Meanwhile, on the bubble front line…

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From a real estate colleague of mine in Melbourne:

I just wanted to give you an example of how heated our property market is.

A property a couple of doors down from where I live (Glen Waverley) sold by private sale in early July 14 through Hocking Stuart.

The property was on the market for about 5 weeks before it sold.

The property sold for $1.1 million to an Indian investor – which is overvalued by about 20% – but it is about what you would expect in this market.

After a 30 day settlement the property went up for auction with Ray White at the start of August 2014.

The auction was on Saturday (6 September 2014) and sold to a Chinese man for $1.365 million.

That is an increase of $265,000 or 24% over 60 days.

Glenn Waverly is a fancied area of Chinese buyers. Hit the bid, peeps!

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. reusachtigeMEMBER

    Good to see property investors making money! These aliens are learning the Aussie Way… flip and profit. Only losers aren’t doing it.

    • Too right – this only proves that real estate investment is getting better and better!!

      Like the old saying goes – when your hairdresser is telling you about an investment, that’s the time to double up and dive in.

      • Only chumps get investment advice from hairdressers, the smart money follows what taxi drivers are saying…

      • “The smart money follows what the taxi drivers are saying.”

        Still better than listen to half financial experts/commentators out there.

      • @TT

        You might not be familiar with reusachtige history on MB. A troll he is not. In his own words, he has given up and now encourages blowing the bubble further so it may burst sooner.

    • agree – and what people forget is thats its better to pay MORE for a property. WHY? cause prices are guaranteed to double every 7 years – woudl this guy rather 1.1 million doubling or 1.365. HE is the winner! Rule number one for investing is ONLY A MUG PAYS FAIR VALUE!!! I always bring along 3 dummy bidders to auctions i bid at to ensure at least a 20% premium which ends up being a 40% premium in 7 years.

      • Only a mug thinks there is such a thing as fair value. The property millionaires of the last decade can tell you that there is no such thing.

        Oz property is the safest bet on Earth. If you can borrow money to buy it, then some Chinese person has 10 times as much available to buy it off you.

        Lever up, buy now, and get rich!

  2. So Macrobiz, the big question is, do you dear speculate on when you think property may crash or start to slide. I am so wanting a correction but it hasn’t happened yet.

    I guess it’s a big ask to stick your neck out on the chopping block and you will never know what the government may do to bail out the property market.

    But, if we were to stay keep the status quo, when do you think we may see a shift in prices, and what cities would get hit first, Brisbane, Perth, Mel/Syd or some other order

    Now that we have S&P on our side (the it’s going to crash side) maybe we can take some educated guess ?

    • reusachtigeMEMBER

      Correction? LOL.. It aint happening. Property is THE investment class and is fully backed, by everyone but the losers!!

    • lol correction… I’ve heard it so many times, good thing I bought a few properties in 2001 when everyone saying it was stupid. I remember it so well, it was so daunting at the time, all that debt, we were scared. Looking back at it now, it was one of the best decisions we ever made, this is coming from someone who rarely makes good decisions. My friend who was looking to buy in the same neighborhood with me in 2001 decided to wait it out, he’s still renting in 2014. Had he bought together in 2001, he would of paid $250k. Houses in the same neighborhood are now around $900k. He is still renting and waiting for the crash. Of course, with limited housing trades people, restricted land supply, record levels of immigration and laxed visa policies he could be waiting awhile. When the crash happens, the government will prop up the market in someway. It’s all rigged for big business. Just join the party.

      • Another success story! The price may have gone gone up by 3-4x since 2001 when things were relatively affordable, but that’s just historic details and irrelevant to now. Just get on now, as much as you can – untold riches await.

