- Marie123 wrote:
So are all those that are saying that the end is coming, or there abouts, are you all selling up your property and putting it into gold, cash, something else? Or don't you have property to begin with? Honest question!
Interestingly, I am rather exposed to property. My Melbourne property has now been discounted by $80k and still no offers 6 months later.
I am also doing developments in a town that has such huge investment that it is unlikely to be affected like the rest of Australia is. The developments are so profitable that I am achieving a 40-50% margin on costs. Very hard to lose money with a buffer like that.
Sounds great, mattnz. Is that Gladstone by any chance?
Yes
So should have bought there when I was going to. Lol. Story of my life – a gunner. ;P
We are well into step 2 now, with large western economies now unable to refinance their debts at reasonable interest rates.
“Step 2. Japan, China and other nations that have been funding debt not just for Australia but the rest of the world, wake up and realise that the debt funding to Western nations can’t continue. Treasury auctions will have no bidders and interest rates will skyrocket.”
Italy is now paying over 7% on their huge debts ($2 trillion to roll over), even with the ECB doing all the bidding to avoid a collapse in the market. This is very unsustainable.
http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html
"Step 8. Baby boomers have to sell their properties now that the value of their super has halved and they need something to live off. This adds further downward pressure to the viscious spiral"
Isnt this already happening? For those that have lost big money in shares (via their super) they have already been selling up, no?
//Australia is no different to any other country and the huge debts to finance our property bubble will catch up with us some day. Lets just hope that we learn from it this time and stop easy credit in future generations to avoid it happening again.//
I wasn't aware that we had the same 'easy credit' that places such as the US gave? I guess it depends on where you source your information from.
Marie123 wrote:"Step 8. Baby boomers have to sell their properties now that the value of their super has halved and they need something to live off. This adds further downward pressure to the viscious spiral"Isnt this already happening? For those that have lost big money in shares (via their super) they have already been selling up, no?
The question is not so much whether the baby boomer have to sell but whether they can afford to sell. No doubt the retirement nest eggs of the boomers have been slammed hard by the GFC, losing much of its value and forcing the boomers to stay working for longer. I reckon the boomers would rather get some income from their jobs when they can while waiting for the value of their nest eggs to recover. Likewise they'll hang on to their investment properties.
When the sharemarket does recover and levels start heading towards the peak again, the boomers would retire en masse. And that's when they'll be selling their investment properties. The boomers have literally watched their nest eggs vaporise in a matter of months and they're in a bit of a pickle…too few working years left and facing too big a loss if they decide to sell up now.
On the flipside however, when boomers well and truly retire, they will either have to stay put in their current houses, or otherwise go for the frequently mentioned tree-change or sea-change. If you've already invested in one of the locations that is likely to be popular with the boomers, you're already well-poised for the movement of the 'gray wave' that's about to occur.
mmmm ……… wow some wild ideas here. I won't bother quoting anyone but having done ok with the share market and the property market and my feelings are the AU RE market is now good to go. My money will be going in over the next 12 months.
Australian Properties will be doing a rebound from recent drops. Goverment steps are being done in order for the drop to stop or be at moderate levels. Anyway it’s still a Buyers Market out now.
cheers
Investment Guru wrote:Australian Properties will be doing a rebound from recent drops. Goverment steps are being done in order for the drop to stop or be at moderate levels. Anyway it's still a Buyers Market out now. cheersWhat steps?
And, if they do take them, all they are doing is kicking the can further down the road. This may impact on the delayed boomer sales that fword suggests.
I don't disbelieve there are plans afoot (it's like the government to be late) but I am seriously interested in knowing what they are?
fWord wrote:Marie123 wrote:"Step 8. Baby boomers have to sell their properties now that the value of their super has halved and they need something to live off. This adds further downward pressure to the viscious spiral"Isnt this already happening? For those that have lost big money in shares (via their super) they have already been selling up, no?
When the sharemarket does recover and levels start heading towards the peak again, the boomers would retire en masse. And that's when they'll be selling their investment properties.
