Analysts tip ongoing property decline

[Sunfish]

Thommo,

I think we'll get a heads up if we look like crossing certain lines (some will doubtless blindside us anyway, much as life tends to do).

I really think you were being overcautious, just as I'm certain that you are sincere and acting in the best interests of posters and lurkers together.

Just out of curiousity (which I can afford, not being a cat) is there a crime of anti ramping where you spread malicious rumours about a company in which you've just brought a swag of put options?

You've probably detected where the rest of this thought is going....

On HotCopper they call it down-ramping, and it is considered more heneous than up-ramping LOL.

And no! I will not plead guilty.

T
Oh! I really dont care that much from a legal point of view. Maybe at my age I have an interest in form and manners is all. With investing one size does not fit all. Possibly posters could think that there will only be one reader of their posts and there is no way of knowing if that reader is sophisticated or a novice.

 

[Patosan]

Here's the link that Thommo was referrrrrring to

http://www.theaustralian.news.com.au/common/story_page/0,5744,15555876%5E601,00.html

See Change

Dr Oliver said Australian houses in relation to wages were more than 2.5 times more expensive than houses in the US and 1.4 times more expensive than in Britain

I read this article and was surprised at the data showing the difference in prices / wages in USA, Britain & Oz. I understand that this is info in isolation ... for starters there's no mention of historical trends for the ratio in the markets mentioned. I know there are specific factors which help to create different markets, nonetheless I'd be curious about the trends within each market.

So does anyone have info on how the ratio has trended ?

 

[quoll]

IMHO legalities should only be an issue if the advise was given from expert in the field, and then there's huge shade of grey as they should be deriving a personal gain.

I'd hate everyone's views to end everyone's freedom to express their views with a disclaimer clause at the bottom. Nobody implies they know it all, after all were just passing ideas

G'day B&M

Unfortunately we live in a country that is rapidly going the way of the USA, too much litigation. Supermarkets are getting sued when stupid?/crafty? patrons slip on a lettuce leaf, public liability needs to be at very high $$ values and is costing more.

A disclaimer is becoming like a seat belt, it's there you use it but most of the time you don't get into a situation where it becomes life saving.

My 2c

PS Thommo ... having some fun with the sig. Might change it to a more legalspeak one later.

Cheers
quoll

 

[Sunfish]

"A disclaimer is becoming like a seat belt, it's there you use it but most of the time you don't get into a situation where it becomes life saving."

Wish I'd said that!!!!!!!

 

[beeroll]

Beeroll's respose shows just how little understanding there is of the "legalities" or "niceities" of giving general advice there is on this forum.

Thommo,

Maybe you can point out where I'm wrong instead of just having a go? I was going off ASIC's guidelines, which say:

Under the law, any business or person that offers or advises you about financial products must either be:
an Australian Financial Services (AFS) licence holder (often referred to as an AFS licensee),
OR
a director or employee of an AFS licence holder,
OR
an Authorised Representative of an AFS licence holder.

The distinction I was trying to make was that there's no law that says someone can't tell you to buy a house in Cairns (because they might be telling you to do that because of the sea (mangrove) air, because of the climate etc etc, and nothing to do with the financial implications), but if they were suggesting that you buy using specific financial strategies for prospective monetary benefit, then they are offering you financial advice, and should be licensed.

Am I wrong in thinking that, and if so, how?

Genuinely interested, Thommo, not wanting to start a war here...

 

[quiggles]

I don't think Thommo was having a go at you per se.

However, I do believe you're wrong. The strategy in question is still related to the purchase of real property and is therefore not financial advice as it doesn't relate to a "security" as defined.

So yes, I think I could say "negatively gear in Cairns and you can't go wrong" [I DON'T recommend that course of action, naturally], and I wouldn't fall foul of ASIC, especially if I wasn't selling the property in question.

At the same time, and I think this may be part of Thommo's point, I could be sued by either Joe_User, to whom I made the comment, or even Sue_lurker, who read it and decided to follow the 'advice'. Even if the suit was without merit, it would cost me time and money.

And also, I think he wants people to be careful of what they say to protect those like Joe and Sue who may seize on the first piece of advice that comes their way, to their detriment.

 

[beeroll]

I don't think Thommo was having a go at you per se.

I was inferring from the removed "bite my tongue" post, followed by the post I responded to

However, I do believe you're wrong. The strategy in question is still related to the purchase of real property and is therefore not financial advice as it doesn't relate to a "security" as defined.

