House prices

stunet wrote:

If there's a crash coming why not sell now, Don?

Why not sell now indeed. Although if you indeed wanted to sell at the top you probably should have thought about selling at the beginning of this year. Markets have already dropped in the last few months.

This is just the start of it IMO.

I've read all of your questions and statements above and just don't have the time to reply in detail to all of them.

But one of you above did hit the nail on the head when you said "as people with expendable income decreases, and the amounts... things like booming Airbnb's will find themselves empty and / or just unviable...". This also applies to investment properties. Also people have a lot of investments, not just houses. they have stocks, super etc. When people see large balances of their assets they perceive themselves to be well off and they spend up big time. When these assets start to tank, they perceive themselves to be losing this well off status so they sell whatever assets they can to not lose too much of their perceived well off status. This is the spiral I'm referring too. There will be a GLOBAL melt down of markets. This will cause panic selling of all asset classes. Housing won't be immune to this.

I'm not sure the Aussie government can step in to stop the blood on the streets, including perceived significant loss in one's house prices, noting people currently believe they are multi-millionaires so 20-30% loss in that is a perceived cliff drop in their wealth., and any government stimulus will be a drop in the ocean compared to the perceived loss of $300-500k on their multiple dwellings.

There is definitely something coming around the corner. Unemployment is one of the first indicators economies are not doing well. Unemployment is rising in Australia. No huge government spending on the cards at least in the foreseeable future.

When people become unemployed they have to sell their assets to maintain some form a lifestyle. As I've said this always starts with non-essential assets/toys. Boats, caravans, 2nd cars, jetskis, all luxury items go at first. Take a look at the 2nd hand market currently for these luxury items. Supply is increasing and prices are dropping. It's starting people, although melt up is well underway at present and still got some way to run (S&P likely another 20%+ to go) before the almighty crash.

Buyers market when that happens, so cash up whilst it lasts people.

Thanks Don, appreciate the comprehensive overview.

Well and truly out of my league.

Don, for a true meltdown to occur the liquidity needs to go down. My house goes up and down in value which has zero impact on my day-to-day spending. Yes, the wealth effect is real but let's be realistic; unemployment needs to be significantly higher for a crash to occur. Where does it need to go in your opinion, 8-9%?

Its only a loss if you "cash in" to realise it. If property tanks in its value why would I sell to cash it in? I'd only sell and realise the net loss if I couldnt pay the bills. Failing that its numbers rising and falling on a piece of paper/stone slab, which has happened since Moses wore sandles..

spookypt wrote:

Its only a loss if you "cash in" to realise it. If property tanks in its value why would I sell to cash it in? I'd only sell and realise the net loss if I couldnt pay the bills. Failing that its numbers rising and falling on a piece of paper/stone slab, which has happened since Moses wore sandles..

Fully agree it's only a loss if you sell. For those that can ride the crash out then well done, but there will be a significant number that have to sell to provide cash flow. Don't forget that those that are mortgaged to the hilt, if the market does dump, banks are gonna coming knocking for those mortgages to be stumped up more to reduce the banks exposure to their possible loss. Spirals will take effect when this happens.

Flollo I don't have a particular % on unemployment. I just know it's rising and this will aid in the panic effect when the market crashes.

Your claims don't seem to match the data:
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/lab...

Patrick wrote:

Your claims don't seem to match the data:
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/lab...

Im seeing it first hand and in real time. Not looking backwards.

And don’t those numbers show a 17% increase in unemployed people compared to this time last year? Talking about not seasonally adjusted numbers.

https://www.realestate.com.au/news/shocking-3-million-aussies-at-risk-of...

Must be most land and resources per person in the world in Australia, or close to it. How the f did it come to this?