/biz/ - Business & Finance

>>12635541
https://twitter.com/ShaneOliverAMP/status/1091605942922145792

>>12635541
https://moneyweek.com/501442/australias-economy-is-set-for-an-overdue-fall/

>The housing bubble now appears to be bursting. Prices in Sydney and Melbourne, the two most overvalued property markets, have now dropped 11.1% and 7.2% respectively compared with the 2017 peak. Meanwhile, the boom in mortgage lending, and general exuberance, has seen Australia’s household debt increase from 45% of GDP in 1996 to an eye-watering 121% at the end of 2018. (In the UK, the figure is 87%). Consumers owe 200% of their disposable income.

>As Bloomberg points out, the Bank for International Settlements has calculated that household debt starts to drag on growth once it reaches 80% of GDP. No wonder, then, that the expansion is beginning to slow. In 2018, weak consumer spending was the “chief culprit” that dragged annual growth down from 3.4% to 2.8% in the third quarter, notes Emma Dunkley in the Financial Times.

>Income growth has slowed, which, along with the debt pile, is making consumers more cautious. Consumption accounts for more than half of GDP. The Australian dollar has weakened to its lowest level in a decade against its US counterpart, which bodes well for tourism. But this is set to be overshadowed by the fact that the economy remains at the mercy of the cycle in China. Australia is the most China-dependent developed economy, says Bloomberg. The Middle Kingdom buys 35% of Australia’s exports, accounting for 8% of GDP.

so how do I make money off this?

>>12635734
cashout crypto at peak of next bubble and buy arable land at bottom of property bubble

get some spiritual gains

>>12635541
What
is with
this stupid
fucking
thread?
What the fuck do you want us to do about it you fucking sperglord?

>>12635541
Over and over, for fucking weeks now. This autistic fucking info dump. NO ONE GIVES A FUCK

>>12635749
Profit? What the fuck kind of retarded question is that?

>boohoo I don't like using information for profit I want to use a dreamcatcher and pray to the sun god rah for blessings

Are you mental?

There's going to be a report about Australian housing on 60 minutes in a few hours. Should get a few boomers in a fluster.

Self-fulfilling prophecy desu

>>12635749
why are there so many literal retards on this board lately

Brainlet here, why is it going down? Is there a deeper reason or is it just prices too high and none of the younger generations are buying?

Gooks and gook land is going towards a black swan !!! Good, they can fuck off and leave Australia alone...that is a no1. Reason why our property went thru the roof to start with, aka Chinese buyers

>>12636105
>is it just prices too high and none of the younger generations are buying?
hmm...
HMM...

You can’t even live in that crap shack to start with, legally !!!& generally it’s only the 2 percent of the rich that buy them for a social status...

>>12636150
>when property prices are going up to ridiculous levels the media treats it like everyones winning and its a funny story
>when property prices are going down the media treats it like everyones losing and its horrible

kek. when will the real-estate advertising reliant for solvency media learn?

>>12636105
>There are about eight reasons why the housing market is in a downward spiral, according to AMP Capital's chief economist Shane Oliver.

>"The decline in property prices is continuing to be driven by a perfect storm combination of tighter lending conditions, poor affordability, surging unit supply, reduced foreign demand, the switch from interest-only to principle and interest mortgages for a significant number of borrowers, fears that negative gearing and capital gains tax concessions will be made less favourable if there is a change of government, falling price growth expectations and FOMO (fear of missing out) risking turning into FONGO (fear of not getting out) for investors."

https://www.abc.net.au/news/2019-02-01/corelogic-property-price-falls-january/10769704

Most apartments should be alot cheaper than they are, asking 350k for a 1 bedroom and 500k+ for 2 outside of blue chip suburbs is ridiculous, should be more like 150-200 for 1 bed and 3-400 for 2

>>12636149
Based

https://www.youtube.com/watch?v=FR0Tu46i8k0&feature=youtu.be

>>12637079
Based martin north

WHEN DO I BUY

t. 23yo in Perth earning 72k excluding bonuses living at home

Looking at apartments in my area for 260k-280k, I don't want a big fuckoff mcmansion just a cosy little apartment I can call home.

