House bubble to burst - 40%? SERIOUSLY

Meh... yawn. As many have said, have a plan, do your DD, don't overstretch, stick with it, and then see who comes out ahead in 10 yrs...
 
Still plenty of money in Melbourne bayside, one I was watching went in bwwighton today in

a **** street
a **** house, so land value
wrong orientation
740sqm

had not been on the market not long I thought - could be wrong. W
Went for near 1.7m I believe which is where it would have been 12 months ago.
 
Property Meister said:
Please turn on Channel 7 at 630 Sunday night, the heading will be

"PROPERTY ABOUT TO BOOM, 40% GAIN SAYS THE EXPERTS, watch tonight for all the inside goss"
Click to expand...

Now that would be false and misleading sensationalism. Instead they will use a hook like, "this 23 year old has just become a multi-millionaire property tycoon. Find out how you too can cash in on the latest property bonanza."

Real Story: Surprisingly cashed up youngster is able to get a loan for one property worth $2M on the minimum deposit. It is hugely negatively geared and he can't support the cashflow. The bank will foreclose and it will be sold in a fire sale.

Twelve months later. "Sydney property has taken a nose dive with some homes selling for 40% less then their owner paid for them less than a year ago. This property mogel went from multi-millionaire to destitue in less than a year... we will show you how you can keep the banks at bay and hold onto your to your dream home."

Journalism at it's best.

Andrew
 
My thoughts and suggestions

Aulyna said:
Any one watched Chanel 7's Today Tonight last night?

No

It said it is time for House bubble to burst - 40%? It seems very SERIOUSLY.

Aulyna
How many houses or units are sitting empty in your local area, what I mean is are there 100+ houses or units unoccupied? go for a walk around your area and have a look, what you are looking for is property developers who have speculated on demand and there is no demand = empty properties.

In my local area there is 1 set of duplexes and 1 spec house for sale. So IMHO in our local area not oversupply

I know most of us here do not want to agree with it, as we love ips. But to be honest, I start to concern if we are to optimised on it, or we are just willing to be optimised?

Not sure what you mean with this statement, other than you are concerned, are you over committed with IP's?

If the house bubble to burst like usa, what will you do?
Watch it burst but I don't believe it will, it may well slowly deflat/stagnate and the odd property may sell very very cheaply.

Fingers crossed.
Is a sign of hope, think about how you will handle the problems if they develop
Click to expand...

Aulyna
Life is a lesson to participate in, at the present time I am closely watching interest rates as I believe (but I don't know) the RBA may leave the rates the same or may decrease to stimulate people to cautiously shop again.

The property market did need to be slowed down - achieved with IR rate rises.

The retail market is now suffering, the share market is down and falling possbly due to IR's.

Median to low income earners are struggling...
Increased costs to daily living are coming from all areas; fuel, food, electricity, health care, mortgage etc. Nothing new here except maybe we have a lot coming at once (flood levy & the new tax to air).

Westpac's Economist is the first one to say IR's are too high so if a few more respected people change there views then IR's may go down.

In the meantime review your assets eg. PPOR, cash in offset, Investments [property / shares], Super, developing your skills & knowledge in relation to your assets


Regards
Sheryn
 
Bargain Hunter said:
Now that would be false and misleading sensationalism. Instead they will use a hook like, "this 23 year old has just become a multi-millionaire property tycoon. Find out how you too can cash in on the latest property bonanza."

Real Story: Surprisingly cashed up youngster is able to get a loan for one property worth $2M on the minimum deposit. It is hugely negatively geared and he can't support the cashflow. The bank will foreclose and it will be sold in a fire sale.

Twelve months later. "Sydney property has taken a nose dive with some homes selling for 40% less then their owner paid for them less than a year ago. This property mogel went from multi-millionaire to destitue in less than a year... we will show you how you can keep the banks at bay and hold onto your to your dream home."

Journalism at it's best.

Andrew
Click to expand...

ROFL. Hilarity at its best. Nice one.
 
pieman said:
Still plenty of money in Melbourne bayside, one I was watching went in bwwighton today in

a **** street
a **** house, so land value
wrong orientation
740sqm

had not been on the market not long I thought - could be wrong. W
Went for near 1.7m I believe which is where it would have been 12 months ago.
Click to expand...

Not all doom and gloom, was on the market for 3 weeks and RE ended up doing a phone auction with 5 bidders. That means there's 4 people with 1.6ish ready to buy a block of land to build a nice family home.
 
Geez what do you expect from such a high class and well regarded "current affairs" (cough, cough, splutter) programme- the truth? Pleassseee....... :rolleyes:

Seriously why do we continue to watch these shows that have become nothing more than dressed-up infomercials? But I digress.....

Evan, one low resale does not a market make. I'm sure all of us could find copious examples to contradict your example but I haven't got the time or inclination at this time of night.... ;)

What I can comment on is my own experience, as limited as it is, across several Sydney suburbs currently buying for a no. of clients with various criteria and budgets.... I've assisted with 6 purchases in the last 6 weeks just to provide an idea.... during this time we've also missed out on approx 8-10 properties as they sold above our maximum price estimation. We've been outbid at 4 of our last 7 auctions and clearly see no signs of a 40% drop.

However, I'd love to be proven wrong with my thoughts that the Sydney market will continue to rise (albeit more slowly in some areas than others) with modest growth in the next 6-12mths. In fact, from reading that I've recently engaged in (can't remember where but I'm sure if I were feeling more energetic I could jump off the couch and find it somewhere :) but I'm too tired....) it was Sydney that led the past 12mths in growth in Aust cap cities, modest as it was with around 2%.
 
Different Here said:
Some people think it's perfectly normal for house prices to rise 100% over several years. But suggest prices could fall 40% over several years, and they'll say that's crazy! Crazy huh?
Click to expand...

DHere

The issue has been talked about in detail many times before.

40% corrections can happen.
It works like this:
Prices stagnate for a year,
fall 5% the 2nd year,
fall 5 to 10% the 3rd,
then stagnate for a few more years and before you know it the overall correction including inflation is around 30-40%.
In the mean time, rents have gone up by 50%

Then one day Residex come our predicting huge capital gains.
People wake up and say, hang on, rents are higher then a mortgage and property prices are about to double, we should stop paying off Bill's mortgage and get our own place.

They buy their own home, the media want a piece of the action and talk up property again, property becomes the flavour of the month and we all run over each other trying to get on the bandwagon.
Then property prices double and Bill retires.... :D
 
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