Haven't ASIC gone after property spruikers though, based on their selling of financial strategies? And what about this, from ASIC's FIDO site
http://fido.asic.gov.au/fido/fido.nsf/byheadline/Investing+in+real+estate?opendocument:

We do licence real estate agents who give you advice about financial products, for example insurance products or negatively geared investment packages. These agents must hold a licence from us or be an employee or authorised representative of a licence holder. You can check ASIC's databases to see if a real estate agent is licensed or is an authorised representative of a licensed adviser. If you think the real estate agent might be providing financial product advice to you and you cannot find their name on our registers, please contact our Infoline at [email protected] or on 1300 300 630.

That's why I was making the distinction between recommending buying a property, even in a specific location, and recommending using specific financial strategies to do so. It's not the property that's the problem, it's the financial product (the loan, in this case).

So yes, I think I could say "negatively gear in Cairns and you can't go wrong" [I DON'T recommend that course of action, naturally], and I wouldn't fall foul of ASIC, especially if I wasn't selling the property in question.

I'm not sure I'd like to test that too thoroughly.

At the same time, and I think this may be part of Thommo's point, I could be sued by either Joe_User, to whom I made the comment, or even Sue_lurker, who read it and decided to follow the 'advice'. Even if the suit was without merit, it would cost me time and money. And also, I think he wants people to be careful of what they say to protect those like Joe and Sue who may seize on the first piece of advice that comes their way, to their detriment.

On this point, I'm in total agreement with both of you. I'm with Thommo in thinking that financial advice should be given extremely cautiously, especially if you know nothing about the situation or experience of the person in question.

I'm not sure that the initial poster was giving specific advice, or ramping, though - just very enthusiastic, and with, was it 9? properties, I'm not surprised

 

[Jamie]

I understand and appreciate the viewpoints mentioned above, but Im struggling to see how they are relevant in this particular case.

If you read Lizzie's post, nowhere does she give advice or express an opinion - rather, she is merely stating what she plans to do.

Originally Posted by lizzie
hmmmm - interesting thoughts and just goes to show how hard the future is to predict.

i like the idea of interest rates staying the same and house prices steady for a few years. that will allow us to buy a new rental (hopefully) every 6 months, negatively gear against our currently positively geared properties so we have a neutral cashflow, let the rents catch up and then be sitting very pretty in time for the next boom.

goody goody

Where is the nexus between stating what you're doing and offering advice/encouraging others to do the same?

Originally Posted by Thommo
Oh! I really dont care that much from a legal point of view. Maybe at my age I have an interest in form and manners is all

Where is the lack of form and manners?

In previous posts you mentioned you were looking at a self storage-related investment. Were you encouraging others to do the same? Or course not - you merely felt it was potentially a good investment for you at this particular point in time, and you said so. After one of your posts on the topic here you even stated very tempting - not so different from the "goody goody" lizzie used.

You didn't have a disclaimer either - hope you werent encouraging others to rush out and do the same

Jamie

 

[Sim]

I've split some posts about disclaimers to a separate thread: http://www.somersoft.com/forums/showthread.php?t=21034

 

[Sunfish]

I understand and appreciate the viewpoints mentioned above, but Im struggling to see how they are relevant in this particular case.

If you read Lizzie's post, nowhere does she give advice or express an opinion - rather, she is merely stating what she plans to do.



Where is the nexus between stating what you're doing and offering advice/encouraging others to do the same?



Where is the lack of form and manners?

In previous posts you mentioned you were looking at a self storage-related investment. Were you encouraging others to do the same? Or course not - you merely felt it was potentially a good investment for you at this particular point in time, and you said so. After one of your posts on the topic here you even stated very tempting - not so different from the "goody goody" lizzie used.

You didn't have a disclaimer either - hope you werent encouraging others to rush out and do the same

Jamie

Jamie, you are typical of those here who resent having a doubter in your midst. Quoting me out of context after I have tried to state my case with reason and logic is the last straw.

You are all welcome to piss in each other's pockets and to sink in the mire of -ve geared property which is losing value. I may not be smart but I sure as hell aint going there!

Cya.

 

[Jamie]

Jamie, you are typical of those here who resent having a doubter in your midst. Quoting me out of context after I have tried to state my case with reason and logic is the last straw.

You are all welcome to piss in each other's pockets and to sink in the mire of -ve geared property which is losing value. I may not be smart but I sure as hell aint going there!

Cya.

Thommo,

Where were we discussing the merits of investing in -ve geared property? I certainly havent mentioned it once, and can't seem to find a flood of other posters doing likewise.

I actually agree with you re: the pitfalls of holding -ve geared property at the moment and dont think the next upswing is anytime soon - so not sure whose pocket Im supposed to be pissing in. Im definitely not planning on buying any in the near future.

