The future of Australian property prices

[Warr87]

Now my sample size is not exact relevant, but having attended a few auctions in my local area over the past few years I'm often blown away that there are folks out there who have openly said to me "things have changed in the economy and we will never see high interest rates again". Yup, a few people have actually said that to me. So to your point "individuals who should've known better"....I'm not so sure the masses are that smart. Hope I'm wrong, but I remain unconvinced that people should have known better. I guess it won't be long before we see who is standing naked as the tide runs out

Well I partially agree. I pay closer attention to American politics and yet I've heard about interest rates here. (And no, not just from this site.) Talk of interest rates--up or down--have been in the news to some degree. That sounds like wishful thinking or ignorance. I've mentioned in other posts that I think the government has a part to play by implementing policies to prop up and move the momentum up which it showed signs of correcting. Admittedly there has been a lot in the news, and by people pushing the RE market (brokers, or these 'gurus' who wrote a book, banks, etc.) but a believe in interest rates never going up just beggars belief tbh.

I am also not surprised at all that there are now articles coming out about it. Media was always going to find at least some who are in this 'trouble' lol. It's an easy article to write and sell lol.

 

[divs4ever]

Well if the ownership is so convoluted, trust fund and companies ect. yet an oliarch is the guy living on it and holding parties then go for it.

My attitude is if you haven hidden ownership to such an extent then you don't own it anymore. And if it takes 3 years to work through the ratnest then it takes 3 years. Bad luck.

I am sure everyone involved knows the ogliarch owns it in reality.

but on ( the obvious ) paper the billionaire only leases it or rents it from a holding company/trust structure .

just because i stayed for 3 years in a hotel room didn't mean i owned it ( the insurance company was bungling house repairs ) and YES certain people owned or long-term leased their rooms/apartments

it will be interesting to see if legal suits arise out of these seizures ( after all nearly all of them are worth more than $US 2 billion each and many of them got that by NOT being nice )

 

[divs4ever]

As I've mentioned I have some sympathy. But the RBA has a job to do. The key point there is highly leveraged. Where else would you get people trying to argue for leniency with a highly leveraged product? Can I borrow 9x my income to buy shares/futures and then whinge when it's difficult? lol. RBA is working for the economy not for individuals who should've known better, and quite frankly, probably new it would be difficult if rates raised. They took a chance that they could pay down enough before that would be an issue, or assumed there pay would raise at a greater rate. Not all gambles work out ....

and who facilitated those high leverage rates ??

( hint - one group were just removed from government and the other ones are busy calculating interest rate rises )

remember all those 'first-home buyer incentives , the very folks who are less likely to understand what steep rate-rises and falling property prices mean to THEM

and what about the 'reverse mortgage advice ' to retirees

last i heard a margin loan now requires you to do a test to understand the subtleties of a market plunge and how it will affect the portfolio

yeah sure they should have known better , but heck they are the same folks guided by RBA policy ( and believed that crap ) even the banks got lettuce-slapped for similar 'customer-guidance ' after 2018

by the way since schools have time to teach children about gender identity , how about some lessons in fiscal responsibility ( 'cos there aren't many paper rounds to teach them that any more )

 

[Warr87]

and who facilitated those high leverage rates ??

( hint - one group were just removed from government and the other ones are busy calculating interest rate rises )

remember all those 'first-home buyer incentives , the very folks who are less likely to understand what steep rate-rises and falling property prices mean to THEM

and what about the 'reverse mortgage advice ' to retirees

last i heard a margin loan now requires you to do a test to understand the subtleties of a market plunge and how it will affect the portfolio

yeah sure they should have known better , but heck they are the same folks guided by RBA policy ( and believed that crap ) even the banks got lettuce-slapped for similar 'customer-guidance ' after 2018

by the way since schools have time to teach children about gender identity , how about some lessons in fiscal responsibility ( 'cos there aren't many paper rounds to teach them that any more )

There's a few hands in there who helped high leverage rates. And I think you're right that some people who were marketed with the first-home buyer incentives probably had less financial acumen than others to understand the market/rate rises.

Reverse mortgages always sounded idiotic to me, lol.