    • Jimbo – have a look at this prospectus for a company listing on the NSX.
      www. nsxa.com.au/ftp/news/ixs_prospectus.pdf

      Pg 47
      the Agent represents and warrants to the Existing Shareholder that the following individual Chinese investors (“Committed Investors”) are committed to investing at least $3.5 million to $5 million each in bonds that will be issued by the Company following listing on an Australian stock exchange:
      1. Shuqiang Wang of Jilin Province, China;
      2. Meng Zhang of Guangdong Province, China;
      3. Tao Wang of Henan Province, China;
      4. Yingfeng Wang of Chongqing City, China;
      5. Junli Zhao of Shandong Province, China; and
      6. Xinfeng Wang of Beijing City, China;

      in addition, the Agent represents and warrants to the Existing Shareholder that there are other wholesale investors who have indicated their interest in investing in bonds to be issued by the Company from time to time after the Company’s listing on the relevant Australian stock exchange;

      Purpose of the new company – invest in Australian RE

      • I’m sure Xi Jinping might be interested in these names – problem is he’s got a backlog of 20 years worth of names to get through first.

  3. It is outrageous what is happening in the South Eastern Suburbs of Melbourne. I’m renting in Burwood East, and every house that goes up for sale in our area is fought for between two or three Chinese investors with no regard for what the property is actually worth, then left empty. My street is littered with empty houses.
    We often look at houses in the hills, but often don’t even bother going in when we see the Mercs and BMWs of the other visitors out the front.

      • I agree, but when I bring it up Reusachtige and others put me back in my place. apparently that’s un austrayan

      • So what? It primarily impacts young people. And the reason young people can’t afford houses is because they are too lazy and undisciplined to save and they expect everything handed to them. (paraphrased)

        Some blissfully ignorant words handed to me on the weekend from an entitled Boomer (yep, three IPs), the generation who has shaped public policy since the 80’s.

        That was all good and well when “the vision” meant turning Australia into a globally competitive melting pot of entrepreneurship as it was in the 80’s. But the past decade and-a-half have turned this vision into one of tax breaks and inflated homes as far as the eye can see…

      • The Chinese model of property investing has moved to Australia. Real estate is a store of value. No point in renting it.

        Wealthy Chinese can see the writing on the wall for their own market, so they want to get out and invest somewhere where property prices never go down, and are guaranteed by the state. Welcome to Straya!

        P.S. not sure how MP and reforming NG, CGT and SMSFs are going to stop Chinese demand. Maybe FIRB should do its job?

      • It’s been out policy for 60 years. The evidence has been before your eyes all that time. It doesn’t matter who it is – The Brits, The Amricans, the Japanese, The Chinese. the Danish Nurses. It’s been our policy to sell everything to them.
        There has been no revolution and will be no revolution. Everybody is in favour of this process. The only thing you are in dispute about is who gets the benefit.

    • Matches friends description of their experiences in Sydney over the last 12 months – St George area, then ever further outwards was where they were looking.

      • Chinese in Hurstville are buying everything that moves in surrounding suburbs. I have now been priced out of my suburb. prices have gone form 1.4 to 2 in the last year!!! knock downs are getting 1.7!!!!

      • The Chinese are behaving like the Japanese in Queensland in the 1980’s

        That all ended in tears.

      • Interesting concept because in all reality if the buyer is a non-resident and has left the property vacant, un-secured, not regularly monitored then it would be difficult for them to assert their property rights without eyes and ears on the ground.

        I wonder, in coming years, what will become of all the empty dog boxes in the sky.

    • Need to get a slingshot and some ball bearings. Test out how long it takes to get a window repaired in an empty house.

    • This raises the interesting question of whether a squatting culture will develop out here.

      Unoccupied houses… homeless youth…

      • We need something like a “deemed rental” tax. All property other than PPOR has a 2% p.a. tax on it. If you earn rental income, you can credit the rental tax already paid for the deemed rental, against the tax on your rental income. So basically, if you rent the place out, you are not paying anything extra, but if you keep it vacant, you’re paying 2% p.a. tax.

      • There was someone in Geelong earlier this year who was adopting a more earthy squatting culture…..

        …..and leaving a tosca somewhere prominent on the floor

      • The Welsh had a unique approach to unoccupied holiday houses owned by the English in the 1970s.

        Involved Fahrenheit 451.

        Probably will get that bad before the issue is taken seriously

      • It would have been interesting to see Abbott ram his 6 month dole waiting period through during a period of increasing youth unemployment.

        That may have led to some very rapid changes in things like squatting culture, combined with young people using innovative methods to get food, power, and communications.

    • Same with Mt Waverley, two houses next to each other got sold to the same Chinese purchaser (with a local proxy) late last year.