Is this crash finally the chance for my generation to make it?

>>12637112
Wait for prices to fall 60%+. You'll be suprised how fast things will fall once we get deep into the recession.

>>12637104
based and red pillled

https://youtu.be/WM-z5MTG2Cg?t=198

>>12637112
Hard to say. it's very likely the banks, property developers and the chinese gov have known this was coming for years and are salivating at the thought of snapping up thousands of properties at low prices and/or claiming them back from all the retards defaulting on their second and third mortgages. Then they'll rent or sell them to you again until the cycle repeats itself and the fraction of this country they own outright increases inexorably.
You cannot outsmart the sociopaths who run this game.

>>12637112
>Is this crash finally the chance for my generation to make it?
Yes lad

These falls are the highest in a generation and there's no magic black swan chinese mining boom to slow it down

>Sydney’s total decline is now the worst since the research firm began collecting records in 1980, having eclipsed the previous record of 9.6 per cent set between 1989 and 1991. Melbourne’s worst fall around the same period was 10 per cent.

>Melbourne house prices have fallen at their fastest quarterly pace on record amid tightening credit conditions and souring sentiment ahead of the release of the banking royal commission’s final report next week.

https://www.news.com.au/finance/economy/australian-economy/melbourne-house-prices-fall-at-fastest-quarterly-pace-on-record-as-sydney-enters-new-territory/news-story/e79281df6b5274a79793ad81941a7edb

>>12637112

Dont buy an apartment you spastic. They rarely go up in value and aren't as desirable as standalone homes, not to mention new apartments are constantly being built. If you ever wanted to sell, you'd be hanging onto it for a bloody long time.
Only gooks buy apartments and they don't even live in them

>>12637136
They're already down like 10%

Are you telling me there's a chance they could drop 50% more? That seems absurd.

>>12637172
They're also cheap as fuck and I am basically never home anyway, my repayments on a two bedroom would be $250 a week with my deposit and I'd be able to pay down the mortgage incredibly quickly if I got in now and even quicker if prices continue to drop over the next year.

>>12637176
It has to start somewhere. Look what they said in Ireland in 2007

https://www.daft.ie/report/ronnie-otoole

>2007 will not be remembered fondly. The Daft Asking Price Index for Q3 2007 shows that house prices have been marking time all year. The index for September shows that prices have eased back 2% since July, undoing the earlier modest gains. On a 12 month basis, asking prices are more or less where they were this time last year.

>So will 2008 be a year of unrestrained joy, or will it usher a widespread gnashing of teeth? In the market for an asset such as housing, short run prices will always be sensitive to the whims of consumer sentiment. On this score, there is plenty of evidence in the Daft analysis that consumers continue to sit on the fence. Of properties initially listed in January, almost 1 in 5 is still on the market. This has forced many buyers to push down prices. About 10% of properties posted in 2007 have had their price reduced.

2007: http://www.finfacts.ie/irelandbusinessnews/publish/article_10006275.shtml

>Without doubt the dramatic price growth which has taken place over the past decade has had solid foundations; low interest rates, strongly supportive demographic trends and an outstanding employment fuelling economic performance. In isolation any of these elements would have supported a strong housing market. Together they created the circumstances which have led to the exceptional growth in prices we have become familiar with.
>Looking forward, these different elements remain in place in the Irish market and while the era of successive years of double digit price growth are unlikely to be repeated, we strongly concur with the view that we are entering the phase of the so-called soft landing where the gains in house prices which have already been made will be consolidated and were single digit price growth is likely for a number of years to come

>>12637215

2008 https://www.irishtimes.com/life-and-style/homes-and-property/two-big-developers-cut-prices-by-up-to-25-1.929548

>Two big developers cut prices by up to 25% - The dramatic slowdown in new homes sales has prompted builders to cut prices in a number of schemes.

