Forum Replies Created
- gibbo1 wrote:Devo,
You state that prices are falling, the house in question is located in Perth. Perth has some suburbs that are falling, some that have fallen but have started to turn around, some that are pretty flat and others that have continued to increase (although at a decreased rate) during this whole cycle. I think its imposible to make an acrose the board recommendation without considering all the other factors for this one particular house.
I agree that the Australian market is more than one market. Sorry if i gave that impression.
urchin wrote:devo76 wrote:NOTE TO ALL PEOPLE READING THISScamp wants to buy into the Australian market and therefore is trying his hardest to drive the market down so he can buy in cheaper. He has stated this on many forums. If this is not bottom feeding i dont know what is.Much of what he says is true but a lot of it is what he personally wants to happen.
Sure scamp is a bit extreme in his views, or at least in how he phrases them, but i think he is right on the basic principles. The economy is in the very beginning of what appears to be a long and painful economic crisis. commodities are plummeting, that means that the mining sector is going to take a huge hit. that means that nat's husband–who apparently is in the mining industry–faces a real risk of unemployment or at least reduced employment. the housing market has not tanked yet but that is primarily because there is no volume–buyers and sellers remain a long ways apart. we are getting more and more unsold inventory as buyers are (understandably) reluctant to reduce prices. in this kind of market, with that kind of risk, i think she should bite the bullet and mark the house down significantly in order to ensure a speedy sale. i am sure that a 10% discount over comparative houses on the market would see real interest generated. A quick sale is definitely the way to go. prices are dropping, so if you dawdle you may have to drop it even more later. and add to that the fact that you are already losing thousands/month anyway… it seems to me that half a bird in hand is better than 3/4 of a bird in the bush…
I totally agree with what you say. I dont agree with Scamp stating so many things as FACT. They are what he believes MAY happen. They are what he WANTS to happen.
gibbo1 wrote:by the way scamp, do you have any idea about where this house is located in perth, do you know where perth is, do you know the demographics of the different suburbs in perth, do you know the median house price of a property in perth, the median house price of the suburb in question, do you know which areas of perth have high rental demands outstripping vacany, do you know the facilities in this house, what services are in the suburb, is the house one or two stories, how big is the block, what is happening in adjoining suburbs, with the change of government – is there going to be any shift in policy that may effect value eg new infrastucture, does the house face north, is it double brick, does it have a tiled roof or metal? If you dont know any of this infomation you just show how stupid you are in being able to "value" a property without these pieces of information. The reason most people loose money in RE is cause they make decissions without knowing all of this sort of information and buy using there heartIm sure he has a graph or a statistic and im sure he has some cut and paste articals aswell. Just the usual stuff we keep getting ramed down our gobs.
harb wrote:Scamp wrote:Can you say cheese ?Beemster ?
Quote:I'm tired of pointing out I am right. This chart is my last gift to you.Scamp, I'm sure you think you are right but so far the rates have gone in the opposite direction you said they would, then you got us all excited about September which btw turned out to be a fizzer, then went in denial about banks passing the previous rate cuts and now you show us charts going back to the time of Burke & Wills and want us to believe that property prices will fall 50%
Quote:I won't feel compassion when I buy your investment property at 50% less than you paid for it, sorry.I'm sure you're just saying that and not really mean it and since you gave us such a nice gift I'd like to return the favor.
