/biz/ - Business & Finance

Not surprisingly buyer sentiment is lower than during the GFC: https://www.theguardian.com/australia-news/2018/oct/10/house-prices-set-to-continue-to-fall-for-another-two-years-survey-says

42% of NSW mortgage owners will be in negative equity once prices fall by 20%, which is only 1-2 years away after falling 7% this year: https://www.afr.com/content/dam/images/h/1/6/v/f/7/image.imgtype.afrArticleInline.620x0.png/1539928703734.png

US Fed is raising rates and the BBSW increases for Australian banks who pass on the interest rate rise to Australian mortgages: https://d3fy651gv2fhd3.cloudfront.net/charts/united-states-interest-rate.png?s=fdtr&v=201809261820x

The Fed is expected to raise rates in December, three more next year, and one increase in 2020. https://www.reuters.com/article/us-usa-fed/fed-raises-u-s-interest-rates-sees-at-least-three-more-years-of-growth-idUSKCN1M60EE

>>11693383
Good stuff OP. The way I see it is all these people who took the IO loans are reasonably likely to have not paid any principle. They will already be in negative equity from the recent 7% downturn.

If they borrowed at 95% LVR they are stuffed when it comes to refinancing as the bank won't want to finance at 102% property value and they also won't want to give a IO loan.

>>11693472
I know a bloke who got a no-deposit, 100% loan for a unit in FNQ for $300,000. After expenses he had $20 per week for savings. Absolutely no buffer for interest rate rises, strata increase, rental yield decline, unexpected expenses, property maintenance, property manager price increases.

I know this story isn't unique by other anecdote, and I know it's systemic from other investigations.

https://www.abc.net.au/news/2017-09-11/500b-dollars-of-liar-loans-in-australia-ubs/8892030

https://www.businessinsider.com.au/liar-loans-ubs-update-2018-9

>>11693517
https://www.rba.gov.au/publications/smp/2018/may/box-c-the-expiry-of-interest-only-loan-terms.html

This is the big mistake the RBA made with IO loans.

"...With significant price appreciation in the housing market in recent years, estimates from the Securitisation Datasbase suggest that many of the households currently facing an IO period expiry will have experienced significant growth in their equity in the property... "

The RBA is run by deluded boomers. They have assumed that either most people wold have accumulated savings, further investments or the property price growth would have saved people like this.

Personal anecdotal experience is actually very relevant in my opinion. If you know someone like this, chances are that most people will know someone like this as well. I know a couple of people who have borrowed at stupidly high LVR on IO loans.

>>11693575
>"...With significant price appreciation in the housing market in recent years, estimates from the Securitisation Datasbase suggest that many of the households currently facing an IO period expiry will have experienced significant growth in their equity in the property... "

Yeah you'd have significant growth in equity, until you don't.

It's like saying everyone should've maxxed out their credit cards to buy bitcoin because it was rising, until it wasn't. Now you have negative equity in your investment, and you need to start repaying the debt as well as the interest on your credit card.

But instead of buying $xx,000 of shitcoins, you bought $xxx,000 - $x,000,000 of property.

I can't wait for the IO borrowers to fall over from Principle repayments and then subsequent USFed rate rises getting passed on to AUS. Let the over leveraged buy high sell low.

And then the AUD will go to absolute shit, which will mean the foreign investors who had purchased during the peak would be at a loss in real terms comparative to their currencies. That'll make Australia attractive to some international investors because it'll be cheaper comparatively, but it'll mean all the old investors will be bearish on Australian investments and will share that bearish outlook with other cashed up foreigners. Hopefully that keeps the international capital at bay and real Australians get to pick up the newly for sale bad investment properties.

>>11693383

Good. Fuck these boomer greedheads.

>>11693633
My favourite part of all this is one of the most popular recent investment strategies was this:

>Get a small amount of equity in your home
>Use equity to finance investment property on IO
>Skim the extra income from the top of the IO to pay down more equity on your home
>Build more equity in your home, enough for a second investment property
>Keep going and repeat

It's a good strategy in a bull market as you're strongly leveraging your position, but it is very high risk and in a bear market it screws you over hard. It encourages you to not pay down any principle in your investments - you need to hope you built up a shit load of equity enough to shield you from 2-3 properties all dropping 5-10% (Or 50k-100k each). It's unlikely the investment properties would've generated enough income over that time.

I went to 3 mortgage brokers, all who tried to sell me on this strategy over the last couple of years. I've kept renting + saving due to the impending market crash coming and I think that will pay off for me.

