7 Comments

  1. At last, it appears a quality examination on the house spruik madness. Hoping it can make it over to Adelaide, where I will be sure to go and have a watch for myself. On that note, a noticeable amount of ‘For Sale’ signs still being observed here in SA. Had been watching a few modest units, that I am end up purchasing one myself in the coming months. However 2 of them have mysterioulsy dissappeared from the RE websites but still with For Sale signs on display, that is until today they were gone to. Taken off the market for not getting the pre-boom prices they were expecting, and probably initially bought at ?? Just a possibilty….

  3. Wow it had to take independant filmakers to finally show what our Property Market really is.

    Shame on the MSM and ABC for not tackling this issue.

  4. Well the impending crash was reported on Today Tonight. If the news has finally reached pleb TV it must have already happened….

  5. Why is there so little critism of town planners who have created this undersupply? Sure the financial institutions are responsible for providing the credit to fuel the boom but without a restriction in supply there would not be such a price increase.

  6. After watching this, I shall blow my own trumpet. Observing property prices from the early (recession we had to have) 1990s, through to 1998-9. I thought that property had gone to the speculators in that period. Just like the stockmarket is full of. When something like that happens, you don’t win if you’re an investor. Unless you’re clever, have lots of money in a particular market to bear some influence on it, or both (, or lucky but that for a very few).

    It wasn’t obvious? No it was! Seeing what house/property prices rose to, the salary most people were/are on, the conclusion was logical. You can’t (well you can and people did) get a $650K mortage with little savings and $72K per year, and walk out of the bank with $50K worth of credit card, furnish your house with the credit card, buy a few more things on personal finance, some people even had a car put on top of the mortgage deal, and live. Its’ not just first home buyers that bought in at a particular time (like 2008), I know people in trouble that upgraded in this last 12 year period too that are on the road to finished. All this because… House Prices Keep Going Up… When speculators hit a market, not always.

    I think the most obvious part of something not good would come out of all this is, 1) people didn’t think their Arithmetic (*NOT* Mathematics, Arithmetic) through, 2) Thought they were on the roads to wealth/riches, 3) Didn’t look around them to see everybody was doing the same[damn]thing, which pretty much means you will not be wealthy buying property. This is not retrospective thinking (always being the best analysis), its what has been going through my head for the past 12 years.

    Then 2008 comes, I can’t say I knew, but felt this show was over for tonnes people. We had (still do) a Shyster Finance, Banking, and Real Estate indusrty, many people seduced by their bait, and a lethargic Government or just compliant. I reckon though despite a bad deal many people commited too, the Finanace and RE sectors should be pulled up by the collar and asked 3 million question. This is horrible.

    AverageBloke this is kind of why I agree with you that Negative Gearing is here for a long time, it will be for the privilege and benefit of the few, most will be making ends meet. Something like this doesn’t happen without a few that are now building their new houses on the shores of Sydney Harbour. NG is for them, not us.

  7. The dynamics of the Australian property markets are essentially the same as elsewhere around the globe. Land speculation and the hoarding of land is ingrained in the behavior of most humans — when they get to a point where we can afford to do so. Three or four generations ago in Austrailia or even the United States, there was a great deal of open land and a relatively small population. Now we have large and growing populations and the land is locked up in the hands of “old money” families, corporations and land speculators. The banks add fuel to the market dynamics by providing cheap and easy credit. Property prices then climb and climb until they reach the point where businesses can no longer absorb the rising location costs (e.g., in office buildings or warehouses where they lease space) and either move where the costs of doing business are lower or shut down altogether. Meanwhile, the people who needed continuous increases in salaries to meet rising land costs find themselves over-leveraged and maybe out of work for an extended period of time. They end up defaulting on mortgage and other debt, are evicted and the property is added to the list of properties coming on the market. Now, the market has become a “buyer’s market” and buyers who still have savings, still have employment, still have good credit, wait for property prices to keep falling before they enter the market. Australians, welcome to the global property market boom-bust cycle!

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