Property prices beginning to drop

The risk adjusted premium for everything right now is zero.

A couple I know froze two IPs , pocketed the rent for 2 months , each pulled out 20 k super and then bought a PPOR with it. The bank lending for the PPOR had one condition- take your IPs off freeze and you can have the money.

Another couple I know we’re in tears in March about to go insolvent. Now just upgraded to a new house worth 200 k more ... on jobkeeper (both) and out shopping for a new car - all within a few months.

This is the worst time in history to estimate the real price of anything.Confidence at all time lows, spending at all time highs. It’s not hard to workout this is a charade that won’t last.

 

The cure for higher prices is ...higher prices. But not when unemployment is 10 % .... for 3 years.

 

It's crazy whats going on out there with jobkeeper especially.
I know of people doing similar things, 1 will pocket 180k in jobkeeper and thats only in the first 6months, completely renovated home with it,and at the same time making more money than ever in there business.
Still people out there that think no way this cant be happening lol

 

Incredible.. maybe they are onto something :S. Early adopters of this new monetary system perhaps?

 

Adairs and nick scali recently reported record profits yet are still receiving jobkeeper...

Money for you, you and you..

Some crazy record high savings and consumption rates coming out of New York/US as well. Are we over stimulated??

 

A debt jubilee in disguise

 

Thats why i have been so vocal about it but seems most think im mad and making it up lol

 

“most” benefit so why would they care.

 

Robin Hood accounts suggest so

 

If it wasn't for job keeper I'm sure our situation would have been a lot worse. Instead we were up approx $1200 with childcare and other costs being reduced. That's mostly gone now but it was great while it lasted.

It all just spures me to pay down debt though.

 

Texas tycoons pocket $18 million thanks to booming regional property market

 

Similar experience from a small business owner,

Recently, he advertised a couple of roles and had 470 applicants. Only two of them were Australian citizens. The rest were temporary visa holders, plus two permanent residents.

"I don't want to sound like an old man, but I just don't feel like the youth of today are willing to do the work these foreign workers do," he said.

He also believes the boosted JobSeeker payment has had the perverse effect of keeping people at home.

"It's been a very good deal for people in an industry that's been broken for a very long time," he said.

This restaurant owner received 470 job applications — only two were Australians

 

Exactly right, same goes with US share markets.
Investors are pricing risk at zero because the Fed will save them.

Not to mention low risk investing (term deposits, bonds etc) are returning near zero so there is a whole bunch of other funds trying to find a home.

However, it does feel like they are taking a breather now. Eventually consumer spending does actually make a difference to earnings... Even for tech giants.

As for Aussie property, I agree, there will be some falls, followed by another mini boom once the economy is back on track, immigration resumes and IRs are still low.

 

we vet and recruit around the same time every year and at the moment applicant numbers are low compared to last period and the ones that are applying are the ones that missed out on job keeper and are on job seeker, so are saying anything to get in the door

 

Still falling. 14th consecutive week.

CoreLogic weekly house prices update: 14th consecutive fall - MacroBusiness

 

I am looking for IP, and like most of you I will need equity release. AND I am refinancing.
The bank has provided and accepted a desktop valuation of X for my PPOR, and I ask can I have another valuation since I re-financing into your bank ?

the bank says "only if you are confident that it will be more than X, if it is less we will have to take that valuation and your IP budget can be affected"

the banks are getting cautious...

 

Thats always been the way to go for the banks

 

Can you see this chart? Australian inflation has been going nowhere for a while. At some point it has to give. Inflation would need to go up. Value of money would go down. That creates a newer equilibrium in prices. Assets go up.

With so much money floating in the system, it’s bound to devalue. #no advice #doyourownreseaech

 

Agree and disagree, you'll see other central banks print which is effectively bullish for the Aussie $. But then AU$ isn't exactly a go to currency. As such, I don't have a clue!

 

in economics, inflation usually happens when there are economic expansion, "economy going well", demand will go up, wages go up, asset prices go up, rent goes up... inflation will happen, then the central banks will increase rates, or like what Janet Yellen did, just "talk the rate is going up", to preserve the value of money.

with this close down of physical travel / close down of economy / "new cold war", the question is when will the "economy doing well again" ?

or we could have a few years of Japan, near zero...
Japan had 0 inflation for decades... but that is a different situation.

{Japan inflation, 2001 to now}