      On the day of bidding, the idiot local proxy spent additional $100k per house bidding against vendor bids (anyone with half a brain should know not to bid against vendor bids if you are the highest bidder).

      The properties sold for $1.2m and $980k. Recently they have settled and is clearing the vegetations to make the houses presentable for rental in the mean time. I asked the proxy about the plan, and she expect to tidy it up and rent it for about $400~ per week. Some yield.

      Anyway the end game would be to move here and pull down one of the house and rebuild to live in. And the other one would be sold to fund the rebuild and their lifestyle.

    • Also not all Chinese are really foreign investors. Local Chinese investors are also going crazy. I know of a couple who work in the health industry. One is a nurse and another is a physiotherapist, both are contacting for $100k p.a. each.

      They have around 6 investment properties. Their strategy is to pay what ever price for large land and then build units. Using interest only loans and pretty much all the tricks in the book. Finally hope to sell at the end.

      Now the amazing thing is that the husband also works at woolworth several days a week after hours to be able afford lifes little extras like holiday and eating out.

      Even more amazingly, the wife now just had a baby!

      Will be interested to see how this plays out.

    • not sure how MP and reforming NG, CGT and SMSFs are going to stop Chinese demand.

      The vast majority of property “investors” in Australia are not Chinese and at least reforming NG will end other taxpayers being ripped off.

    • So what? It’s propping up the Australian economy. The old baby boomer that owned that house has now pocketed $1.x million and is now either blowing that money on pokies or buying stuff to prop up Australian businesses. The rest of the money has probably now been invested in some Australian company. The income he makes out of all that is now taxed. All I see is better outcome for all Australians. First home own buyers are not going to be buying $1+ million homes, they will be looking at $400k+ homes. Too bad they no longer exist near the CBD, it is not a “right” to live near the CBD.

    • One quarter of all foreign purchases in the US were to the Chinese. Cashed up too.

      ‘While the median sales price of homes in the United States is $199,575, the median price paid by Chinese is $523,148.”

    • Yep, the pensioners probably partied hard for a few weeks before returning to scratching their heads as to why their rates, food, utilities, entertainment, cars, insurances are so damned expensive in this country….

  4. Makes you wonder how long can this go on, it’s just mental – I have faith in Australia though, this will probably go on for years with the conservatives in power. Their job is to conserve the status quo, high property prices for boomers and investors – just like we’ve been doing for 20 years already!

    • Its easy money, mad money, a gold rush! We’ll all be rich! Abbott guarantees it! Get in now! Houses are cheap! They’ll all triple before the coalition are voted out!

      SPAIN
      IRELAND
      US
      JAPAN
      ITALY
      GREECE
      ETC…
      &
      A U S T R A L I A

      Getting closer.

      🙂

      • The Game Theory of elective government ensures that single-issue parties like SPP will ultimately get nowhere. (See here for an example.)

        Proportional representation might change that slightly, but not if the Elite parties were in agreement to oppose the policy in question.

        Ultimately the only way for The People to have any effective say in their government is through genuine Democracy such as exists in Switzerland.

    • To be fair, Labor (under Rudd) have been slightly more effective at pumping the bubble than the Libs. Both parties want a bubble.

      Which is why when it all turns pear shaped, the cries of WHOCOODANODE? from both parties will be deafening.

  5. 1. Sack Brian Wilson, sack the board.

    2. Audit Syd/Mel existing dwelling sales for FIRB compliance.

    3. Approve sales to foreign buyers of new dwellings only.

    4. Require proof of buyer’s compliant residency status be attached to transfer of title of existing dwellings.

      • And don’t forget “the adults are back in charge!”.

        This country really is like a sick joke at the moment. Is this what 23 years without a recession does to society and government?

      • Torchwood: yes, this is what 23 years without recession does. I’m convinced that recessions are absolutely necessary to avoid massive misallocation of capital.

      • LordDudley I couldn’t agree more. It’s something my Economics I lecturer argued in great detail, and he was quick to point out that we were overdue (2002!).

      • LordDudley I couldn’t agree more. It’s something my Economics I lecturer argued in great detail, and he was quick to point out that we were overdue (2002!).