2009 http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/

>Depending on whether you take Census or Dept of the Environment figures, that represents between 37% and 43% of homes in the country. Put in plain English, two in five homes in Ireland are worth less now than when they were bought.

>How far back has Ireland’s property market rewound? The graph below shows average home values in eight regions for the period 2002-2009. There are three shades of colour used – the lightest (further to the right) are house price gains that been wiped out, the medium shade represents current asking price levels, while the full colour lines represent asking prices less 10%. Overall, the asking price for the typical home in Ireland now is similar to what the home was worth in March 2005. If you believe asking prices are overstating true prices, the typical home in Ireland is now worth the same as it was in July 2004.

>>12637215
>>12637226

End result pic related

>>12637176
take this as an example
https://en.wikipedia.org/wiki/United_States_housing_bubble

>>12636225
>reduced foreign demand
Chink economy is contracting and they're all going full insect savings mode so western investment is about to dry up

what should i do in this case?

>>12635749
>>12635766
t. Australian Real Estate Agent

For anyone that is new the main catalysts historical and in the future can basically be tldred below

>2017: China implements capital controls in an effort to stop the dodgy chinkbux from being stashed offshore > It works pretty well, foreign buyers (AKA money launderers evaporate almost overnight)
>2018: Banking Royal Commission > Credit tightening
>2019: (YOU ARE HERE) > Labor wins in 3 months and implements policies which sour appetite for residential property just as much as making them less attractive (boomers think Liberals = economy always goes up)
>2020: At this point about half of the mortgages that have rolled over from interest only to principal and interest will have rolled over, there will still be a shit ton to go through in what will no doubt be a big of a recession/depression by that point in time
>2021 onwards: Fuckwits realise that having an economy stacked on residential property was a terrible idea, sentiment is at a record low for a number of years and (hopefully but probably not), Australia moves towards an actual productive economy where our wealth isn't tied up in blocks of unproductive land for tradies to repair and that's it

I would avoid property altogether and just stay in cash for some banking/financial shares come late 2019/early 2020. NAB and Westpac will be hit the hardest as they have the biggest exposure to mortgages, Macquarie and Challenger are 2 other really high quality companies that you could also probably pick up for cheap around that time.

>>12637079
thanks for this.

Also anyone who has super that can switch their investment class easy, put it into ca$h asap

>>12637145

Keep an eye on the unemployment rate. Negative equity + Unemployment is the biggest predictor for mortgage default.

>>12637799
https://academic.oup.com/rfs/article/31/3/1098/4430495

>Abstract
>This paper uses new data from the PSID to quantify the relative importance of negative equity versus ability to pay, in driving mortgage defaults between 2009 and 2013. These data allow us to construct household budgets sets that provide better measures of ability to pay. Changes in ability to pay have large estimated effects. Job loss has an equivalent effect on the propensity to default as a 35% decline in equity. Strategic motives are also found to be quantitatively important, as we estimate more than 38% of households in default could make their mortgage payments without reducing consumption.

>We find that job loss is the main “single trigger” determinant of default in the PSID,
and the quantitative importance of job loss is robust to several different specifications of our
reduced-form model. Specifically, we find that job loss increases the probability of default
between 5 to 13 percentage points. Severe negative equity (-20% or more) also increases the
probability of default by 5 to 18 percentage points. The impact of severe negative equity on
default drops significantly in magnitude when liquid asset positions are taken into account.
Furthermore, we find evidence for the “double trigger” event of job loss and negative equity,
as well as job loss and severe negative equity. Specifically, we find that the joint occurrence
of both job loss and negative equity raises the unconditional default rate by 11.3% over and
above either trigger on its own.

>>12637655
I thought it was CBA that had the highest mortgage exposure, and that NAB was more into business lending. I mean they're all heavily exposed to mortgages anyway.

