The future of Australian property prices

[luutzu]

Shhh about this house prices falling stuff.

The photographer and person drawing the plans for house I’ve got for sale only left literally 15 minutes ago.

Should there be any slump on the way, could it please be kind enough to wait until I’ve got the place sold.

Nothing to worry about if they're going to have perfectly lush fake lawn and blurred bright lights all over the listing photos

It took me a while to realised they photoshop a lot of their listing. At first I thought they were just using fancy cameras but na, google maps showed the lawn are very different in real life.

 

[luutzu]

It wasn't long ago, that everyone was crying for those who couldn't get into the market, Now I bet those poor sods who couldn't get into a house are saying thank god.

https://thewest.com.au/business/housing-market/perth-houses-most-affordable-on-record-ng-b88901143z

Now we will hear all the same bleeding hearts, crying about all those people who are in financial trouble, for getting into the market.
Is there any wonder you get cynical about people's sympathy, how about letting people make their own decisions, and allowing them to be responsible for the outcomes.

Yea, while I do have sympathies for first home buyers rushing in for fear of missing out... you're young, wanting to own something, start a family... Mr Market wasn't very nice.

For investors generally... meh.

 

[Smurf1976]

Smurph, do the Christmas lights go with the house?

No but they're in boxes and combined that's 4 pallets worth.....

 

[sptrawler]

Yea, while I do have sympathies for first home buyers rushing in for fear of missing out... you're young, wanting to own something, start a family... Mr Market wasn't very nice.

Mr Market is always pushing, that is one of life's first lessons, don't panic buy.
Everyone gets a seat in the school of hard knocks, for some they learn and graduate, for others they get to repeat.

 

[luutzu]

Mr Market is always pushing, that is one of life's first lessons, don't panic buy.
Everyone gets a seat in the school of hard knocks, for some they learn and graduate, for others they get to repeat.

Yea, I have a feel that, unfortunately, the coming lesson is one that will last a lifetime.

Heard some American investor, hedge fund guy who was shorting some Canadian mortgage lender I think... he was saying that if we do not believe housing/property could crash, just pick up the phone and call anyone in Japan.

oh btw, thanks for that advise... keep hammering and something will give. Wise words.

 

[sptrawler]

oh btw, thanks for that advise... keep hammering and something will give. Wise words.

Jeez, I think that was said a long time ago.

But I'm pleased it helped.

 

[sptrawler]

Well at last house prices are falling, now all the young have to do is save a bigger deposit, at last equilibrium is approaching.

http://www.abc.net.au/news/2018-07-16/finding-it-harder-to-get-a-loan-heres-why/9999912

 

[sptrawler]

I have never seen this amount of people dumping DHA houses, funny how everyone wanted to bail into houses, now everyone wants to bail out.
Check out the mid term lease sales, on their website, it is a mile long.
It wasn't that long ago, everyone was up in arms, because the young couldn't get into the market.
Well now the young that got in, will be up in arms, because they didn't wait.

 

[luutzu]

I have never seen this amount of people dumping DHA houses, funny how everyone wanted to bail into houses, now everyone wants to bail out.
Check out the mid term lease sales, on their website, it is a mile long.
It wasn't that long ago, everyone was up in arms, because the young couldn't get into the market.
Well now the young that got in, will be up in arms, because they didn't wait.

Hard to blame people for being scared of missing out.

I mean, even those investors I know who own houses since ever, have watched it going up and down over the decade or three... even they think property will just keep rising or flatline for a bit then rise again.

So if you're a young couple who haven't seen or experience a correction, let alone a crash... quite understandable to get in in case you miss the boat.

-------------
A new report from Reuters.

When Wall St screw main street on the way up and on the way down.

I'm definitely sure we're going to see this happening to Australians en mass coming few years.

They've engineered a property boom... made crap load of money on the way up.

Now it's time to engineer a proper crash, push millions of Australian families out of their over-leveraged property. Then load them up on the cheap, rent them back out again.

We're going to see a massive increase in homelessness and a generation of mainly landless peasants.

https://www.reuters.com/investigates/special-report/usa-housing-invitation/

 

[luutzu]

Jeez, I think that was said a long time ago.

But I'm pleased it helped.

Yea, been a while. Have been hammering away since... more often than not

Almost there.

 

[sptrawler]

-------------
A new report from Reuters.

When Wall St screw main street on the way up and on the way down.

I'm definitely sure we're going to see this happening to Australians en mass coming few years.

They've engineered a property boom... made crap load of money on the way up.

Now it's time to engineer a proper crash, push millions of Australian families out of their over-leveraged property. Then load them up on the cheap, rent them back out again.

We're going to see a massive increase in homelessness and a generation of mainly landless peasants.

https://www.reuters.com/investigates/special-report/usa-housing-invitation/

See, now your humanitarian side, is swinging from wanting to help people to get into houses, to wanting to help people get out of houses.
Basically all you want to do is help, whether it does or doesn't, isn't important as long as you feel you are trying.
You're just one of life's nice guys.

