Thnings are slowing a lot quicker than I thought!

evand said:
The fundamentals of property wont change.....low yields, historically very high prices, huge personal debt etc
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Evand

Watch carefully because the yield thing is about to turn around and interest rates may stay low for a long time.
By Intl standards our property prices are not very high

Our interest rates are unacceptably high and this is the problem.
You can't have 10% interest rates in a decent economy,
common RBA wake up, we are not Zimbabwe
 
Ausprop said:
strange - i dont really feel things slowing at all. I have been thinking that we are suppose to be in this big recession but nothing seems to have changed.
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Things have certainly turned for the worse in the buidling industry, we have been warned that people will be losing their jobs probably next year unless things change.
Also, I have been told that banks are valuing properties just before completion and as they are valued at less than the loan are refusing to hand over the final payments.
 
refusing to hand over the final payments.
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How would that play out in practice? Does the house just sit there, unfinished? Hard to see how that protects the bank's interest. That would be scary for the "owner". :eek:
 
Sunfish said:
How would that play out in practice? Does the house just sit there, unfinished? Hard to see how that protects the bank's interest. That would be scary for the "owner". :eek:
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My wording slightly incorrect, the bank sends the vauler out when they receive the final claim so the house is all but finished. The clients meanwhile have everything organised to move into their new home and have been waiting months for this so at this stage they are pretty anxious for handover. They would be faced with the option of continuing to rent or sourcing some more funds to pay the builder.
 
So if the "owner" couldn't find the cash the builder gets hissed and forces a sell up. By the time he and the bank have split the proceeds the "owner" has done the lot.

If I thought there was any chance of that happening to me I'd run.

(Not arguing, just trying to get my head around this.)
 
I know a few builders and have never heard of this happening. If you have a fixed price contract and the loan has been approved then why wouldn't the bank hand over the final payment.

Maybe you are referring to higher end property with mainly fixed price where people have gone overboard on the PC items? I would not expect this to happen in too much in mainstream housing.

What were the circumstances?
 
The only thing I have heard of first hand of the slowing economy is my wife's beautician. She has gone from being really busy and not being able to get in for a booking, to have only 1 or 2 bookings a day and looking for a night job to help her cover the costs (long lease casue she has been raking it in for years), all in the last couple of weeks. We are in a well off inner city suburb so maybe margin calls due to the turbulence? Hasn't affected turnover in any of my places yet.
 
Not good....it is a clear sign....it is usually the non essential spending that takes a plastering!:(:(

RPI said:
The only thing I have heard of first hand of the slowing economy is my wife's beautician. She has gone from being really busy and not being able to get in for a booking, to have only 1 or 2 bookings a day and looking for a night job to help her cover the costs (long lease casue she has been raking it in for years), all in the last couple of weeks. We are in a well off inner city suburb so maybe margin calls due to the turbulence? Hasn't affected turnover in any of my places yet.
Click to expand...
 
even tho we are financially okay - the current situation has made me stop and think about unneccesary spending also.

there is a swing band coming to town that hubby and i would like to go to, but tickets will cost around $100 so i haven't bought them. now, $100 is nothing in the scheme of things - and we can afford to go - but the mindset has changed.

a year ago i started shaving the legs again instead of waxing - why pay $40/mth for a wax, when a razor costs a couple of dollars?

just a few little changes in the mindset and off we go - less spending.

actually, i think the majority of my mindset is that i want to pay off some debt asap so that i can go property spending again as we are at our servicing limit - especially as lo and no docs are off the board.
 
