Monthly Archives: May 2013

WHEN WILL THEY EVER LEARN?

Why do Governments led by the learned opinions of economists (many of whom can’t balance a chequebook in my experience) keep interfering in the housing market?

In the United Kingdom the barrow of “HELP TO BUY” is being pushed.  The Government thinks it’s doing the right thing by providing up to 20 percent of the price of a house (as some kind of freebie) to encourage lenders to lend to people who just manage to scrape together a 5 percent deposit.

Are they NUTS?

This is heading for a repeat of what started the mess we’re in right now.  House prices will just jump to soak up the “government handout” and a whole bunch of people who also cannot balance their cheque books, will be given loans that they’d otherwise not qualify for.  Give it a couple of years, these hapless folk default, the market is (again)  flooded with mortgagee-in-possession sales and prices tumble, AGAIN!

Looking beyond the housing market, we see articles about youth unemployment in Europe where, for example, a museum advertised 11 low paying jobs and received over EIGHTEEN THOUSAND applications. There is and has been much talk bout the moving lump of baby boomers through the economy and the effects, good and bad that WE have had, but the up and coming problems in Europe where chronic long term youth unemployment is threatening to destabilise Nations is something we have to keep an eye on.

I read a lot from my bank, HSBC. They have their fair share of economists, pollsters and researchers but come out with some interesting stuff.  They say the economic cycle has peaked and is on the way DOWN.  if governments haven’t got their act together now and economies aren’t strong, well, basically, they’ve missed the boat.  They are still looking to US Treasuries, but calling them ‘the least rotten apple in the barrow’.  Well THAT inspires confidence – NOT!

Europe is the canary in the coal mine.

America is weakened to the point of (nearly) no return – I’ve just come back so have seen, and heard, for myself.

Australia is poised to go down with the Chinese Junk.

Biting fingernails anyone?

We are clutching at straws and re-arranging the deck chairs on the Titanic.

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MARKET UPDATE – USA COMPARISON – 31 MAY 2013

Still jet-lagged but I have to share.  I stayed with a friend who lives about 35-40 minutes outside a very nice large city which is about the size of Sydney, here in Australia.  he recently bought a gorgeous house of family size, on an acre, on a picturesque lake, with a dock and old established gardens.  There are photos!

I hunted around Sydney for comparable properties in desirable areas that roughly matched my American friend’s new place. I found a few that would compare.  They were priced from $700,000.00 to well over $1,000,000.00.

I keep saying our property market is overpriced, to a ridiculous level, and a correction of monumental proportions just has to happen. Will it be as severe as I’ve now personally seen in the USA?  Probably not but the correction to ‘affordability’ just has to occur or we’ll have our kids living with us forever and ‘mortgage stress’ will become just another major health problem to add to the obesity and diabetes epidemics already stalking us…

The House 20130426_071924 20130426_071805 20130426_071822

 

AFTER my friend spends $50,000.00 on renovations, the whole place will owe him just $225,000.00

 

I rest my case.

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SINGAPORE! MALAYSIA! UNITED STATES OF AMERICA!

I’ve been lucky enough to have travelled to Singapore and Malaysia in April. This quick note comes from Atlanta Georgia in the USA.

What I’ve seen, and continue to see and hear, only reinforces all I’ve said on this blog to date.

I’m travelling to Florida, California, Nevada and Arizona next and will write more later.

Cheers for now

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