Forum Replies Created
I think its unfair to jump down Steve's throught. Yeah sure many predicted this( As you seem so happy to keep reminding us). But exactly how many predictions have been thrown around over the last 12 months.Fuel prices,gold prices,interest rates.Many many people have been wrong. Sure some may be burnt by the recent mining slump but how many have actually made a fortune.Steve only gives out his ideas on the information at hand. its up to the individual to do the DD and therefore see if the risk is worth the reward. After all we have all being told of the risk in mining towns.
What i want to know is what happens to prices when they hit bottom. Do we all really believe they will stay there. If things have improved economy wise and sentiment has changed then it is a fair call to suggets that they will trend upwards in value from that low. At what speed i dont know but here we are comparing Aussie prices at the begining of a correction to those that have already had theres. Apparently we tend to follow these other countries so when we are nearing our bottom of the cycle theres a good chance that our housing affordability will look as good if not better than these other countries due to ther prices trending up again. And this does not have to be because of 50% drops. A small correction down for us and a correction up for these other countries will bring things back in line rather quickly.
DONT rush out and sell your house like negative Nellie suggest above. Yes values are declining but if you where to sell your place to downsize and free up some cash. Remember the houses you would be buying will have dropped also. Plus there are many ways to use your equity without selling. Im sure some people with expieriance in building there own wealth will jump in soon. Me, im just starting out.
I would say another 1 % drop over the next 6 months then stable for the remainder of the year. Maybe some upward movement in 2010. A 6% 10 year fixed rate will have me pushing foward the house hunt. 1 % to go.
My spin on it is to never sell until you reach the point in time where you want to live off your investments or subsidise your existing wage allowing you to reduce your work hours. At this point you have a few options.
1# The rent on all properties pays for all shortfalls( Interest included) plus enough left over to live on. ( no need to sell any properties)
2# Sell some properties to pay the others off. The remaining properties a debt free and all the rent ( Minus holding costs) is yours to live on.
3# Build up a large enough portfolio that the equity growth is enough to cover costs plus your required income.Just keep drawing on the growth in the properties.
There are more options with many variations but i hope you get my drift.The main idea being when you are building on these portfolios if you buy and sell this eats up your cash through the buy/sell costs. If you choose well you should hold on long term. This does not mean that you should sell a pig if it is holding you back.
It seems that what is happening now has put a hold on drawing down equity. BUT things will change and equity growth will return. We are in a bad few years i would think but it does not mean put the whole LOE draw down system in the trash.
Now is the time for low ball offers. Most would except the fact that prices will be lower in 6 to 12 months time so make offers that reflect that. Dont be afraid. I believe i paid too much for my first Ip. It will not happen again. To offer 20 to 30 % below asking price is not too bad. Its a good starting point. Some may laugh. Others may have you rushing to organise finance,.
Just bought a mint Ducati 916 strada. Love it. Also have a pulsar sss for the wife( Last one sold in Australia). I also have a zookie sierra that i bought 4 years ago for under $1,000 bucks. Love it, never one thing wrong with it and runs on a oily rag. Great for bush bashing,towing my tinny and generally carefree motoring. I also have a company car for use while im at work. Cant take it with me on leave.
ummester wrote:I was watching an american economist on the business channel the other night who said that modern capitalism was now fundamentally changed – for good. Easy credit is over and with it so too will be societies based on consumption.I'll check back in a few months, when this little crisis hasn't passed and see what you think then.
For every economist that you show me to support your view. I will show you three that say this will pass then on we go again.
Next few months…..Dont care
next few years………..Care more
Next ten to 15 years…..This is my end goal.Sorry i am not going to spend all my time fixated on the what ifs. Im going to give it a go.Money still drives the world and as soon as they can the taps will be turned back on. May be some time off but it will happen
I get your point i just dont believe it is about to end. If you had got into the 80's greed you would have land,gold, etc all the things that apparently will always be in demand. This will pass just as all before it has.
If you are waiting for a change i feel you will have wasted your life.
There investment properties are probably pos geared now anyway. As for the ones you could have bought in the 80's. I think they would be pos geared also.
ummester wrote:devo76 wrote:Debt???. Didnt say anything about that although without it you would struggle to build wealth. This has been proven many times over. Its just that its become a naughty word at the moment. This will change with time as it did in the past debt bubbles.This one will be worse… even you bullish proptimists must admit that something pretty mean is setting itself up this time.
As for the bottom – I hope it is no less than 3-4x average wage (entry level between 200&250K country wide) because if it gets lower then that the hurt will be too great. I also hope it comes around quickly, like America's did, because if it is too prolonged the job loss will really start to bite.
This is my hope, not a prediction, for the bottom. 30% of the 2007 peak (so around 20-25% off where we are now), within the next 6-18mths. Due to the next 10-15 years being boomer retirement and asset offloading in a down market, there shouldn't be another boom before 2020 – the boomers, it seems, boomed too early for their own retirements.
It's funny, this is the downturn I have been waiting for since the 80's but now it's here I hope it doesn't end up as bad as it could get. I am pretty sure that the US as we know it is dead, though.
Are you kidding me. You have been waiting for this boom since the 80's. ha ha ha. thats the funniest thing ever. Wow what a financial whizz. How much money could you have made. I my god im getting a stich from laughing. I gotta go. ha ha ha
Neg gearing just helps the cash flow while you are trying to build your asset base. Sure its not as good as positive but positive is not always a option with preferable properties that you expect to see good capital gain. Capital gain is not happening now in most areas but you will see gains again and if the neg gearing helps you with the negative cash shortfall. Well then thats a good thing.
Debt???. Didnt say anything about that although without it you would struggle to build wealth. This has been proven many times over. Its just that its become a naughty word at the moment. This will change with time as it did in the past debt bubbles.
hbbehrendorff wrote:That's what I have been thinking, Why does everyone one this forum seem to think that a 50% would be terrible ? For me it presents huge opportunity'sThough I guess it will be bad for those people who are using equity and now have negative equity and those who have a bigger mortgage then what there house is worth.
Lucky for me I don't have any debt
You are on a property forum where the majority of people would have one or more properties and you wonder why there is concern over dropping values ???? Not everyone on here is a bottom feeder.
A recession is great………….. If you keep your job.
hbbehrendorff wrote:OK, lying is goodCan you please explain to me how going into grave debt is good for the economy and how it will fix everything ?
America is in debt over 10 trillion and that does not seem to be solving all there problems….
Maybe we just need to increase the debt to 100 trillion to fix our economy, That would be cool, Then we can continue on with 20% a year property booms
I can assure you i have no idea. But i am sure as s@#t they know more than the keyboard heros on here and other forums. Yes politics has its fair share of idiots but there has to be some brains in there. Easy to to be critical from the side lines.
How do you think you would go in the top jobFair go. Things are changing rapidly and therefore our leaders must also change. Would you really want our head boy to be pushing policy that has become irrelevent. Be real. Things are changing week to week so its good that he is acting when he can. Do you still think fuel watch is top priority ????
PS And you really are too hung up on these bogun ideals you THINK we all have. Relax like me. Im going in the torana down to the pub to buy a case of VB then me missus shaza is gunna make me hot dog for dinner while we watch kath and kim on our lounge in the front yard with our six kids. phht.
I was approved for a additional $580,000 ( No i am not taking it all)on top of my current $400,000 debt. Yeah its getting real hard.
If scamp is right. I would buy as many of these one dollar houses (that will soon appear) as you need to have there rent suppliment your negative equity from your existing Property. A couple of one dollar houses renting at $50 to $100 dollars a week should do it. Too easy
