Society/Culture Australian Property Prices to Crash?

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HirdsTheWord

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Jun 19, 2014
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UBank now offering 35 year term home loans.

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We will have 40 year mortgages by the end of 2029.

Interesting they only offer a 5 year fixed mortage. Huge de risk for them.
 

hamohawk1

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Feb 18, 2011
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This all comes back to the the western world pumping way too much money into the economy over the past 2 years. Would love to pot the libs but labor would've done the exact same thing, they were pushing for such scheme.
 

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Evolved1

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Jun 14, 2013
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ATH property and stock prices during a pandemic never made any sense to me. You can only prop the markets up so long before something gives, and I for one would love to see a big dump in property prices so our youth can get their foot in the door.
 

Number37

Anyhow, have a Winfield 25.
Oct 5, 2013
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ATH property and stock prices during a pandemic never made any sense to me. You can only prop the markets up so long before something gives, and I for one would love to see a big dump in property prices so our youth can get their foot in the door.


If the rate of return > the cost of capital you would borrow money and pump it into the stock market until your nose bleeds.
 

HirdsTheWord

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This all comes back to the the western world pumping way too much money into the economy over the past 2 years. Would love to pot the libs but labor would've done the exact same thing, they were pushing for such scheme.

Thatโ€™s just the tip of the iceberg.

Allowing your country to get into so much debt in the first place is the real issue. There is no wiggle room.

Inflation comes and goes and will always Do so. Putting your country in a position where it canโ€™t deal with it is the real issue.

Housing prices should have been dealt with years ago to keep them from being this inflated. Australiaโ€™s housing has just passed 10 trillion. We are more in mortgage debt than 99.9% of the countries in the world.
 

darcytiger

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Apr 11, 2007
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Didn't mean you,meant generally.
I'm talking a dead employment market.
Nearly zero house sales
Nobody affording 2 hand 4wd,s
Tradies not willing to take a factory job to make ends meet.
Tradies wives not affording nails and hair cuts.
Nobody buying 2nd hand jetskis.,motorbikes canoes,paddle boards and sail boards.
Having to use the stove to cook.
Making kids walk or catchbus to school.

The millennial will starve and their brains will
Cave in.

Will be an interesting time.
Show me on the doll where the tradie hurt you
 

Gigantic

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Aug 31, 2014
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Uncontrolled inflation + negative real wages means we can't inflate our way out of the debt either. Add to that, years pissed down the drain by the previous government that's caused low productivity because they'd rather sit back and enjoy watching money funnel out of the real economy and into the property market.
 

hamohawk1

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Feb 18, 2011
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US hiking rates by 0.75%, if the UK does the same we're on track for similar, if not .50% at the absolute very least.
 

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sdfc

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Feb 15, 2019
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US hiking rates by 0.75%, if the UK does the same we're on track for similar, if not .50% at the absolute very least.
The market's pricing in 3.75% cash by the end of the year and almost 4.5% by the middle of 2023. It's insane.
 

HairyO

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Jul 13, 2015
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The market's pricing in 3.75% cash by the end of the year and almost 4.5% by the middle of 2023. It's insane.

Its insane that we will be back to our long term average in a year or 2 ?

We should have been heading upwards 6 months ago, but instead the RBA Governor was saying we wouldnt see rate rises for at least a year.

Central Banks everywhere got very lazy.
 

sdfc

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Its insane that we will be back to our long term average in a year or 2 ?

We should have been heading upwards 6 months ago, but instead the RBA Governor was saying we wouldnt see rate rises for at least a year.

Central Banks everywhere got very lazy.
The cash rate should never have been cut anywhere near this low in the first place. Years of cutting rates to chop off the bottom of the business cycle has fuelled such a huge run up in household debt that the economy can't handle rates anywhere near the long-term average.
 

HairyO

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The cash rate should never have been cut anywhere near this low in the first place. Years of cutting rates to chop off the bottom of the business cycle has fuelled such a huge run up in household debt that the economy can't handle rates anywhere near the long-term average.

Lowering rates is fine but they waited way too long. We have known for months that inflation was going to go up a lot. And they sat on their hands.

The longer they waited the worse the housing market got.
 

Pessimistic

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We will have 40 year mortgages by the end of 2029.

Interesting they only offer a 5 year fixed mortage. Huge de risk for them.

If you are a retiree and the home loan is averaging 5% and your super 9%. So long as itโ€™s not a huge portion of your home equity why not?

Itโ€™s a nice basic diversified portfolio
Redraw is like very cheap credit card

Retirees or those about to retire soon might be asset rich (property boom) but cash poor (not a full lifetime of 10% sgl)
 

Pessimistic

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ATH property and stock prices during a pandemic never made any sense to me. You can only prop the markets up so long before something gives, and I for one would love to see a big dump in property prices so our youth can get their foot in the door.

The youth which will have almost 50 years of 10% super levy by the time they retire? Maybe itโ€™s not so bleak

Many now retiring will have had 20 years at most. Thank god they are living in decent property assets
 

Crankyhawk

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Sep 21, 2007
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I don't understand your point.
if your return on what you borrow is higher than the interest you pay on what you borrow, its "all good"
Until interest goes up or rate or return drops, and you find that the capital is also of less value..
then if you have to sell, you have debt left over with no asset...

risks of leveraging imo.
 

Pessimistic

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if your return on what you borrow is higher than the interest you pay on what you borrow, its "all good"
Until interest goes up or rate or return drops, and you find that the capital is also of less value..
then if you have to sell, you have debt left over with no asset...

risks of leveraging imo.

Sacrifice some gains to keep a decent liquid cashflow
 

Number37

Anyhow, have a Winfield 25.
Oct 5, 2013
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if your return on what you borrow is higher than the interest you pay on what you borrow, its "all good"
Until interest goes up or rate or return drops, and you find that the capital is also of less value..
then if you have to sell, you have debt left over with no asset...

risks of leveraging imo.

:thumbsu:

What happens if you do it short term?
Just keep turning it over, like it is a casino.
Money for jam.
The richest 1% have gotten richer over the last 3 years, whilst most others have almost reached the point of eating the paint off the walls. Who would have thought paint would be cheaper than lettuce!
Capitalism is like the carny kids at all the agricultural shows promising "everyone's a winner".
When it is really more like musical chairs where there is 5 billion people and maybe only a million or so chairs at best.
 

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