>>12635606
Monetary invasion by China. Canada is next.

>>12637864
I guess its hard to say.

Is commercial property going to be hit as hard as residential property?

A lot of small businesses as part of SME business lending have their residential properties used as collateral the vast majority of the time

A lot of people with loans/consumer finance products work in the Finance/Real Estate/Trade sectors and so will get gutted from higher unemployment and lower incomes.

You are right, they'll all be fucked. But that makes for the buying opportunity of a lifetime, no way the Australian government under Liberal or Labor would let a big 4 bank let alone Suncorp or Bendigo & Adelaide or bank of queensland go under

how the fuck do normies watch tv... I want to watch 60 minutes so I need to suffer through the most insane shit

>>12636196
>can't do whatever the fuck you want on your own property
Why are kangaroos so cucked?

>>12635766

>t jobless boomer cunt with their 1.2 mill house for sale going on 1 a year now and with no buyers in sight

>>12637901
>buying opportunity of a lifetime
Yeah very true. The banks aren't going to go bust any time soon, when they're getting pink wojacked I'll be picking some up.

>>12637966
That bit on the investment scammers wasn't too bad actually

>>12638079
Yeah that was good. it was the married at first sight shit that triggered me

Hate seeing good aussie blokes getting rorted. theyre so trustworthy.

>>12637799
is there one of these for melbourne?

>>12638198

>>12638283
source?

>>12638351
https://www.youtube.com/watch?v=WM-z5MTG2Cg&feature=youtu.be&t=198

>>12637655
So buy puts on Westpac and NAB with 2020 expiration dates?

Haynes Banking Royal Commission Final Report is out tomorrow lads. Getting super comfy just thinking about reading it.

It was given to the Governor-General on Friday, and Haynes was ice cold to Treasurer Frydenberg on the occasion which indicates its going to be fucking savage.

>And then there’s the day the Treasurer, Josh Frydenberg, met the royal commissioner, Kenneth Hayne. The very air took on a chill so deep it might have blown in from the Arctic vortex currently turning the northern hemisphere to ice. "A handshake or something...?" implored a photographer, vainly hoping to open a crack in the glacial atmosphere.
>Commissioner Hayne, fresh from months assailed by evidence of the wicked doings of gangsters in suits and giving more than a few of them a doing-over from the bench, wasn’t in a handshaking sort of mood. Or any sort of ice-breaking mood at all. As Frydenberg, the Treasurer of Australia, sought desperately to maintain a smile that gradually devolved into a hideous rictus, Justice Hayne studied a spot in the air that might have been in a universe far, far away, where he appeared to wish he might be transported. His hands remained determinedly resting, jiggling slightly, on the Treasurer’s desk. Not a word passed his lips, nor the hint of a smile. The awkward moment stretched. And stretched. The volumes of the final Hayne report sat as untouched. They might have been hand grenades.
https://www.baka.com.au/politics/federal/commissioner-hayne-turns-treasurer-s-moment-in-the-spotlight-ice-cold-20190201-p50v75.html

I don't now how to webm but click the link and just look at the contempt for Frydenberg on Hayne's face.

>>12638378
Theres gonna be so much shit in there that it'll probably be worth reading because the media will focus on the sensational rather than the important

I hope they used smart headings so I dont have to read the whole thing ;_;

>>12638410
>>12638378
Predicting a lot of huffing and scolding concealing little more than a slap on the wrist.

feed me the boomer tears!

>>12636149
Lmao since 87 we've been going up. Youre fucking autistic to think the chinese had anything to do with this in the grand scheme of things.

>>12637172
This. White people don't like apartments. Land goes up in price; not concrete. Family has stake in a 150m unit complex.
>>12637655
2016 capital controls started, but fucking brilliant.
MQG won't dip too severely. WBC is a good short- RBA will buy bank balance sheets as stimulus.

Mortgage sweep will happen soon.

>>12638378
It will be a way to get superfunds to buy more government bonds.

