60 minutes hyperbole??

W

WallyB

Hey all

against my better judgement :rolleyes: just watched 60 minutes piece on sub prime crisis, potential oz impact etc

Kellyville (NW syd) was mentioned and "houses going for 900K's a few years ago are now in the 500K's"- I realise it's a softish market but surely these figures would be for a one-off property and not the norm- any thoughts

Wal
 
I think they said there were 4 properties in the street that went for that price.

Those 4 properties will set a precedent in the street and they will all be valued around that price now. That's the way it works on the way up so it should hold that it works on the way down too.
 
That woman lost all sympathy when she said she had attempted suicide because she couldnt face what was coming. This coward would rather destroy her family than face up to her responsibilities.

Its only money people - get a grip. Dont mind the small stuff.
 
oldjonesy said:
That woman lost all sympathy when she said she had attempted suicide because she couldnt face what was coming. This coward would rather destroy her family than face up to her responsibilities.

Its only money people - get a grip. Dont mind the small stuff.
Click to expand...

I only read the transcript, so didn't get to see the interview first hand.

To be honest though, financial stress can be very challenging. Imagine bill after bill after bill piling up - with no way of paying them. On top of that having to pay for food and groceries, items for children etc.

It is only money, but when money is needed to provide essentials for living and it is not available life would be very stressful.

Even if they sell the house they will most likely end up with -ve equity. Paying back a loan with no asset. (Unless they declare bankrupcy).

No easy answers...., but I agree suicide is definetely not the answer....
 
hello,

they saying 1000's of people just packing up and leaving,

where are they going? are trailer parks en masse being set up, are rentals still available?

thanks

myla
 
myla said:
hello,

they saying 1000's of people just packing up and leaving,

where are they going? are trailer parks en masse being set up, are rentals still available?

thanks

myla
Click to expand...

Assuming what they say is true, which I very much doubt, they would be renting, moving back with parents, caravan parks or the park bench. But usually they rent.
 
WallyB said:
Hey all

against my better judgement :rolleyes: just watched 60 minutes piece on sub prime crisis, potential oz impact etc

Kellyville (NW syd) was mentioned and "houses going for 900K's a few years ago are now in the 500K's"- I realise it's a softish market but surely these figures would be for a one-off property and not the norm- any thoughts

Wal
Click to expand...

Yeah I'll blame the subprime as well. The subprime crisis caused me to buy 7 IP's I cant afford and made my mates draw down their equity to fund new cars and a holiday.

Damn you americans, damn you all to HELL!
 
How about the expert predicting 50% drop in prices over the next 2 years in Syd? I can't wait for that to happen. A nice ocean front on the Northern Beaches dropping from $2M to $1M. I'll have a couple of those thanks. And if homes in blue chip suburbs of North Shore falls by that amount, the expats out of Asia will be lapping it up, even if the Aussie was at parity.

Experts indeed!
 
Notice the articles use of the key words up to 50% off? It's like those sales that you go to where there are only 3 items that are for sale at 50% off and they are gone in the opening minutes, everything else is 5% off.
 
I think the circumstances in the US are not the same as here, the US had an over supply coupled with 1% sub prime loans. With hind sight it's easy to see why prices have fallen.

Apply the same circumstances here and we would also be facing the same issues, but we don't have the same drivers.

We have a 20,000 - 30,000 house shortage per annum. It's estimated that by 2010 we will have a 200,000 short fall, more than what is currently built per year.

Default rates for 2007 on prime loans was .2% and sub prime .7%, with no out of average increase. I havn't seen the 2008 data but even at a doubling of these numbers it's hardly a crisis.

The couple in Melbourne who where represented as the Aussie Batlers have a house with a mortgage of $207,000, at 10% interest on I/O thats a repayment of $20,700 per annum. I would also guess that as stated they bought their house 7 years ago it would be at least valued around $350,000.

The stress of repayments can really weigh hevily on peoples minds, I'm sure a little financial education would see them out of housing stress.

I don't see house prices falling in Australia on mass.

Mark
 
Mark C said:
I think the circumstances in the US are not the same as here, the US had an over supply coupled with 1% sub prime loans. With hind sight it's easy to see why prices have fallen.

Apply the same circumstances here and we would also be facing the same issues, but we don't have the same drivers.

We have a 20,000 - 30,000 house shortage per annum. It's estimated that by 2010 we will have a 200,000 short fall, more than what is currently built per year.

Default rates for 2007 on prime loans was .2% and sub prime .7%, with no out of average increase. I havn't seen the 2008 data but even at a doubling of these numbers it's hardly a crisis.

The couple in Melbourne who where represented as the Aussie Batlers have a house with a mortgage of $207,000, at 10% interest on I/O thats a repayment of $20,700 per annum. I would also guess that as stated they bought their house 7 years ago it would be at least valued around $350,000.

The stress of repayments can really weigh hevily on peoples minds, I'm sure a little financial education would see them out of housing stress.

I don't see house prices falling in Australia on mass.

Mark
Click to expand...
I'm as biased as any of you but from the other side. So for what it's worth this is my POV on the shortage.

If we have a genuine shortage then I agree with you - it will give some support. I am skeptical though as demand is not a fixed beast - it depends on people's sentiment about property. The UK and California both claimed crazy shortages yet the market turned anyway - California especially turned and now has as surplus - houses for sale all over the place. The dissapearing buyers may come back into the market one day and restore the "shortage" but for the moment they've gone.

The other point is why the low turnover and high number of properties for sale around Australia? Sounds almost like a surplus.

Could it be that when prices are going up there is a shortage as everybody wants in on the action (or doesn't want to be "locked out forever") but when they got flat or drop these people simply work something else out.
 
Oh - I should add - we shouldn't discuss 60 minutes seriously. It is gutter journalism.

edit: gutter isn't the right word actually. probably should say "lazy or simple journalism".
 
you've also got to remember that in the usa, if you default on your mortgage you can just hand the keys back to the bank and walk away owing nothing and no bad credit rating (even if the value of the house has dropped below mortgage).

in australia, if the house value drops lower than the mortgage value and you have to walk away, the bank comes after you for the difference.

in regards the the couples in melbourne or sydney or wherever it was ... okay, they were on a low income but with only one school aged child, surely the wife could pick up some sort of employment during school hours to help out? even if she's unskilled - cleaning houses, washing dishes, mowing lawns, ironing - something ... and that looked like a pretty new trampoline with the net around it ... (granted they didn't have to usual fancy dodads in the background like many other "battlers").

and at paying $378 interest only (9.5%, which is around), they wouldn't be much better off by renting in the current market - maybe only by $100/wk at the most.
 
I thought so too Lizzie - she obviously doesn't work outside the home but surely if her husband can't work due to injury (he would be on compo so can't see what the issue is there...) then he can look after the kids while she finds a job at Coles. There are plenty of jobs out there that they can't fill for even the most unskilled people these days.

I have to disagree about the doodads though - I saw a big 4WD in the driveway and what looked like a boat on a trailer covered in a tarp in the background.

While I tried to feel sympathy for these people, it was another case of "who can I blame because I was a greedy and now I'm stuffed" scenario.

The story about the bees before this story was very interesting though...
 
hobo-jo said:
Notice the articles use of the key words up to 50% off? It's like those sales that you go to where there are only 3 items that are for sale at 50% off and they are gone in the opening minutes, everything else is 5% off.
Click to expand...

I would agree hobo-jo. Besides if we get to this stage and there are properties everywhere available for a 50% discount the economy is going to be in a fairly sorry state.

Regards Jason.
 
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