"Investment, finance and economics is all about understanding and managing risk, and when we cannot trust anyone to tell the truth about risk, be it media, politicians, family, friends, and certainly not real estate agents, it is the surest sign that we are reaching the zenith of the largest land bubble in Australian history." "For otherwise intelligent and expert commentators and leaders to accept the very real risk of collapse, but to convince the impressionable young to assume that risk is a deeply selfish and contradictory perspective that must be condemned. History will ensure that it is condemned.... It is inevitable that we will see at least some price falls, and that these price falls will lead to a rush for the exits when there is no longer any policy or monetary levers left to bail out the market."
When bubbles pop, prices always return to a level lower than the starting point of the "irrational exuberance". Where do we pinpoint the start?
Mid 1970's (that was the legitimate start to the bull market). I do not think it will go to those levels though but that was the actual start of it.
I've come to the conclusion that arguing/ trying to convince folks about such things is akin to trying to convince citizens in Soviet Russia that there is a better way. The one's that have had enough have already got out ( or are in the process) The one's that are unsure will argue tooth and nail with you. And those that have skin in the game will persecute you. So, like soviet russia, no amount of jawboning is going to change things.... it has to collapse before it can be fixed.
In other news.. On the next season of the block we get together a new group of plebs to see which team of narcissistic wankers can out do themselves with a false sense of importance and sink good money after bad into a non productive asset in sydney's latest trendy shit hole
Gawd that was a great piece of writing about the rotting heap that is the Australian RE market! I'm guessing it was written by Kris Sayce or Dan Denning or one of their colleagues at The Daily Reckoning? It was them who first opened my eyes to the truth about RE here in 2010 already - while 99.9999% of Australians were fevrrishly spreading the gospel of real etate written downunda! The rotting pile of dung that is our RE market certainly maintained its momentum for longer than most of us contrarians thought possible - thanks to guvmnt and bank meddlng - but all that has done is to inflate the bubble more thus ensuring an even more spectacular collapse! The day of reckoning draws nearer...
So should one sell their own home or speculative investment properties only? I'd consider selling mine (currently around the 400k valuation, 120k mortgage, 250k purchase price 8 yr ago) in toowoomba but my housemates are paying the mortgage and where will I keep all my shit?! I've always felt the toowoomba market prices have been quite subdued compared to the big smoke (and therefore have less to fall in a probable revaluation scenario) but wtf do I know..? Then theres the issue of where to put 250k.. I dont trust the share market (bubble) or the banks for that matter (can you say bail in?) and probably the only real option I see is buying up big in gold /silver and leave it sit in the reserve vault or holding a large cash /pm position waiting for shtf. Your thoughts?
There were a number of members here who sold their RE years ago and bought PM's. They have not had a return in years and have watched their PM's decline in value. As you say, the share market is in a bubble, bank it and watch inflation eat your savings, put it into your super and kiss it goodbye until you are old. Read this before you do anything: http://forums.silverstackers.com/topic-22856-building-an-investment-property-portfolio-101.html and remember, no one here has a crystal ball and if there is one thing I've learned, the powers that be have been kicking the can down the road longer than most of us thought possible.
It'll be front page tabloid news - HOUSING CRASH! if average prices drop by 5% average in a year. Whoop-de-doo I've seen many houses in Sydney drop by 40% after the last bubble in mid 2000. As usual, land will hold it's value, people who paid top dollar for shiny chrome plated and glass McCastles, or astronomical prices for new trendy apartments that will be the losers, as they were last time. Some will drop back to levels 5 years ago, some will drop bugger-all, it'll be a huge range.
Whatever you plan to do, do it early. Because if you wait and you're 1 second too late... you've missed out. Here's a little talk from Tony Robbins. Mainly about shares, but in truth its about spreading your risk... and should apply to all investment classes https://m.youtube.com/watch?v=c0ARb1N-3kM
They are. The only ones who should be really considering getting out are those in Sydney. You should never sell your home unless you have a compelling reason to move, but if you have investment property in Sydney and bought in say 4 to 5+ years ago, I'd be selling them and cashing in within the next year. Almost everyone in that boat would have almost doubled their money. Heck, if you only bought in 2 years ago in Sydney you'd be doing great guns. If you hang in there thinking you'll double your money in another 4-5 years, or even 10 years, you are delusional and deserve to get burned. Anyone who thinks the government is going to bail-in and get you cash in the banks is more delusional than those who think property in Sydney will double again in another 5 years. I think you are pretty safe in Toowoomba, I wouldn't do anything.
Inflation is bugger-all in the scheme of things, a couple of a percent. There is nothing wrong with keeping your money in the bank, the interest (what little there is) basically balances out inflation. If you want to argue a percent here or there, go ahead. Just remember that silver has swung +/-5% in a single day in recent times. Smart people who are good disciplined long term savers and investors shouldn't need to use super.
So 40% drop in Sydney brings us back to what.... 2011 prices? And is that really the bubble bursting, or is that just a correction? And really, is there a bubble anywhere but Sydney... Prices are fairly reasonable here in Brisbane IMO.
