Hi all, recently I've noticed a big increase in posts about negative gearing, capital gains and the housing market in general. Do you fellow OzBargainers feel that the property market is being talked about with increasing frequency. Meaning that people are feeling skeptical/uneasy about it. Do you think there will be a big correction/stops put on the property market to cool it down. I know politicians are up to to their throats in IPs but do you believe there will be a point where mortgages become unserviceable for the average person and the whole house of cards comes toppling down.
Discussions on Housing at an All Time High?
strongzero on 13/09/2021 - 13:07
Last edited 13/09/2021 - 13:35
Last edited 13/09/2021 - 13:35
Poll Options
- 63No Crash
- 5Crash
- 14Small Correction
- 6Bikies
Comments
What is the point of holding property if you're never going to sell?
You can live in property, or rent it out.
passing on to next generation.
This is exactly why lots of Boomers I know aren't selling off their portfolio.
Playing monopoly in real life. Every time you pass Go! the government gives you more money.
Primary place of residence.
Rental income. Buy 10 properties - pay them fully out. $20K rent per year gives you $200K in income. Easy to retire on that.
I know politicians are up to to their throats in IPs but do you believe there will be a point where mortgages become unserviceable for the average person and the whole house of cards comes toppling down.
It is basically this….politicians have a vested interest in keeping prices up, aka loan pauses for 12+ months.
But as prices of property continue to rise, more than the wages. There is a tipping point that the average person can no longer afford housing. So who will be buying these properties?
I just envision it being à la 2008 when the banks were "too big to fail". I guess it will be companies buying property at that point if the market doesn't make a downturn. IIRC somebody was mentioning how Sweden has these big companies buying property and leasing them out at exorbitant rates.
The government can do the following:
- Allow people to pillage their own super to pay for mortgages or a deposit
- Offer more grants
- Reduce stamp dutyAny more?
Isn't gladys also trying to make rent to own a thing too?
Isn't gladys also trying to make rent to own a thing too?
Isn't that what normal people call a mortgage!? :)
@JimmyF: Its different from a mortgage in that the terms are really cooked. You often have less flexibility with repayments financing etc & all-around worse conditions than a mortgage.
@strongzero: So its a mortgage from the dodgy loan shark around the corner for people who can't get a normal mortgage?
@JimmyF: Pretty much. It's a pretty big thing in America I believe. But there is almost no consumer protections and they target people with (profanity) credit scores.
Also this rent to own stuff is general new properties so you would be looking at McMansions and the like.
It's a pretty big thing in America I believe
No idea about the rent to own but they have 30 yr fixed rate loans over there. So it is basically 'rent' to own, as the weekly/monthly repayments are fixed for the life of the loan!
Some crazy youtubes purchased up big on 2% fixed rate home loans, so are laughing all the way to the bank!! Just insane.
@JimmyF: They're lucky. So much supply over there mixed with easy credit. Would love to get a fixer upper in some quaint regional town in the states.
The government can do the following:
- Allow people to pillage their own super to pay for mortgages or a depositAlready raided….
- Offer more grants
Already doing it
- Reduce stamp duty
Already happening.
Any more?
But why!? Why is the gov taking TAX PAYERS money to give to other people to buy over inflated property!?
Why not just save everyone the hassle and stop pumping the housing bubble so people can afford property.
Because they're watching their speculative investments go through the roof!
It's a talking point because of the rapidly increasing prices due to high demand being far more than expected levels.
It's not going to get better when borders open and influx of people (and cash) start flooding in again thus raising prices even further.
Regret not buying 1-2 years ago.
I know the RBA has committed to not raising interest rates for a while now but the big four keep talking about self imposing higher rates on consumer lending.
Many of the auctions I've been to are won by people paying hard cash (as repeatedly advised by agents), don't think minor changes in interest rates are going to change much.
bloody depressing
I really don't think REAs should be trusted whatsoever.
OP where the option of Rocket to new time highs ?
Your poll is so bias !damn, should've put that in there. I tried changing it, didn't work.
I don't see it crash unless property market in China crash
China is at its tipping point already as it looks like a couple of mega developers might default on their upcoming debt. The question is whether CCP will let it be a hard or soft landing or kick the can down the road.
I have read about this, albeit briefly and I don't fully understand the global effect. Care to elaborate?
the simpliest explanation is that these mega developers borrow a crap ton money from everywhere like investment banks, pension funds, etc. So if they default, it triggers bankrupty and the debt that an investor holds will be worth a fraction of its face value, i.e. anyone with exposure loses money and this could trigger a global financial crisis.
So the CCP will have to step in and take action like extending maturity datelines, negotiate for more credit etc. But its pretty gloomy right now. Anyone interested can read more on Evergrande. There are also many smaller developers who are struggling.
Anyone looked at Canadian crazy prices ?
Compared to here we are tame .Why are their prices going up?
Foreign investment and supply/demand
It's easy to sell hysteria around this. Reality is that markets spend most of their time at the highest ever price. So do wages. So do groceries.
Inflation tends to push the curve towards the north over time. Recently there has been a spike in prices that is almost directly proportional to the reduction in interest rates. As Jessica Irvine said in the SMH on the weekend, "Truth is, once you get a foot in the door with a big enough deposit, the cost of servicing a mortgage has fallen dramatically – back to where it was during the 1980s and 1990s (property was cheaper then, but interest rates were much higher)."
If rates go up again slowy, price growth will slow or likely back off a little. But it's just wrong to assume that because prices are at 'record highs' they are about to collapse. It's how markets work. Politicians will simply want to make sure that when rates start to rise they do so slowly. Alternatively, that they do so as modest wage rises occur. With slow rises in rates and slow increase in real wages, the market will likely keep on doing what it's been doing.
Always happens. Reason is usually the following:
Those who complain they can't get into the market because it is over $1m but they could find somewhere for $600k but they don't want to.
Those who get into trouble: buyer's remorse they paid $1.2m when it was listed at $1m but they could really only afford $800k
Those who think there is some trick to it: my mate made 3x their money how does it work or the mystical property development route
You can substitute property for anything else such as shares and crypto.
I want to see what happens when international borders open and all the people currently trapped here are able to go back overseas to live their lives. What will happen to the houses that they are vacating?
Plenty more waiting to come in as well.
What do you think is the catalyst for holders to sell?