Real Estate: Never a Dummie Sucker Be.
Apr 21st 2003, 12:36 pm
#1
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Thread Starter
Joined: Mar 2003
Posts: 4,432
Real Estate: Never a Dummie Sucker Be.
I would expect that most posters here would be fairly shrewd about money and houses.
But after watching this program I'm not so sure about the public:
Tall Stories
"Property messiahs, wanna-be millionaires and the promise of riches... Despite the forecasts of flagging interest, Australians' love affair with property shows few signs of cooling."
The web page includes a forum which might interest you.
But after watching this program I'm not so sure about the public:
Tall Stories
"Property messiahs, wanna-be millionaires and the promise of riches... Despite the forecasts of flagging interest, Australians' love affair with property shows few signs of cooling."
The web page includes a forum which might interest you.
Last edited by Megalania; Aug 8th 2004 at 8:07 am.
Apr 22nd 2003, 1:22 am
#2
Banned
Thread Starter
Joined: Mar 2003
Posts: 4,432
Some quotes from the forum:
-------
"The slick sheisters are just doing their thing, same as the suckers are doing their thing.
It's just the way of the world, if they weren't getting conned on shonky property it would be stocks or interest rate speculation, or some other ridiculous false hope.
Or maybe some sort of addiction, drugs, booze etc, certain people are born with a target printed on their back, can't change it just accept it."
My synopsis: ie There will always be marketing victims, get over it / get on with it, meet your destiny quicker.
-------
Subject: Get real, property believers post id: 901
Interesting case study from the US I wanted to post - who here can identify with this -
Case Study: Mr. & Mrs. John Q. Traveler
Profile: Family of three
Jobs: Computer technician and medical insurance claims processor and would-be real estate tycoons
Both husband and wife have stressful jobs and need to get away. After losing money in the stock market, they have tried their hand at real estate. They own a home with a lot of equity, but bought a rental last year that is bleeding them dry with negative cash flow as a result of low rent-to-value ratios. They can’t get favorable financing for rental property because it is a rental and there is very little equity. They overpaid for the property and the rent isn’t commensurate with their expenses of taxes, insurance and mortgage payments.
They have decided to pull out the equity of their home to put down on their rental to reduce the negative cash flow. They can get a much more favorable rate on their residence versus their rental. Makes sense until you consider that it has not occurred to them that real estate prices are at bubble levels. It would make more sense to get rid of the rental, since prices are softening and it is creating a household budget problem. This financial strain has created stress in their lives.
They were doing well until the stock market collapsed and they lost money in stocks. They thought it better to go with a sure thing with real estate, which can only go up. Besides, they figured they could write off most of the expenses. In addition to refinancing their home and rental, they need an extra $12,000 to pay for a European vacation to relieve the emotional stress. They don’t have the cash to pay for the vacation -- that will come from the cash out of refinancing their home. They called the loan officer from Europe to make sure that they were approved as Mrs. Traveler was worried about how the credit cards will be paid if their new loan is approved for less money. My friend tells me they will probably get the money. Very few households have been turned down in this market.
It then goes on to discuss:
At the moment American consumers are making the most of rising housing prices and falling interest rates to finance their monthly bills. The current trend in refis is coming from cash-strapped homeowners who need to borrow more money than their house is worth. Pressure is mounting on appraisers to come up with higher appraisal values now that home prices are starting to soften. We are now approaching the end of the line. When prices start to fall debt-trapped households will have nowhere else to go. The equity markets are doing the heavy lifting to replace savings and home prices will eventually turn down when a dollar crisis hits the bond markets. When this happens, interest rates will head up and the refi boom will go bust. The home equity well will run dry. When rates start to rise, variable-rate mortgages payments will go up. Limited-term fixed rate mortgages will have to be refinanced at higher rates when they mature. Home equity will start to disappear. The result will be a flood of bankruptcies that overwhelm the financial system as homeowners walk away from properties, leaving financial institutions and bondholders holding the bag. This will be a time of extreme social unrest.
Homeowners just don’t see the storm clouds that are on the horizon. The rising tide of asset prices that have supported consumption this last decade is coming to an end. Like cargo ships overloaded with cargo in a violent storm, debt-laden balance sheets and no savings have left households ill prepared for the storm that lies directly in front of them. Instead of taking precautionary steps as the equity bubble burst, consumers have been led astray by the next bubble. Most investors follow whatever is hot. For the last three years, real estate has been "the place to be." But just as expanding credit helped to create the stock market bubble, it has also led to a mortgage bubble, which spilled over, into the housing market creating yet another asset bubble.
My synopsis: Only buy housing you personally use / need as that is the best "investment" for most people.
-------
Subject: Oversupply of apartments in Melb post id: 849
This is the reason that Bracks, APop and various development enthusiasts are pushing for one million more people in Melbourne. They want to sell apartments.
The hell with our way of life. They want to sell apartments! That's what government boils down to these days. The state collects stamp duty (never enough), defaults on infrastructure, and the developers collect the bucks from a bunch of totally naive investors, and we all pay the cost.
See the article entitled, The Housing Monster at:
http://home.vicnet.net.au/~aespop/ho...terarticle.htm
-----------
Subject: re: How close is the market to bottoming out? post id: 816
Good question.
The market isn't likely to bottom out any time soon unless the world economy goes bust, which is not unlikely. The reason that the property market will keep on climbing is because the Australian property market went global about ten years ago.
So you guys are all competing with buyers from the richest countries in the world.
See Chapter 8 of http://www.alphalink.com.au/~smnaesp...odiversity.htm
You make the sound point that our wages aren't going up. Our economy is breaking down as well, except for this mad pyramid property selling.
Basically we are auctioning off everything we own.
