Should we feel sorry for these investors?

An $800k mortgage on a $200k house: the reality of the mining bust

Part of me thinks no, it's their own fault for being so stupid, gready, uninformed etc. The other part of me is genuinely sympathetic, especially for uninformed small time investors who thought they were doing a "smart thing" and now are severely burned financially with real impact affecting their families.

 

Sounds like you have split personality disorder
I feel for em

 

I feel bad for them. It was their decision but who likes to see someone in a bad state anyway?

 

I take no enjoyment from seeing people get burnt but I don't really feel sorry for them either. Don't expect anyone to cheer on your victories. Don't expect anyone to feel sorry for you when you lose.

 

Yeah. The reason I'm split on this is that ultimately it really is their own fault. They basically made a very bad "bet" and paid the price.

Who here will feel sorry for those Sydney investors who will soon be burned?. It's all so obvious what will happen yet a combination of greed and ignorance keeps people in the market.

But of course I'm not one to kick someone when he's down. Having said that, I presume all of us here would happily enough buy a property from someone at a severely discounted price during the bottom of a bust. (Which is what I try my best to do at the borrom of any cycle that in believe will eventually recover).

 

Yep, done that before. Block of land I purchased for $230k, previous buyer paid $320K. He didn't overpay either, it was worth 320k. He had to put it on the market because couldn't service the debt when rates were 9% and he had gambling debts to pay. Another I got for 30k less because the couple was going through a divorce and couldn't be stuffed hanging on any longer. **** happens.

 

I agree mate, I too would take advantage of the situation if I could, and I still feel when others loose big though

 

I don't feel sorry for them. These are the same people who would brag about how much easy money they are making.

 

In the case of investors "due diligence" comes to mind
I do feel for them, but a capital loss can be offset against current/future capital gains

Who I feel for are the owner occupiers, whom may have finally bought thinking they were doing the right thing, who then due to the downturn lost their job, then lost their home, they don't have any way of writing off the capital loss, some still servicing loans for houses since sold at a loss
(such as the couple and two kids over the road from me, moved back from WA to live with her parents the last 2 years and counting )

Having said that, they were earning really good money for years, and like good consumers they "spent very well" also, never putting aside for the rainy day/what if/buffer, so my sympathy evaporates quickly when I see them arrive home from the gym with take away coffee's and donuts not broke, and by no means poor or struggling, just POOR CHOICES

 

I feel for them.

I feel for the families who lost their homes when interest rates went to 17%, I feel for businesses that went belly-up during the GFC, I feel for the taxi drivers who bought their licences for $250K+ but now the Vic Govt is offering them $100K, I feel for investors who bought in mining towns, ...

All of these activities have risk and some times they come true. That is why people should do risk analysis, develop risk management plans for if/when a risk occurs, invoke the plan when the **** hits the fan, ...

I feel for them but I don't feel sorry for them. And the ones I feel least sorry for (if that is possible) are the investors who bought in mining towns. Why?

Why would anyone buy a property in a town of say less than 10,000 people for over $1M when you could have bought two properties in, say Melbourne, for the same price. It was only ever going to end one way, in tears.

 

I'm basically emphatic. I feel for them.
Anyone could have been in their shoes.
They took a risk and it didn't work out.
Risk based on "gut feeling", calculated guess, hopefully guess, systematic guess,educated risk... what ever the reason.
Everyone of us fits into one or the other category of how we take risk AND it failed.
Can happen to the best of us.
Hope this doesnt destroy them.

Take away for me, seasoned/amateur investor or not, market dictates everything

 

It has to be one of the biggest property scandals in aust history? Maybe should have been more Gov warnings at the time??

That said, when I saw house prices in the middle of a desert were more than in an inner city suburb it was pretty clear to me not to buy

 

Agree 100%. I don't feel sorry for them at all. Just as I won't fell sorry for the investors in Sydney that get burnt because they paid stupid prices at the top of the market.
I'm just waiting for the mortagee sales ).

Same as I don't feel sorry for the people who got burnt in shares during the GFC. They are all gloating "experts" until the **** hits the fan.

I just wish I was one of the lucky vendors that had made a motza of these fools.

All the API magazine stories in 2011/2012 about how these guys were so smart and made easy money in mining towns. I remember one older couple had a 900k property, and got anothet 900k property as the yields were so good. Gloated in the mag how clever they were. Now at probably 65 they are having to go back to work out of retirement. Suck eggs. Greed sucks.

 

It does not matter if they were bragging about something or not. I will congratulate a person who is happy on his achievement. We all cheer when we are successful.

On the other hand I will take advantage of a depressed market and will still feed bad for the person who bought at the top.

 

What about the one shown listed for sale for $1.1 million and eventually sold for $235,000

Is that the stuff of a property investor horror show?

 

I feel sorry for them but it's their decision, it's like stock markets when a stock rise a lot in short period of time, it would come down but the question is when, as we only knew after it fell.

But guess it's back to pre boom price so it's ok.

 

I don't know whether I would call it 'taking advantage of the situation' but I suppose it depends on the situation.

I once bought an investment property and my purchase price was $600,000 below what the vendor paid for it 8 years earlier.

In the first 12 months after I bought it, the property increased by $150,000; so I clawed back 25% of her (it was a 'little old lady') losses.

Did I take advantage of this little old lady? I don't believe so. She listed the property, I saw the listing, I offered what I could afford (I believe it was fair market value) and she accepted.

She had been trying to sell the property on and off for 7 years. Some would say I did this lady a favour. To me, it was a pure business decision (no emotion).

She had to keep dropping the price every time she listed because the market was falling and she was always overpriced. It even went to auction and it was passed in. Many others had the opportunity to buy this property and a number made offers that she rejected.

I bought because I could see that market was going to turn at some time in the near future. TBH, it turned a little quicker and a little higher than I was anticipating.

Some times, good luck happens to good people .

 

I thought they were crazy at the height of the euphoria & unfortunately they now know it too.... this is what we call a bubble market. The sad thing is that it'll happen again somewhere to another cohort of speculative "investors".....

 

I don't see it as greed. They were trying to improve their financial position. Maybe a bit carried away.

 

This isn't news, the bottom fell out of the property market how long ago?

Did they not get concerned when the construction phase ended?

Did they not get concerned when they could no longer get a corporate lease at $××××/wk?

Did they not tweek when the mining company said there's only a handful of jobs when the mine becomes operational?

Were they not aware that the price of ore was falling?

Why have they held on?

In the bright side, they may never have to pay cgt again.