>>11693750
>I went to 3 mortgage brokers, all who tried to sell me on this strategy over the last couple of years. I've kept renting + saving due to the impending market crash coming and I think that will pay off for me.

The amount of brokers and 'financial advisors' or 'financial planners' who sold this stuff to their family and friends just to make trailing commissions and lump sum paydays.

>you shouldnt have listened to me, your friend and brother/son/uncle/nephew! buyer beware!

literally selling their own mothers out

>tfw the JUSTing is almost upon us

>>11694349
>this cant be happening im in charge here

Theres this fat Indian guy at my work and whatever hes talking about or investing in crashes to shit.

He was talking about bitcoin and alts in December, then after btc crashed he started talking about property, and then more recently when property started falling about the stock market which is now falling.

I'll short the fuck out of whatever he starts talking about next

>>11694349
We need Shorten in next year to add fuel to the fire.

>>11694847
international macro environment combined with maximized private debt means theirs no intervention that can help anyway

if you could legislate a bubble to stop popping itd have happened in america, ireland, spain, finland, japan, canada etc...

think about this fact: even if APRA relaxed lending standards youd have a temporary return to growth before overseas interest rates forced the banks to raise rates causing even more people to go into negative equity because they bought after 2016

>>11694623
>Starts telling you about the time he did a gay sex chain link with his buddies in Dehli

FUCJ SEELL SELLK SELLL

>>11693633
>AUD will go to shit

I'm close to all-in crypto. I'd love for this to happen. Hoping for AUD to go below 65¢ USD

>>11694623
> mfw a fat pajeet is predicting every bubble pop

>>11693633
Please let the AUD go to shit. I'm paid in USD so im golden

>>11695017
>predicting

causing. he is the anti king midas.

I can’t wait to drink those sweet boomer tears

>>11695284
>Tonight in A Current Affair: This couple retired thinking they'd have over a million dollars from the sale of their home. They've only gotten an offer for $500,000 - and now they're outraged. Hear about the tax they want to impose on millenials to recover their $500,000 in equity they lost to the free market by not selling at the top of the bubble.

>>11695289
>"IT'S A FUCKING OUTRAGE"

>>11695284
check out this doozy if you havent seen it already

https://www.realestate.com.au/news/were-heartbroken-home-in-same-family-for-93-years-passes-in/

based and also redpilled

https://outline.com/J38yr2

>>11695392
>The buyer said they didn’t believe it was a fair negotiation process. “I had to bid against myself to get it on the market, which I find highly irregular in any form sense, whether it’s a house or a business.”

kek

>>11695301
>After the gavel fell, the agents managed to get the bidder up to $1.67 million, but it was still a way off the $1.75 million reserve.
>“Yes we are heartbroken,” Mr Kerr said. “We expected to get something more reasonable than this.
>“This is garbage.”
hhahaahahahaha fucking boomers.

With how bad that domain article is, which usually talks up the best of the worst, i expect clearance rates in Sydney to be low 40s today for the worst in 30 years

lets wait and see

>>11695448

HAHAHAHAH

IT'LL BE FUCKING 37%

Some friends are looking to buy. They just got preapproved for 600k and are looking for a townhouse in the northern suburbs of melbourne like preston or reservoir. I said hmmm are you sure it's a good te to buy and they're like yeah the bank guy said it's the best time to buy as it's dipped a bit but will go back up. Fucking irresponsible on the bankers part but i guess he gets paid comission or some shit.

>>11695448
>>11695454
honestly hope this is a slow bleed instead of an insta-JUST, i wanna see this property investment obsession of australians to die out for the next 10-20 years or so. im sick to DEATH of cunts only talking about houses, holy fuck man

>>11695531
>they're like yeah the bank guy said it's the best time to buy

how do people still fall for this shit? why would anyone take advice from the jerk thats trying to sell you shit? reeeeeeeeee

>>11695553
it happens quickly then stagnates then recovers. look at all other places except japan really (but their entire economy was fucked not just a bubble in housing)

ireland is now back to or above pre-bubble levels in many places, so is america. humans are creatures of habit and theyll always invest in property for dem gains and dat roof over muh head.

Is this happening in Canada too?

>>11695565
https://business.financialpost.com/real-estate/toronto-luxury-home-sales-tank-from-last-years-record-pace

>Sales of detached homes in and around Canada’s biggest city fell 46 per cent in March from the same month a year ago, while the average price fell 17 per cent to $1.01 million, according to data released Wednesday by the Toronto Real Estate Board. That dragged down the average selling prices for all housing types by 14 per cent from a year earlier to $784,558, the biggest drop since 1991.