And you are correct! With IB you do a test and state your level of experience in order to get a margin account. And even then it is limited to certain products (mostly shares, but are products are separated so you need to do the same thing with questions/experience, and an income/wealth threshold too).

I have no issues with proper teaching of sex & gender in schools. I am also in favour in lessons for fiscal responsibility, basic money handling concepts, etc. Nothing too intense, but basic adult/life skills.

 

[divs4ever]

Yellen says inflation to stay high, Biden likely to up forecast

https://www.investing.com/news/econ...ls-of-inflation-yellen-tells-senators-2834401

https://www.britannica.com/biography/Janet-Yellen

didn't she say ' no inflation in my lifetime ' ?

 

[Knobby22]

but on ( the obvious ) paper the billionaire only leases it or rents it from a holding company/trust structure .

just because i stayed for 3 years in a hotel room didn't mean i owned it ( the insurance company was bungling house repairs ) and YES certain people owned or long-term leased their rooms/apartments

it will be interesting to see if legal suits arise out of these seizures ( after all nearly all of them are worth more than $US 2 billion each and many of them got that by NOT being nice )

If you can't nominate an owner, then you don't have an ownership!

If its owned by a trust fund which is in turn by a second trust fund based in Monaco which is owned by a third shelf company based in the Caribbean by an entity that is based in Namibia that doesn't list the directors then bad luck. You can bet you can trace where the money is coming from to pay all the bills.

 

[divs4ever]

You can bet you can trace where the money is coming from to pay all the bills.

maybe , but if you have earned the billions yourself , there is a good chance you have an expert organizing the books

the BIG question now , is how many billionaires will structure their paper-work now like a master criminal ( as opposed to somebody just minimizing their tax-obligations )

remember the best brains in finance and accounting DON'T work for the governments ( for long ) the BIG pay-packets lurk elsewhere

 

[3 hound]

Aren't interest rates still incredibly low??


Geez if there are issues now I would hate to see what happens if interest rates get legit high.

 

[divs4ever]

Aren't interest rates still incredibly low??


Geez if there are issues now I would hate to see what happens if interest rates get legit high.

YES , however they might rise VERY quickly ( some are thinking the RBA rates will get to 3% by Xmas , still historically low , but are they affordable to those with loans , now )

and some are uncomfortably leveraged ( IMO ) even at May rates , but the trouble doesn't really start until prices DROP , then you still owe more than the market price of the property and THAT makes lenders VERY nervous ( even if you have a spotless record of repayments )

 

[divs4ever]

Aren't interest rates still incredibly low??


Geez if there are issues now I would hate to see what happens if interest rates get legit high.

watch normal family homes become 'boarding houses' with either homeless rellies or folks renting rooms to help pay the costs of the home ( power , water , mortgage , rates etc )

 

[MovingAverage]

then you still owe more than the market price of the property

And you only have to look to the US and the crash of 07/08 to see what happened then…people just walked away from the houses and defaulted on their mortgages. In some states like NV banks became the largest holder of properties as they repossessed properties. Wasn’t pretty.

 

[divs4ever]

And you only have to look to the US and the crash of 07/08 to see what happened then…people just walked away from the houses and defaulted on their mortgages. In some states like NV banks became the largest holder of properties as they repossessed properties. Wasn’t pretty.

but that was the US and it will possibly happen again ( over there )

but Australia it isn't so simple , worse the problem might hit most of the developed world ( UK , EU , US , Australia ) , i don't have enough info on India , and Mexico , if that happened you are looking at several major banks in several large nations all in trouble at the same time .. now sure governments can print more BUT who will buy those extra bonds ( won't be Russia , probably won't be China , maybe Mexico , but maybe not , how many more can Japan buy ) and even worse after the sanctions on Russia , who will even trust their own government , let alone foreign ones .. maybe they won't seize them just make them perpetual ( no maturity date , so you never get your capital back and get pathetic interest )

 

[Smurf1976]

just because i stayed for 3 years in a hotel room didn't mean i owned it ( the insurance company was bungling house repairs )

3 years to fix a house? What on earth happened to it? Fell into a sinkhole or something?

