Sign of the times - Winners at auction forfeiting small deposit?

Winner from Sydney. Underbidder local. Both Vietnamese

 

I'd like to know what these fellas are smoking? Will St Albans become Springvale Mk 2 or the Box Hill of Vietnamese?

If one is to crystal ball events, just take a look at Springy (Springvale) - I've never quite got my head around some of the prices. $800K-$900K average if you are around a 1km radius of the main shopping centre.

 

Went to upgrade my phone at the Vodafone store last Friday owner was a st Albans local of 20 years - While nego some freebies and prices off he talk about this Alfrieda st and he said many saw this place an extension of Footscray, Springvale and sunshine similar to what Doncaster glen Waverley Balwyn box hill is to the Chinese

When I said rumours about defaulting he just said u heard and know about the "hui" system in the Vietnamese communities. I heard abt it but normally thought this was mainly underbelly kind of stuff. He just said this guy from Sydney has coin and if in trouble they dun need the banks - they go to the hui system if from a big Viet clan group they got millions stashed up over generations. Hui is like an informal loan club - as said what I know was just rumours and whispers from Viet friends. maybe @willister with some Vietnamese background may know abt it and how it works ?

 

Hui is where a group pool their money each month and then one of them takes that money, but is obliged to keep paying into the syndicate. then someone takes the next pool and everyone keeps contributing until each gets a turn. Often this is chosen by picking one at random.

Often problems arise because of fraud or one of them doing a runner after getting their turn.

 

@Terry_w yeah I heard of it this way but always thought of the borrowings more like gangland kind of stuff. So a hui could be hundred or thousand members or more?

 

I have heard of 12 or so members, but not more.

 

I have heard about these systems too. Not very common these days though. Still some old people do it in low socio communities who think banks are too complicated to handle. It is a 2 gen older thing at least.

 

yeah apparent it is still happening - restaurant owners in st albans etc (theage)

each demographics I suppose are diff in sourcing financing, Indians (do multiple jobs), Chinese (overseas money), Viets (hui). Not surprised they're pushing the alfrieda st prices to the millions.

The Maidstone stabbing which shone a light on an alleged Vietnamese loan system

 

I'm no expert and some of my knowledge is patchy at best, from what I've heard via relos (folks too chicken **** to "play hui").

Essentially it is a personal loan but instead of a bank that is high interest and credit checks, the lender are a smaller pool of 'investors'. The person who initiates it basically will lose out as he would have to pay the highest interest because he/she needs the money asap to do whatever they want to do with it.

It can range but normally it is relative to the term of the loan, that is, if there are more people involved, it generally takes longer, it's roughly I'd say about 10-20 people max. Say you had a group of 10 people including the initial borrower and the total sum was $10,000 so everyone had to pool in $1,000 (but not all at once, in installments). The borrower agrees that he will repay the $10K + interest in deposits but he/she will be need to pay up whatever the deal the others strike (not entirely sure how it works though) of what they call "sweeping".

The intervals can range from weeks or months, more common is months and generally held at the initial borrow's residence of shopfront/premise. All parties come or send a rep. to the premise and they jot down numbers of how much they want to "sweep" i.e. take the money, whoever puts the highest number will take the sum of cash on that meeting so essentially the initial borrower pays the most and then the guy at the end will reap the most benefits. I have no idea how the maths works and what the numbers mean/represent....

The initial borrower will pay the most to loan the $10K, he may end up paying say $13K. The first person to "sweep" the first round may make only $500 because he chickened out first, the last bloke will pocket the $3K margin.

The danger and risk is when people "run away with the money" - there are people playing in this Hui that you really don't know. I have heard it is the ethnic Chinese in Vietnam who were the ones most active and invented this finance system....but not sure of how true this is? It was an easier way to finance instead of going through banks.

There may be gangland activity involved but traditionally most Huis were operated amongst friends and even relos/siblings.

I don't think huis exist in large amounts (max I've heard is $20K) or for a long period of time, so I think that fella may have told you a few porkies. What I think is more likely is like the Mainland Chinese, the Vietnamese have money stashed overseas or have business partners over there. Note that the Vietnam economy during the past 5-10 years has sky rocketed as well.

 

It is an old relic from the first generations here who found is more difficult to borrow, who didn't understand the banking system and had language barriers.

A bad side effect of these huis is the large amount of cash involved.

 

Years ago there was a similar approach called the "starr bowkett" (or something like that) which was a legitimate style product. There was an office in Newtown (Sydney) I think. It was above board but went the way of the dodo in the late 80's or so.

all the best

 

Truth is... seller's agent hired friends or actors to make fluff bids to push up the price for real buyers but when they (the actors) pushed too hard and won the auction and no one else out bidded them they ran.