Australias Property Bubble Bursting MEGARED

[Anonymous No.11850182]

Last time Sydney had a dust storm of this type it was 2009 and the property market had just shit itself after the GFC! Coincidences do happen.

Price falls in Sydney and Melbourne faster than during the great recession or any other event in at least 30 years: Sydney https://twitter.com/DocNicolaPowell/status/1055939261554319360 and Melbourne https://twitter.com/DocNicolaPowell/status/1055950182574055426

Only in 3 other extreme events have clearance rates been in the 30s in Sydney: https://twitter.com/LouiChristopher/status/1053585757351231488 (they'll be revised down to ~38% once the full results come in) - Oct/Nov 2008 (GFC), May 2004 (NSW vendor stamp duty) and July 1989 when the cash rate hit 17%. Sydney buyers are responding with the same recluctance to buy as during the worst recession in our generation, the highest new purchase tax in our generation, and the highest interest rates in the boomers generation.

Clearance rates have a direct correlation with price change, as clearance rates drop so does prices: Sydney https://twitter.com/ShaneOliverAMP/status/1061916517032292352 and Melbourne https://twitter.com/ShaneOliverAMP/status/1061916812936245251

Melbourne down 4% in a quarter: https://www.domain.com.au/news/melbourne-house-prices-drop-4-per-cent-in-three-months-776913/

Clearance rates worst in a generation: https://twitter.com/ShaneOliverAMP/status/1053562178626678784?s=20

[Anonymous No.11850190]

Not surprisingly buyer sentiment is lower than during the GFC: https://www.theguardian.com/australia-news/2018/oct/10/house-prices-set-to-continue-to-fall-for-another-two-years-survey-says

42% of NSW mortgage owners will be in negative equity once prices fall by 20%, which is only 1-2 years away after falling 7% this year: https://www.afr.com/content/dam/images/h/1/6/v/f/7/image.imgtype.afrArticleInline.620x0.png/1539928703734.png

US Fed is raising rates and the BBSW increases for Australian banks who pass on the interest rate rise to Australian mortgages: https://d3fy651gv2fhd3.cloudfront.net/charts/united-states-interest-rate.png?s=fdtr&v=201809261820x

The Fed is expected to raise rates in December, three more next year, and one increase in 2020. https://www.reuters.com/article/us-usa-fed/fed-raises-u-s-interest-rates-sees-at-least-three-more-years-of-growth-idUSKCN1M60EE

Here's some data from previous bubbles to aid you in approximating what the value of a property today could be worth at the bubbles bottom: https://i.imgur.com/yX5AXk9.png

That's from Page 5 of this economic paper published in 2007 in Ireland by Prof. Kelly who correctly predicted the bubble and the dramatic price falls. See: http://irserver.ucd.ie/bitstream/handle/10197/38/kellym_workpap_001.pdf

For comparison Sydney rose over 100% since 2009: https://www.yourmortgage.com.au/mortgage-news/sydney-home-prices-have-risen-over-100-since-2009/255029/

This too shows the peak to troughs of bubbles: https://imgur.com/a/yKrpe6C

Interview here where he debates a property bull with tears in his eyes trying to help people see what was going to happen to the Irish economy: https://www.youtube.com/watch?v=Gd6ZwqLePC0

[Anonymous No.11850196]

>>11850182
>tfw no dust storm here in newcastle

[Anonymous No.11850208]

>>11850196
Give it a day

In the end this all comes down to credit. What can a person borrow? The answer is much less than in the past few years. Meaning their is no physical way for people to pay the prices they had, and prices therefore must come down when property owners are forced to sell due to moving, deceased estates, debts or divorce. See: https://www.sMH.com.au/money/borrowing/one-in-five-people-with-a-mortgage-wouldn-t-qualify-today-broker-warns-20180719-p4zscl.html

All these new buyers on Interest Only loans will rollover in 2019/2020/2021, and almost all of them will have made a loss in Syd/Melb, so they'll be in negative equity, and they'll be required to increase repayments by around 40% when going from IO to I+P, on a depreciating asset in a falling market, and lose hundreds of thousands - or they'll sell the property to stop the losses, and they'll be forced to come up with the hundreds of thousands difference between the principle mortgage value (that they didn't pay off) and the sale price of the property. https://www.rba.gov.au/speeches/2018/images/sp-ag-2018-04-24-graph4.gif

https://www.youtube.com/watch?v=iwV9bwIkWqw The consequences of the combination of forced sales and IO rollovers who can't afford I+P selling at the same time are outlined here. Notable fact Off-The-Plan buyers who paid years ago for a property worth $X will have the property revalued at settlement by their bank, and the bank will value it lower than when they bought it years ago, and the buyer will need to scrape together the difference between what they purchased for and what the property is now valued at. Basically off the plan buyers are going to be in debt at the time of settlement and most won'y have access to the money to make up the difference - and will have to buy into negative equity, or sell and make a loss before they even got to use the property.

