Definitely not. See they had to use a town, and I am sure of other mining towns, where property prices have crashed in line with mine closures and retrenchments. I believe that y.o.y. valuations have to moderate because a 100k house 20 years ago worth 500k today doesn't convert well for a 500k house now to be worth 2.5 million in 20 years time.Perhaps Moranbah will play a role in triggering a domino effect?
Also thought it was funny how if these people had made (a tonne of) money, they'd be boasting about how smart they were,
but when they lose money they seemed to shift the blame onto someone else (ie. the bank shouldn't have lent me that money).
They did, they made that magazine for being the number one property investors (or something like that) and were all smiles in the photos.
It's always blame someone else isn't it?
As soon as I saw that program I thought....
1. I never heard of that town
2. It's a 1 mine coal town......*danger*
3. What if it closes down? Who will buy these houses? Who will they rent them too?
4. Interest only loans? Who in their right mind would do that?
5. Why buy so many houses all in one area, considering all of the above?
As the reporter said, it was gambling. And now, oh shucks lets blame the banks.
But hey, you make a poor stock selection and the company goes bust, you pay, no one helps.
You buy debentures and they go bust, you pay, no one helps.
I'm sorry but I do not have any compassion for anyone who admits they were "GREEDY". One thing going for that lady is that she is 24 y/o, she can go bankrupt and start all over again and put it down to an expensive lesson learn't.
It's always blame someone else isn't it?
As soon as I saw that program I thought....
1. I never heard of that town
2. It's a 1 mine coal town......*danger*
3. What if it closes down? Who will buy these houses? Who will they rent them too?
4. Interest only loans? Who in their right mind would do that?
5. Why buy so many houses all in one area, considering all of the above?
Cherry picked eh? Get out of Sydney and have an optitractomy - you know the operation where they remove the link from your eyeballs from your anus to improve your sh!tty outlook on life.
Was talking to a friend tonight about the 60 Minutes segment, and he relayed to me a story about a friend of his, who had a deposit saved up but had no job at the time of applying for a home loan. No problem. Documents were fudged a bit, deposit paid, no questions asked about how he was going to service the loan despite being unemployed.
My friend doesn't know either how his friend manages to service the loan (though we guess it must be some cash/slightly dodgy stuff going on).
Bill, australian banks do not finance business , they at most agree to lend it some money against your own house, unless you are Palmer, or BondOnce, quite some time ago I went to a credit union to borrow a some money (about 20K) to buy into a small business venture. Even though I owned my apartment outright they knocked me back because at the time I wasn't working. Of course I wasn't, I was trying to start a business.
It was like a scene from the film The Big Short. A hedge-fund manager and an economist pose as a gay couple on a combined income of $125,000 and tour Sydney's western suburbs viewing housing developments and meeting mortgage brokers for research to determine if there's a housing bubble.
The conclusion is it's worse than they thought.
"The further west I went, the more irrational it felt. Lots and lots of supply and prices that bore no resemblance to construction cost and income of people around there," says John Hempton, Bronte Capital's chief investment officer.
He joined with Jonathan Tepper, an economist and founder of Variant Perception, and toured suburbs across north-west and south-west Sydney and met 20 mortgage brokers three weeks ago.
What they discovered repeatedly was that mortgage brokers were advising them to lie on loan application documents about the deposit for a house and about income.
As Tepper has written in a report, "we asked if the bank would call our employer, and both reputable and disreputable brokers said banks rarely verified payslips".
Nothing new here, if property crashes he becomes famous, if if doesnt ppl will forget about him as we get these predictions every few years. Asym payoff so of course pundits are bears.
When it comes to bubbles, Australian property ticks pretty much all the boxes. If there is a sharp correction in the eastern states it will have a devastating impact on our banks and economy, writes Ian Verrender.
"There is no cause to worry. The high tide of prosperity will continue." Andrew W. Mellon, US Secretary of the Treasury. September 1929.
"These consultations confirm our view that the underlying economy remains sound." White House statement, Black Monday, October 19, 1987.
Talking to a friend over dinner tonight, found out a mutual friend of ours had recently bought three off the plan apartments in a short span of time after being introduced to someone akin to a mortgage broker. All she had to pay was 10% deposit for each one, without actually obtaining a bank loan for the balance. Apparently the loan is only required once the apartment is complete, but the plan is to re-sell this (at a profit hopefully) before completion.
If this is not gambling then I don't know what is. At least with the casino you know the odds.
As an ex lender I would guess that either your friend is lying / exaggerating (preaching to a position you clearly hold as evident by posts here) or has taken the low-doc loan route with a 30% deposit which gives a lot of leeway to the lender.Was talking to a friend tonight about the 60 Minutes segment, and he relayed to me a story about a friend of his, who had a deposit saved up but had no job at the time of applying for a home loan. No problem. Documents were fudged a bit, deposit paid, no questions asked about how he was going to service the loan despite being unemployed.
More bad news for Melbourne property investors: central Melbourne off-plan apartments fell about 11 per cent in the first year between their original purchase and pre-settlement valuation, figures from valuation firm WBP Property Group show.
The average 11.5 per cent decline - equivalent to nearly $68,000 - in the value of 14 apartments WBP valued within a year of their sale date gives an indication of the extra equity buyers of off-plan apartments may have to produce when the projects into which they have bought come due to settle.
Banks rely on the valuations of firms like WBP and are using lower values, as well as a string of other conditions to reduce their exposure to what many regard as oversupplied apartment markets.
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