|
|
Post by SA Hunter on Jan 14, 2018 5:01:50 GMT 10
|
|
spatial
Senior Member
Posts: 2,396 
Likes: 1,560
|
Post by spatial on Jan 14, 2018 20:07:04 GMT 10
Just before every major crash 1929, 2000, 2008 there were stock market booms that were out of control. Since trump election the markets have gone crazy beating all kinds of records including the first year where every month has ended in a positive return on stocks. In Dec/Jan 30 days the Dow Jones climbed 1,000 points the fasted in history.
Stock valuations are now higher than any previous record - the bubbles are set to blow...
|
|
|
|
Post by SA Hunter on Jan 14, 2018 21:15:11 GMT 10
there was an article about the stricter rules for foreign house ownership causing a drop in prices - I'll look for it.
|
|
|
|
Post by Peter on Jan 14, 2018 22:50:52 GMT 10
Just before every major crash 1929, 2000, 2008 there were stock market booms that were out of control. Since trump election the markets have gone crazy beating all kinds of records including the first year where every month has ended in a positive return on stocks. In Dec/Jan 30 days the Dow Jones climbed 1,000 points the fasted in history. Stock valuations are now higher than any previous record - the bubbles are set to blow... I'm so curious - yet largely lacking in knowledge - about what's going to happen with bitcoin. It showed ridiculous growth over the last 12 months or so, and decline in the recent short term. I'm waiting to see if it will crash bigtime in the coming months... |
|
Deleted
Deleted Member
Posts: 0
Likes:
|
Post by Deleted on Jan 15, 2018 22:16:03 GMT 10
I think the bitcoin is a lot like emu farming those who created the demand got rich at the expense of others. The thing to remember is bit coin has no intrinsic value what so ever, and there are some very big players in there creating the impression that it has value.....for their own purposes...which means at some point there will be a very sudden drop in the price when the smart money pulls out.
I like to keep my eyes and ears open for any early indications of SHTF events and I'm always more worried about the event I don;t see coming than the ones I have considered. I decided today to check out the frequency of earthquakes all around the world to try and get a feel for anything strange......strange all right from 1910 to 1990 we had on average one earthquake per year over magnitude 8. Over the last 15 years it would seem that has gone up to nine per year. The other thing I noticed was it is almost impossible to get trends past about 2013...like as if they stopped checking! I don't know at this stage what all that means but it looks odd. I would be interested in others opinions.
|
|
blueshoes
Senior Member
Posts: 609
Likes: 700
Location: Regional Dan-istan
|
Post by blueshoes on Jan 16, 2018 8:39:35 GMT 10
Even if we have a big inflation/deflation event, i am more and more convinced that house prices here will stay at 7-10 years income.
If house prices dropped, it would have to be because banks stopped issuing loans (but I can't see them forgoing interest!)
otherwise people will be flocking to get a house as soon as the price drops within reach (pushing prices back up again).
|
|
paranoia
Senior Member
Posts: 1,098
Likes: 1,252
Email: para@ausprep.org
|
Post by paranoia on Jan 16, 2018 10:47:50 GMT 10
In my opinion the housing market continues to grow, not because of good economic factors, but due to poor ones.
If you have wealth you're always faced with the issue of where to keep it. The fact that the housing market is growing so well (growing on average, as housing markets are very localised) does not mean things are good. This growth is not tied to wages or productivity growth so it's just money being shifted in from other markets.
Being housing, this money is highly leveraged and we have a really high household debt to gdp ratio. Many of these loans are interest only too...
I don't see this happening in 2018 but at some point conditions will change. Interest rates will rise and you'll start to see better returns out of stocks... The smart people will jump ship early, a quick drop in prices and people panic... Prices drop and the high debt investments are no longer viable.
No market can exist without corrections. My fear is that we have so many convinced that Australia's housing market can keep going that it's been built on fragile low capital investments...
|
|
spatial
Senior Member
Posts: 2,396
Likes: 1,560
|
Post by spatial on Jan 16, 2018 12:01:19 GMT 10
Even if we have a big inflation/deflation event, i am more and more convinced that house prices here will stay at 7-10 years income. If house prices dropped, it would have to be because banks stopped issuing loans (but I can't see them forgoing interest!) otherwise people will be flocking to get a house as soon as the price drops within reach (pushing prices back up again). When the economy changes and interest rates go up the house market comes crashing down. Most people including investors will go broke in interest rates go up 2%. We are at record low interest rates - the rest of the worlds interests rates are going up -not long and it all comes crashing down and the bubble is burst. Number of house owners is dropping - the houses are getting purchased by investors - housing affordability reaches a peak then crashes. Australia also has one of the highest personal debt in the world - most are at limits with very generous credit card limits - just a slight breath of change and it all explodes... |
|
Deleted
Deleted Member
Posts: 0
Likes:
|
Post by Deleted on Jan 18, 2018 9:39:57 GMT 10
Not wanting to dampen anyone's enthusiasm for the property market as i feel it has a way to run before people get burnt too much, but the sentiments about the market continuing to grow sound exactly like what people were saying prior to the 1929 great depression which most people considered impossible to happen prior to it occurring. The thing to remember with property prices is that houses and land are the same as everything else, and are only worth what people are willing to pay. If there are no buyers then you may not even be able to give houses away...
