Society/Culture Australian Property Prices to Crash?

[Taylor]

So easy everyone should do it

They should. It would make the swings bigger and put more money in my family's trading account.

I could build paradise 5,000ft up a mountain and it would be too much effort for some to walk up.

 

[its free real estate]

Lol, 50%?

A 20% price decline in a debt-financed illiquid market is a crash.

 

[CheapCharlie]

They should. It would make the swings bigger and put more money in my family's trading account.

I could build paradise 5,000ft up a mountain and it would be too much effort for some to walk up.

Which company do you use to trade through?

 

[Pie eyed]

TBH if you're going to make it your mission to buy as many as you can then you're probably going to end up among the fools who go broke and belly up. All good to own 7 investment properties until you're underwater on 5, three of them are empty and you only earn enough to cover the rent on 1.

Well that really depends what you buy them for, with what and how long you hang on to them.
Pay cash and you have very little exposure. Once they are rented you have a very good income stream.

 

[Taylor]

Which company do you use to trade through?

His.

 

[Nuggs Bunny]

Well that really depends what you buy them for, with what and how long you hang on to them.
Pay cash and you have very little exposure. Once they are rented you have a very good income stream.

Damn son, if you're in the position where you can already pay cash for multiple houses then Lieutentant Dan says you don't need to worry about money anymore.

 

[Benny78]

Anyone thinking places like Narre North and Warrandyte are going to crash think again! Every suburb doesn't go down the same, some have barely even moved to begin with. Places like Glen Waverley/Springvale//Clayton will all crash big. These are below average areas that shotup way too much. Clayton had a 1mil median at one point.

Dandenong hasn't moved at all or hardly the last 5 years. Don't see that crashing 20-50%. That will actually gentrify soon as everyone who used to live there has moved to Clyde and Officer

 

[CheapCharlie]

His.

Top secret..okay

 

[Benny78]

Damn son, if you're in the position where you can already pay cash for multiple houses then Lieutentant Dan says you don't need to worry about money anymore.

You don't buy them the bank buys them. Any idiot could've done it before the credit tightening!

You could've picked a house for 200k and watched it double within 6 months if you knew what you're doing. Then you could've split that 200k equity into 10x20k deposits for 10 more 200k homes.

It's just some people research it and get it right, others have no idea, and the worst group only wants one when they seem going up in the papers. Basically this worst group are millennials who bought after 2015 and this is exactly what they deserve for buying at the top.

 

[twotooto]

How many beers are you down when you post?

It's a solid username<>m.o. correlation. Methinks Pie eyed be Pielastered.

 

[Benny78]

Say a house in Orbost in 2030 is worth 600k. Then you buy it and it goes to 900k in 2032.

You never needed 600k or paid it. You and your partner had a 100k income combined and serviced a loan of 1100 a fortnight. That's why in my opinion they're not expensive and are actually the biggest free ride in human history when it comes to making money. The prices just scare off idiots who think they actually have to pay that over 30 years. When what actually happens is at some point a chinese person pays it for you and then some.

 

[Deliverance]

You don't buy them the bank buys them. !

You could've picked a house for 200k and watched it double within 6 months if you knew what you're doing. Then you could've split that 200k equity into 10x20k deposits for 10 more 200k homes.

And 10x180k bank loans. Who the * is being loaned 1.8mill?

From a general point of view.
Personally, I can admit I was wrong. I thought a crash was coming earlier than this. I've cashed in all property investments.
But it still seems a perfect storm of massive mortgage stress, removal of international investors, reduction of interest only investor loans and soon to be removed negative gearing will hit the market pretty hard.

 

[Espe]

You don't buy them the bank buys them. Any idiot could've done it before the credit tightening!

You could've picked a house for 200k and watched it double within 6 months if you knew what you're doing. Then you could've split that 200k equity into 10x20k deposits for 10 more 200k homes.

.

That's a Ponzi scheme.

 

[Scotland]

Lol, 50%?

A 20% price decline in a debt-financed illiquid market is a crash.

But they are. Same levels of unemployment, recession, etc. Just nominal prices float for a decade.

Nope and nope.

 

[its free real estate]

Nope and nope.

Yep and yep.

 

[Frank Grimes]

I've heard of people doing this my entire adult life. Most of them don't get a win on the board.

