NSW Newcastle NSW is absolutely booming

Did you buy yet in Hamo South @Ald ?

 

He's priced out that's why he's ranting.

 

Priced out young sky walker I am not.

Now let's take a big fat slug out of the reality bottle.

Let's try and think first, managed that yet? I know it's Australia and thinking is harder here because it's hot and climate change has not improved things, but please close your eyes and for ten seconds, think about how much money is 1.8 million dollars?

It's about $1million more than anybody was plonking down on Hamo South just 5 years ago and 1.5 million more than 12 years ago. Please stand back and think about that for a while. Please stop reading and think about that.

Now why on earth was nobody readily putting down more than $800k 5 years ago on Hamo South? Why?

So 5 years ago nobody from Sydney was putting their mr and Mrs rich underpants on, placing their bums in the leather and driving up the freeway to Newcastle to buy 650 sqm of contaminated and frequently flooded land in Hamo south?

All of a sudden interest rates drop, not because times are good but because times are bad, their goverment has splurged on bailing out banks and keeping people employed with all kinds of subsidies and handouts, they have a debt problem so big they sell everything they can allow foreigners to buy it and Mr and Mrs Rich Underpants discover their PPOR has doubled in value and instead of paying off their mortgage and saving cash for the next cash purchase of a house they go on a spending spree because they are rich with this equity. Magic money I call it.

What I am sure of however is that living in Floreat, Dalkeith and Cottesloe in WA on a 850 sqm block in a completely renovated modern house for 1.8 million, with the captains of industry and commerce as neighbours, with beautiful western Australian sunsets and earning a fat salary, is far more appealing then living in Bazza the welders grandmas Hamo south freezing miners cottage, which he inherited after the BHP shutdown and he took his retrenchment package and spent it drinking bin tang in Indo and surfing with his mates from the Bar beach. He comes around to look at the dilapidated asbestos garage, he drives past the canal with smelly water and across the road is the housing commission flats . And he thinks he is such a great smart guy because he has a great investment that's worth 1.8 million.

But he is not alone because while he smokes dope, and has a right to his delusion Mr and Mrs Sydney rich Underpants are just plain stupid.

 

Now let me tell you about mr and Mrs rich smarty pants the accountancy firm owner from WA who I met while I was scoping out another property to buy in Karrinyup South In WA.

He was downsizing in 2010 from a 2.5 million dollar property that had also just doubled in price to something more reasonable in the $700k range. You see interest rates then we're 7% and Mr Smartypants told me that what the normal Aussie family double income could afford was no more than 1 million if they wanted to retire comfortable and that's only if they could secure a sizeable inheritance. He told me that Australia was about to go into a period of interest rates so low and high unemployment that he would expect them to even be close to negative. I laughed at him silently at the time. He said to me that the next decade would see the Australian goverment and Australian people getting themselves into the greatest debt Australia has ever seen. He said that by 2020 the country would be in a economic stranglehold and property prices would then drop back to where they needed to be which is no more than 3 times annual salary. He enlightened me that Australia has no housing supply shortage overall, only a shortage of new housing supply because people here buy a house, mess it up and then move into another new house as they are overwhelmed by renovating. I listened to him like he was from out of space. Yet everything he said came true basically.

Basically if Was Bazza the welder, or Mr rich underpants from Sydney I would be selling my place in Sydney or Hamo South now and I would be putting it all into a safe investment that is not housing in Australia.

 

Hmmm...one minute your saying Newcastle is absolutely booming and the next your saying its going to drop right back. To be honest, with all the development going on in Newy i think Hamo South is more likely to be headed towards 3 Mill. Theres just a shortage of land there close to the city and thats not going to change any time soon....and the more people that come to Newy, the more people are going to be bidding for it. I hope it does drop but just cant see it happening.

 

Hamo South at $3mill, that means Mayfield at $1.5mn . . .