A friend of mine currently owns a new home built in Queensland to cash in on the new coal mine that was going to employ thousands....his house cost $300k to build he cannot get tenants at any price and the house next door to his was sold recently at auction for $120k.....I asked him why he does not sell in Melbourne since he is retired and live in the Queensland house himself..... even he does not want to live there...so what can you say.... I see his house possibly sitting empty until vandals destroy it. Meanwhile he is pouring money into his negative geared loan like a bottomless money pit..... So never forget how quickly things can turn around and people stampede in mob mentality.
|
|
Beno
Senior Member
Posts: 1,310
Likes: 1,433
Location: Northern Rivers
|
Post by Beno on Jan 18, 2018 17:59:05 GMT 10
Not wanting to dampen anyone's enthusiasm for the property market as i feel it has a way to run before people get burnt too much, but the sentiments about the market continuing to grow sound exactly like what people were saying prior to the 1929 great depression which most people considered impossible to happen prior to it occurring. The thing to remember with property prices is that houses and land are the same as everything else, and are only worth what people are willing to pay. If there are no buyers then you may not even be able to give houses away... A friend of mine currently owns a new home built in Queensland to cash in on the new coal mine that was going to employ thousands....his house cost $300k to build he cannot get tenants at any price and the house next door to his was sold recently at auction for $120k.....I asked him why he does not sell in Melbourne since he is retired and live in the Queensland house himself..... even he does not want to live there...so what can you say.... I see his house possibly sitting empty until vandals destroy it. Meanwhile he is pouring money into his negative geared loan like a bottomless money pit..... So never forget how quickly things can turn around and people stampede in mob mentality. mining booms are a good example of how economically daft most people are. In early out early is the key to profit during a mining boom. |
|
|
|
Post by ziggysdad on Jan 20, 2018 18:50:34 GMT 10
|
|
|
|
Post by jonasparker on Jan 26, 2018 3:33:52 GMT 10
In my opinion the housing market continues to grow, not because of good economic factors, but due to poor ones. If you have wealth you're always faced with the issue of where to keep it... Remember, in investing, if you can't hold it in your hot little fist, you don't own it! |
|
|
|
Post by spinifex on Jan 26, 2018 10:07:31 GMT 10
Banks must be optimistic about the future. Westpac just told my daughter she could borrow up to $1,000,000 to fund house number 3. That's a staggering amount of money to lend a young couple who are still paying off their first two properties. At this stage daughter thinks she might pay off the family home first. The steady increase in property values sure is tempting though. So Frostbite ... are you (or her husbands parents) guarantor for any of the loans? .......................................................................................................................................................................... Just a few thoughts on the general topic of this thread: In recent years I've noticed a few things about how banks are doing business that have changed significantly since 2011. All designed to maximise their control over savings deposits (remember when short-cutting a Term Deposit was easy?) and get their fingers into a good, deep grip on baby boomer home equity. I have many peers who have loans that involve their parents family home being 'on the hook'. Then there's all that speculative loan money of institutional investors sloshing around the share market: if shares tank ... margins get called ... and real-estate investments may require significant liquidation to cover margins and losses. With a lot of investors entering the housing market needing a quick sale there is plenty of scope for significant price drops. (This is equally applicable to PM's and crypto as well.) Rest assured; if we get led by the US into a serious trade/diplomatic tizzle with China ... the real estate sector will be in deep trouble. Just like many mining companies find themselves now that the tide has gone out on Chinese investment into that sector. The west coast of USA and Canada are in a similar situation. Valuations in capital cities here are no longer based on what an average couple/family can afford based solely on family income. The long term valuation of an average house in an average suburb used to run at about 4X the median wage of a male, full time worker. Last I checked it had crept upto 7X and the bulk of that rise occurred since 2000. If we believe the stats that real wage growth has been stagnant for decades ... the market will be in for a big contraction to get back to that long term average at some point in the future. |
|
|
|
Post by graynomad on Jan 27, 2018 7:21:40 GMT 10
... The long term valuation of an average house in an average suburb used to run at about 4X the median wage of a male, full time worker. Last I checked it had crept upto 7X and the bulk of that rise occurred since 2000. ... I bought my first house in 1981, it cost $42k and I was earning $13k, only about 3x, and with 'er indoors working (earning more than me), plus we both had part-time jobs as well, and no kids, we paid it off in no time, about 2 years IIRC. I would not like to be a first time buyer these days, at least not in the cities. |
|
|
|
Post by spinifex on Jan 30, 2018 18:49:15 GMT 10
Sounds like y'all have a sound wealth strategy. I'd be totally stoked if one or both my youngsters got into the cyber security field. That or biochem / genetic manipulation.
|
|