Soon our assets will be so valuable, but owned by banks and foreigners, that we, on our commodity based real economy wages, will not be able to afford to live here.
Don't other people consider the consequences of this speculation? You can't eat money.
What kind of values are we selling out for?
--------
-------
"The slick sheisters are just doing their thing, same as the suckers are doing their thing.
It's just the way of the world, if they weren't getting conned on shonky property it would be stocks or interest rate speculation, or some other ridiculous false hope.
Or maybe some sort of addiction, drugs, booze etc, certain people are born with a target printed on their back, can't change it just accept it."
My synopsis: ie There will always be marketing victims, get over it / get on with it, meet your destiny quicker.
-------
Subject: Get real, property believers post id: 901
Interesting case study from the US I wanted to post - who here can identify with this -
Case Study: Mr. & Mrs. John Q. Traveler
Profile: Family of three
Jobs: Computer technician and medical insurance claims processor and would-be real estate tycoons
Both husband and wife have stressful jobs and need to get away. After losing money in the stock market, they have tried their hand at real estate. They own a home with a lot of equity, but bought a rental last year that is bleeding them dry with negative cash flow as a result of low rent-to-value ratios. They can’t get favorable financing for rental property because it is a rental and there is very little equity. They overpaid for the property and the rent isn’t commensurate with their expenses of taxes, insurance and mortgage payments.
They have decided to pull out the equity of their home to put down on their rental to reduce the negative cash flow. They can get a much more favorable rate on their residence versus their rental. Makes sense until you consider that it has not occurred to them that real estate prices are at bubble levels. It would make more sense to get rid of the rental, since prices are softening and it is creating a household budget problem. This financial strain has created stress in their lives.
They were doing well until the stock market collapsed and they lost money in stocks. They thought it better to go with a sure thing with real estate, which can only go up. Besides, they figured they could write off most of the expenses. In addition to refinancing their home and rental, they need an extra $12,000 to pay for a European vacation to relieve the emotional stress. They don’t have the cash to pay for the vacation -- that will come from the cash out of refinancing their home. They called the loan officer from Europe to make sure that they were approved as Mrs. Traveler was worried about how the credit cards will be paid if their new loan is approved for less money. My friend tells me they will probably get the money. Very few households have been turned down in this market.
It then goes on to discuss:
At the moment American consumers are making the most of rising housing prices and falling interest rates to finance their monthly bills. The current trend in refis is coming from cash-strapped homeowners who need to borrow more money than their house is worth. Pressure is mounting on appraisers to come up with higher appraisal values now that home prices are starting to soften. We are now approaching the end of the line. When prices start to fall debt-trapped households will have nowhere else to go. The equity markets are doing the heavy lifting to replace savings and home prices will eventually turn down when a dollar crisis hits the bond markets. When this happens, interest rates will head up and the refi boom will go bust. The home equity well will run dry. When rates start to rise, variable-rate mortgages payments will go up. Limited-term fixed rate mortgages will have to be refinanced at higher rates when they mature. Home equity will start to disappear. The result will be a flood of bankruptcies that overwhelm the financial system as homeowners walk away from properties, leaving financial institutions and bondholders holding the bag. This will be a time of extreme social unrest.
Homeowners just don’t see the storm clouds that are on the horizon. The rising tide of asset prices that have supported consumption this last decade is coming to an end. Like cargo ships overloaded with cargo in a violent storm, debt-laden balance sheets and no savings have left households ill prepared for the storm that lies directly in front of them. Instead of taking precautionary steps as the equity bubble burst, consumers have been led astray by the next bubble. Most investors follow whatever is hot. For the last three years, real estate has been "the place to be." But just as expanding credit helped to create the stock market bubble, it has also led to a mortgage bubble, which spilled over, into the housing market creating yet another asset bubble.
My synopsis: Only buy housing you personally use / need as that is the best "investment" for most people.
-------
Subject: Oversupply of apartments in Melb post id: 849
This is the reason that Bracks, APop and various development enthusiasts are pushing for one million more people in Melbourne. They want to sell apartments.
The hell with our way of life. They want to sell apartments! That's what government boils down to these days. The state collects stamp duty (never enough), defaults on infrastructure, and the developers collect the bucks from a bunch of totally naive investors, and we all pay the cost.
See the article entitled, The Housing Monster at:
http://home.vicnet.net.au/~aespop/ho...terarticle.htm
-----------
Subject: re: How close is the market to bottoming out? post id: 816
Good question.
The market isn't likely to bottom out any time soon unless the world economy goes bust, which is not unlikely. The reason that the property market will keep on climbing is because the Australian property market went global about ten years ago.
So you guys are all competing with buyers from the richest countries in the world.
See Chapter 8 of http://www.alphalink.com.au/~smnaesp...odiversity.htm
You make the sound point that our wages aren't going up. Our economy is breaking down as well, except for this mad pyramid property selling.
Basically we are auctioning off everything we own.
Soon our assets will be so valuable, but owned by banks and foreigners, that we, on our commodity based real economy wages, will not be able to afford to live here.
Don't other people consider the consequences of this speculation? You can't eat money.
What kind of values are we selling out for?
--------
Last edited by Megalania; Apr 22nd 2003 at 1:59 am.
Apr 22nd 2003, 1:56 am
#3
Banned
Thread Starter
Joined: Mar 2003
Posts: 4,432
Squabbling over your body and your money:
CHAPTER EIGHT - EVIDENCE CHAPTER : GLOBALISING THE PROPERTY MARKET : FOREIGN FINANCE AND IMMIGRATION FROM THE 1980S
CHAPTER EIGHT - EVIDENCE CHAPTER : GLOBALISING THE PROPERTY MARKET : FOREIGN FINANCE AND IMMIGRATION FROM THE 1980S
