Sydney property hasn't crashed & won't crash

superted said:
But as i said glad u said it first then the REA's wont jump on me for making things up :)
Note that Always_Learning stated that it was 'hearsay'.

If that's what you base your views about REAs on, why would they ever bother to correct you. :D

Cheers,

Aceyducey
 
geoffw said:
I gather then that you felt that holding onto them was not an option?

What I felt doesnt matter anymore, Mrs AL felt that selling everything at $1000 and me taking over all debt was best for the families independant future! A few weeks ago Mrs AL hadn't sleeped for 48 hours, at least last night after the sale of one unit she did sleep.

Back to under my rock!
 
Definition of a Crash

Hi All,

To answer the question put "hasn't crashed & won't crash” I thought I would look up online the definition of a crash as it is being applied here.

crash - undergo a sudden and severe downturn

crash - a sudden large decline of business or the prices of stocks/property (especially one that causes additional failures)



OK, both definitions use the word sudden. It is pretty clear in the Sydney market we have seen prices drop 10%+ in 6 months so that is sudden in my books.

Severe ? We cannot answer that one yet. If rates stay low and market levels out as we are, the drop cannot really be classed severe? If it continues and casues pain?

Perhaps the real knowledge we look for is in the last definition which adds (especially one that causes additional failures)

It is too early to read this one yet, but the drop has seen banks not loaning money to settle on off the plans which will have a flow on effect to construction jobs and materials demand and retail spending (TV, DVD, beds, etc.).

This will slow the Oz economy overall. And if inflation rises due to world economic conditions (oil, dollar movements, USA recovery, china boom) then rates will have to rise, further choking economic growth, with the potential for more job losses and potentially a recession.

So it seems we don't have crash yet, but we do have half of one to me.

IMHO the next six months are critical.

For example, what about the fact the last quarter growth dropped to 0.2%? Almost 1 half of a recession ( two quarters of negative growth) and history tells us after a large property boom there often is a recession?

Are we seeing History repeating itself again?

Are we back in early 1990?!?!?!

Regards, Peter 147
 
Peter 147 said:
IMHO the next six months are critical.

For example, what about the fact the last quarter growth dropped to 0.2%? Almost 1 half of a recession ( two quarters of negative growth) and history tells us after a large property boom there often is a recession?

Are we seeing History repeating itself again?

Are we back in early 1990?!?!?!
Yawn.

Peter, read the Macquarie bank report.

Cheers,

Aceyducey
 
Peter 147 said:
Hi All,



This will slow the Oz economy overall. And if inflation rises due to world economic conditions (oil, dollar movements, USA recovery, china boom) then rates will have to rise, further choking economic growth, with the potential for more job losses and potentially a recession.

So it seems we don't have crash yet, but we do have half of one to me.

IMHO the next six months are critical.


Regards, Peter 147

I agree fundamentally with what you have said. The most important thing holding up proceedings is the US election and secondary our own Aus elections due during this next six month period ;-)

The US has more pressure to lift rates then us at present time and may move before there election. But since Greenspan just got another term from the Shrub (little Bush) then its unlikely.
 
Peter 147 said:
And if inflation rises due to world economic conditions (oil, dollar movements, USA recovery, china boom) then rates will have to rise, further choking economic growth, with the potential for more job losses and potentially a recession.
Regards, Peter 147

Peter,
The rest of the world have much lower interest rates than us.
I was just talking to a friend in Sweden and he is paying 3.1%
for his mortgage.

I don't see why we should be the odd ones out paying more
for our home loans, getting hit from all directions with bank fees
and getting no interest on our savings?... :confused:

Nowdays a lot of people have high mortgages and any government
that would raise interest rates to levels much higher than what they
are now will be committing suicide.
 
BV said:
Peter,
The rest of the world have much lower interest rates than us.
I was just talking to a friend in Sweden and he is paying 3.1%
for his mortgage.

I don't see why we should be the odd ones out paying more
for our home loans, getting hit from all directions with bank fees
and getting no interest on our savings?... :confused:

Nowdays a lot of people have high mortgages and any government
that would raise interest rates to levels much higher than what they
are now will be committing suicide.

Hi BV,

It doesnt seem fair i agree

Interest rates have lots to do with cross rates, attracting foreign investment and domestic inflation but nothing to do with equality across all countries.

Regards,
Ted
 
always_learning said:
What I felt doesnt matter anymore, Mrs AL felt that selling everything at $1000 and me taking over all debt was best for the families independant future! A few weeks ago Mrs AL hadn't sleeped for 48 hours, at least last night after the sale of one unit she did sleep.
That's a huge pity- and perhaps the worst thing that could have happened to you in terms of you trying to let Mrs AL come over to your side.

I hope yyou won't have to endure too much "I told you so".
 
Well what I endure is "You trusted people who sold you a swampy land with quicksand, you trusted builder who didnt finish on time and made mistakes, you trusted an agent who did nothing, it was late, it was more expensive than they said, it couldnt be rented and we have to sell cheap!, I told you so, I warned you, even professionals got burnt in the Japanese bubble, you dont trust me and you ignored the risk to your family, you hurt them....." ouch!