    • Brian Wilson and the FIRB are very effective at the job they have been specifically chosen by the Treasurer to do. I imagine big bonuses will be the order of the day at the end of this calendar year.

  6. “There may be excessive house price inflation, if that is the case…” – Prof Ross Garnuat

    24% in 60 days enough for you Prof?

  7. If anyone says they can predict when it will pop, they are lying. Every time it seems like things can’t get more expensive we get anecdotes like this one.

    It’s also naive to think anybody has any interest in applying the FIRB rules to something that looks like free money.

    It’ll pop when some butterfly flaps it’s wings in Brazil.

      • Could be that.

        A mate of mine jokes that because he has been out of the housing market forever, as soon as he buys an upgrade property, his action will trigger the landslide. So be warned, he is signing the contract on his upgrade this week.

      • I have a mate who is a leading indicator for recession. He moved to Argentina just before their debt crissis, he moved to the UK just before the GFC and he is just setting up home now in Melbourne.

      • Uteman: I was pretty sure I would trigger it a few months ago when I put my house on the market… but the house-horny real-estate enthusiasts delivered in spades! It was in Adelaide though, so bought by locals, but I’m sure the foreign buyers in the East have been having a knock-on effect in the Adelaide market.

        I now have a nice liquid little stack of ETFs, and am quite happy to wait before buying another one. Helps that the missus and I already have 3 kids and have owned a house/money pit; that got it out of our system quite nicely.

    • +1. Its infantile to hope for Lib/Lab to tighten up the FIRB any time this decade or arguably even this century.

      They both want a big Australia and they want to push us into regional areas. Its working to a certain extent too.

      I’m going with Grantham. Armageddon after the next US election.

      Get your flannos out the grunge days will be making a come back.

    • BUT a few things are certain:

      – it WILL pop….. you know it when the Chairman of a BIG 4 even confirms it

      – the higher it goes the deeper it will blow – markets are horribly irrational. I see a situation where Australian bank NPL’s skyrocket and they and the Australian government are heavily downgraded and shut out of capital markets for a very long time. Given the size of Australia’s CAD hence reliance on foreign currency inflows, it will crush the country for years to come. Possibly back to a more simple, but certainly poorer time when all those foolish highly levered NG’d idiots are trying to flog their underwater ‘investments’ as those very same banks who were only just recently happy to lend to them now start to cripple them with threats, property seziures and bankrupties. All those silly Chinese ‘investors’ (who are doing nothing other than flee possible jail time at home) dump property like hot potatoes.

      Oh its going to be so beautiful to watch it burn, and eventually see the green shoots of true productivity return.

      • When that happens, I reckon I’ll start using Facebook, just to post stuff like ‘Equity Maaaaaaate’.

  8. MB should do more “frontline” news on real estate being sold. I really don’t think people know the reality of the madness that is occurring every weekend across the country or even care – aslong as their house prices rise.

    • if this news goes mainstream, thousands of speculators would get instant confidence to pay 10% or 24% more for their new “investment”.

      Everyone is predicting future by projecting past so the only thing they get out of news like this is that the house price will go up by 24% over the next 60 days.

    • MB reader start video recording.

      Upload to a wistia/YT/vimeo channel

      watermark

      MSM will pick up eventually

      Revenue for MB

      My cut .5%.

      Thanks

    • I can say this. I know RE agents who will certainly tell me about what is going on (one of them, now deceased – had been an agent for 40 years in the east of Melbourne – was the genesis of the Chodley Wontok FIRB application). But the only time many of them will speak is when they are departing the industry. If they speak out of line they get reamed (ask Catherine Cashmore).

      If there is mention of a specific sale it tends to be very easy to work out who has spoken to anyone in the press.

      I have a camera guy trying to film some and he gets harassed by RE types whenever he is too obvious.

    • patents are for fools, patents require large investments in R&D, they are easy to get around and they last only 17 years.

      copyrights on the other hand do not even require a brain and they last forever (95 or 120 years or 75 years after death + all the “mickey mouse” extensions)

  9. “The property sold for $1.1 million to an Indian investor – which is overvalued by about 20% –…”

    the property then sold later for 24% more, therefore it was never overvalued at all, rather it was undervalued to began with.