Wouldn't you need to get a job first and then a mortgage? If things are going to be as bad as you think then its very likely that there won't be many jobs around and definitely not in IT. With the economy going down fast there will be a lot of cost cutting which means most of the remaining IT jobs will move to Bangalore & Mumbai where a good IT specialist (as opposed to a cyberloaffer blogging all day long ) earns from $9K a year. You could arrive here only to find that you can not get a job, can't get the dole either and have to rent an overpriced dump because you don't have any previous local landlord references. By the time the economy turns around you could end up spending all your house deposit on rent and will not be able to afford to buy a place at any price. I don't have a nice chart to show you but if I'm correct we'll see at least a 20% increase in house prices by the time the economy starts to recover in about 2 years time. Yes the prices are quite high right now and I'm sure you would like to see falls of 50% BUT most of us bought them when they were A LOT cheaper hence they are affordable to us and can ride the storm specially with rates falling and rents rising. Before stepping on that plane think very careful, with world economies collapsing all around you do you think this the right time for you and your girlfriend to migrate to a new country where you'll have to live on your savings while hope to land a job, get a mortgage and buy a house ?Spot on. Even if we did reach this mythical 50% drop. I would still be ahead. My total commitments now are around $300 PW on both IP and PPOR together. And also the massive buying spree once the gloom is over on these 50% properties will mean they would be at that level for about 1 day. I genuinlely feel for people who bought at the top at there max borrowing capacity. Its easy for the gloomers to burn them but many are just your average Joes that dont sit on computers all day reading the market. They believed the hype they were told and bought feeling they would be ok.But this is still a small percentage of morgage holders at present.
Scamp wrote:Sell if you still can. Put it up for sale for 450.000 ( you say you think you can sell it at 560.000 which is clearly not true market value ). Take the loss and see this as an expensive lesson.You were suckered into a property bubble that will keep declining for years to come. In the meantime you are losing capital on this house while getting nothing back. Your loss will be 100's of thousands of dollars which you could have SAVED and then bought a house cash now ( with the 15% rebate ).
When ( not if ) your husband loses his job ( yes, recession is coming, and mining will be affected most ) you will not have choices anymore, you will end up on the streets without a home.This is reality, not the fairytale propertyinvesting.com website with amateur investors.
Get out, and stay out of property until prices dropped 50%.Can you please look into your crystal ball and tell me what i am having for dinner tomorrow so i can take it out of the freezer tonight. You are a complete loon. You actually have some good information to share and then you get caught up in your own preachings and start rattling crap off like it is a 100% certain outcome.
NOTE TO ALL PEOPLE READING THIS
Scamp wants to buy into the Australian market and therefore is trying his hardest to drive the market down so he can buy in cheaper. He has stated this on many forums. If this is not bottom feeding i dont know what is.Much of what he says is true but a lot of it is what he personally wants to happen.
WJ Hooker wrote:Kylie,
Why is everyone talking about the end of the world as we know it?
I also think the economy is in bad shape and getting worse, but its not quite to the end of the road just yet. Lets all just hope it doesn't get to the pack up my swag and head for the hills stage!Its just the standard over reaction from the negative nellies out there. And when they dont understand why everyone else isnt following them to the hills. They start preaching to gather followers.Yes bad times are coming but these blokes want us to melt down our wedding rings to sell,shoot the dog for food and prepare for the second coming of the big man upstairs.I am a middle man i guess. I have been shown both the best and worse case outcomes on forums like these and logic tells me the truth will be in the middle somewhere. My dog is safe for now
You are right . The bubble must burst just as it has in the past. Then it will repair itself and start inflating again. Its part of the usual cycle. Its just the lenth and magnitude of the cycle that is unknown. Why in hell do people think this is sooooooo different from any other time. Sure the specifics are different but every event in the past had a huge following of peolpe who believed it was a world ending event( WAR, FAMINE, DESEASE,WAR ON TERROR, DOT COM). Whatever. Yet here we are again.Life will go on. Things will recover quicker than most realise then of we go again.
I guess it comes down to two possible outcomes.
One leaves us in a collapse of things as we know them and the other is that this is another one of lifes bumpy sections and things will work themselves out given a bit of time.
Now we can believe we are on the eve ov a world wide collapse as we know it and dissapear for the hills or you can take some risk and protect yourself in the short term but prepare for future oppertunities that could be just around the corner.
If you take a risk via investing and things collapse then to be honest you will not be far behind everyone else. We will all be in it together to some degree.
Or if your risk pays off you will be ahead of the pack as they are still lying in there bunkers waiting for the sky to fall.