[Anonymous No.11850212]

so QBE is going to zero, r-right? is it time to start loading up on put options?

[Anonymous No.11850252]

Sydney's broke

https://twitter.com/ANZ_Research/status/1065397305661042688

[Anonymous No.11850294]

Everything has to go down.. All the boys have been talking about how they're not going to be able to afford a house. Even if you're married it'll still take you about 2 years to save for a down payment in a far away suburb

Either that or boomers somehow find a way to afford those interests

[2 scoops !!DU22SQMj6dQ No.11850296]

>>11850182
Good post anon
I posted a screenshot of your thread in /smg/. We really appreciate shit like this over there.

[Anonymous No.11850308]

>>11850296
he usually posts once every few days. pretty good, but im trying to figure out what companies are going to zero.

[Anonymous No.11850369]

would shorting the AUD/USD pair be a good idea?

[Anonymous No.11850378]

I've got 50k AUD cash what do

[Anonymous No.11850393]

>>11850378
slowly enter crypto over the next 10 months

[Anonymous No.11850877]

>>11850393
What if you had a fair bit more than that?

[Anonymous No.11850890]

>>11850877
just hold tight fren

[Anonymous No.11850897]

melb lol

[Anonymous No.11850921]

Daily reminder, the government will confiscate your savings to bailout failing banks

http://cecaust.com.au/releases/2018_02_16_Govt_APRA.html
https://www.ainsliebullion.com.au/gold-silver-bullion-news/senate-passes-e2-80-98bail-in-e2-80-99-law-e2-80-93-how-safe-is-your-cash-now-/tabid/88/a/1722/default.aspx

[Anonymous No.11850973]

>>11850921
What do I do with my savings, I’m panicking.

[Anonymous No.11850997]

>>11850973
settle the fuck down faggot. you do not wake up and your savings were all missing, they are depleted as gradually as the seductive pick pocket. merely wait for the tickle of her dainty hand and then strike like all fuck

[Anonymous No.11851014]

>>11850973
Theres no good answer that I'm aware of. best thing you can do if you want to keep it cash is to spread it across many banks or keep physical cash.

ANZ>NAB>CBA>Westpac is the order of risk for the big 4, with westpac most risky, from what I've heard but theres no official data released to back that up

fuck captcha

[Anonymous No.11851036]

>>11850378
Buy gold or silver, there's a decent chance that is the housing market crashes the economy (and therefore, the value of the AUD) will crash too. With your money in gold or silver the value will increase inverse to the value of the dollar. So as the AUD crashes the value of your precious metals by comparison will skyrocket.

Then when the AUD bottoms sell off your precious metals back to cash and you'll find yourself considerably richer.

[Anonymous No.11851047]

>>11850973
For the last time
BUY GOLD AND SILVER
You can keep them in your house, government can't do shit about that. Shove it all in a sturdy safe well hidden and wait for shit to blow over.

[Anonymous No.11851093]

Does this entail that the australia economy is going down the drain? Or only the housing market? (I'm a bit new to finance)

How can non-australians profit from this?

[Anonymous No.11851095]

>>11851047
How do I keep the precious metals safe when renting and no guns?

[Anonymous No.11851127]

>>11850182

If you look at australian property prices on a graph its looks like bitcoin btc but just on a longer scale.

If the chinks get cold feet and move their dirty money out of here and interest rates go up, this niglet is gunna fall of the table.

[Anonymous No.11851133]

>>11851095

put in a hole in the back yard of your parent's or grandma's house

[Anonymous No.11851143]

>>11851047
and bitcoin just in case

[Anonymous No.11851151]

>>11851093
Whole economy is about to fuck out imho... once the interest rates go up and the housing market fucks out, credit will dry up, new construction will stop, heaps of people will be out of work, this will flow to hospitality and retail, lay offs at banks..


how can non australian's profit? short asx or wait for the bottom and buy a few apartments here.