  10. http://www.news.com.au/finance/real-estate/nathan-birch-went-from-pouring-beers-to-owning-a-property-portfolio-worth-millions/story-fnd91nhy-1227051194576

    “In a notoriously tough property market, he has accumulated 160 properties and “retired” five years ago. This year, he made $10 million in real estate deals.

    Mr Birch’s $30 million property empire, mostly acquired over the last 18 months as Sydney house prices soared, has put him in an elite group of investors. ”

    Even with all that money he still cant by class.

    • I don’t know about the last 18 months as that might cause him some grief later on but atleast he is going about it like a real investor should. Getting yield and not just CG.

      A specufestor, he is not.

    • AM – You wouldn’t have a clue.

      He doesnt need to buy class. Birchy’s got class up the Yin Yang baby!!

      And Im sure he’d like to thank the residencies of the Yin Yang too..

      Apologies to Seinfeld 🙂

    • That’s right kids, forget about doing well in high school, getting a degree and working your way up. That’s for losers.

      Just become a barista and start flipping properties until you retire a multimillionaire at 29.

      This country is a joke.

    • Sydney morning domain has the “classy” market. He goes for the westie bogans. His Ford xr6 with the numberplate “cashflo”, is hideous but a good marketing gimmick.

  11. I’m over caring. Leave the muppets to their monopoly game. Rent (it’s cheap, relatively speaking), enjoy life and watch the ponzi burn from afar.

    • @mm I’m yet to reach this stage of grief… coming out of the anger phase still. Hopefully won’t be long 🙂

      • Well the anger is bound to return….it comes in waves lol.

        But since we’re not satisfied with our own domestically reared and nurtured bubble, and have now taken to importing an even larger bubble from China, sometimes I just think F*CK it!!! Why bother….let her boom. Property to the moon!!! And then to hell…..

      • The property industry morphed out of the tingle phase, into the drool phase and getting close to the cerebral palsy phase. Jordan Belfort has seen it all before.

    • Yup.

      $1.4 MILLION. for a three bedroom shit hole.

      Ok. Seems legit. 10% deposit – leaves around $8000 / month repayments.

      No – really. That’s close to $100k per annum for 30 years.

      If we were to see a return to interest rates during the Japanese down turn of 17 % – well thats only $18,000 a month repayment.

      All seems perfectly normal.

    • Locus of ControlMEMBER

      I’m in the same mental place MM and very content!

      Buying for an increase of 24% over 60 days is very appealing. But the risk/ return in terms of being left ‘holding the baby’ as the market blows-off (eg. shock in China, etc. freezes this game, whatever else might crop up) would mean that until I successfully flipped it, not even grossing $265K (less selling costs – not mentioned here!) in one-sixth of a year could compensate for the stress levels!

      So I will stay stress-free, cashed-up, property poor, rent for one-tenth of my after-tax income (share-house), and watch this with some popcorn from the sidelines. When you have no skin in the game, it’s all very amusing. A bit like limbo in reverse (not how low can we go – how high can we go?). BTW, if/ when the SHTF I’ll have plenty of $ available to bail this place and I’m cautious enough to ensure it’s not all in AUD 🙂

    • It’s incredibly liberating to accept that it’s insane.

      Most of my friends and colleagues see me as somewhat sensible when it comes to money and often ask for my opinions. It has surprised a few of them when they have asked me about real estate and I’ve told them that I don’t have any interest in buying into such a risky investment.

      • Yep – risky is the word.

        Bizarre that in RE world people sleep out these days to ‘secure’ a foothold in the market. The risk/reward matrix has been inverted. Buyers are skating on a frozen lake and summer is fast approaching.

      • Everyone loves summer, even snowmen- ‘Winter’s a good time to stay in and cuddle/ but put me in summer and I’ll be a happy snowman!’

        I’m sure everyone skating on the lake agrees- with each piece of good news, property goes up, with each piece of bad new, property goes up.

    • snippet – According to Congressional hearings on illegal lobbying activities ’46 was the year that Milton Friedman and his U Chicago cohort George Stigler arranged an under-the-table deal with a Washington lobbying executive to pump out covert propaganda for the national real estate lobby in exchange for a hefty payout, the terms of which were never meant to be released to the public.