Looking back through past history and looking at all the information in front of me. I still believe property will be a smart long term move to financial independance. This current crisis will become history eventually and a new one will take its place with the potential to end things as we know it once again. One thing for certain is this period right now will be a time when the next generation of rich people laid the foundation of there wealth building . I hope to get in on some of that.
hbbehrendorff wrote:I have to say, Don't listen to misinformed people, Or people who have a ulterior motiveFirstly I have to say that its quite possible that property might fall 50% like Scamp says, Unlike what most people assume will happen if there is a crash, Property prices won't go down to a more realistic value, They will go down beyond there true market value, It will swing as hard down as it did up, You will see property at totally unrealisticly cheap prices.
As for buying now, anyone who recommends that is telling you lies, Remember the rule: Buy low, Sell high
you only need look at a chat of property prices since say 2000 and it will clearly tell you that you should have sold your house half way through 2007, Now is certainly not the right time to buy, The charts don't lie! only people do.
Someone noted how well our banks are doing at the moment, But the elite money masters of the world at the privately owned RBA are putting there plan into 5th gear, Interest rates will continue to fall, But that won't result in a recovery in the property market, Inflation will rise, jobs will be lost and people will start defaulting on there debt in continuing greater numbers, Banks profits will shrink up and eventually they quite possibly could go bust, People don't realise how similar to the americans our story is folding out, We are just a few years behind.
How many people on this forum know that the Rudd government has commited to spending 4 billion dollars of tax payer money towards backing so called "AAA" Mortgages ? The government told us that intervention was needed to allow banks to continue to loan out more money !!! Do people realise how this works ?
Those 4 billion dollars that back private banks will turn that into 10x that figure through the magical process called "Fractional reserve banking" So basically the banks will create 40 billion dollars "Not necessarily more home loans, But anything the banks wish to do with that money" through 4 billion dollars of current debt.
This is what a strong ecconomy is all about ?, Debt compiled apon debt and more debt and more and more, Everytime its compiled its 10x greater then the last.
Anyone who wishes to make money in these critical times should look at investing in gold, Everything points towards gold hitting a minimum of $1500 in the next 6 months, And its arguably been one of the best returning investments in the past decade.
You make a valid point on how low house values will go. If they were to drop on average 50% then in most case this would be far below there true value. They would just be suffering due to the current climate. When things improve and sentimate changes to a more positive outlook. Then values will head back up and more likely than not pass current peaks.
It just spins me out when some gloomers are jumping on this like it is a new thing and they want pats on the back for calling it first. Its crazy. Good times lead to overvaluation. This brings on a slump possibly leading to undervaluation. So what. This is not a new thing. Just be prepared and dont over extend in times like this.Scamp wrote:How the people on this forum have changed. When I posted ( about 6 months ago ) that buying would be suicide , they all said "you can always buy, property always goes up". Now that it's too late they realize their mistake they made 6 months ago. Property will crash 50% within now and 3 years.By that definition, a bargain must be at least 50% cheaper than what you think it's worth now.
People live in a bliss , in a dream , in a world of endless credit. That's all come to a halt now, people, businesses, banks are going bankrupt. What you should be doing is sell all your crap to people on this forum who still think they can 'make a bargain' and then buy 3 houses for that in 3 years, if by then you still think Property investing is a good thing. ( in time, and this won't take long, people's opinions about property will change from 'oh my god that's the best thing in life' to 'oh my god you bought a house ? Just hope that you don't go bankrupt then'.Now i may be wrong but can you please point me in the direction of all these so called investors saying property NEVER GOES DOWN IT ONLY GOES UP. I for one have never read that. People say long term you will not lose. Say 10 to 20 years. I think even you cant argue that.
You listen to peoples best case senario ON these forums and you laugh yet you expect everyone to confirm to your belief which is clearly worse case. Be realistic. The truth lies in the middle somewhere. Yes we will have areas that will be hit hard with possible 50% losses or more. And im sure people like you will do your usual cut and paste of articles showing this and claim that it is Australia wide. Many areas will not be this bad just as in America.You cannot pile the whole of Australias Property market into one percentage value.You clearly have your own agenda talking the market down.
Yes things are slowing
Yes people will be hit hard
Yes there will be massive value drops in some areasBUT
Some areas will hold strong
Some areas will recover quickly
The credit crisis will end
Confidense will return
The cycle will continue eventually.My properties are in NSW and we did not experience the second boom you mentioned. I hope this means we will suffer less in this downturn.