I don't think that's so much of a problem as I think there will be a corresponding number of new buyers on the market via increasingly cashed up SMSF's. Adding to that is that you can now borrow to make that investment meaning even more properties can be bought by this cohort. So I think the sale of the baby boomer properties will be absorbed pretty readily by the next generation. Perhaps there will even be insufficient supply.
itsandrew
Go as far as you can see and you will see further.
//When the sharemarket does recover and levels start heading towards the peak again, the boomers would retire en masse. And that's when they'll be selling their investment properties. The boomers have literally watched their nest eggs vaporise in a matter of months and they're in a bit of a pickle…too few working years left and facing too big a loss if they decide to sell up now.//
That is what JL said at a recent seminar.
Marie123 wrote://When the sharemarket does recover and levels start heading towards the peak again, the boomers would retire en masse. And that's when they'll be selling their investment properties. The boomers have literally watched their nest eggs vaporise in a matter of months and they're in a bit of a pickle…too few working years left and facing too big a loss if they decide to sell up now.//That is what JL said at a recent seminar.
Pardon the ignorance, but who's JL?
Peaking emigration, 32% of workers are part time or casual, thee US can;t get their act together, the EU is falling apart and China is about to pop its RE bubble…..
No all is fine…….not.
fWord
Pardon me, I thought you and I spoke about John Lindermans' book in this thread – or was it someone else? Whoops.
Marie123 wrote:fWordPardon me, I thought you and I spoke about John Lindermans' book in this thread – or was it someone else? Whoops.
Sorry Marie, I didn't recognise the abbreviation. John's book is a good one, contains a good amount of logical information and doesn't take a rocket scientist to absorb it. Indeed he makes a mention of when to buy into certain segments of the property market. Obviously he doesn't lay down concrete dates and nothing is ever fool proof, but there are some key indicators to look out for.
It will be a number of years before the boomers finally sell out of their investment properties. The share market is shabby at best and we're far from a solid recovery to hit a new peak. As John says, the time to buy into 'final buyer markets', or as I understand, lovely posh houses or tree/ sea change properties would be now, or at least soon, before the stock market starts heading towards its old peak, prior to the proverbial hitting the fan.
That will also be the time when the boomers will also sell their investment properties, sit back and enjoy. If this is the case, they will be selling their properties when market sentiment is good and prices will be high with very high clearance rates. We won't be expecting to pick up a bargain in this sort of market, quite unlike what some are led to believe. In the aftermath, prices might become unattractive or an excessive amount of old investment properties hitting the market may cause interest to wane. Prices drop or stabilise and then eventually become attractive to buyers again, hence the property cycle.
This is looking pretty far into the future of course. Who knows what will truly be in store for us? Regardless, if you invest in solid properties that are well located and priced close to the median price of that particular area, I'll be very surprised if you didn't get an equally solid return over the long term.
No worries. It was a while ago we were talking about JL anyway.
I am looking to get a report off him in the near future regarding a few suburbs. Hopefully it all stacks up.
Other then the 'final buyers market' I think he encourages the 'family home market' – but don't know what he calls it. The banks are more likely to lend to someone who is buying their second home, than those that are just coming on the scene – and of course a much larger amount.
On a side note. I had one of my properties valued by the banks roughly $8k more than I thought the market would pay for it, recently. I thought they usually undervalued a property?? Strange.
Marie123 wrote:No worries. It was a while ago we were talking about JL anyway.
I am looking to get a report off him in the near future regarding a few suburbs. Hopefully it all stacks up.
Other then the 'final buyers market' I think he encourages the 'family home market' – but don't know what he calls it. The banks are more likely to lend to someone who is buying their second home, than those that are just coming on the scene – and of course a much larger amount.
On a side note. I had one of my properties valued by the banks roughly $8k more than I thought the market would pay for it, recently. I thought they usually undervalued a property?? Strange.
Well, John's opinion is one amongst many. But if you get a few other opinions that point you in roughly the same direction, then it probably will 'stack up' in the end.
In other words, if you've done a lot of research and are well-read, then you'll be in a very good position to make an informed decision.When JL discusses the 'family home market', is he referring to couples starting a family, moving out of first home buyer areas and looking into houses in more established suburbs?
Yes, that is correct. The families that have made a bit of equity, usually, who want to upgrade their PPoR as their family is increasing and or want to live in areas that are closer to their needs such as schools, etc.
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