Back to my under my rock
 
superted said:
Hi BV,

It doesnt seem fair i agree

Interest rates have lots to do with cross rates, attracting foreign investment and domestic inflation but nothing to do with equality across all countries.

Regards,
Ted

Hi BV & Superted,

I am no economist but as I understand it you cannot compare rates in one country to another on a nominal only basis.

For example I have read ( and correct me if I am misinformed) that US home rates are set by the 10 year bond rate and not the cash rate like here. And also you can NG your PPOR in the US.

BV you mention, Sweden, paying 3.1% for the mortgage. Why shoud we be the odd one out. Well I know in adjacent Denmark for example ownership of cars is greatly discouraged by high purchase taxes and higher rego tax for large capacity engines.

An I also know from a friend in England, council rates are huge and passed directly onto the tenant. Something like 40 pound a week for a two bed flat in Oxfordshire. 1.5hr from London.

All of these factors obviously adds the mix of ecomonic measures in that Country that is very different to us. Maybee 3.1% is equal to us?

All rates are not "apples for apples".

Regards, Peter 147
 
Sorry guys, this is off subject ofcourse but blame AL :D

AL
With all the respect, we find it hard doing business with REAs and
builders when we live just about next door to them and you decided
to do it from Japan?

If you were living in Melbourne you probably would have known
that it was swampy land and wouldn't have bought it,
or you would have pushed the builder earlier to speed things up
and the REA wouldn't have told you bull stories and most probably
you wouldn't have been forced to sell in a low market.

cheers
 
AL

Please come out from under that rock!!! I want you to buy a T-shirt with "ALWAYS.....ALWAYS LEARNING" written in big letters. Face the doomsayers squarely. They would have been around if you had made $1 million. "You were lucky this time but..... next time.....you'll see......we told you so." If you had held onto it those marshy foundations may have led to big cracks and you wouldn't even have found a buyer. You haven't said what kind of havoc this has wreaked financially, hopefully you will recover.

In 1994 my husband went into a joint venture to build a terrace house in inner Sydney. Got the land quite cheaply (my find!). My husband (architect) did the drawings for nix, others put in the guarantee for the loan money, one was RE agent who did the selling. The builder (doing us a favour for a friend) took 14 months for a 6 month building project. (We called it the house that Ross built) cos that was all the builder allocated to it - one carpenter. It was beautiful. But the market was deader than an Embalmer's Convention. After all the heartache, the building work, the hoped for architectural commissions that never came it was passed in to the one bidder at auction and we basically got our money back but not our time and sleepless nights and hopes for the future with the wonderful profit we were going to make.

We have all trusted people in the past only to find they weren't trustworthy. I'm currently trusting my loans officer is putting forward the best case to my bank for an OTP I have to settle next month. With valuers getting edgy I'm looking under my mattress for that extra money I will probably have to come up with ....(I'm sure I hid 100k or so under there, just can't find it....). Husband unhappy at work, I may be about to get retrenched - always a good look when applying for loans!!! Doomsayers are loitering.....told you not to buy OTP........told you the sky was falling..... It's like share trading. Sometimes you have to cut your losses and console yourself with the loss you have waiting to offset the next big gain.... Like you I was really worried about another OTP I settled last month and started listening to the bad press about my location. I still feel my gut was right. I got a tenant - took 3 weeks and $20 p.w. less than I wanted but ... hey.... it was $20 p.w. more than the agent thought I'd get!

I cried during the 1987 stock market crash too..... not so much for the $20k I lost overnight but for the NAB shares I could have bought for $4.20 ....so out from under that rock and start looking for the next pile of rocks that will make you some money.
 
superted said:
On the crash theme, recession, interest rates. Has anyone been followoing the comments from BIS shrapnel as they appear on TV randomly or in the print...is it just me or has the tone softened slightly depending on which adviser/economist is speaking.

I did a bit of much needed cleaning on Friday, I found the March 2000 BIS article from the SMH - definitively stating that the boom was over... and they still get press.

Remind me that if I ever want press coverage just pump out the media releases at either extreme POV.
 
Peter 147 said:
Hi BV & Superted,

I am no economist but as I understand it you cannot compare rates in one country to another on a nominal only basis.

An I also know from a friend in England, council rates are huge and passed directly onto the tenant. Something like 40 pound a week for a two bed flat in Oxfordshire. 1.5hr from London.

All of these factors obviously adds the mix of ecomonic measures in that Country that is very different to us. Maybee 3.1% is equal to us?

All rates are not "apples for apples".

Regards, Peter 147

Yes I'm a little unhappy paying £80 per month (1 bedroom flat) in council rates in England for my landlord at the same time as paying the ACT rates for my tenants in Australia - I bet British investors who move to Australia must be smiling!

Regarding the interest rates in different countries I don't think they can be compared either. The european house prices haven't hit the low rental yield levels of Australia yet and their economy is slow and highly taxed. IMHO the rates are mostly for economic policy objectives like encouraging borrowing for investment and business stimulation.
 
Top