Great new term coined for the Sydney and Melbourne markets and is starting to apply in Newcastle as all the investors flee for the exits: FOGO "Fear of getting out" People selling their property quickly at a low price before the property price drops further. People are seeing that property prices are dropping fast and people are not buying, they are having fun watching the property get cheaper every week. This is accelerating. The sellers are panicking and are selling before the property price drops further. The agents are dropping the prices fast. They want to get a sale and they initially promise a high price to the seller not telling them its a falling market and after they sign on, they then deliberately get potential buyers excited by telling them to put in a low offer, which the agent then presents and tells the seller that market is turning quickly so hurry up and sell and get out before it drops further. CLASSIC AGENT SCAM. FOGO! A friend sold her house this week, had she sold it in summer february 2018 she would have had an extra $80000. I warned her take the money and run. She had offers earlier in the year but she got played by her super expensive, billboard prancing, new agent. He promised her $140000 more if she did not accept offers with her previous agent until the agreement lapsed. She even added an extra $12000 in staging and cosmetic improvements. She realised quickly when she got one offer after 3 weeks of marketing a nice house and the offer had a 5 hour clause and the agent was circumvented because he did not want to deliver it. Later the buyer told her that she deliberately low balled because the agent told her that the advertised price was a unrealistic vendor. The agent got an earful but he just said he was looking after her. I am sure he laughed his ass off at her when he put the phone down. Plenty of suckers out there waiting to get played by an agent. Another colleague has said they are looking but not buying as they see far less people and sometimes they are alone. The word on the street is property prices are falling in Newcastle. Basically people are waking up to the fact that banks have been lending money like drunken pirates. Now that the Royal commision is in progress the banks fear that the public might revolt against the goverment and make the banks carry the burden of their bad investment decisions and become liable as it should be. You see a bank in effect buys a property for you and then you pay them rent (interest) and your principal over 30 years. They then increase property prices so that the next generation has to go through them. Genius. A fool bellieves this to be true and takes a loan instead of saving and investing in other assets. If someone cant afford the property anymore ofcourse they should just walk into the bank , hand in their keys, loose their interest paid, plus some deduction for selling costs and admin from their principal and give the property to the bank who is its legal owner. Next time dont rush to buy a house you cant afford. Next time dont listen to the lies of a bank who says you can afford it. You cant afford it if its more than 3.5 times annual income, assuming both will work if its a couple. Gone are the days of lazy property money. Watch Newcastle tumble as FOGO kicks in. Watch the FOGO reach light speed in the next 5 years, when Liddel shuts down, when Adani and Palmer get their mines off the ground in Queensland killing the newcastle coal price, and shutting down mines in the hunter, and when Tomago smelter shutsdown. Super cheap properties as everyone leaves for Queensland and WA mines.
Fear of getting out would mean you wouldn’t want to sell. Most uneducated “investors” suffer from FOGO. They don’t sell a lemon out of fear when really it’s exactly what they should do.
Do you have any data to back up your claims - other than a couple of observations that might have been distorted from the start? I googled and couldn't find anything. I think Newcastle is starting to cool and stagnate - don't know that it's actually dropping. Even if Newcastle did drop back off a little, it climbed pretty high and fast in the last 5 years
So people are not buying as they go to a property and see there are no other people there and because other people arent' there, they don't buy? Sounds like a good strategy to get a deal to me As a single buyer, I stretched and bought at over 4 x income and nearly 100% mortgage on a 2 bed apartment 10+years ago, and had no equity to speak of. People were warning me about how I was daft, how overpriced property was, the market was going to crash etc, why go to that area, etc. it was hard and expensive for a while. bought the place as it' had been on the market a few months and reduced in price . saw an opportunity. fast forward 10 years - it went up in value. eventually I sold and now live in a larger house in a better suburb, mortgage free and also have investment properties (not neg geared) happily ticking away for my retirement in 25 years or so. Guess I have been fortunate to stay in work and have bought in an area where I saw value at the time when others were being doom and gloom but others would tell a similar story. we all have to start somewhere. how long will you wait OP?
Not necessarily. A friend of mine didn't have enough fongo and didn't cut her losses with her off the plan apartment in roseberry. Now a 50k loss is likely to become a 150k loss
Ouchie! ...more of that coming..has not made the press..when it does...there will be blood in the water...and perhaps a few fins in the water....
10 years ago you would have been drumming about Global financial crisis and why you shouldn't buy. You are good investor in hindsight. I would love to see your portfolio and purchases /sales over the last 15 years.