[Anonymous No.11851154]

>>11851093
Yes most of the economy, but it is not Bit Coins, anything and everything will be done to keep Real Estate Property above water

[Anonymous No.11851164]

>>11850196
Oy fellow newy dudeman here, theres still a fuck tonne of dust in the air, look at the moon

[Anonymous No.11851175]

>>11851151
the cash rate isn't going up, the next actual move made will surely be down to counter overseas cost. everything else you said does happen but will be dampened as much as possible

[Anonymous No.11851210]

Im building 2 town houses on my deceased father's property in Brighton. It's costing me 450k to build but similar properties have been selling for 2m each. How fucked am I? Completion by Xmas and already have one sold, and have low ball offers for the other one. Should I take it?

[Anonymous No.11851220]

>>11851210
>low ball offers
take it unless you want to rent the place out for 10+ years

[big4 bank an No.11851297]

National Australia Bank [ASX: NAB] had to borrow USD$4.5 billion from the US Federal Reserve during 2008 and 2009.
Westpac Banking Corp [ASX: WBC] needed USD$1.09 billion in January of 2008 and 2009.

https://www.federalreserve.gov/regreform/reform-taf.htm
search teh spreadsheet for westpac lol

When the US Fed bailed out the ausise banks.

>>11851014
>https://twitter.com/ANZ_Research/status/1065397305661042688

plenty of official data to back that up. I'm big4 ato anon.

for instance, 50% of the loans originated at westpac since 2014 have been interest only. 50%. and they are only interest only for 5 years.. try refinancing when your 2017 interest only mortgage has gone from 80% lvr to 140%

[Anonymous No.11851298]

>>11851151
Is the downward trend in the last couple of months related to the housing bubble, or was it just following the international markets?
And should ASX be shorted now? It seems like it's rebounding pretty well the last couple of days? (Pic related)

Will the international economy suffer because of Australia?

[Anonymous No.11851330]

>>11851298
meow meow meow! Aussies are going waaaaay down with China. Short the bounce

[Anonymous No.11851341]

>>11851298
More like the combination of the downturn in international markets combined with the real estate crisis will combine in a perfect storm and tank the Australian economy completely.
I'm Australian and god dammit this is gonna be a shit 2-5 years.

[Anonymous No.11851392]

>>11851341
>2-5

[Anonymous No.11851395]

>>11851297
>50% of the loans originated at westpac since 2014 have been interest only. 50%

Jesus Christ !!

[Anonymous No.11851399]

>>11851392
Fuck you mate, let me just hope that it won't be any worse than that.
I'm still a young boy and I don't want the early years of my life ruined by a complete destruction of my earning potential for like 10 years because of faggot bankers.

[Anonymous No.11851403]

>>11850973
>>11850378

BBUS

[Anonymous No.11851414]

>>11851095
150kg Gun Safe. No need to bolt down and, when you get your rec shooters licence, you can fill it with gold, silver and a few guns. Thats my plan.

[Anonymous No.11851489]

>>11850182
Can the person who is making these threads never stop. I come to /biz/ for these threads instead of /gif/ to make my dick hard, the thought of the smug 'investment gurus' boomers and kikes who thought they could get rich from ripping off their children

[Anonymous No.11851490]

Prices will certainly continue to drop, especially when the next election hits and we see changes to negative gearing and capital gains discounting, or a significant lowering of immigration, or (likely) both. Certainly some segments of the population will suffer, particularly boomers whose retirement plan is to milk their home equity, but other segments will benefit, like first home buyers. Overall, the outcome of lower property prices by itself is manageable and not too bad.

What I am unconvinced about is that we will see a debt crisis. I don't think the banks are too highly exposed to mortgages, and I think most people will continue to be able to pay them, even with IO converting to P+I. The construction industry isn't a big enough part of the Australian economy for theoretical mass unemployment in the sector to have a large, economy wide effect. Even in the worst case scenario of mass defaults, the RBA still has room to move on interest rates, and the government still has lots of options to cushion the blow, which will spare Australia from a debt crisis. The only thing I am pretty much betting on is a weaker AUD and a rise in government benefits to the needy.

Feel free to change my mind.

[Anonymous No.11851599]

>>11851399
>muh banks fault

they made money giving the people what they wanted. employment, mortgages and apple pay. blame your faggot parents for raising you in this delusional shithole.

[Anonymous No.11851617]

>>11851599
>I'm the one who gets fucked by shit that I didn't benefit from in any way and had no say in
God dammit this place sucks.

[Anonymous No.11851634]

>>11851599

Correction.

They made money by given people money the banks didn’t have in the first place.