True. I remember people telling me that house prices were over valued in back in 2005 and wait for the market to fall. Thankfully I didn't listen to them.

Nobody can tell how the market is going to react. There was an economist who lost a bet in 2008 saying that prices will crash by 40% and had to hike to mt Kosciuszko after losing. Seeing that prices have almost doubled since then, they would have to fall 70% for him to be right.

Prices won't always go up, I'm just pointing out that nobody can acuately predict the property market.

Though at the moment the market is clearly in decline in Melbourne and Sydney. The reason in hindsight is because of banks tightening their lending. I believe access to loans is the biggest driver for house prices.

 

[Jibroni]

Our tax system won’t allow a housing crash but I think a gradual decline of 20% in 7 years in plausible.

 

[Leeda]

Lol, 50%?

A 20% price decline in a debt-financed illiquid market is a crash.

regret is always a bad outcome in regards to any market crash, or market surge.

 

[Seeds]

Our tax system won’t allow a housing crash but I think a gradual decline of 20% in 7 years in plausible.

Our tax system?

 

[Espe]

Our tax system won’t allow a housing crash but I think a gradual decline of 20% in 7 years in plausible.

Ok firstly, wtf does the tax system got to do with anything?

Also 20% over 7 years? Nearly halfway there in just 1.

 

[The Edukator]

These declines are a result of tighter credit. Lol if you think that's going to last 7 years.

 

[Nuggs Bunny]

These declines are a result of tighter credit. Lol if you think that's going to last 7 years.

People just want a doomsday scenario. Two years before it was incessant wailing about property prices potentially increasing by 10% a year for the rest of eternity and pricing an entire generation out of the market and yet in the space of 24 moths, people are talking about a crash of biblical proportions. I've noted this forum has a propensity to rail against political biases in the news, yet the enormous professional bias of "property journalists" doesn't stop them from lapping up every Chicken Little story about the next disaster that's right around the corner. The actual figures from the independents are grim, but not diabolical.

 

[Benny78]

APRA gone. Hopefully this starts another mini bullshit boom. As it's what completely destroyed the boom in the first place!

 

[Footyfan61]

True. I remember people telling me that house prices were over valued in back in 2005 and wait for the market to fall. Thankfully I didn't listen to them.

Nobody can tell how the market is going to react. There was an economist who lost a bet in 2008 saying that prices will crash by 40% and had to hike to mt Kosciuszko after losing. Seeing that prices have almost doubled since then, they would have to fall 70% for him to be right.

Prices won't always go up, I'm just pointing out that nobody can acuately predict the property market.

Though at the moment the market is clearly in decline in Melbourne and Sydney. The reason in hindsight is because of banks tightening their lending. I believe access to loans is the biggest driver for house prices.

Supply and demand plays a large factor in to house prices.
Looking at property in Australia as a whole it was only NSW,VIC and a lesser extent Tasmania that boomed and the rest of the country was rather stagnant or in decline

 

[Hamingja]

I can't picture a motivation for selling at such a loss, I'd rather hold.

If it is an owner occupied you can generally do that if your personal circumstances stay the same. A big thing in a falling market would be relationship break ups. Neither person can usually afford the mortgage on their own these days so they have to sell when they split up. Anyone that has bought recently and then later has a relationship breakdown after the prices have dropped are in for a bad time. There will be tons of parental guarantee loans out there that will end up in tears in this scenario. Parental guarantees were basically risk free in a rising property market so the banks have been happy to hand them out like candy knowing they will never have to call the guarantee in and parents have lined up in droves to help their kids into the property market, win-win-win for all parties. With the property prices always going up, the borrowers didn't even have to make a dent in the principle really, they just had to wait a few years and then could release the parental guarantee due to the property growth alone. Tune in to the project for the parental guarantee bubble burst stories coming soon. That prick of a son/daughter in law has ruined us. It's all the banks fault yada yada.

It's the leveraged investors that are really screwed in this scenario though. They bought up multiple properties on interest only loans without the ability to be able to service on P&I. Now the banks have tightened lending and once the i/o loans start switching to p&i payments they cannot refinance to i/o again and are stuck with loans they cannot afford the repayments on. Most i/o periods go for 5 years so as far as the royal commission crackdown goes we are only very early days into these people copping their medicine.