 

[divs4ever]

it started with water leaking into the ceiling in 2014 , in 2016 it rained HARD again causing the gutters to overflow again ( internally this time ) , they started to replace the ceiling and the 2014 repairs were found to be asbestos ( but not the usual stuff ) so by the time them had removed this stuff unsafely .. ( didn't LOOK like the usual asbestos so dust and fragments were spread the 30 metres to the bin ....) now in replacing the ceiling they put thin fibreboard to protect the ceramic tile floors ( unsuccessfully ) the tiles were 35 years old so no replacements ( well , not enough ) so 80% of the floors has to be jack-hammered out ( shame about the gyprock interior walls ) started patching the walls and found the mould that had been growing from 2014

to cut it short the kitchen was replaced 3 times , the bathroom 4 times , was majorly rewired 3 times , the hot water system replaced , most walls replaced twice , as were the tile floors ( except the bathroom they were replaced four times including new water jackets ) the tile roof was fine but it was pressure cleaned anyway to make sure no leaks and new protective coating applied

a damn good thing it was brick veneer they held the roof up for weeks at a time

if you have ever watched the old movie 'The Plank ' it was much worse than that every crazy thing from no rubber grommets on the exterior lights ( discovered after a bout of heavy rain AFTER the repairs were underway ) , to a tradie blocking the toilet to the extent it had to be replaced and about 10 metres of sewerage pipe

AND the house contents was taken away to be cleaned ( two containers full ) 75% of it came back ... eventually ( it took so long to fix the house they lost track of the containers ) , and of course the odd delays a kitchen bench top a month late and then broke when fitting the plumbing , could not get enough of the replacement tiles for a while , etc etc etc

OH OH and at one stage the bathroom drained into the central hall causing the newly replaced walls to be damaged ( sigh ) again

 

[qldfrog]

it started with water leaking into the ceiling in 2014 , in 2016 it rained HARD again causing the gutters to overflow again ( internally this time ) , they started to replace the ceiling and the 2014 repairs were found to be asbestos ( but not the usual stuff ) so by the time them had removed this stuff unsafely .. ( didn't LOOK like the usual asbestos so dust and fragments were spread the 30 metres to the bin ....) now in replacing the ceiling they put thin fibreboard to protect the ceramic tile floors ( unsuccessfully ) the tiles were 35 years old so no replacements ( well , not enough ) so 80% of the floors has to be jack-hammered out ( shame about the gyprock interior walls ) started patching the walls and found the mould that had been growing from 2014

to cut it short the kitchen was replaced 3 times , the bathroom 4 times , was majorly rewired 3 times , the hot water system replaced , most walls replaced twice , as were the tile floors ( except the bathroom they were replaced four times including new water jackets ) the tile roof was fine but it was pressure cleaned anyway to make sure no leaks and new protective coating applied

a damn good thing it was brick veneer they held the roof up for weeks at a time

if you have ever watched the old movie 'The Plank ' it was much worse than that every crazy thing from no rubber grommets on the exterior lights ( discovered after a bout of heavy rain AFTER the repairs were underway ) , to a tradie blocking the toilet to the extent it had to be replaced and about 10 metres of sewerage pipe

AND the house contents was taken away to be cleaned ( two containers full ) 75% of it came back ... eventually ( it took so long to fix the house they lost track of the containers ) , and of course the odd delays a kitchen bench top a month late and then broke when fitting the plumbing , could not get enough of the replacement tiles for a while , etc etc etc

OH OH and at one stage the bathroom drained into the central hall causing the newly replaced walls to be damaged ( sigh ) again

Material for a movie...now i know why insurances premium are so high.?
can you now see any humour in this or is it still painful memories.?
Hardly believable. wahoo....

 

[Smurf1976]

if you have ever watched the old movie 'The Plank '

Seen that one a very long time ago.

Your builder's name didn't happen to be Frank Spencer by any chance did it?

1970's TV reference for anyone who doesn't get the joke.



Seriously, if that had been me in your situation then I'd have been rather less than friendly with them by that point. Mistakes are one thing but that sounds like, well, something from a comdey show yes.....