I love the economy. I'll be up 50k in the next two weeks & by years end I'll be up another 100k.

>>12638447
Stockland sold the grove above book value. Vicinity revalued 6 months interval at -0.2%. Many companies will still post a profit and positive revaluation. You're fucking retarted to buy a house with the intention NOT being to instantly refinance and buy stocks.

WEL well well! You guys need to YouTube German bank!!!! They will be the black swan of banks, and if they don’t let the banks go, Australia will be in hyper inflation... good job dumb ass

>>12638496
Fuck off schizo.

Fuck off pan head, pedo fucker

I'm calling the big banks to close 5% down by end of this week as it sets in

stay in cash and stay comfy, buy the dip 2020

Thoughts on this tushy?

>>12638615
absolutely and utter fucked

if you want non-bank financials get on the likes of Macquarie or Challenger. AMP is an absolute dog

>>12635541
The only way the property bubble will burst is if demand falls, and that will only happen if they halt immigration. Which won't happen since we're on the trajectory of becoming a majority minority NWO outpost.

>>12635541
Where the fuck is Eastern Australia?

>down by a 1.7 per cent drop in Melbourne and a 1.4 per cent fall in Sydney.

That's not a free fall.
Imagine someone saying "Bitcoin FREE FALLING!!! 1.7% down!! What the fuckin' fuck, eh!"

When the price of a 240% overpriced house will crash at least by half you will be able to talk about Hurr Durr Free Falling.

A 380%-overpriced house falling by 1.7% is no more than a fart inside a hurricane.

>>12638644
This

When is my generation going to realize they've been robbed by all these foreigners.

>>12638669
That's what I am saying. Most Anglos I talk to are too busy partying it up and living in share houses so they are circumventing the issue. So what are the boomer elite doing? Importing Indian and Asian couples to immigrate here, and they sign up to 20-30 year mortgages no problem.

Any discussion on the cause of the Australian housing bubble that forgets to mention immigration as a primary driver behind the bubble is being dishonest at best.

>>12638669
1.7% isn't much on it's own, but if the next 11 months are like this, it's gonna be significant. Look at the rate of decline, it's pretty steep.

Especially in Australia where 'real estate only goes up', it's a rude awakening for some. People also don't realise that if their property goes up 20% then down 20%, they're not back to their initial capital, they are actually down 4%. Losses are far bigger than gains in absolute terms

>>12638669
Unlike proper productive investments like bonds or equities, property returns are quoted in gross returns (ethnics and low IQ boomers don't realise this)

factor in legal fees, council rates, water, depreciation, stamp duty, maintenance and you can reduce most returns by a further 2%-3%

An economic and social CATASTROPHE is happening in Postcode 2570!

North and Adams present statistical evidence that backs up police claims that MORTGAGE & RENTAL STRESS are the catalyst for a massive spike in DOMESTIC VIOLENCE!

https://m.youtube.com/watch?v=kbLiFxUwtrE

Do your think they will adjust interest rates on Tuesday? There are rumours floating around the markets for it on betfair ages Tasty AF

I remember in a previous thread, that someone said the only property that has fallen in price are the most expensive ones, and that this crash hasn't affected the cheaper property at all.

>>12638644
Correct. This is just a minor wobble before Labor gets elected and the current deluge of foreigners turns into a torrent. Property prices will resume their upward trajectory, your salary will never increase and in 5 years all job postings will require applicants to be multilingual before they'll even look at your resume.

>>12638803
>2570
and nothing of value was lost

>>12637655
oh yeah when am i supposed to vote

>>12635541
They call it a housing crash, I call it the first time rent has gone down in 10 years.
Different people have different perspectives, I suppose.

>>12636105
Chinks

>>12637559
It’s even better: based Emperor Winnie the Pooh is actually cracking down on capital outflows. This in conjunction with an economic slowdown and increased political pressure will make for a rough ride. I hope you cunts are ready.