I am in the UK. How do I short the Australian real estate market?

>>11694623
Someone get that pajeet a job at CNBC

Does anyone know if now is the time to buy in Perth?

I work for Rio Tinto and mining boom 2.0 is basically starting now! FIFO employees will be moving here in droves.

>>11695553
I dunno. I told em to chuck 3-5k into crypto while it's low and they said nah too risky, i'll just borrow 600k to buy high.

https://twitter.com/ShaneOliverAMP/status/1061162402476044288

IO loan holders are the normie equivalent of Chainlink swing traders. My sympathy levels are a negative integer.

>>11693383
will this hit the New Zealand real estate market too? Maybe I will finally be able to afford a house.

>>11695623

>>11695623
cutting rates isnt going to do shit this time. our currency is going to be worthless soon. i fucking hate the fact that all central banks do is manipulate asset prices to encourage economic growth. their mandate is too large as well

they have to
>control inflation
>reduce the level of unemployment (to "full" employment)
>improve the "economic prosperity and welfare of the Australian people"

how the fuck can they ever achieve this? the first two points are difficult enough

>>11695626
based and redpilled. the average buyer is about as educated as the average bitcoin buyer, except theyre spending about 100x more money on property.

>>11695629
didnt you cunts just ban foreign buyers? i dont follow NZ

>>11695668
>didnt you cunts just ban foreign buyers? i dont follow NZ
from purchasing homes, yeah

>>11695664
wtf do i do with my money?

>>11695719
Crypto, PMs, cash. For the time being.

Not convinced it is ganna crash the way everyone is hoping. People have been predicting a crash since 2012, the cycle was supposed to end atleast 5 years ago and they just keep pushing it out further and further. So many people in the media and politics are heavily leveraged into property and they are ganna do everything they can to ease the landing when prices inevitably come down. I think its very possible they will just be able to limit it to a cooling off period for the next 5 years or so without a US style crash. The only exception would be if interest rates start to rise, but the RBA has already said they have no intentions of doing that for the next several years

>>11695719

>>11695754
RBA don't control FED rates. If FED rate goes high, Aussi banks will be forced to raise lending rates pushing it to the retailers.

>>11695719
apparently theres a handful of gold miners that might be worth chucking your money into

>>11695553
Aye m8-ey I am also sick of strayans talk about their 6 properties, none of which they actually own. The JUST will be glorious. I kind of doubt the government will let this JUST'ing continue.

>>11695604
Imo Perth is much more affordable, however it's still all going to head down.
Agreed that there's a recent uptick in mining in the last year. It's been fucking busy. (I work in an eng company quite close to central park)

gonna sound a little like im playing devils advocate here, but im kinda worried about this downturn. most of the boomers bought into it pretty early with the exception of super fags that dumped all of it into property and had the audacity to claim a fucking pension. the people that will be affected most by the crash are hard working young folk like you and me. the ones that we fed the boomer propaganda about housing and the usual "get in now otherwise you'll miss out" bullshit. as much as i want the streets to be painted red with boomer blood, i dont wanna see mid-late 20 somethings getting JUST'd hard, while having to deal with HELP debt and everything else. the use your equity and buy another property meme is going to obliterate so many late 20s early 30 year olds, its going to be insane

>>11695970
https://www.youtube.com/watch?v=fiCXsu_4BoA

>>11695301
I honestly thought it was satire first time I read it

>>11695970
Better to be obliterated at 30 than 40 or 50. It's a relatively early investing lesson for people too NPC to actually think independently about investing.

>>11693388
Lul 42% negative equity is going to be fricking carnage.

From my estimates prices could drop 30% or more. Why did it ever get this crazy that someone wanted to pay like 1M+ for a shitbox in Penrith.

I have most of my money in cash or in stocks that are getting taken over atm. So I am pretty safe and can get ready to buy when I need to.

>>11695589
Big 4 banks are fucked.
They'll probably get easy fat bailouts though

>>11693383
What happen in Tasmania? Why the bubble still growing there?

>>11696060
Its a nice place for retirees and the cost is very low. Perfect place for an investment if someone is committed to investing in property.

Eventually you reach a pricepoint where the natives can no longer afford to buy because they'd never be able to repay on their low income wages comparative to the cashed up investors pushing prices up, and you're stuck with investors selling to other investors, like we've seen in Melb and Syd.

