleasure and satisfaction of having one's own home to do with what we want (no asking the landlord) and the sense of security it provides. Imo no gain in the share portfolio can equate to the sense of achievement I feel every time I come home.
Julia

I agree 100% with everything you said.

People make decisions for non-financial reasons all the time - they take holidays, they buy fancy cars etc etc. I agree with that, afterall you only live once. I was referring to people to people with additional investment properties. A person's house is their castle, but our economy would be much better off if they didn't own more than one.

 

[Judd]

Oh, for heaven's sake. No one got ripped off. I am so sick of people not taking responsibility for their own decisions. No one forced them to release some of the equity in their home. Why didn't they seek advice?

A valid view. I assume that you would put that point of view to your relatives face to face if it happened to them.

Sadly there is a hugh gap in financial education in the unwashed masses - sorry "unwashed masses" but you are, in general, financially dumb. They are attempting to make up for wasted years [see the comment by Neil Jenman in the article.] In combination, these two elements create ANFO and all it needs is the detonator in the shape of spivs to rip people off and create havoc. This couple, and others like them, have been ripped off even though in the final analysis they are responsible for their decisions and the resultant outcome.

 

[money tree]

Realist....

is your real name George W Bush?

 

[RodC]

The property boom wasn't an obsession of people buying their own homes - it was an obsession of owning as much property as you could... built on releasing housing equity, easy finance, negative gearing and paying 15k to go to property cheerleading seminars!

It's not as simple as that. In reality there were many concurrent booms.

There was certainly an investment driven boom in inner city apartments, driven aprtly by spruikers and slick marketing, this (in Melbourne at least) seems to have largely corrected itself, though there could be more pain to come.

There will be some who will have overused equity to get into trouble, but this is more of a poor investment issue than a property issue. Many of these would have got into strife even if they'd invested the funds into shares.

Much of the boom has been in the outer suburbs with the FHOG and 100+% finance allowing those who couldn't really afford it to pruchase "McMansions". Many of these have also used equity to purchase the latest goodies (PlasmaTV, 4WD etc). This is where the pain will come.

It's not about whether shares or property are the better investment it's about making appropriate choices, unfortunately many don't.

Rod.

 

[Ageo]

and the joy I get by seeing my bank balance and my share portfolio grow while house prices fall!!

id love to see your share portfolio's performance in the last 6 months

 

[dubiousinfo]

Interestingly all the focus on property investment seems to be only about residential property.

Sydney commercial property prices & yield began to pick up 6 months ago & is set to perform very strongly in the next 12 to 18 months.

I am currently involved in a number of developments with strong precommitments for both leasing & sales.

Residential property is not the only way to invest in the property market. Never hurts to broaden your scope of investments.

 

[tech/a]

The property boom wasn't an obsession of people buying their own homes - it was an obsession of owning as much property as you could... built on releasing housing equity, easy finance, negative gearing and paying 15k to go to property cheerleading seminars!

I was one of those people.
I had a difference.
I never attended a property seminar.
I never purchased an IP unless it was positively geared.
Sure I geared to 87% at onetime,now 37% After the sale in Sept goes through.
Id do it again if conditions/criteria were right. Infact it is still possible to positively gear.
IE more down,Build 4/6 High density keep 1 or 2.

There is just as much opportunity in Property investment NOW as there is in ANY investment including Share trading.

Very True Dudiousinfo Commercial usually runs 3-5 yrs behind Residential.I only have one Commercial property from where my Company runs.It has doubled in 18 mths.

Its not the investment class its the Class of investor!

 

[Realist]

id love to see your share portfolio's performance in the last 6 months

Work it out for yourself. Add in dividends, no tax....

WDC, BHP, RIO, FGL, CBA, CQT, MTN, PRG, BSL, NEL, FUN, FDL,

More recently RIN, AMC, MRE. got at close to the low's fortunately.

I'm up a bit.

 

[Ageo]

I'm up a bit.

good to hear

 

[Realist]

good to hear

Well, I have had a little luck recently. FGL up alot today on takeover rumours. And CQT currently in a trading halt.

WDC, MRE etc. have done very well for me in the past few weeks as well.

RIO, CBA, BSL, and FUN have done nothing for me though.

 

[Realist]

Actually BSL is up 20 cents today, and MTN up 3.5 cents.... miracles will never cease..