Warnings of an asset crash just went mainstream: "correction" likely

I think they have the monopoly to do that lol.
I've seen it many times. Look at the tricks that politicians perform in order to get 'budget ok'. These are, in fact, the very same tricks that they sue private companies for fraud for.
One of the biggest existing examples: if fruit producers, instead of compete, would come together to agree a same price, it's called "price agreements" - fraud. If governments come together to agree a same price, it's tax "harmonisation" - NO fraud.

 

When does a company stop?
When the bills exceed the income?
Year loss.
Another year loss.
One has to eat it.
And at some point everybody ceases.
To try something else.

 

Those doing the job bad: their light goes out.
The others, see opportunities.
I think it's named 'correction'.
It has to be allowed.
The longer it isn't, the bigger it will be.
That's a really old story.
World doesn't end. Goal is just to cross the ugly bridge with as much as you can.
What may make the difference? A promise versus a bag goodies?

 

.

 

This one line perfectly encapsulates your cognitive dissonance on the value of properties vs everything else

In a scenario where most listed companies would fold, most businesses would fold.
In this scenario there would also be massive unemployment

If businesses shut down, who would rent commercial property ?
If there was massive unemployment, who would rent houses ?
Rents would drop massively and the value of properties along with them

Property is not somehow disconnected from the real world - it is highly integrated with it

Try being a property investor in Greece or Argentina and see how you go

 

or USA.

thanks to the fed, and zero interest rate policy, 30 year fixed loan at almost 3%, house prices climb back up again.

if the fed/rba closed its door, what would happen to all of those houses that keep coming down, and banks wants to get rid of the house. Fire Sale !!!

i hope those days will never come.. as i am exposed as well.. although not a lot.

 

It is not simply a matter of rising interest rates killing the housing market. Don't forget the housing boom in the 80's with increasing interest rates.
the real estate market is a variable animal depending on location and price.
Overseas money is driving the top end and it would not matter if interest rates went to 10% if the reasons for the overseas money does not change.....ie diversifying out of dead currencies (euro) or escaping from banking industry bail ins etc.
It is not always a domestic issue which everyone incorrectly assumes. global influences can more than counteract domestic ones.

 

Unless it affects the AUD value against other currencies.

 

This would give even more reasons to buy.

 

Only if AUD went down.

 

no, no, no....that's just it....
Watch our stockmarket when our currency improves...........through the roof..
As it is with real estate....profit on the capital gain and the improvement in the exchange rate.
It is too risky to invest in a nation with a depreciating currency....your profit margin can easily be wiped in the currency exchange.....

 

http://www.theguardian.com/world/2014/feb/28/home-ownership-greece-property-market

 

I had no idea things were that bad over there.

 

To illustrate my point regarding domestic issues and exchange rates etc.
Look at spain in the early 2000.....the English were falling over themselves to buy Spanish real estate.
The pound was dropping against the Euro which increased their perceived capital gains.
The property boom was not due to domestic influences. Interest rates could have risen or fallen in this time and nobody would have given a damn. The boom was on.
Eventually the boom went bust and combined with a collapsed domestic economy eventually led to devastating losses.
We are all waiting for this bust but many factors are in play. Our interest rates and the u.s. will rise which will in turn lead to more capital inflow seeking a safehaven. Our domestic situation may be crappy but that will not make enough difference to counteract the influx.
This housing boom will appear to defy logic but by observing the capital flows and understanding why they are flowing the way they are makes everything clear.
Of course the boom in specific real estate markets will eventually end.

 

All booms defy logic... some for a long time... until they don't

 

We don't live in the failed states of Greece or Argentina, the tax and property laws are not the same as the U.S or the E.U. or south America the tax and property laws are AUSTRALIAN.

What part of that don't you get???? I have said many many times on this website you will be F#@ked if your gearing is too high.

Our super properties are worth 10x what I paid for them and every 2 years 2 months I get a full return on my total original total purchase price plus stamp duty and legals. They are owned outright and I have written about a moat of bullion as a hedge. Check out my property investing 101 for the who what where when and why. I use that tax fee Return On Investment to pay down my other property investments which now are under 30% gearing.

Your doom and gloom scenario says to me like most males you have two heads but your thinking with the little one you need to take your hand off your little head and scratch your big head and pay attention to what I am explaining. If it all shut down ? yes I'd lose 60% of my assets but unlike you we could retire comfortably because 40% of our assets are out of the reach of creditors.

You... like the reserve bank F#ckwits and the economists who cannot chew gum and walk and the Fairfax press are doing their best to bring on a property crash. I am willing to bet that the Fairfax press will go under before the so called property market.

Back in 2006 I like a few others saw the sub prime evolving and when I went to my bankers all stressed out they laughed at me. After 2008 and the Lehmen brothers crash they weren't laughing.

Steve Keen sold his Sydney flat in 2008 and six years later he's still waiting for that property crash.

My take if and when it occurs good property will always recover. You hear a lot about how property in the US and Europe collapsed. What you don't hear is that places like New York and London blue chip properties are 40% above where they were in 2007.

Kind Regards
non recourse

 

What part of my post did you actually read ?

I said nothing about gearing, nothing about property being a bad investment, nothing about how well you have done out of it
I didn't paint any doom and gloom scenario or wish a property crash

I simply said that property goes where the economy goes - it's just another investment
Yes good property will recover - I agree - and so will good businesses
You can't have one without the other

Like it or not, the success of your property is linked to the success of those companies on the stock market you seem to detest :lol:

 

In a nutshell.

People.
Products.
Trading.
Gaps between trading.
Gap-bridging products.
A given product X.
X alot used > X got added alot value.
Trading gap passed.
X alot sold > X got removed alot value.

What makes success?
Not X.
But which ticket you received when chosen.
100 tickets.
Got number 100?
You paid the highest price to number 1.

What's a crash?
When all the added value is taken.
What causes a crash?
When it wasn't taken for a longer time.

 

We all die, all companies eventually fold often when the owner does.

Six feet under usually involves real estate

It doesn't disappear

What were you arguing about ? I think your dissonance toward property is cognitive.

Kind Regards
non recourse