When the crash comes knocking on Australia's door...

[Caput Lupinum]

Yeah, like we're in the southern hemisphere for starters....

 

[aleks]

Plot twist:

China launches a stimulus program an order of magnitude greater than anything greater that has come before and China, India and Indonesia experience nosebleed levels of growth, the commodities market skyrockets. Economic feasibility studies are flushed down the toilet and any commodities project in Australia ever conceived of previously shelved is scrambling to dig shit out the ground. Boom times are back, Hockey is named as the world's best treasurer and in ten years time those who didn't fomo into the property ladder will be lamenting the near $2 Million median property price in Sydney.

 

[1for1]

I was listening to ABC News Radio's "Japan in Focus" today.. the story doesn't seem to be up yet
http://www.abc.net.au/newsradio/programs/japaninfocus/

The reporter recounted how Japanese house prices in Tokyo, Yokohama & Osaka are just 4 times the median wage. What's more, outside of these major centres houses prices are rock bottom, there's heaps unoccupied and are beginning to deteriorate.

Since the 90's Japan and Japanese wages began to decline. The owners can't sell because no one has the money to buy them at the $ needed to clear the mortgage... so they fall into disrepair.

Is this what our crash will look like?

Absolutely.. they are giving away houses outside of Tokyo.. could think of far worse places to live if you have an okay job.. life is good

There seems to be no housing expansion as Japanese tend to like to live in the same house their parents did being very family orientated people.. very different to Australia where the trend is moving towards living alone or with a partner with a large immigration and foreign expenditure with a government and media PIMPING OUT the real estate market

 

[bordsilver]

Population in Japan is actually declining as well (and has been since ~2009 from memory). Hence, unless average number of people per unit is decreasing then the overall housing stock will be decreasing (or being amalgamated to make bigger houses compared to the past).

Edit: It's different (t)here

 

[willrocks]

The owners can't sell because no one has the money to buy them at the $ needed to clear the mortgage... so they fall into disrepair.

So what happens to them? Do the owners keep paying mortgages on empty decaying real estate? Hoping for higher prices.

As many stackers will tell you. When the market moves, you can hope all you want, it won't change prices.

 

[Clawhammer]

The owners can't sell because no one has the money to buy them at the $ needed to clear the mortgage... so they fall into disrepair.

So what happens to them? Do the owners keep paying mortgages on empty decaying real estate? Hoping for higher prices.

As many stackers will tell you. When the market moves, you can hope all you want, it won't change prices.

Well, that's pretty much the reporter was saying.
Apparently its getting a bit like Detroit with the houses and yards becoming overgrown and rundown. It's left to the local councils to address.
They're ordering the owners to either fix up or demolish their houses... but they don't have the money to do either... and neither does the council :/

 

[Midnight Man]

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.

The problem is, I don't think having money in the bank at a time when the RE market bubble bursts is a wise idea.

Banks lend a considerable sum to homeowners for mortgages. If the market crashes, and RE prices fall, many homeowners will find themselves owing more money to the bank than the property is now worth, and as a result, will be incentivised to stop paying their mortgages and hand over the keys to the bank. At that point, if enough borrowers do this, your bank becomes insolvent, and closes it's doors permanently.

Don't even think about the government guarantee on bank deposits, it won't be worth a cracker when all of this is added up and the government admits with a big cheesy grin that the deposit guarantee can't apply in this situation because it's so "unique". And that this is the economic reset we "had to have".

 

[SilverDJ]

The problem is, I don't think having money in the bank at a time when the RE market bubble bursts is a wise idea.

It's the perfect time, so you can buy in when the blood hits the streets.
You do realise the RE bubble has burst several times before and the world didn't end, right?

Banks lend a considerable sum to homeowners for mortgages. If the market crashes, and RE prices fall, many homeowners will find themselves owing more money to the bank than the property is now worth, and as a result, will be incentivised to stop paying their mortgages and hand over the keys to the bank. At that point, if enough borrowers do this, your bank becomes insolvent, and closes it's doors permanently.

The chance of this happening you can realistically round down to zero.

Don't even think about the government guarantee on bank deposits, it won't be worth a cracker when all of this is added up and the government admits with a big cheesy grin that the deposit guarantee can't apply in this situation because it's so "unique". And that this is the economic reset we "had to have".

You stocking up on potassium iodide tablets too just in case?