 

[notting]

Interest rates are all that matters when it comes to property and they matter a lot!

 

[Wysiwyg]

I'm definitely sure we're going to see this happening to Australians en mass coming few years.

They've engineered a property boom... made crap load of money on the way up.

Now it's time to engineer a proper crash, push millions of Australian families out of their over-leveraged property. Then load them up on the cheap, rent them back out again.

We're going to see a massive increase in homelessness and a generation of mainly landless peasants.

I like how you always expose the financial system as a cold, callous devourer of the hard working average person's money.

 

[luutzu]

See, now your humanitarian side, is swinging from wanting to help people to get into houses, to wanting to help people get out of houses.
Basically all you want to do is help, whether it does or doesn't, isn't important as long as you feel you are trying.
You're just one of life's nice guys.

I don't think people should lose their home.

If they're investors and load up on a few hoping to flip it... well, investment can go bad so those will just have to wear it.

I'm referring to people who jumped into their first home because they just want a house to live in, think they could afford it... did everything right but then gets the rug pulled from under them. That's not cool.

I mean, sure that's life and all that. And one can point the finger to them being naive or greedy or stupid... But can't really do that when we know that these policies aren't handed down from God or some sort of natural phenomenon. They're designed, not accidental.

During the GFC, over 10 million families lost their home. It's their biggest asset... all wiped out. Then hedge funds and other masters of the universe, most of whom got bailed out, moved in... gentrified certain places; turn others into ghettos and seek rent.

 

[luutzu]

I like how you always expose the financial system as a cold, callous devourer of the hard working average person's money.

And I chose finance as a career for some reason.

I guess we all like sausages until we find out how they're made.

 

[luutzu]

Interest rates are all that matters when it comes to property and they matter a lot!

Yea, and principal.

Read somewhere that about 1/3rd [?] of OZ loans are due to roll into interest and principal repayment by 2019 to 2020?

When the big banks pass on the full cost of their borrowings, and won't allow interest only repayment... wooo. Not going to be pretty.

 

[sptrawler]

Yea, and principal.

Read somewhere that about 1/3rd [?] of OZ loans are due to roll into interest and principal repayment by 2019 to 2020?

When the big banks pass on the full cost of their borrowings, and won't allow interest only repayment... wooo. Not going to be pretty.

The thing is, if people took an interest only loan, they either couldn't afford it, or they were just gambling on a capital gain.

 

[Smurf1976]

Interest rates are all that matters when it comes to property and they matter a lot!

And being able to borrow the money in the first place.

 

[willy1111]

The thing is, if people took an interest only loan, they either couldn't afford it, or they were just gambling on a capital gain.

Or rather than paying principle and earning an after tax return of approx 4% (today's rates) they took the principle part of the payment and invested it elsewhere for a higher expected return.

Also most loans these days are set on a 30 yr term, of course extra repayments can pay it off sooner.

If the customer wants an interest only loan, generally most lenders will offer upto 5 yrs interesy only and then the loan reverts to P&I for the remaining 25 yr term. Some lenders offer 10 yr terms and one or two offer up to 15 yr, well they use to.

When the lender initially calculates the borrowers capacity to repay at the start of the loan term they do it on the remaining P&I term.

So a lender will lend less to a borrower wishing to take an interest only loan compared to a 30 yr p&i term.

As such it should cause much less issues than most believe.

 

[luutzu]

Or rather than paying principle and earning an after tax return of approx 4% (today's rates) they took the principle part of the payment and invested it elsewhere for a higher expected return.

Also most loans these days are set on a 30 yr term, of course extra repayments can pay it off sooner.

If the customer wants an interest only loan, generally most lenders will offer upto 5 yrs interesy only and then the loan reverts to P&I for the remaining 25 yr term. Some lenders offer 10 yr terms and one or two offer up to 15 yr, well they use to.

When the lender initially calculates the borrowers capacity to repay at the start of the loan term they do it on the remaining P&I term.

So a lender will lend less to a borrower wishing to take an interest only loan compared to a 30 yr p&i term.

As such it should cause much less issues than most believe.

That's just another way of saying they speculate on a capital gain like Homer was saying.

Interest only loan is a major factor in the property boom. First they make it attractive to speculate on borrowed money, make property flipping easy and quite profitable for those with a friendly lender/broker.

Second, they make it "easier" for genuine property owner to get in at a higher price than they otherwise would.

People, when worried or greedy enough, can be quite optimistic. They might know that they wouldn't be able to pay both the interest and the principle now... but in a few years' time, life's going to change, they'd get a promotion or a pay raise... or worst comes to worst they can just sell out at a profit because property will always go up etc. etc.