I agree. Hold off unless you find a bargain. Even then bargain harder. If you get a good price for a property that does not go up for sale often then it might be ok to jump now.
Neg gearing review. Whatever, ill worry about that one when it actually happens. Plus with the amount of people using it there will either be a massive backlash as before or it will be modified so as not to affect people too much already using it. I personally believe with or without it will make know difference. The heard mentality will ensure we continue to have booms and busts. Nothing will change
As for asset deflation. Yers this is happening but as most expierianced investors say. This will not last forever. Sentiment will change, credit will free up and asset values will climb back to where they are now and a boom after that will see them climb up even more. This repeats over and over. Why the beliefe that this time is different. Sure the length and magnitude of the slump is hard to predict but the end result will be the same. Over and over again.
I think another factor is today people have a lot more drive to own more than one house while others have resigned to renting for there life time. That sounds to me like the rich get richer and vice versa for the rest of the population. I just hope im on the winning team.These days everyone wants to invest and this will play a big part in the next upswing.
ummester wrote:harb wrote:Mid 5s RBA rate not the variable rate but it could even get to that by X-mas 2009 if things are not picking up over the next 9 months. Someone else told me it was funny when during last May-June while most of the "expert economists" were calling a couple more rate rises by X-mas I suggested the possibility of a couple of rate cuts. Bloody hilarious.
RBA rates will go down. Mortgage interest rates will not.
You borrow direct from the RBA do you?
Not trying to pick your post but many negative nellies on a certain other anti investing forums also stated that no way would the major banks drop there rates when the RBA made there first move down. YET THEY DID. Now they say that there is no chance of them lowering again. They have all the facts in the world to back up these claims but the real world proved them wrong. I believe they will continue to lower rates. maybe not the same day as the RBA but they will go down.
Had a visit with the bank thursday. They are throwing money at me. No real change there at all.
Scamp raises a valid point. Dont buy a $550,000 house if you have a single $50,000 wage. Simple stuff really. But there are plenty of properties well under this figure. Buy one of them. Reduce the debt over time and with some equity gain in the future. You will be on your way.
As for $500,000 properties selling for $100,000. Could you imagine how positively geared many properties would become and this alone would mean the values would rocket back up with consumer confidense.
Good info there. Can you also tell me what next weeks lotto numbers are??
All crap aside. Listen to scamps advice as well as the over optimistic people out there. Then and this is most important. Listen to All the available information between these possible outcomes and work out for yourself which direction you want to go. I myself am waiting for 6 months to see what happens. I fully expect to see big losses in some areas but i also expect others to be resiliant and these areas will be positioned well for the next upturn. Not every part of Australia will halve in value to such a precise amount as some believe.
I like the way you think and it would be a different world if everyone was the same as you. But unfortunately the mighty dollar rules all so it becomes a case of beat em or join them. Cant beat the rich so im trying to join them. It seems to me that civilisations are formed and grown on the basis of wealth transfer. everyone is worth something and you use the skills of people at a cost ( Money)From this things grow. this is an extreme basic view of things. But the problem seems to form when all the wealth transfers from the many to the few( RICH). This appears to be the downfall of many past civilisations.Can this fault be corrected. I truely do not believe so. Just as cycles seem to appear in every part of life. Countries will also fall prey to this evolutional cycle.
So where are we on this cycle. We are moving along but i feel we are far from the tipping point. America may be closer but still way way from it. So for me it becomes a game of self preservation and the protection of my family and friends. That can best be done with the accumilation of wealth. This will bring financial freedom,Low stress from not worrying about cash shortfalls. Looking after myself and others through medical support i could afford and also the purchase of the fine things in life.
We only live once. We are dead a long time.
I think that because both shares and property is tanking togehther i doubt property will take off.Housing was affordable last time when the sharemarket went down. My personal believe is this could be a long plateau for values with likely 10% + drops in prices for some areas over the short term. I am no expert ,just looking at the information available and making my own observation.
