paranoia
Senior Member
Posts: 1,098 
Likes: 1,252
Email: para@ausprep.org
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Post by paranoia on Jan 18, 2018 9:43:29 GMT 10
Further to the 'everything bubble' thread and my thoughts on excessive interest only loans increasing the fragility of the system. There was an interesting article front page of the AFR this morning... www.afr.com/real-estate/interestonly-borrowers-brace-for-mortgage-crunch-20180116-h0ixx3Is behind a paywall but hopefully the link provided will work...  (will depend on your browser) This change to conditions and therefore increase in payment terms could lead to a sell off in my opinion. Not something to panic about obviously... But factor it in. |
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paranoia
Senior Member
Posts: 1,098
Likes: 1,252
Email: para@ausprep.org
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Post by paranoia on Jan 18, 2018 12:36:15 GMT 10
As I mentioned in the other thread, my 26 yo daughter is looking to buy a third property. Westpac have offered to lend her up to $1mil, but we've had a discussion and she agrees with me that the next couple of movements in rates will be upwards. So she's holding off and putting excess income into increasing equity in her existing properties. If the bubble bursts she will be fine. In fact, a medium to large reduction in house prices would be a great opportunity to use her earning power to buy at least one additional property. The upside of a crash is those with wealth or high earning capacity have the opportunity to make some serious money. For us, economic collapse is good. ^^ this 1000% Those predicting a correction in housing are often seen as doomsayers (some are TBH) but for me it's more just about seeing what is ahead and acting accordingly. If you own your home out right or have sufficient equity to ride it out it really means nothing to you over sufficient time period as it will always come back up. Land will always be a good investment if done right and people don't get greedy. Far too many investors push the limits of their income and equity, that greed will bite you in the ass long term. |
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Post by Peter on Jan 18, 2018 20:39:56 GMT 10
Far too many investors push the limits of their income and equity, that greed will bite you in the ass long term. I've seen this time and time again in too many investors. I've done well by being conservative in this way; just remember it's bureaucrats and big-banks who ultimately set the rates. Neither of whom care about the little guy. |
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