Wow, Micko how much would Mayfield be worth if Hamilton South was worth $3m? Also what new industries are you seeing in Newcastle? Are the biggest employers still hospital and uni?

 

There is far more to Newcastle than hospital and Uni.
What are all those big boats doing back and forth from the river?...

 

Oh yes but looking at the jobs market specifically - the 2 biggest employers are the hospital and Uni, both big organisations to be fair but not going to shoot the lights out with growth anytime soon.
Newcastle region adds 2-3000 new people each year and about 500-1100 new jobs, mostly in healthcare and aged care.

I dont think Apple, Google or a big bank is going to move operations to Newcastle anytime soon.

My point is - its a slow burn on the jobs market. SO what is going to cause rent pressure in Mayfield to catch up to prices exactly? Otherwise you will be living with a 3% yield for a while.

 

Please put your hand up if you can guess what happens next in this riddle?

5 years ago Sheila and Bruce are earning $80000 each and were not willing to pay more than $535k for a Sydney house and $315k for a Newcastle house.

5 years ago trillionaire private bankers were trying to get European goverments to transfer their debts to taxpayers.

Today Bruce and Sheila are earning $80000 each and are willing to pay $1.1 million on a Sydney house and $815k on a Newcastle house.

Today trillionaire private bankers who managed to get paid out by the goverments and have sent their cash to Australia at low interest rates.

What happens next?

If inflation is 2% and the trillionaire is lending this money to Australia's big four banks at 1.5% and hedging against foreign currency fluctuations how much money is this trillionaire actually making? He must be loosing at least -1%

So let's consider for a while and think about his perspective?
Why would he lend his money out at a loss? That's because he is like a drug dealer.

He hands out drugs for super cheap at first waiting for the new sucker to take up his offer, he promises them fantastic dreams, then slowly he ramps up the price, before you know it the druggies are hooked and they can't get out, they will take any wealth they have to try and keep up with the rising prices before they give up.

So it is with house prices.

Bruce and Sheila are the young ones, their parents and all their aunts and uncles are telling them, don't worry mate, house prices only go up, buy a house and secure your future. The bank is lurking around the corner along with their pimp the goverment, looking for somebody to feed cheap money too. Then once they have signed up the contracts from hell, full of the delicious fine print that makes them debt slaves for the rest of their lives, they will raise slowly raise interest rates, they just need 2 or 3 years of regular payments and after that the bank is free from risk. They have made their money , any extra is just bonus and they don't care.

Beware people of Australia the enemy is within the gates, and it's looking to strip your parents and your future wealth from you.

 

Welcome Back @Ald

 

A lot seems to have changed since your initial post in this forum @Ald ?

 

Oh Mick me mate!

Have you not figured it out yet?

It's there to make people think.

I have people at work who one day are Jekyll bellieving property is a bad investment and the next day are Hyde bellieving it's great.

But there is a truth out there and it's quite simply the car dealers truth.

A car dealer looks at what he can quickly sell a car for in the next month. He then buys a car at a much lower price then that.

It's the same on the stock exchange.

You buy stocks when they are cheap after an irrational panic , you sell when they are high after a lot of irrational investors drive the price high.

So why would it be different with houses?

If you go onto the other Newcastle thread you can read about all the stupid money pushing property prices up, and none of those guys will make money.

If anybody has bought a property in Newcastle in the last three years and they are not heading for the exits this summer and selling up, they will experience a lot of pain by next summer.

I have been playing the stock market fluctuations this year and observing what has not changed.

Sheila and Bruce ain't got no money and their debt has increased massively and this chicken is going to come and lay a big fat smelly egg that Bruce and Sheila won't be able to deal with.

 

I am saving big cash for the nice renovated houses that people are buying this summer that they will be selling in 2 - 3 years time for the price we had 3 years ago.

Smart people know that bank loans are only the way to go just before a boom starts and then to sell up and become your own bank.
Nobody has ever, over a lifetime, beaten the banks.

