Tuesday, August 22, 2017

Betting on the house

Australia's real estate obsession driving us to the brink.

"I think it's a powder keg." says investment consultant "The statistics are startling. Australians are carrying more personal debt than ever before".

For every one dollar earned, on average, Australians have nearly two dollars of debt. We hold the dubious position of having the second highest level of household debt in the world. Much of this stems from our obsession with buying real estate. http://www.abc.net.au/4corners/stories/2017/08/17/4719901.htm


So on the whole......i'm 50/50 about this, on one hand it was full of gotcha journalism and the most ludicrous cherry picking of facts. Sydney is not Ireland or Detroit - happy to discuss specifics on why but you've probably already heard them from me before.

On the other hand......its good to give the general public warnings but lets face it when you have the ANZ pensioner who receives a cold call and 48 hours later is signing of mortgage on an investment property in QLD with no income....seriously what was she thinking?

She deserved to be separated from her money (a fool and their money)....and no amount of warnings will help her.

In addition how many investors did they film and reject before they settled on the clip of "Beavis and Butthead - Pina Colada" investors...?

Seriously if you are in your 40's and only have $300k for your retirement any actuarial table with a 4% drawdown will tell you that you have a retirement income of around $12k pa in addition to your superannuation (or in their case most likely pension) or about $115pw per person.

You arent going to be travelling around the world drinking pina coladas on $115pw.
(There is a longer post about Beavis and Butthead on propertychat.com.au and details on their financials are on the Binvested website).

Yes Syd and Melbourne is expensive.

Yes property investors overspent on WA/QLD properties driven up by FIFO mining workers......but if people invested in mining company equities.....they have also fallen.

Are mining company investors also crying into their beer that they over invested on margin and got a margin call??


Likewise.....neither should property investors be crying foul and claiming ..."the banks mislead me your honor and i was a poor naive victim of their trickery".

One final point i do want to make that "wasnt really highlighted by Four Corners" about our industry experts.

Why do you think they are appearing on TV talking about the future potential crash of Aussie property".....
This below was from a 2016 post

"The dream run is about to end. Price to income ratios are very high,” Mr Tepper said. “Anyone with a pulse could essentially get a mortgage,” he said.​

Hempton discloses has a short on the Australian housing market. Tepper has told 60 minutes, he will probably do the same.​"

Yep Jonathan Tepper – founder of London-based research house Variant Perception, known for his bearish views on the housing market has a short position and will make money when the Aussie market crashes.....

Lol btw as the market has gone up at least 10.9% in the last 12 months....Mr Tepper is most likely currently underwater on his own investment...........

But hey what do i know.

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