>>11693383
It's silly to take your house to auction anyway, no matter how good the market is.

>>11696055
Some places are already at -30% in Sydney, the disparity between suburbs and regions is very high. But the Sydney median is down ~7%, that'll increase next year, so minimum -14%, more likely ~17-19% from peak next year, that'll mean some suburbs will be down close to -50% in 2 years from peak.

This time next year all the talk will be about: Will the market flatten out in 2020? The AUD is weak, exports are up, we'll surely see more investment now right? And whether it flattens or not the USA is about to enter a recession that'll cause property prices to continue to fall again.

>>11695801
I’m all in Beacon Minerals. BCN.

2 huge Kalgoorlie mines just starting production.

>>11696116
>BCN
Bytecoin. Based.

>>11694623
>Stock falling
Where? Dow at 26k, that's 400 below ATH

>>11696116
Any more analysis than that>?

How are they raising money?

I just had a look at their 4C and they have no cash left and are burning 8M per year.

>>11696145
what is it adjusted for inflation

>>11695562
Youre wrong about ireland, extremely wrong. Look at credit levels. My mate had a family castle and it wasn't worth anything after the gfc.

>>11695754
Rates have to rise or our currency goes worthless. Skyrocketing us bond yields are already making our currency trash. Put a strong credit crunch in too and our whole economy is fucked.

Idc, I'm balls deep in aveo right now. Go look at the shortland waters deal & look at the course on google maps- to pay 1.5M for that land is insane. I'm loving this, cant want for keynesian policy to turn me into a literal millionaire at 21.

>>11696058
Bail ins. Look at the prep- including the capital requirements by apra- literally foreshadowing a bail in for all the big banks.

Westpac is fucking toast.
I'll ask my old mate, one of the top few in the company, what the go is.

>>11696116
Hahahahah holy fuck my dad has 15k options went to perth to see how his father lived as an italian immigrant & a bloke said sentiment was good in the company.

>>11696170
2005 is pre-bubble

https://www.irishtimes.com/business/economy/residential-property-prices-rise-by-12-7-in-year-to-march-1.3489020

https://www.news.com.au/finance/real-estate/sydney-nsw/sydney-regions-where-sellers-lost-the-most-money/news-story/77aa3d64bca95f4a6baa7cb08da03a55

>This home on Heber St, Hurstville sold in August for $74,000 less than the price the owners paid in 2014.Source:Supplied

>This home on Thorn St in Ryde sold for $1.228 million in August, but it had previously sold for $1.25 million three months earlier.

>A unit inside this building on Canterbury Rd, Canterbury sold in August for $73,000 less than the 2017 purchase price

>This Beronga Ave home in Hurstville sold in September for $100,000 below the 2015 price.

struth

>>11696184
>shortland waters deal
Whoever's running that golf club is fucking retarded. Well jewed, Aveo.

People say boomers are fucked but honestly there's a bunch of our retarded generation who are just as stupid..

Borrow mum and dad's money to buy the house, just make repayments and save up to go on holidays in their first 12 no the of being a home owner....

Think they're living the high life but are living beyond their means and deserve to get fucked by the long dick of the crash

>>11696184
could you clarify to non-aussie whats the adequate price for this land?

>>11696246
>all the kids who put their parents home up as security on a property that they'll have to sell but they'll be in negative equity and now the bank wants their parents house to cover the difference and they'll have to sell and you have 2 parents + 1 child now homeless buying a place with the leftovers from the proceeds of mum and dads place

EQUITY MAAAAAAAATE

>>11696269
it's a sad situation would you autists really laugh whent that happens? yeah fuck the boomers etc. but seeing that despair, would you actually react like in the pic?

My grandmom sister family been fucked by the bank loans too. Her husband had an design and build contractor firm in booming 2005-2007. Those years were also teenage period of their children. They were acting rich - buying new cars, bought some land and built two big houses. After they lost their business in 2008, reality of repaying loans had hit them hard and they had to sell all their cars and one of the houses to repay the loans. This wasn't enough though and they borrowed some money from my family which they are yet to return 10 years later. Their children continued to live in the bubble taking high interest loans, trying to set up their businesses and going on holidays. Now they are asking money to repay those loans. Now looking at boomers getting justed looks sweet on paper, if you have them in your family, they may start chasing you which could put a permanent negative strain to your relationships.

>>11696408
I don't feel sorry for these people, many businesses fail, some people don't ever get the chance to but a house.
Rent.
Live in your means.
Move further away from city.
Sell your car buy a functioning old car.

