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Five reasons the only smart reaction to a housing crash is fear

Discussion in 'General Property Chat' started by Propertunity, 17th Dec, 2015.

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  1. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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  2. Jennifer Duke

    Jennifer Duke Well-Known Member

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  3. Perthguy

    Perthguy Well-Known Member

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    lol

    >> Australia’s house price rollercoaster has chugged uphill for the last 20 years.
    No it hasn't. I wish it had! :)

    >> Aussie super funds invest mostly in shares.
    No, they don't.

    >> That means your superannuation depends on the health of banks.
    No, it doesn't.

    I will stop now. lol. :D
     
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  4. Perthguy

    Perthguy Well-Known Member

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    I don't find these articles very different or very convincing. A mate just sent me a link to that macrobuisiness nonsense also about an imminent housing crash. There was one interesting comment.

    Investors will keep piling into housing because it’s a government guaranteed get-rich-quick scheme…” will become “Record numbers of housing investors taking large rental losses are panicking now that capital gains are vanishing before their eyes, and have no personal attachment to their house and mortgage to stop them heading for the exits; which are quickly becoming clogged, leading to panic spreading to owner occupiers, many of whom are banking on as-yet untapped housing wealth to fund retirement…“.

    This is making a lot of incorrect assumptions. I have found myself holding a loss making IP with a rapidly diminishing value. I can imagine for the uninitiated, this might be quite stressful. Personally, I didn't care. Share prices go up, share prices come down. House prices go up, house prices come down. I didn't even think about selling as my IP value plummeted. I don't accept the argument that investors will panic sell when prices fall. We have seen in the past this is not true. The author has fallen into the same trap as the spruikers he is criticising: exaggeration.

    There will be widespread price corrections. They will even be severe in some areas. But a crashing large enough to take out lenders? I doubt it.
     
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