      The arrangement between Friedman and Stigler with the Washington real estate lobbyist was finally revealed during he Buchanan Committee hearings on illegal lobbying activities in 1950. But then it was almost entirely forgotten, including apparently by those celebrating the “Milton Friedman Centennial” last week in Chicago.

    • Wellie it seems we have some polies and developer issues of late around Oz too, maybe that’s why polies scoff at voters.

      Thinktankistan and lobbyists have almost completely taken over America, replaced voters, $$$ = votes.

      Skippy…. That old 20 years difference thingy between US / Oz is probably more like -10 methinks…

      • Heck even the ideology is dubious… especially when the dealers start consuming their own product… couple of generations of acolytes give it a religious like zealotry… complete denial when ridged pet tenets are soundly refuted…. on and on and on~~~

  12. boomengineeringMEMBER

    It used to take 3 months to evict a squatter, why aren’t more people doing it. Flip or swap with other squatters every three months.
    If everyone did it vacant or through an agent the investors would think twice especially the mortgaged. Price comes down.
    A good way to save money to buy after the crash.

    • I dunno.
      Now that the terminator is doing adverts for realestate,com.au surely things can only go up

  13. Why the Spruikers want to convince people?!! I have never ever met a rich person who wanted to share his/her secret! The Spruikers keep trying to convince people about their ideology, and this is seriously sign of desperation. If you (Spruikers) are correct about your ideology, then why are you guys trying sooooooo hard to represent your pathetic argument?!! It makes you guys look soooooooooo desperate. I will keep on reading and laugh about your comments.

    • They’re just nice people. They can afford to be, ’cause they’ve already got their bankroll, a great car in the garage of their awesome house with awesome views and someone with movie star good looks in their bed.

    • I’m no spruiker… I just like educating the financial illiterate. I make absolutely no money but take joy in helping educate family and friends. And occasionally the odd closed-minded MB muppet.

      You’d be surprised how many people just don’t understand how cash flows and compounding growth works.

      It’s relatively easy on a modest starting salary of <$100k pa to accumulate a $3-5M IP portfolio in less than 10years growing at between 4-7% pa.

  14. boomengineeringMEMBER

    AngyMan,
    Very appropriate. I was once (30+yrs) president of Australian NATURAL Bodybuilding, he was in the other camp and I think real estate is now in that camp too.

  15. Ahhh…. a man without property is not a man, only property owners should have the right to vote, make laws, et al….

    skippy… historically not that long ago

    • Mining BoganMEMBER

      Eh? A rerun of the Eureka Stockade coming?

      Excellent. Been looking for a chance to use my brick.

  16. I’d really like to know how this Indian investor gets away with it.

    If he’s a non resident for tax purposes that capital gain will be assesable, unless he can argue that he has a nexus to Australia and that was a place of residence theb its not really an investment and will make it cgt exempt.

    Am I missing something here? Is there a double tax agreement between India and Australia?

    Christ

    • No. It’s poor lending standards and a solid belief that you are as ‘safe as houses’. I kid you not – I have spoken to VERY senior risk bank officers (I am talking CRO level) who have off handedly dismissed the notion that property prices could fall 25%, despite the fact they rise 25% quite easily. I am talking guys with Phd’s in mathematics who are seasoned risk professionals but also very long property.

      People simply believe that ‘Australia is different’. Be it due to negative gearing or foreign investors, its different.

      So the Indian chap can happen very easily. Probably he has a few highly leveraged NG’d assets in Australia. The bank doesn’t exactly ask him to prove his FIRB approval. He stacks them like dominoes – each time the investor builds 5% equity in his NG property (pretty easy with prices rising) he gets a bank valuation and stacks on another IP. Sure he may have a harder time servicing the debt but he will probably eat bread and water, work double shifts and cross his fingers interests rates only go down. With banks still fixed on the Henderson Poverty Index and thinking that LMI providers will always pick up the bill they are dropping lending standards like crazy,

      This is a one way, correlated, directional bet. Why do you think the banks are sh*t scared of bail in laws? Its very possible it will be the straw that breaks the camels back – where the banks and the speculators are left to clean up their own mess.