Don't feel sorry for those over committing and losing that gamble.

>>11696408
No one gets fucked by a bank loan, its all in black and white. they get fucked by being greedy and over comitting

>>11696408
Should have refused to pay them, simple white lie like "sorry we don't have that kind of cash" or "sorry we're getting hit quite hard ourselves" should have sufficed.

People that over leverage and then ask family to cover them make me sick. It's like using your credit card to long 10x Bitcoin and the then asking your family to cover your rent. It's ridiculous and to some extent they deserve to face reality.

>>11696408
>onions

We all had the option to jump head first into the property market. That we did our homework, or were just naturally fearful of the huge mortgages required in the capital cities, meant we didn't. That others did is not my problem. Did they fucking sit around and feel bad for me renting? They sure didn't fucking give a shit. Did they get upset when they made equity profits and paid for holidays and cars? They sure didn't fucking give a shit.

You want sympathy now you will be right out of fucking luck I tell ya

>>11693633
>which will mean the foreign investors who had purchased during the peak would be at a loss in real terms comparative to their currencies.

China on suicide watch?

>>11693383
> tfw sold last month

>>11696408
>Muh lucky country

Hard to sympathize when every generation of Aussies had it better than virtually everyone else globally. Dumb people need to held accountable for their dumb choices.

>>11696507
Based and Redpilled.

>>11696507
While you took a mortgage
I studied the blade
While you went on lush holidays
I invested in precious metals
And now the market crashes you come to me for help? Pathetic.

>>11696641

>>11696641
kek

I’m 22, got 15k in savings and I’m probably the only white person living in the postcode of 3000.

What should I do with my money?

>i just turned 28 an hour and a half ago
>only have a 40k deposit

am i the most JUST'd ausfag on this board?

>>11697226
nah youre doing quite well, it might not seem that way due to selection bias, but most people who are 28 im pretty sure have no savings or just have large debts (mortgages) with equity they consider actual tangible currency

just keep saving

>>11696507
haha mate the housing market will bounce back, id much rather be paying off my mortgage than someone else's

>>11697331
See. Tell me every one of these over leveraged gamblers don't deserve it.

>>11697331
oy

vey

>thread populated by the shitposting capital of the world is more informative than most business news articles
Where the fuck am I?

>>11697441
I try

I may be bearish but 1.02m for this penthouse in waterloo seems to be cheap as fuck

https://www.domain.com.au/80-788-bourke-street-waterloo-nsw-2017-2014699006

>>11697441
you've seen nothing yet m8

Does this mean I will be able to buy a house after the crash?

>>11696149
Look at their recent announcements. They just secured a 9 mil debt facility.

>>11696200
Yeah they are fucken great. Operating cost of $850 AUD an ounce for gold. Current gold price like double that.

>>11697634
Depends on your deposit, debts, income, expenses...

Here's some data from previous bubbles to aid you in approximating what the value of a property today could be worth at the bubbles bottom, see: https://imgur.com/a/xCstpaB

Published in 2007 in Ireland by Prof. Kelly who correctly predicted the bubble and the dramatic price falls. Here: http://irserver.ucd.ie/bitstream/handle/10197/38/kellym_workpap_001.pdf

Interview here where he debates with some property bull with tears in his eyes trying to help people see what was going to happen: https://www.youtube.com/watch?v=Gd6ZwqLePC0

>>11697764
>Here's some data from previous bubbles to aid you in approximating what the value of a property today could be worth at the bubbles bottom, see: https://imgur.com/a/xCstpaB

For comparison Sydney rose over 100% since 2009: https://www.yourmortgage.com.au/mortgage-news/sydney-home-prices-have-risen-over-100-since-2009/255029/

>>11697848
This too shows the peak to troughs of bubbles: https://imgur.com/a/yKrpe6C

Does this mean I'll finally be able to afford a house in Vancouver?

my parents house had offers at 500k 5 years ago in perth. not selling for 400k now. Prices have fallen off a cliff and not a whisper from the media or anyone in perth. that place is a real sleepwalking shithole

>>11694623
The Oracle pajeet

>>11698092
This isn’t about you, leaf. Go smoke some weed

>>11697764
>>11697848
So if it was consistent with the other drops you're looking at about a 40-50% drop over 5 years ish. Bear in mind that Australia hasn't actually done any preparation for being a post resources economy so it might be even worse than that.

>>11698216
Mining boom stopped booming Doesn't have much to do with the rest of the country.

>>11694623
>Hello sir, have you heard about chainlink?