Re: The end is nigh

In alt.sysadmin.recovery on Thu, 21 Jun 2007 18:42:07 -0500
John F Eldredge <john@xxxxxxxxxxxxxx> wrote:

Plus, it sounds like both the UK and Australia are probably having a
real estate bubble at the moment, with prices spiraling rapidly
upwards due to speculative investing. When the bubble bursts, and

Oh I don't think that's in any doubt. Plus low interest rates and a
lot of government (read tax payers including those not eligible)
handouts like negative gearing and "first home buyer grant" which all
lead to vastly inflated prices.

The average home-buying household is apparently paying more of their
income in mortgage now than the last housing crisis time when rates
were at 17%


prices move back towards a more moderate level, a lot of recent

Which, given the current prices, is forecast to take 10-15 years
minimum.


purchasers are likely to find that they owe the mortgage lenders more
than their properties are currently worth. The most extreme case of
this in recent decades was the Japanese real-estate market in the
1980's. At one point, the book value of just the real estate in Tokyo
alone was more than the book value of all of the real estate in the
continental United States.

Yeah, and that's already happening in some places. The local rag
doesn't realise real-estate transactions happen west of Glebe (inner
city suburb) so their real estate stories of the "look, prices still
rising" and "battlers do it hard"[1] kind both feature houses in the
$600k+ bracket.

Buried in a little 2 para item somewhere in the middle of the paper are
notes that houses in the real battler country, the south-west and far
west of Sydney are suffering negative equity and a lot of mortgagee
sales. Isn't clear how many of the latter are family houses and how
many investment though, I suspect at the moment most are the latter -
buy an overvalued cheaply built apartment and discover you can't sustain
the loss caused by the rent being so much less than mortgage and outgoing
negative gearing or no. "Tax loss" is still "loss" after all.

Zebee

[1] First of theses I saw was a couple of years ago. A young couple
making heaps having a whinge that they couldn't afford to buy a
renovated terrace in Glebe at $600k+. That they could afford
something a couple of suburbs over which would still be well serviced
but wasn't *quite* so trendy was apparently neither helpful nor
mentioned. We were supposed to be sorry for them. Ditto the ones who
were paying $800 a week to rent on the North Shore and crying that
they could never afford their own home.

I cried because I had no shoes, then some *** writes a sob story
about someone who can't work out which of their 500 pairs to wear...

Zebee
.