Amazing how it happens. Political pressure and self interest ensure the general public receive almost no real news about their biggest investment…. until, of of course, it is far too late for the majority to get out of the way.
And so, it seems, today, for me at least, is the tipping point. In reading all the major newspapers over the last week or so, there is more bad news about the faltering real estate market than I’ve seen in any previous twelve month period. And I will blow my own trumpet here – it is all OLD NEWS! I have been writing about this day for the last 3 years. The craziness in the market – the craziness in the eyes of desperate ill-informed bidders at auctions, and the interference of the Chinese Government, through it’s agents, in using money sent to Australia to blow Auctions out of the water!
The sheer fright will start in Nappy Land, with over geared, lied-to youngsters with massively high percentage mortgages against their poorly built and badly located “dream houses’ in the middle of nowhere. The suffering will start here and be the greatest pain to the people who, sadly, can least afford it. There is so much of this “crap” property that I would not be surprised to see 50% drops as streets fill up with Auction signs emblazoned with “Mortgagee In Possession” stickers at 45 degree angles, as if to add to the misery knowing that the Banks are going steal back your biggest possession (Notice I did not say “asset” because it ain’t an asset if it’s an albatross!). Property the Banks financed knowing full well that this day would come. Brokers who continue to complete bullshit Loan Applications to Bankers who rubber stamp and approve anything with a thready pulse!
I read the local joke of a paper where colourful articles showcase multi-million dollar sales in flash locations as if the owners have made yet another couple of million profit. The facts are that these behemoths have been on the market for 2 years or more, have started at $4.9 million ask and were finally sold for $3.75 million. What is not revealed is that the mortgage was $3.5 million and the necessary renovations cost $500,000.00 to make the place pass a Building and Pest Inspection! I know these figures as FACT but I won’t embarrass anyone with the address/s. The house next door, nearly identical in form, function, size and aspect, sold in 2013 for $5.5 million. Using the RBA Inflation calculator, the neighbours house would have to sell, in 2018, for at least $6.25 million just to get their money back!
Its all smoke and mirrors and I call bullshit on all of it!