"The Crash" has been called... end of 2017.

Discussion in 'Property Market Economics' started by Perthguy, 23rd Oct, 2015.

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  1. dabbler

    dabbler Well-Known Member

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    or 1.5

    Frankly think that is insane price, some people and places better get ready for a lot of pain if forced to sell, or very long wait for gains.

    Where is our friend saying Sydney would double again by 2020 ish ..... we have a few reserved usernames for those... nutjob1, nutjob2 etc etc
     
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  2. dabbler

    dabbler Well-Known Member

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    They missed the re grading because it is us, the taxpayer who will foot the bill.

    Our govt set all this up.
     
  3. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    This may be the reason given, and yes if it hit the fan that's exactly how it would play out. Unfortunately the alternative to not doing so would be much worse.

    While yes sure some areas may be overinflated, and there's the potential for correction. I'm not really one for prediction's, on market pricing, sure its fun to hypothesise and muse about what if. Prices will go up then down and then up again, I dont stress about things out of my control. I focus on key areas within my control and base/apply strategies' within that framework. (Market fluctuation to me is irrelevant).

    If housing prices where to correct to a point where there would be forced selling, and people would feel the "pain", there would be other consequences.

    As I have previously mentioned there are correlations in the economy. For example: house prices-consumer confidence-your place of business or employment.
     
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  4. dabbler

    dabbler Well-Known Member

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    The alternative to not doing what ? You think the small lenders needed a downgrade while the big banks get a free pass ?

    I am not worried, I am not doing what if, it is pretty clear what happened during low rates and regulators being asleep and big banks having a party. Like Eisenstein said, actions have reactions, I think all the rushed changes recently just adds to the evidence. Seems so obvious & this sort of pattern is not a new one.

    The govt actions re levy and the downgrade of small guys adds to the problems for those who may be moving towards selling, people will already be in trouble, as does all the other recent reg changes and shake up.

    Near everything is done a** about in this world.
     
  5. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    No I just dont care as S&P have zero credibility Imo and I don't use small banks. I can tell your passionate about it and that's great, but like everything in business/finance the little guy usually gets squished. (im not saying i agree with it) But if a triple A for the big boys, buys confidence/stability I'm not going to protest.

    Couldn't agree more, I also think that's a great title for a new thread. I would be more than happy to contribute a few posts. :)
     
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  6. dabbler

    dabbler Well-Known Member

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    lol...... yeah ..... but do we need help to become cynical ?

    I always use the smaller lenders, it does not overly bother me, but I think big banks sort of been acting like a exec at a credit union or other body with an open credit card, cause they know/think they are covered.
     
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  7. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Sure I can see where your coming from, you wont catch me defending the behavior of the big four. We have gifted them the aussie market to themselves, and our tax dollars is ultimately there protection buffer.
    I have some issue with this regarding free market principles, but as I have also stated the return/reward has been economic stability.

    But this also doesnt give them the right to collusion on interest rates, taking advantage of mums and dads by peddling 2nd rate financial investment products and substandard customer service.
     
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  8. pwnitat0r

    pwnitat0r Well-Known Member

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    I have read the book. He's got some valid points about Australia's economy being very heavily reliant on the three pillars - mining, banking, building.

    His point about China's shadow banking is also interesting. Jim Chanos reckons they have enough office space for a 5x5 cubicle for every person in China - Here’s the moment Jim Chanos knew betting against China was a once in a lifetime opportunity

    However, the doomsday predictions David gives are pretty wild stuff. Very rarely do people get these kind of predictions right. There are too many variables to take into account to model things accurately, that's why economists are academics. Until you see guys putting their money where their mouth is, they're just academics.

    Here is a different view - Property market mid-year sanity check | The RiotACT

    My person belief is to look at property prices in terms of the long-term average of interest rates which is 7-8%. The standard apartment price in Sydney is now $700-750k. Most people I know don't have a 10% deposit, so best case scenario is a $630k loan at 90% LVR + $15k LMI = $645k. Interest at 7% = $45k a year, or $862/week. P&I is $1,000/week. I reckon most households would struggle with that.

    I don't buy low interest rates are now the new norm. Whenever you hear this time is different, it's time to run IMO.

    Can a $700k apartment be worth $1 million anytime soon for the average household in Sydney? I don't think so.

    Every man and his dog is talking about buying property, or buying an investment property. That is a sign for me that we are at the peak. Nobody is talking about shares, or saving cash for a good investment opportunity. I'm more comfortable doing that since I feel like I'm in a boat myself. If you're following te crowd, you're more likely to lose money.
     
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  9. pwnitat0r

    pwnitat0r Well-Known Member

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  10. pwnitat0r

    pwnitat0r Well-Known Member

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  11. Magoo

    Magoo Well-Known Member

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    I'll take notice when Australia shuts the door on immigration which will decrease demand, a few expected speed bumps along the way with policy levers, changes in gov etc but until they shut the gates its all white noise to me.
     
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  12. Sackie

    Sackie Well-Known Member

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    5 months to go for the crash fellas. :rolleyes:
     
  13. highlighter

    highlighter Well-Known Member

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    I'm not sure this year will be it, but even if it were, it's not just going to happen. We probably won't even know it's happened (if it does) till 6-12 months after the fact, perhaps even longer.
     
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  14. Sackie

    Sackie Well-Known Member

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    Its a fantasy that there will be 60% crash nationwide. Most people who are wishing this are the ones who ignored their many chances to get in on the massive growth/wealth markets have already provided people in the game. They wish they could turn back time a decade or two. The lefties, labour, anti capitalists, socialists and the like. They have kept many others and myself entertained (and frankly, wealthy) since I entered this game 17 years ago. I strongly suspect the next 17 years will be more or less the same.
     
    Last edited: 27th Jul, 2017
  15. Lions4Eva

    Lions4Eva Well-Known Member

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    Amen...I use to be one of the people who didn't want to act, and instead sat on my arse using the crashing excuse to make myself feel better upon witnessing the growth in the markets.

    Lets just say after carefully reevaluating myself the last couple years, I have bought property in Geelong and I am loving it. My only regret is that I wished I did this a year or two ago.
     
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  16. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    Agree brother. 100%
     
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  17. Sackie

    Sackie Well-Known Member

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    Nice going @Lions4Eva :)

    Imho you've achieved the most difficult part already - that is significantly changing your mindset. Everything else will follow from that.
     
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  18. Kangabanga

    Kangabanga Well-Known Member

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    agreed, unless its an acreage those are just crazy prices, Bella Vista is way too far out. IIRC its even further than Cherrybrook which is like 30kms from the CBD. Can probably get to the city in half hour or so via the M2, IF theres no traffic, but still.
     
  19. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    Although I agree 2.5 millie for Bella Vista is ALOT of coin - but northwest (Hills District) is going insane. More than 40km from the CBD.

    ALOT of millionaires around there though. Heaps of them. I know a tonne of ppl living in Baulkham Hills/Castle Hill. They are on huge incomes and to be honest the entire hills area is one of the best to raise a family.

    Baulkham Hills high is there. 2nd best school I think in ratings in entire Sydney after James Ruse.
     
  20. Sackie

    Sackie Well-Known Member

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