I have no problems whatsoever with doubters, so not sure how typical I am of anyone else here - I certainly dont resent anyone, but thats not what we were discussing

Most of this thread originated because you said Lizzie's post was borderline illegal and irresponsible. I simply asked you why, when all she did was tell us what she was planning for the next few years.

Referring to your earlier post was meant as a joke, hence the

Jamie.

 

[ggumpshots]

Thommo,

Maybe you can point out where I'm wrong instead of just having a go? I was going off ASIC's guidelines, which say:



The distinction I was trying to make was that there's no law that says someone can't tell you to buy a house in Cairns (because they might be telling you to do that because of the sea (mangrove) air, because of the climate etc etc, and nothing to do with the financial implications), but if they were suggesting that you buy using specific financial strategies for prospective monetary benefit, then they are offering you financial advice, and should be licensed.

Am I wrong in thinking that, and if so, how?

Genuinely interested, Thommo, not wanting to start a war here...

Common sense would tell me that because someone tells me that I should do something in terms of finance ,it doesnt mean I should follow their instructions.
If that person made out he was qualified to give advise then that is completly different

 

[quoll]

From memory, I could be wrong, someone got into trouble for saying he thought a company was a good buy in a newsletter, where as he was in fact selling said shares, the readers of the newsletter purchased said shares, some court action came about once it was discovered what was happening and someone got sent to prison.

So you could find that opions are able to get you into trouble. So Thommo could be right or wrong, depending on the situation and the outcome, maybe.

I hate the legal system so often.

cheers
quoll

 

[ivi]

If that person made out he was qualified to give advise then that is completly different

I can not see how anyone discussing what they personally intend to do could be used legally against that person if someone attempts to do the same.

Maybe if there was an exchange of communication between an identifiable professional and another member then this could be interpreted as giving advice, in this case a disclaimer would be warranted.

However, if I express my opinion and another member follows that opinion, I hardly think I could be held accountable.

Maybe Somersoft could place a general disclaimer for the site somewhere.

Thanks all. Really learning a lot from the knowledge shared here.

Cheers,

 

[quiggles]

I think the concern that many share, starting with Thommo's reaction but more broadly based and including the knowledge that a forum shutdown has been threatened by others, is the increasingly litigious nature of Australian society.

Make no mistake, the litigiousness is a partly a product of imaginative media claims, partly fabrication when you look at the outcome of court cases and partly (unfortunately) true.

We, as potential and actual wealth holders, are therefore undemocratically vulnerable to the machinations of others. It behoves us all to be as careful in this regard as we are in other ways.

 

[topcropper]

Just decided to get this thread back on topic.

The housing doom and gloom is just accellerating. here's another bearish article.


http://www.economist.com/opinion/displayStory.cfm?story_id=4079458


I could find another few articles all saying the same. Why all the articles all of a sudden? Property's been expensive for a while. It's as though the media has decided to let fly all at the same time. Just reading the Sunday paper, a journalist was saying no gains for 10 years. As someone who's waiting for cheaper prices, I don't mind.

Any thoughts why the media is so suddenly anti property? The media really only reflects public opinion. Has public opinion suddenly changed in the last month? Maybe I will be buying real estate sooner than I think.

See ya's.

 

[see_change]

Any thoughts why the media is so suddenly anti property? The media really only reflects public opinion. Has public opinion suddenly changed in the last month? Maybe I will be buying real estate sooner than I think.

See ya's.

I think there have been articles in the media for a while, but anectodotally , people knew there were places that were doing well , so we ( as a group ) tended to ignore them . Though they are still analytical pieces , not front page ( to the best of my recollection ) Newspaper articles.

I've put my thoughts on this down in one post, and my misnamed link gives a analytical view to booms and busts.

http://www.somersoft.com/forums/showthread.php?t=21024

http://www.bis.org/publ/bppdf/bispap21d.pdf

See Change

 

[Panic]

Imf

I found this intriguing

"A study by the IMF found that output losses after house-price busts in rich countries have, on average, been twice as large as those after stockmarket crashes, and usually result in a recession."

Should we learn from the past experience, or should we consider Australian property market as "special"?
Can someone who has been through few cycles in both property and share confirm IMF's study?

Thx
V

 

[ivi]

When we queried Google yesterday for the term, "housing bubble," we received 476,000 responses. The phrase "stock market bubble" produced only 144,000 responses. "Oil bubble," returned 9,910 responses, while "soybean bubble" yielded a mere 6 results.

Maybe investing in soybeans is the way to go...

 

[geoffw]

Maybe investing in soybeans is the way to go...

But I thought "soybean bubble" was what you produced by eating too many soybeans?