Fractional banking is one hell of a money printing drug.

[Anonymous No.11851636]

>>11851599
Found one.

[Anonymous No.11851638]

What all this means is that technically Australia is one federal government election away from going down skid row exactly like Venezuela.

Socialist Bill and his anarchist backing will soon be in control and nothing will help them more than this shit hole slide the property market and ASX are going through now.

The writing is on the wall.

[Anonymous No.11851722]

>>11850182
Hey guys aussie here with 10k in saving(only 19 lay off pls :'( ) where should i buy my gold and silver from ive had cold feet about our economy for the last year but not im going into panic mode
legit question.

[Anonymous No.11851723]

>>11851638
I'm just happy that my qualifications are internationally recognized. If shit goes too far south here I can literally just up and leave for any other developed nation and pick my career up exactly where I left off.

[Anonymous No.11851813]

Should I buy gold, 27, 65k in the bank

[Anonymous No.11851833]

>>11851617
this goy gets it
>>11851634
this goy gets it
>>11851636
fuck yourself with your ass sipping apparatus fucknut

[Anonymous No.11851859]

Is there like, some kind of full economy reset button that unfucks everything and vaporizes all of the money currently in circulation so we can start circulation over from square one?
Because we really fucking fucked this shit up.

[Anonymous No.11851875]

>>11851722
10k in savings is better than most people, let alone 19 year olds.

Better off converting it to the chinese YUAN. We will be using it in Australia when china takes over in a few years.

[Anonymous No.11852093]

>>11851599

> creating money out of thin air then loaning it to you to return a profit from the saving off other people is a good moral position.

If you or I were to create money out of thin air that would be counter-fitting. But our Jewish friends in the bank can do it.

[Anonymous No.11852117]

>>11850182
Short the planet.

[Anonymous No.11852130]

>>11851859
yeah, it's called a depression

[Anonymous No.11852172]

>>11852130
I wanna say that we should just have a global depression and get it over with but frankly I think we'd just fuck it up all over again.
Though at least if I lived through the depression I might be able to buy a house at a reasonable price that doesn't literally consume my entire life in debt.

[Anonymous No.11852177]

problem is how much the government takes when you by a house. I just bought a $460K house and was taxed $20K on top of that even though i had well over 20% deposit. I know a guy who had to sell his house back to himself to remove his ex-wife's name from the property. It cost him $50K oon taxes

[Anonymous No.11852305]

>>11852177
The ATO has very sticky fingers.
Many taxes, but suspiciously few taxes on the super rich people in the country and the select industries that those people run.
HMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM, I WONDER WHAT COULD BE GOING ON HERE?

[Anonymous No.11852556]

>>11851875
Don't. China is fucked. That's the biggest reason Australia is fucked actually.

[Anonymous No.11852611]

https://www.youtube.com/watch?v=J9gKyRmic20

[Anonymous No.11852637]

>ANZ doubles down on housing downturn: prices to fall 20pc
>Nov 22 2018
https://www.afr.com/real-estate/anz-doubles-down-on-housing-downturn-prices-to-fall-20pc-20181122-h1875g
>ANZ predict “10 percent fall from peak in Sydney”
>Sep 18 2018
https://www.sMh.com.au/business/the-economy/sydney-melbourne-house-prices-to-decline-by-10-per-cent-from-their-peak-anz-20180928-p506kr.html

[Anonymous No.11852707]

>>11852637
>"Until recently, housing prices have been performing broadly as we expected," they wrote. "And in fact, most capital cities are still tracking in line with our forecasts.

>"Sydney and Melbourne, however, are not.

>"We had expected by this stage to see some evidence that price declines in these cities were moderating, as the impact of credit tightening started to wind down. But price falls are continuing at a material pace and are broadening through most segments of these markets."

[Anonymous No.11852728]

>>11850208
>Only loans will rollover in 2019/2020/2021, and almost all of them will have made a loss in Syd/Melb, so they'll be in negative equity, and they'll be required to increase repayments by around 40% when going from IO to I+P,
right out of the fucking america 2004-2007 playbook

[Anonymous No.11852750]

>On CoreLogic figures released this month, Sydney house values have fallen 8.2 per cent from their peak in the middle of 2017. Melbourne is down 4.7 per cent over the same period.

>On ANZ figures, Sydney prices are now 9 per cent below the June 2017 peak, and, by the end of this month, the fall will be larger than the 9 per cent fall in 1988–91.


>>11852728
Give people a credit card and they're all gonna max it out. Behavioural economics a non-shit.

