I am no expert, but I would guess that if there are many people in the same situation then banks wouldn't auction them all off to the wolves. I guess the banks would just sit tight in hope, the problem for banks (as in Japan) isnt so much the negative equity, but the fact that many loans are "non-performing", ie the people have stopped paying the interest.
Economist article on the Real Estate bubble
- Thread starter PEI
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H
Michael Croft
"I know the above scenario all seems rather fancifull in the current market, however I know it can and does happen as I have been there done that - twice."
I haven't been looking at real estate around the country in the past, and am not aware of such large reductons. I know there was a large problem around 1988 with 18% inflation, but didn't realise it was that large. Was that one of the 'Twice" you mentioned, and when was the other.? Just curious
jahn
Michael Croft
"I know the above scenario all seems rather fancifull in the current market, however I know it can and does happen as I have been there done that - twice."
I haven't been looking at real estate around the country in the past, and am not aware of such large reductons. I know there was a large problem around 1988 with 18% inflation, but didn't realise it was that large. Was that one of the 'Twice" you mentioned, and when was the other.? Just curious
jahn
While the peak was in 88 , I saw two houses sell for about 60 % of their 88 price while looking for a PPOR in 93 -94.
These were good houses in good streets in Pymble. One was nearer the top of the market . The other was medain price range.
See change
These were good houses in good streets in Pymble. One was nearer the top of the market . The other was medain price range.
See change
Hi jahn,
Sorry it should have said thrice not twice, I benefitted in the last three only, but remember the first which opened the mind.
1975 post Whitlam and the razor gang - mainly in Canberra some pockets elsewhere
1985 post reintroduction of capgains tax - Aust wide
1989 16 -18% interest rates - Aust wide
1994-5 slump following a building frenzy - Aust wide
As for always_learning I don't mind being one of the wolves, we perform an invaluable environment service and are being reintroduced world wide to restore ecological balance.
regards, MC
Sorry it should have said thrice not twice, I benefitted in the last three only, but remember the first which opened the mind.
1975 post Whitlam and the razor gang - mainly in Canberra some pockets elsewhere
1985 post reintroduction of capgains tax - Aust wide
1989 16 -18% interest rates - Aust wide
1994-5 slump following a building frenzy - Aust wide
As for always_learning I don't mind being one of the wolves, we perform an invaluable environment service and are being reintroduced world wide to restore ecological balance.
regards, MC
Hi Everybody,
Great thread. Interesting comments from everybody.
After throwing some numbers into a spreadsheet I have calculated the current 'boom/bubble/anomaly' has put the property cycle where it should be in 5 years (based on 7% compound growth from 97). My data is based on my portfolio and isn't indicative of the Australia wide market.
It remains to be seen how the market will correct itself. The more dramatic the correction, the greater the bargains will be. I hope my planning will put me in a position to capitalise when the corection happens so I can secure my ticket out of full time employment.
Cheers
Great thread. Interesting comments from everybody.
After throwing some numbers into a spreadsheet I have calculated the current 'boom/bubble/anomaly' has put the property cycle where it should be in 5 years (based on 7% compound growth from 97). My data is based on my portfolio and isn't indicative of the Australia wide market.
It remains to be seen how the market will correct itself. The more dramatic the correction, the greater the bargains will be. I hope my planning will put me in a position to capitalise when the corection happens so I can secure my ticket out of full time employment.
Cheers
Hi,
In my experience the correction needs a catalylist/shock to the system; war, famine, pestilence, taxation - the biblical type of stuff. Otherwise what tends to happen is the market runs out of steam and just slows to a plateau which last for several years whilst reality (there's a pun there) catches up with the fanatasy.
With interest rates stable and the predicted bust/doom and gloom in the press a plateau lasting (as Will predicts) about 5 years seems the most likely scenario. The exception to that is in units where a bust is still on the cards due to a glut. No glut of inner city land on the horizon though
regards, MC
In my experience the correction needs a catalylist/shock to the system; war, famine, pestilence, taxation - the biblical type of stuff. Otherwise what tends to happen is the market runs out of steam and just slows to a plateau which last for several years whilst reality (there's a pun there) catches up with the fanatasy.
With interest rates stable and the predicted bust/doom and gloom in the press a plateau lasting (as Will predicts) about 5 years seems the most likely scenario. The exception to that is in units where a bust is still on the cards due to a glut. No glut of inner city land on the horizon though
regards, MC
Hi MC
Thanks for the info.
Still curious
When the banks move in to throw to those environmentally active wolves, how is it best noticed by them. Is it just adds in the paper or is there a diferent (better) system to find out.
Had to laugh at the different terms for different times.
'Whitlam and the razor gang' - I remember a few things of that era, but think it is a bit of an 'Off putting' term these days.
Just a thought. The figures posted on this forum a few weeks ago showing CG for the last twenty years did not indicate any large variations other than 1988 and then a plateau for three years followed by another rise seemingly to 'catch up.' (In Sydney)
I suppose as someone else said, there are "cycles within cycles", and areas within areas.!?
jahn
Thanks for the info.
Still curious
When the banks move in to throw to those environmentally active wolves, how is it best noticed by them. Is it just adds in the paper or is there a diferent (better) system to find out.
Had to laugh at the different terms for different times.
'Whitlam and the razor gang' - I remember a few things of that era, but think it is a bit of an 'Off putting' term these days.
Just a thought. The figures posted on this forum a few weeks ago showing CG for the last twenty years did not indicate any large variations other than 1988 and then a plateau for three years followed by another rise seemingly to 'catch up.' (In Sydney)
I suppose as someone else said, there are "cycles within cycles", and areas within areas.!?
jahn
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