 

[divs4ever]

Material for a movie...now i know why insurances premium are so high.?
can you now see any humour in this or is it still painful memories.?
Hardly believable. wahoo....

neither was the bill , in fact investigations into the overrun , extended accommodation costs etc etc ( including the asbestos ( two government departments involved about that ) ( since nobody worked out what the stuff was until after remover and sitting in the dumpster )

at a quick guess it was almost cheaper to demolish the house and rebuild ( the price of the new slab and plumbing probably made the difference ) for instance think of the costs of the porta potty alone because they sure didn't plan for the repairs to even last six months ( it started as a big wet patch in the ceiling after all , much like 2014 ( and most of the building damage was poor remediation from 2014 , let grow in all the wall cavities , ) including behind the built in wardrobes .. but it was a half-assed check here , a quick patch there UNTIL THEY TRIED TO REPAINT STUFF THE FIRST TIME , some paint wouldn't stick , some wouldn't dry , some let the black mould bleed through ( because the gyprock was still well months later ) and after most of it was finally repainted they lifted the floor protection to find broken tiles in almost every room , so in comes the jack-hammer to rip up the tiles ( and the gyprock walls had no chance ( they didn't even think to hang up bed-sheets to protect the walls )

they tradies got really annoyed about the integrity of the slab under the bathroom ( something about jack-hammering the floor 4 times in 3 years had me concerned ( after all the slab was over 35 years old at the time ) i did suggest they just make it an in-ground sauna .

i probably should mention that project managers were replaces , contractors were replaced , even the assessor it wasn't just one inept crew , in fact the final painter , was a Polish engineer ( and he got it right except for painting the bottom of the bathroom door )

and yes that saga did NOT include the bathroom door that needed to be replaced later ( absorbed the humidity from the bathroom and swelled up )

but the silver lining is sometimes a full replacement policy is worth the money

 

[divs4ever]

Seen that one a very long time ago.

Your builder's name didn't happen to be Frank Spencer by any chance did it?

1970's TV reference for anyone who doesn't get the joke.



Seriously, if that had been me in your situation then I'd have been rather less than friendly with them by that point. Mistakes are one thing but that sounds like, well, something from a comdey show yes.....

no but the English electrician was the one that actual discovered the missing grommets in the outside lights .. after realizing they had all most likely had water through them over the previous 2 years .. tested them and 10 new flouro light fittings were added to the bill , but the comedy show was the first year , after that it was just a drama series , AND the car park from hell ( at times 2 x 40 foot shipping containers + a pod , a skip bin , the porta potty , various tradesmen vehicles , and other claim related visitors , and all i can say is THANK GOODNESS THE GRANNY FLAT WAS UNDAMAGED 'cos that is the back corner so spare stuff was put in there ( there is only so much fits in a hotel room thank goodness the room came with washer/dryer stove/fridge etc etc )

am i get the impression the insurer did the 'less than friendly ' bit after the bill blew past $250,000 roughly halfway through the saga

 

[divs4ever]

anyway now that you are all cheered up , was anyone else keeping an eye on the US Treasuries ( and auction ) ??

that might be a market mover for us ( guess what happens when the buyer of last resort isn't buying )

 

[sptrawler]

Yep the baby boomers are making it hard for the younger generation, I just wish I had the same problems these younger people had.

‘Overpaid a tiny bit’: Doctors spend $3.295 million on Lane Cove first home

They outbid a dozen others at the auction where buyers were reluctant to place bids from beginning to end.

www.smh.com.au

From the article:
Bidding further slowed after the $3 million mark, and two agents fought tooth and nail for every increase from the two remaining bidders. The home eventually sold for $3,295,000 to the first home buyer couple who are renting in North Ryde.

The pair, both doctors in their 30s who declined to be named, said they felt they overpaid for the property a “tiny bit”. The reserve was $2.8 million.
Selling agent Julia Sikora of McGrath Lane Cove said it was a stand-out result for a market where many homes are selling prior to auction due to the lack of competition. She noted the vendors’ expectations had been in line with buyer feedback.

The Reserve Bank’s decision to lift the official cash rate another 0.5 per cent on Tuesday, was “definitely a talking point and buyers are taking that into consideration”, Sikora said.