[Anonymous No.11852759]

How high were housing prices in Melbourne and Sydney (since they seem to be the most affected) ?

[Anonymous No.11852779]

>>11851399
Checked. I am millennial and the 08 crash fucked over all of our earnings trajectory. Same as it ever was. I hope to watch it all burn, even if I die. The cabal's game is up

[Anonymous No.11852793]

>>11852759
They are and were fucking mental.

So the median income is $50,000AUD? Median property is $500,000AUD. That's the combination of apartments (much cheaper) and homes (more expensive).

Its hard to find the perfect graph but this summarises it

[Anonymous No.11852804]

Who fucking cares about Melbourne and Sydney house prices they're all owned by greedy cunts living beyond their means trying to make a quick fortune by flipping properties. They deserve it. Perth's fine.

[Anonymous No.11852833]

>>11852793
>price to household income 10
Well the crash is kinda deserved wew.

[Anonymous No.11852851]

>>11852759
https://www.domain.com.au/product/house-price-report-september-2018/

Sydney median house $1,101,532. = 16.2x median income
Sydney median apartment: $734,775 = 10.8x median income
Sydney median income: $67,808

Melbourne median house: $852,980
Melbourne median apartment: $496,260
Melbourne median income: Can't find but it's less than Sydney

[Anonymous No.11852889]

>>11852851
How much it is as a function of square metres ?
For example in my city the average annual income is 34000€ and the average sqm of housing is 4025€

[Anonymous No.11852918]

>>11852851

Pretty average house price $544,609
Average income $62,000

That's what normal looks like

[Anonymous No.11852926]

>>11852918

Perth average house price $544,609
Average income $62,000

That's what normal looks like

[Anonymous No.11852927]

>>11852889
https://www.commsec.com.au/content/dam/EN/ResearchNews/ECOReport.20.11.17_Biggest%20homes_size-fall.pdf

The average floor size of an Australian home (houses and apartments) has fallen to a 20-year low. Data
commissioned by CommSec from the Australian Bureau of Statistics, shows the average new home is
189.8 square metres, down 2.7 per cent over the past year and the smallest since 1997.

The smaller home size reflects the increased building of apartments (around half of all new building is
apartments). But Australians are also still building big free-standing houses. The average new house built
in 2016/17 was 233.3 square metres, the biggest in four years and more than 11 per cent bigger than 20
years ago. In fact the average house built today is over 30 per cent bigger than 30 years ago (the 1986/87
financial year).
 Australia is still building some of the biggest houses in the world, but, on average, US houses are still
bigger by around 5 per cent. And US homes (houses and apartments) are 8 per cent bigger.
 Victorians are building the biggest houses in Australia, ahead of Western Australia and NSW. But notably
the average size of houses built in South Australia in 2016/17 was the biggest in the state’s history.

[Anonymous No.11852963]

>>11852926
god i wish that were me

[Anonymous No.11853020]

>>11852927
>>11852889
Well its insane. Paris is supposed to be an awful unaffordable housing market two times worse than my city (Lyon) and it doesn't even register >>11852793 here.

[Anonymous No.11853085]

>>11853020
I expect EU rules meant banks werent able to lend people money without a reasonable expectation theyd get repaid

[Anonymous No.11853494]

>>11853020
https://www.realestate.com.au/sold/property-house-nsw-redfern-127020598

Sold: $1,110,000

[Anonymous No.11853584]

It’s called the everything bubble faggots. Crypto was early action in bursting because it went up the most violently. Stocks and real estate will take longer, but they have peaked.

[Anonymous No.11854741]

>>11853584
Yeah QE consequence

[Anonymous No.11855149]

lol

[Anonymous No.11855929]

>>11850182
I scooped up a place in Sydney but in rather unique circumstances - dude couldn't sell for like 13 weeks on the market and I lowballed him pretty hard below market value because it was clear he had a settlement coming up and I was preapproved for my loan because I have a rather well paying job.

I can tolerate a pretty big drop in the median price in the area before losing equity and I mainly wanted it to live in so I'm going to be okay.

So many people are FUCKED though.

[Anonymous No.11855957]

NOOOOOOOOOOOOOOOOOO

ALL MY INHERITANCE IS IN REAL ESTATE

[Anonymous No.11856278]

>>11852556
EMA equity. Even though you don't like pajeetland, their demographic will drive the next mining boom which can be proxy-played via BHP and GLD.

- Short AUD/USD
- Long BHP and GLD