  17. I hope the bubble blows higher and higher and faster and faster. It’s the slow grind higher and waiting for the eventual crash I can’t stand. So I hope all those investors and foreigners just go completely nuts and push the average house price to at least $1.5m in a hurry. Then We will see delinquencies rise, the banks downgraded, credit restricted and the bubble bursting in an ugly way. Let’s just fast forward the inevitable.

    Encourage the flippers and the big mortgage idiots. Encourage all those idiot foreign investors who know nothing about Australia to pile in like never before!!

    • Yep – fck it. Let’s blow it up. A 20% decline won’t get us anywhere anyway. Property to the moon…..and then to hell….

      Get your popcorn.

    • Jim gets it!

      Side benefit of this approach is being able to cheer the inflation, like the rest of the herd.

    • There’s another large country in the Southern Hemisphere that starts with ‘A’. 10 years ago it was unthinkable, but every passing day makes it more likely Oz will be in the same boat as them.

      I won’t cry… Australians collectively deserve it. Good for the character.

  18. Have given up ever expecting the bubble to pop. The ponzi is now being fed by Chinese dollars seeking to land bank regardless of return, and who can blame them, if stupid Australian policies allow it. Given the populations of China 1.2+ billion, even only a 1% exit rate of the cashed up from China will keep the ponzi going for many decades to come.

    That fact there will be nothing else in Australia expect houses and land, because our housing Spree is being done at the expense of industry investment, doesn’t seem to bother our beloved leadership. Apparently you don’t need to actually sell anything to produce income, coz house is the magic pudding. We just keep borrowing and voila, some other sucker will come buy.

    Sigh…

    • The higher the house price to income ratio gets, the better! Come on Aussie, I want to see what epic means. Drink the slab that Bon Scott drunk, Strata! Go hard or go home!

  19. I can’t wait to see property correct, and this continued gross miss allocation of capital end.

    All of this talk of grabbing popcorn, and watching from the sidelines however, has a bit of a flaw….

    If prop prices substantially correct, the Aus economy will essentially go into a depression, and that will hurt all of us, even the smart ones like me and most of the commentators here, who are debt light, cash flow strong etc etc

    PS, i am a mid 30’s, non home owning renter, debt light business owner, and i make well north of 500K a year…..

    Watching this great country slowly ruining itself, with over 90% of new credit in 2014 pouring into property, with enormous systemic risk and moral hazard now firmly and inextricably wound into the economy…. Watching our leaders (all boomers of course) seemingly only caring about protecting there own little investment portfolios….. it all saddens me deeply.

    We could be so much more….

    It is heartening to read and hear from other people that actually get it… I think our ranks are slowly growing….

    • Mark, yes our ranks are slowly growing, but the majority of the population really has no idea there is any bubble – most people think ridiculous prices here are just normal.

      This great country is slowly ruining itself. Except that it’s not so slowly any more; it’s picking up pace. And you’re absolutely correct – we cannot have this bubble burst without the country going into a deep depression for years. I guess that’s why politicians don’t like to talk about the bubble – and besides, why would they want to spoil the party when every property owner is growing so rich?

      500K a year? That sounds like the sort of salary that would have no trouble affording a house even at these nosebleed prices.

      • Yes yes… I could buy virtually any house in Adelaide where i live for sure… But this is not about me!! My thoughts and concerns are about the country!!

  20. Flipping houses, that’s the way to go. The only thing that beats that is drug trafficking. Make a quick buck, then dump the tender for something tangible. Like meth lab.

  21. on this farm we call “earth” there are two types of animal. The (socially mobile) Bear and the (immobile, but plow pulling) Bull. The world needs Bulls, they are the stupid, slow and big animals that seed the land, they are the negative equity types of the US, Spain, Ireland etc..

    Bears are %*^king scary to all types of govern-ment. They are mobile, individual (indivisible) and big animals that travel far and wide in search of their own needs. Plus, they kill Bulls and all sorts of livestock if gone unchecked, the harvest requires this to be done.

    We are in a deep-winter now, time to clean out the deadwood, before the bears wake up.