The Great Australian Property Swindle
#61
Re: The Great Australian Property Swindle
I found that report hard to read with the overuse of underlining, wild italics, exclaimation marks.
It read like those ads in the Sunday papers and did not make the author come across as believable.
Anyway- affordability in years gone by? I remember a relative getting married in the late 1970s. To prepare for buying their house, they saved for the deposit for a year- no going out, no clothes, no holidays, no car and this was the norm apparently.
Then parents paid for the wedding.
The they moved into their house with borrowed minimal furnishings.
So perhaps it is not so much housing affordability which has changed, but peoples' expectations of what they should have. No-one i know would put their life on hold for a year to save for a deposit...that's what banks are for!
It read like those ads in the Sunday papers and did not make the author come across as believable.
Anyway- affordability in years gone by? I remember a relative getting married in the late 1970s. To prepare for buying their house, they saved for the deposit for a year- no going out, no clothes, no holidays, no car and this was the norm apparently.
Then parents paid for the wedding.
The they moved into their house with borrowed minimal furnishings.
So perhaps it is not so much housing affordability which has changed, but peoples' expectations of what they should have. No-one i know would put their life on hold for a year to save for a deposit...that's what banks are for!
#62
Re: The Great Australian Property Swindle
There is one fly in the ointment with this property price crash.... This much vaunted hyperinflation that the World could supposedly experience.
If the price is going to crash, surely there is a way of making money with this alleged fact. Like the futures market in shares.
If the price is going to crash, surely there is a way of making money with this alleged fact. Like the futures market in shares.
#63
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Re: The Great Australian Property Swindle
Who knows enough ? Can you provide a source for an estimate ? I didn't actually ask for a specific figure.
Also there is the degree of "distress". Distress ranges from arrears in mortgage payments to defaults, foreclosures and repossessions.
And with all the NAB customers in Mortgage distress this month, there will certainly be a spike for Nov 2010.
Also there is the degree of "distress". Distress ranges from arrears in mortgage payments to defaults, foreclosures and repossessions.
And with all the NAB customers in Mortgage distress this month, there will certainly be a spike for Nov 2010.
#65
Re: The Great Australian Property Swindle
If in Australia, using 2010 published figures, the average Australian mortgage is over 4 times the average male full-time wage....how does this compare to the UK which has already crashed. Does anyone know? ie. Does this give us a guide to what it will reduce to after a house price correction?
#67
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Re: The Great Australian Property Swindle
If in Australia, using 2010 published figures, the average Australian mortgage is over 4 times the average male full-time wage....how does this compare to the UK which has already crashed. Does anyone know? ie. Does this give us a guide to what it will reduce to after a house price correction?
UK median pay for full-time employees £25,428
So the UK shows a multiple of 4.4 on those figures.
#68
Re: The Great Australian Property Swindle
So almost identical, if not the UK slightly higher....curious...if Australia continues with strong employment rates it seems unlikely to crash "below" the UK figures then where unemployment is higher and GFC hit harder?
#69
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Re: The Great Australian Property Swindle
Who really knows for sure what will happen. I know that I don't .
"The real estate market will crash. It always does. And the bigger the boom, the bigger the bust. Anyone who says real estate always goes up and it's the world's best investment does not know much about real estate."
So we wrote near the end of 2001 in a series of four articles called Boom & Bust.
In most areas today – especially Sydney and Melbourne – property is overpriced. Its peak will probably turn out to be late 2001 to mid 2002, around the time we issued our first warnings.
If you're investing in real estate today (2003), you are almost certainly taking an enormous risk.
http://www.jenman.com.au/news_item.php?id=60
So we wrote near the end of 2001 in a series of four articles called Boom & Bust.
In most areas today – especially Sydney and Melbourne – property is overpriced. Its peak will probably turn out to be late 2001 to mid 2002, around the time we issued our first warnings.
If you're investing in real estate today (2003), you are almost certainly taking an enormous risk.
http://www.jenman.com.au/news_item.php?id=60
#70
Re: The Great Australian Property Swindle
I don't think anyone knows for sure...we all know it will slow down at some point as that is the nature of cyclical property market, as has already happened....but knowing for sure it will crash as opposed to staying stagnant for a decade or so while wages catch up....or maybe it will dive in one big crash...who knows???? Does seem curious that UK mortgages are higher than Australian ones after their crash
#71
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Re: The Great Australian Property Swindle
I don't think anyone knows for sure...we all know it will slow down at some point as that is the nature of cyclical property market, as has already happened....but knowing for sure it will crash as opposed to staying stagnant for a decade or so while wages catch up....or maybe it will dive in one big crash...who knows???? Does seem curious that UK mortgages are higher than Australian ones after their crash
The problem being that everyone really wants the beach side property, which is of course at the high end of prices. But there is a large number of lower priced property about, which is more suitable for those 1st time buyers, who do consider finances before dreams.
My guess is that if things do get tight, fewer high end properties will sell, bring their prices down, and more of the lower end will sell, with the higher demand then bringing their prices up to a degree.
However, the median will be brought down due to the larger number of lower priced property selling, even though at higher prices than before.
#72
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Joined: Mar 2009
Posts: 1,412
Re: The Great Australian Property Swindle
I've been busy this evening so haven't had time to pull out figures for those interested. These will give a rough idea of the lower end of the scale of figures we are looking at.
Based on this article:
1.38% of the prime segment from Irish banks are over 12 months.
They give a figure of 750,000 mortgages outstanding in total. This may or may not include securitised mortgages. I would tend to believe they are not included.
This article suggests between 15,000 and 30,000 imminent repossessions. This represents 28,000 at least 180 days behind on repayments.
This article suggests up to 45% arrears among securitised sub-prime sector.
This article suggests 33% at INBS including 50% among BTL. One economist putting the distressed figure around 100,000.
These figures don't include mortgage contracts which have been renegotiated to assist homeowners or contracts which have been on extended interest only periods so as to help buy-to-regret landlords. There are also hugely generous supports to the housing market which cannot be afforded in the medium term but would expose huge holes if they were removed. These include enormously generous social welfare allowances paid to private landlords on behalf of social welfare tenants and mortgage interest relief on PPRs. I think that for most in Ireland, if they get one month behind on repayments that it's a major uphill battle to recover without much incentive.
Last edited by Steve2009; Nov 29th 2010 at 12:07 pm.
#73
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Joined: Mar 2009
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Re: The Great Australian Property Swindle
http://blogs.thisismoney.co.uk/2010/...age-wages.html
#74
Re: The Great Australian Property Swindle
The Great Rock and Roll Swindle is so much more fun than this thread
#75
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Joined: Oct 2005
Posts: 191
Re: The Great Australian Property Swindle