hello,
maybe so, the media is still pumping up the negatives more than anything i believe
would be 5 negative to 1 positive article, been that way for a long time because of the vested interests the media outlets have (ie. fund businesses/interests)
thankyou
robots
Got to laugh at Fairfax media. A few weeks ago they were saying
Red-hot Melbourne market starts to glow white
"MELBOURNE'S property market is shaping up to record its strongest pre-Easter results due to insatiable demand."
now they are saying
Housing market to weaken as buyers retreat
"BUYERS are retreating from the Melbourne property market at the rate of 600 a month, causing real estate professionals to predict an ''exhausted market'...'
lol
The China bubble
Edward Chancellor, a member of the asset allocation team for Boston-based GMO and, interestingly, the author of a recent Financial Times piece on Australian property, is a financial historian and bubble expert.
His 1999 book, Devil Take the Hindmost: A History of Financial Speculation, examined past speculative manias. Perhaps you've read articles comparing the tech boom and 1990s' bull market to tulipmania in 1630s' Holland.
A property investor said that investment property loans are similar to margin loans on shares. If the value of the property falls under the loan value by x amount, the bank wants the difference. If the investor cant pay, this property and other assets may be liquidated to cover the shortfall, could include their primary residence.
With home loan rates forecast to rise upwards of 10% and investment loans higher are investors locking themselves into a dangerous situation?
1) I am saying that if a valuer places a value on a certain property and if there is LMI involvement and a bank forecloses then the Valuer is liable for the LOSS made by the LMI (in certain mitigating circumstances) The insurers will pursue the Valuer involved if he has placed a value on the property and the financier/LMI suffers a loss.
3) robots is of an idealogy that has it's place in here and he believes in property. Balance is required for sure but if you read between the lines the blogger has not been wrong yet. No bubble, no reversing of prices, auction rates still clearing at high %. What more do you want?
He has been wrong, as property prices fell last year. If it's not a bubble are you or would you be buying at these prices? At the very least it's not sustainable, a symptom of bubbles..
I know of three couples in recent years who were asked by the banks to come foward with extra money as they were over their LVR's on investment properties.
All three cases were the same, retired couples who had drawn equity out of their PPOR to by risky off the plan apartments.
In one case, the IP was sold by the banks and the couple had to give the bank the difference about $20K
Second case, bank sold the IP and the PPOR and the couple were down about $200K.
Third case, couple paid the bank the extra money and later sold the IP for break even.
So it can happen, depends on how leveraged up you are and how well you can service the debt.
Note : in all three cases the couples were retired, so income was an issue.
Cheers
go with the flow brothers, yeah i'm in for another one right at the moment, 100% LVR thanks to working hard, reducing debt and not sitting out the front of coles
thankyou
robots
Only if the valuer is proven to be negligent in his methodology of valuation, which is then a court case, so as far as being an issue if property prices fall, it is a non issue if the valuer has valued correctly. It (insurers having to pay up) in itself has no bearing or influence on property prices...
He has been wrong, as property prices fell last year. If it's not a bubble are you or would you be buying at these prices? At the very least it's not sustainable, a symptom of bubbles..
hello,
yes robots got it wrong, the melbourne median dropped a MASSIVE 6% during the BIGGEST financial/economic event since 1929
thats right brothers a HUGE 6% and now reached even higher figures than pre-GFC, oh yeah paradise (hope macca can repost that graph)
go with the flow brothers, yeah i'm in for another one right at the moment, 100% LVR thanks to working hard, reducing debt and not sitting out the front of coles
thankyou
robots
Note I did write and even placed it in brackets (in certain mitigating circumstances) - hopefully this has cleared it up for you Uncle. Ummmm ... where did I mention that this would influence property prices? You mentioned that PI did not work this way? I mentioned that there is a clawback for the bank, the LMI and that the Valuer would ultimately be reposnsible and the client would be responsible for their debt to the bank and the bank has a legal right to pursue the person/company/entity that borrowed the money.
robots was wrong ?? Prices fell exactly where last year? Have you got a graph or a pie chart or a link to a website to back this statement?
Adviser Edge research director Louis Christopher said it was very unusual for the level of housing finance to be falling at the same time as auction clearances remain strong, with prices rising.
http://www.theaustralian.com.au/bus...loans-in-decline/story-e6frg9gx-1225852932552
The softening of housing loans should allay any fear of bubble territory IMO.
Along with the unwinding of the low interest currency carry trade which will start to look at the relative safety of US Treasuries out of Australian instruments ie local banks funding requirements. Tis only a matter of time "brothers"?
If rates are going to 10% then why are the lenders still offering under 8% for a 3 year fixed rate? It does not make sense? Banks NEVER lose.
So they weren't standard mortgage products? They sound like reverse mortgages which have much more stringent LVR restrictions than standard products.Note : in all three cases the couples were retired, so income was an issue.
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