 

If people want to make money from property,
Go west young man, spread your wings and fly to the coastal suburbs west of Perth and North of the river and south of Carine.
That's where the growth will be in the future. Especially if they secced from Australia as expected.

 

More Trouble in Australia.

Interest rates not rising any time soon

Wages not going up

Tax cuts being announced

The poor Aussie dollar looking to hit $65 so that the goverment can turn this mess around.

Just think the value of all your assets will drop by 20% when the Aussie dollar drops.

So we will see a flight of capital from Australia first over the next months and then when the Aussie has settled down where it should be a return of that capital.

you see people I am not a gambling man.
I invest when I am certain I will win.
I can be sure that buying property from a bankrupt and desperate person at 20-60% below value I will win.

There will be many very desperate people within my 3 -5 year time frame. And I will have the cash to buy your renovated house from you dirt cheap, leaving you with $100k debt owing to the bank while you wonder why you never exercised caution and did not stop yourself buying a house you really cannot afford.

People in Australia, the young people, sit there and complain like the idiots that they are, that housing is unnafordable, that they can't get into the market. They beg the goverment to give them first owner grants, subsidies, the fools. They don't need the goverment. All they need to do is collectively boycott buying property for 6 months perhaps a year. Not go to a single home open, not even click on a website. The property will be as cheap as chips within months. The 1 million dollar house will be back to $480k which is what they really can't afford, because they should be buying at $250k.

They have all the power to do this, but they won't, and that's why I will be rich. For their lack of solidarity they sacrifice all their life energy, to pay a bank a lifetime of exhorbitant interest. What a waste of life force and youth and enjoyment of life.

 

Good one ald.....Where are you certain to win currently and not in 3-5 years as you state?

 

I am waiting for the 1 mil too 480, let me know when you have a place where it has all dropped 50% and is not a mining town or some remote place with zero going for it.

 

The only way to certainly win right now is to save cash.

The stock market is in a funny place at the moment. I pulled out just before the October November rise, I did not feel it. I lost a huge rise in value but I am ok because I conserved huge cash.

Property everywhere is also on tenuous ground. I was not ready to attack Sydney, I must admit, 3 years ago because I never believed it would rise as much as it did. This surprised the living bejeebies out of me and has the hairs on my neck standing on end in a cold chill as I am perhaps one of few who realized that this was an act of economic terrorism against Australia what the goverment did against its people by letting foreigners in. Second only to the terrorism they perform by allowing endless cheap money to flood real estate. This all will kill retail completely and ensure the end of small and medium business and allow the corporations to dominate every single aspect of business in Australia. Welcome to Amazon. What we will end up with is the exact opposite of communism, nothing will be owned by the people everything will be owned by the corporation, same totalitarianism, just imagine sitting hours on call centres calls trying to get your payments to stop or a product fixed. Centrelink style. Nobody knows anything, confusion to the max.

This speeding train is hurling itself down hill on icy tracks, it's flinging politicians, the train service staff on and off every 3 years and the driver the prime minister is changing every 2 years and everybody knows nothing about what is going on and the drunk passengers are asleep in first class dreaming off all their paper wealth in assets wrongly bellieving it's cash and borrowing more and more without imagining the cliff they are all headed towards. The owner of the train wants to crash it all so that they can own it all. They want to flood the passengers with money and then comes the crash, the debts will remain, the assets worthless, the owners of the train will restart the train again, keep the old passengers who survive indebted and sell the old carriages cheap to the new generation at low prices and start again.

You want to win, get off the train, own everything you have 100% and save cash. Just wait for the dip. Economics can't be cheated, teachers, policemen, nurses, office workers and retail staff, can't afford the million dollar properties. They won't pay higher rents, so yield will be awful and they will wait and not buy until the system falls apart.

 

End of days ?

It could happen, but I think being in, still, and choosing where to be in, beats being out, all will kick the can down the road.

PS if it falls apart the way you say, the cash will be no good either.

 

Will bitcoin crash before Realestate @Ald