hi all
first have a read back about 6 months maybe longer and you will see that the chinese have been investing and still are
anywhere on this rock of ours so that when that bridge is raised they can run to the airport get on a plane and go some where and not china.
so to say that they don't think it will slow is simply not true
how long it will last is a very different question and there is still alot of steam in that boiler for me
as for banks holding stock because they don't wish to pay the last 20% taht been going on for years
what they do is at 80% they re evaluate the site and see if they are going to get there money back and is there security enough to cover the debt
you would do the same if you lent some one some money and he said he will pay you in say 10 months you ring him in 8 month to make sure he's still alive and taht you will get your money.
the banks do the same
now if you don't they have to decide finish lose money
liquidate lose money
which loses the most
we are talk casino gambling here.
before the dealer was the bank as he was giving the money.
now the table turns and you owe him and he has to guess whats in your hand if he puts money on the table will he get it back or does he fold and take the chips on the table.
the trouble with this game is the chip on the table are less value then he bought so he bought 1000 chips and the value just dropped to 500 of each chip and not only that but while he is deciding the chip price is dropping.
try that one in a casino.
and then you will see why things change very quick.
for those that have not seen a change.
that god for one market that has not adjusted.
the comm out west of sydney is off by about 30%
the east resi say bondi etc is about 25% and the darlinghurst is off by about 30%
and this is not prices down this is what selling against val
and that auto takes down val
will we have a commodity fall
no
why because there are a couple of other countries other then china and india that are running on a freight train that will over take them very shortly
and yes china will correct and the others will take up the slack
the issue for us is alot bigger.
for every coal mine we lose a farm.
and yes we get a income from the coal but the farm commodities are increasing at a higher rate.
so in reality we are selling a item at say 10 dollars and destroying a commodity of say 25 dollars
so we are going back wards.
now when you have dug out the coal what do you do with it then
turn it into a park
not only that but arable land( which is were mot of this coal is)
why because coal is made from dead and rotting vegitation and you don't get that in a desert that much)
is going backwards fatser then that freight train that the other countries are aiming at
so at some point we are on a collision path with that freight train
and we are driving a motor bike
not only that we are the passanger and the driver has not got a clue how to drive.
for me it not come on very fast at all
again in reality its come on slow.
and should have happened about 2006 to 2007
as that was 4 years after 2003 when banks started the backward pedal.
for me we have alot more problems then the melt down.
we need to dig out the materials ad yes sell for the highest price.
but is the highest price
the price today or the price tomorrow and buy doing that does that cut of our b-lls so we can't the produce tomorrow.
as I am getting more farmer educated its like having a winning bull and instead of selling the semen sell his whole b-lls and reattach to another bull.
and thats what we are doing
we are selling coal tenaments they pull out the coal leave a big hole and turn the coal into their power
coal tenament bull
ex b-alls whole in ground
their power surigate bull
its the same
difference here is that I can get a new bull as I have a tube with his dna.
I don't have a new fertile land without a big hole in it
and fertile land is going backwards by 20% per year
and to put this into prospective and into how we look at it against the rest of this rock.
uae, the saudis even the libyans are putting over 10 billion each into land reclamation and reforrestation.
and they are not doing it on fertile land like we have
all three are doing it onto sand and have pushed the water back to do it onto the raw sea bed.
we are digging and selling to the people that are pushing back water to give them what we have
now isn't that some thing to think about.
uae is putting a chicken farm on a sea bed with grain grown from recycled water and feedlot produced for the local market
and its produced by a australian company.
ground breaking stuff
did they think this stuff has come on quick.
no
its just we are at the tail end of information.
an again not to point fingers but website like this have a bit to play in that information lag
because if we were to post do you want to get involved in this.
we would have asic,mods even dazzling saying you can't post that
but its great to sit on the beach and say I wish I caught that wave.
and then when wave hit you say
gee I didn't think it would come up that fast
and the board rider says what do you mean fast
I have been shouting for the last 10 mins get out of the way.
and you just didn't listen
well have a read back about 6 months that the board rider
me has been saying get out of the way and I can tell you now I am on the little front wave
and Im telling you that behind me I see a 15 mtr wave comming.
and that will be wheat water and beef
and unless someone starts to look we are going to have some very big problems with all three.
oh and while you are on that beach thinking whats that little wave out there
mr rudd is over your shoulder
and he is in the pub having a chat with the rba and won't be out until that wave has swamped you and the rest of us
 
:D This one just may be his longest post yet.

P.S Just got home from the beach ( beautiful sunny silver sands beach ) The water was great, but no waves in sight....:confused:
 
Gross,

I followed you the first part, but got a bit mixed up in the second.

Are you suggesting that minerals and energy will be used up at a hugely greater pace than expected, to be quickly followed by wheat, beef and water? This is from demand coming out of BRIC type countries (what sort of timeframe?)? Evidence for this need is the above farming projects other countries are working on?

And therefore Australia will be very vulnerable to this 15m wave you see coming as they will have few resources?. So is the wave economic or geographic?

And how do you suggest Joe the Plumber, who cannot yet stand on a surfboard, make sure they don’t get swamped?
 
hi all
yes i do
they are not slowing quicker then you think.
its just your not looking correctly.
is it going to slow even quicker
yes
what going to be the next problem
the farming community.
why
the prices for all food stuffs is going to go thru the roof because the cost is going thru the roof.
so the beach maybe great but won't be if a burgers cost 15 bucks and 1 buck for the sauce.
beef is being held down but for how long.
try to get chips at 8 bucks for the small size
the lets see is its all roses.
this is the shortened version
hi tulip
minerals will get eaten up at the same if not a high degree but arible land is fall at a higher rate with wheat water and beef very close behind.
and I do not need to give evidence of the project try googling
for get a 15 mtr wave this is not economic or geographic this is demand and that demand is already building.
as for joe the plumber he has to understand and how he survives is up to him.
and will he get swamped for me yes he will
how will he get thru I have not got a clue nor do I think I will try that.
but I can tell you one thing.
it wont be with any government assistance
 
Rockstar said:
I know a few builders and have never heard of this happening. If you have a fixed price contract and the loan has been approved then why wouldn't the bank hand over the final payment.
Click to expand...
I've had it happen- early 90's.

The house was built, and final payment was due.

The val came in well below previous estimates.

This not only affected prices- it also affected LMI (Loan Mortgage Insurance- what the bank charged me for a loan above their protection ratios).

I paid up some money in cash to cover the difference. I paid the cash by credit card. I saved a lot of money by bringing down the LMI down just below their ratios.

It may have been something like- pay $2000 extra credit card to reduce the LMI to just below their 90% ratio.

And this saved something like $1000 (or more?) in LMI payments.

The LMI payment scheme was stepped. So reducing from 90.1% to 89.9% saved a lot.
 
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