Symptoms of the impending property crash are here now!

lots of debt, is it a good thing??

Re: Symptoms of the impending property crash are here now!

Postby Ausdebt » Jul 15th, '10, 09:23

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Street art in DeGraves Street.

What is this? Answer: Street art. Is it really from Herald Sun? Answer: No.

What it is though is a social commentary on a certain issue which the artist wants to express, in this case it's a point about media hype and the power of fear to sell papers (In my interpretation).

But more than that, it's something new, which I havent seen before in Melbourne and the theme 'panic' is consistent with darkening economic storm clouds and the kind of suppressed panic that one (if an astute observer) can spot cropping up everywhere in the local community and in the world too. People thesedays tend to be filled with latent anxiety often converting to hysteria. This kind of energy often gets channelled and directed to boat people or doll bludgers, but if people never knew about such things they'd still feel the anxiety because it is the result of dwelling in a community who's economy is severely debt-stressed. I think people don't often make the connection between anxiety and hysteria and the economic stress they are emmerced within, principally because mass media portrays the economy in mundane nothing-to-see-here terms and often front-pages false issues like what Lady gaga is up to, or 'botox epidemic' as a conduit for the plebs to direct their phobias and so on.

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Re: Symptoms of the impending property crash are here now!

Postby kentukeyfriedchicken » Jul 20th, '10, 19:05

Gday, I seen on telle a election advert of librerals and It says debt is growing 100,000,000 per DAY! And in the news today a disabled girls got pay reduced to $2 bucks a hour. Depression on the way? Yes sir!
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Re: Symptoms of the impending property crash are here now!

Postby Austacker » Jul 22nd, '10, 10:13

I don't know if this is really a sign of impending crash as much as a shift in public sentiment.

One generally precedes the other, but probably shouldn't be confused.

Very hard to move the market quickly however when you have people literally tied to their debt. In the US you can hand back the keys and walk away from your debt obligations - here, they hound you to the grave for it.

The change here in Australia will be a much slower process I believe, but also a far more painful one as those who are over leveraged have no where to run.
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Re: Symptoms of the impending property crash are here now!

Postby benjamind2010 » Jul 25th, '10, 08:41

It can't be any more painful than the problem in the USA. In fact it probably won't be as painful.

I keep hearing the same story about how Australians are going to wear it worse than everyone else. I'm sorry, but I can't agree with that at all.
What keeps our house prices higher than most countries is the fact that we're tied down to them more heavily. Our house prices will not fall as much as they have in the USA, not nearly as much.
I expect a 30-50% drop at worst. Debtors will not be able to walk away from their debts, but the inflation will ensure that eventually at some point the debt problem will correct itself over time. In the USA some houses have dropped 85%.

Those who invest in precious metals stand a better chance of dealing with their debts when the shit hits the fan, at any rate.
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Re: Symptoms of the impending property crash are here now!

Postby Michaeloz » Jul 25th, '10, 09:21

I agree, however a 30% - 50% drop in house prices is considered a complete disaster in this country.

There has never been in living memory across the board percentage drop in that vicinity.

This creates some strange attitudes.

With all things, property included, intrinsic value and market value should be close cousins, all most neighbors. When I buy gold there is my purchase price and a buy back price which is generally 10%-12% lower than what I just paid. All very normal.

In the case of property so called property “values” in Australia, intrinsic value (real or actual value) and market price are living on two different planets and not even in the same solar system.

This in my view is where the disconnect from reality takes place.

Most people live on planet Market Price………… a strange world where the inhabitants see homes in their world selling for twice the price of just several orbits of their sun ago. To them this makes it all real.

Like trying to tell fish they live in water, they are blinded by the reality which imbues every aspect of their reality. No facts, data, or common sense seems to shake their ambivalence.

The people of planet “intrinsic value” who seem to be a much more coherent and sensible bunch watch with interest to see what will become of the inhabitants of Market price world.

They know they are in for some kind of shake up…….and their world will never be the same again!
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Re: Symptoms of the impending property crash are here now!

Postby Austacker » Jul 26th, '10, 14:36

benjamind2010 wrote:It can't be any more painful than the problem in the USA. In fact it probably won't be as painful.

I keep hearing the same story about how Australians are going to wear it worse than everyone else. I'm sorry, but I can't agree with that at all.
What keeps our house prices higher than most countries is the fact that we're tied down to them more heavily. Our house prices will not fall as much as they have in the USA, not nearly as much.
I expect a 30-50% drop at worst. Debtors will not be able to walk away from their debts, but the inflation will ensure that eventually at some point the debt problem will correct itself over time. In the USA some houses have dropped 85%.

Those who invest in precious metals stand a better chance of dealing with their debts when the shit hits the fan, at any rate.


Are you looking at the same figures I am I wonder?

Official inflation currently 2.9%
Interest Rates 7.40% (still 1.5% under the national average)

But more interesting is the lending figures. Peaked in Oct/Nov last year, plateaued into the new year and now on the 4th or 5th straight month of falling.

The market is simply taking time to respond, the natural lag as it were, but the trend is already set.

This market will fall simply because the credit to fuel it is being taken away.

The rest will simply fall into place as a natural process.

Australia has 12 of the top 20 most expensive property locales in the entire world as of the demographica survey done this year.

You know enough of fundamentals through your PM ideology to know what wins out in the end. This is more of the same. The property market in Aus is an irrational market at present, but it'll be brought back down in time whether folks want to admit it so or not.

Even a 30%-50% crash would be considered an absolute disaster in the Australian property market for many.

35,000+ property owners in Australia were forclosed upon last year - a national record. This year will be no better. Job growth isn't there, rates have gone up and will more likely go up than down considering the inflation rate.

Be prepared for what many here thought could never happen.
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Re: Symptoms of the impending property crash are here now!

Postby Ausdebt » Aug 7th, '10, 20:50

The general trend ive been observing for a while now, is that everytime i turn on the radio, tv, or read a paper, there's quite a great deal not going on...

The news reports are so utterly mundane that they are hardly worth following. Items of near zero value are constantly given much attention, as though they were extremely important.... A strange atmosphere (in my opinion) clouds the current non-event pre election to and fro.... Strange, because all the forums on the net be they this one or on youtube or newspaper online user comments - all full of discussion of property prices and related topics such as immigration, population, living standards, wages, jobs and so on....yet the "heated election" is rather disconnected from these topics. In particular, property price, the big topic of today's domestic ecomony, is not so much as mentioned by the candidates, isnt it odd that the important issue is the very thing both major candidates seem determined to avoid.
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Re: Symptoms of the impending property crash are here now!

Postby Ausdebt » Aug 10th, '10, 19:11

As time goes on news comes in and identifiable trends develop. Two new news items are worth noting. The first being the australian stock exchange's decision to investigate the idea of creating a property price derivative index, to allow investment property owners to hedge against price falls thus protecting themselves from declining property prices.

Secondly, it will come as no surprise to most, that low and behold, loan volumes are today at a nine year low according to the age.
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Re: Symptoms of the impending property crash are here now!

Postby Ausdebt » Aug 11th, '10, 21:00

Dodgy fashion brand Ed Hardy has gone into administration, ie the iconic brand is bankrupt.
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Re: Symptoms of the impending property crash are here now!

Postby Ausdebt » Aug 12th, '10, 09:33

Another tidbit of anecdotal evidence that flies in the face of the officual media line of "everything is okay", is the news that the next james bond film will be produced by a debt ridden MGM studio, which is on the verge of bankruptcy..
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