Australia is a leveraged time bomb waiting to blow

I don't know if it's a time bomb.

All I know is if you're not in melb or syd blue chip now you'd be spewing blood.

One month ago I was saying the market is moving fast. Now it is just crazy.

Exactly. At 5% interest rates - who cares if you pay $200,000 more for a $2m house?
 
Exactly. At 5% interest rates - who cares if you pay $200,000 more for a $2m house?



this is exactly where high end properties dies... i seen houses that used to be advertised for 1.5-2 mil in adelaide eastern burbs now forsale 700-900k :) guess 200k doesnt really matter now.
 
Who cares what they are. If a piece of rock goes from $100k to $800k, and you bought it, it's a good move.

Same could be said about gold. A more useless commodity.

Couldn't agree more but if you pay 800 and it drops to 600 then that would be a bit sad wouldn't it.

But if I were to pay 400 and it dropped 50 it would be more melancholy than sad ;)
 
Couldn't agree more but if you pay 800 and it drops to 600 then that would be a bit sad wouldn't it.

But if I were to pay 400 and it dropped 50 it would be more melancholy than sad ;)

Yes, no duh.

But my original post was saying, if you had bought last year, and am still in the market now, it's gone up a lot. So that means you're the guy who bought at 600 and is now worth 800.

You may not prefer to have my 800k dog box and maybe neither would I for 800k, but I bought it for 600k so am smiling (hypothetical numbers).
 
But my original post was saying, if you had bought last year, and am still in the market now, it's gone up a lot. So that means you're the guy who bought at 600 and is now worth 800.

You may not prefer to have my 800k dog box and maybe neither would I for 800k, but I bought it for 600k so am smiling (hypothetical numbers).
Assuming it doesn't go back down to $600k. Not a profit until it's sold.
 
It is a "profit" if you can refi the $800K at 80% and get your $120K/20% out of the original $600K deal.
I think you are confusing debt with equity. Just because you manage to draw down a larger loan against the property while it's valued higher than purchase price doesn't make those funds a profit. Also not sure how you came to the $120k figure... 80% of $200k is $160k.
 
I think you are confusing debt with equity. Just because you manage to draw down a larger loan against the property while it's valued higher than purchase price doesn't make those funds a profit. Also not sure how you came to the $120k figure... 80% of $200k is $160k.

Not confusing hence the "profit".

The $120K is the 20% deposit for the 600K.
 
lol don't be silly, simply borrowing more money (up to the purchase price) is not locking in a profit, it's just unlocking access to borrow against the equity. Join us back in reality friend.
 
No - it's not profit - it's better than profit. Profit gives you access to money that you have to pay tax on. Tapping equity gives you access to money that you not only don't have to pay tax on but becomes a tax deduction if used for investment purposes.

Personally, I just like having access to lots of money! Running out of money is far and away the main reason people go broke! :)
 
No - it's not profit - it's better than profit. Profit gives you access to money that you have to pay tax on. Tapping equity gives you access to money that you not only don't have to pay tax on but becomes a tax deduction if used for investment purposes.

Personally, I just like having access to lots of money! Running out of money is far and away the main reason people go broke! :)

Added a bit

Profit gives you access to money that you have to pay tax on

Tapping equity gives you access to money that you pay interest on and becomes a tax deduction if used for investment purposes.
 
Who cares what they are. If a piece of rock goes from $100k to $800k, and you bought it, it's a good move.

How do you know when to buy the rock? When it is sinking like (excuse me) a rock, when it is rising, or when it is neither increasing nor decreasing in value?

Buying for capital gains is always risky (in any market), because as many here would agree, it is a purely speculative bet on the hope that your analysis is right.

So now that there has been a relatively weak uptrend in some property markets, are we buying the $800 rock for $799, or more relevant in my case, selling some $800 rocks for $801 each? I really think that if you wanted to buy a $100 rock in the Australian property market you're probably about 30 years late!
 
How do you know when to buy the rock? When it is sinking like (excuse me) a rock, when it is rising, or when it is neither increasing nor decreasing in value?

Buying for capital gains is always risky (in any market), because as many here would agree, it is a purely speculative bet on the hope that your analysis is right.

So now that there has been a relatively weak uptrend in some property markets, are we buying the $800 rock for $799, or more relevant in my case, selling some $800 rocks for $801 each? I really think that if you wanted to buy a $100 rock in the Australian property market you're probably about 30 years late!

Maybe in 30 years time instead of $100 and $800 rocks we will be talking about $800 and $4000 dollar rocks...
 
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