I know a few investors that went belly up during the early mid 1990's ,what the Banks would do is bring in a new manager and call various investors in and ask them within 3 months to fix up the mess or they would call in the loans,or just look at any money lending contract and look for the all monies clause,it will be in there somewhere..
What happens when Boom goes to Bust..
- Thread starter sash
- Start date
I know a few investors that went belly up during the early mid 1990's ,what the Banks would do is bring in a new manager and call various investors in and ask them within 3 months to fix up the mess or they would call in the loans,or just look at any money lending contract and look for the all monies clause,it will be in there somewhere..
Yes I do. I think Sydney will probably peak this year and put in a similar top to that seen in 2003 (that won't be surpassed for half a decade at the earliest and prices down 8-10% minimum). The downturn may even be worse than the 2003-2005 decline after Sydney's last peak depending on what other economic conditions we see over the next couple of years.
Couple of things you can do:
1. Revalue you properties now and get it to 80% LVR or less. Any spare cash keep it in a offset.
2. Observer interest rates...some banks are offering 1-3 year fixed rates at 4.38%. Fix before they rise....when rates do go up..it is unlikely the bank will charge you to break as they can loan the money for more
3. Keep lots of money in offsets.....cash is king!
I don't think banks will repossess if you have great conduct and not behind. The neagtive publicity and flow will be disasterous. But ensure you are not behind in payments.
The old hands would have seen what happened in the early nineties and mid 2000s.....the newbies who are full of confidence and have not seen a downturn watch out.
As they say be alert not alarmed....prepare a lifeboat while times are good.
1. Revalue you properties now and get it to 80% LVR or less. Any spare cash keep it in a offset.
2. Observer interest rates...some banks are offering 1-3 year fixed rates at 4.38%. Fix before they rise....when rates do go up..it is unlikely the bank will charge you to break as they can loan the money for more
3. Keep lots of money in offsets.....cash is king!
I don't think banks will repossess if you have great conduct and not behind. The neagtive publicity and flow will be disasterous. But ensure you are not behind in payments.
The old hands would have seen what happened in the early nineties and mid 2000s.....the newbies who are full of confidence and have not seen a downturn watch out.
As they say be alert not alarmed....prepare a lifeboat while times are good.
Yep me too. I though about 2019 as well. Low LVR and ready to go. Maybe not buying aggressively but at the ready.
Sash,Couple of things you can do:
1. Revalue you properties now and get it to 80% LVR or less. Any spare cash keep it in a offset.
2. Observer interest rates...some banks are offering 1-3 year fixed rates at 4.38%. Fix before they rise....when rates do go up..it is unlikely the bank will charge you to break as they can loan the money for more
3. Keep lots of money in offsets.....cash is king!
I don't think banks will repossess if you have great conduct and not behind. The neagtive publicity and flow will be disasterous. But ensure you are not behind in payments.
The old hands would have seen what happened in the early nineties and mid 2000s.....the newbies who are full of confidence and have not seen a downturn watch out.
As they say be alert not alarmed....prepare a lifeboat while times are good.
Based on your experience, is bank able to revalue and cancel spare money if not used for long time?
Plan to re-val next year, keep it as LOC. When the market change to buyer market, I will use it. By saying that, that spare money could takes up to 2-3 years. Does Bank have ability to take their money back?
Or simply choosing the right product with mortgage broker will do the trick?
If you can ...keep cash across a couple of different Offsets.
As for LOC...yes they can cancel this as they are secured against property....Offsets are essentially transaction accounts so a bit more difficult to take away. In any case spread risk via keep Offsets via a couple of different banks.
Bear also in mind the govt quietly brought down how cash they will guarantee from $1m to 250k. If you are with a Big 4...not as much an issue.
As for LOC...yes they can cancel this as they are secured against property....Offsets are essentially transaction accounts so a bit more difficult to take away. In any case spread risk via keep Offsets via a couple of different banks.
Bear also in mind the govt quietly brought down how cash they will guarantee from $1m to 250k. If you are with a Big 4...not as much an issue.
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Refinance as much as you can, pay down what you can
wouldnt that just increase yoir risk profile even thoigh you are cash rich?
eg house worth 500k at its peak, you refinance, and then its value drops to 250k, you ve got 400k cash from the refinance for a house thats worth 250. if you kept it as backup then its fine but if you spent it on personal choices or invested it somewere else, youd be in a potential pickle
i suspect a major slow down or plateau in sydney prices, but honestly i cant see a drop at all.
i would love to see a drop,to be honest, so i can buy more
Watch Brissie...when it takes off..time to get out in Sydney...
Already heaps of Melbourne/ Sydney people in the Inner Brisbane market.
Already heaps of Melbourne/ Sydney people in the Inner Brisbane market.
I think bris has already long taken off, like 1.5-2 years ago, whether its going to boom i dont think so, i think it wil just be aove average growht
Whilst people are slapping each other on the back...it might be a good idea to see what happens when the market turns...will be particularly useful for newbies who have not seen a bust!
I was telling people at a Seminar run by a spruiker to avoid mining towns as it will inevitably come to a bust....see the story below.
http://www.abc.net.au/news/2014-04-28/boom-bust-moranbah/5353114
The irrational behaviour in Sydney...could result in similar price fall in some areas of Sydney....
I am hoarding cash to buy aggressively in Sydney from 2018-2020! I feel we will see a major correction..at some point....
In my opinion we still have a fair bit to go in Sydney - circa 30%. I believe this will come quite quickly now - circa 18 months. Then we will see a price drop of circa 10 to 15% over the next two years , then 8 years of stagnation then the next wave of prices up. Therefore if I don't buy in Sydney again in the next two months (for a quick turnover trade) I will not be buying until circa 2026/2027.
Only my opinion and for any newbies here please seek your own due diligence and listen to others on the forum. I started a Sydney Silliness Warnings 2015 thread in which I am trying to put the warnings out there so people don't get burnt which is also probably what Sash is trying to get across in this thread too.
There have been quite a few members saying they wouldn't buy in Sydney at the moment , or for a while .
Cliff
Agreed!
I'm selling! No, not everything, not even half, but enough to give a nice little nest-egg to sit in some offsets.
Agreed!
I'm selling! No, not everything, not even half, but enough to give a nice little nest-egg to sit in some offsets.
Well done Skater on your sale/s etc. You have done well from what I have read in other threads and all the best to you. Sounds as though you are following a plan and are taking a very sensible approach. If I was you I would be riding the wave a bit longer but hey who knows when the worm will turn and as you say you are not even selling half so really you are riding the wave.
Maybe skater wants to skate off elsewhere and buy in other places and be a bargain hunter ...
Cliff
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