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PROPERTY
nipper
post Posted: Oct 6 2018, 05:42 PM
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In Reply To: triage's post @ Oct 6 2018, 04:21 PM

well, there ya go. Put it this way, I wouldn't alter it (on principle), so it must have been 'embedded'.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
triage
post Posted: Oct 6 2018, 04:21 PM
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In Reply To: nipper's post @ Oct 6 2018, 11:40 AM

" the duration of the principle and interest mortgage"

Hmm is that an actual cut and paste from the Oz? If so, I'm surprised on two levels: first, that a professional journalist would make such a basic error and secondly that the spellchecker that News Ltd uses even recognises that word (boom, boom).
Also funny question at the end. Surely the key question should be why so many interest only loans were approved in the first place not why are so many of them are now being converted into principal and interest loans. Once interest rates start to trend up and/or property prices begin to trend down it is more prudent and humane to clean out most of the interest only loans sooner rather than later.




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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
nipper
post Posted: Oct 6 2018, 11:40 AM
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QUOTE
UBS has uncovered some startling facts. When asked why borrowers took out an interest only mortgage, 18 per cent responded they “can’t afford to pay P&I” (principle and interest), 11 per cent said they expected house prices to rise and to sell the property before the interest-only period expires and 44 per cent noted it gave them more financial flexibility. One can safely assume some proportion of the 44 per cent were also in the can’t afford P&I camp.

When combined there are a substantial number of borrowers who have taken out an interest- only loan for the wrong reasons.

Moreover, many of these borrowers don’t understand the product they have been sold.

Among owner occupiers only 48 per cent understand their interest-only term expires within five years, which is the maximum term typically offered.

Meanwhile, 18 per cent observed they didn’t know when their term expired and 8 per cent believed their interest-only term lasted more than 15 years.

QUOTE
UBS has ... calculated the step up for investors and owner occupiers with a $600,000 interest-only mortgage moving over to P&I. Depending on the duration of the principle and interest mortgage the step up can be as much as 91 per cent.

In other words, for some borrowers repayments could double. Clearly the majority of this cohort are unprepared or underprepared for the inevitable increases.

What has happened here? And why are all these people being forced on to principle and interest loans?

The answer, in short, is the regulator Australian Prudential Regulation Authority.
ouch
https://www.theaustralian.com.au/business/w...b5fa432c66c937e



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Sep 24 2018, 08:40 AM
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QUOTE
WeWork now occupies more Manhattan office space than any other company, a milestone that reflects booming demand for flexible workspace among legions of small and midsize firms — and, increasingly, larger companies, too.

The co-working company rents 5.3 million square feet (nearly 500,00sq m) in Manhattan. WeWork calculated that a lease it recently signed for 258,344sq ft at Penn Plaza pushed its total past the 5.2 million square feet of space rented or owned by JPMorgan Chase , according to real estate services firm Cushman & Wakefield.

WeWork is one of the biggest and fastest-growing of the “flex space” office providers, a group that also includes Knotel, Industrious Office and IWG.

The New York-based company and similar flex-space operators have made big strides in New York City this year. They accounted for 9.7 per cent of Manhattan’s new leases signed in the first eight months of 2018, compared with only 3.3 per cent in all of 2017, according to real estate services firm CBRE
Wall Street Journal



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Aug 16 2018, 12:16 PM
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Western Sydney is ground zero when the " interest only " mortgage bubble bursts

https://www.macrobusiness.com.au/2018/08/we...-mortgage-bust/



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  NPH  
 
blacksheep
post Posted: Jan 19 2018, 03:18 PM
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In Reply To: blacksheep's post @ Jan 19 2018, 02:09 PM

Saxo Bank's Quarterly Outlook for Q1 2018
Saxo Bank's strategy team is out with their take on world markets for the first quarter of 2018.
QUOTE
CONTENTS:
HOW TO SPOT A BUBBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAGE 3
BUBBLES: A TECHNICAL APPROACH . . . . . . . . . . . . . . . . . . . . . . PAGE 6
HOUSING BUBBLES ARE POPPING UP EVERYWHERE
… SO WHAT NOW? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAGE 8
EQUITIES: THE MOST IMPORTANT YEAR SINCE 2008 .. . . . . PAGE 12
FOREX: CURRENCIES EYE A BUBBLY 2018 . . . . . . . . . . . . . . . . PAGE 17
COMMODITIES: INFLATION IN FOCUS
AS GOLD BULLS GATHER STRENGTH . . . . . . . . . . . . . . . . . . . . . PAGE 20
BONDS: DEEPWATER HORIZON . . . . . . . . . . . . . . . . . . . . . . . . . . PAGE 22
WILL THE CRYPTOCURRENCY
MANIA CONTINUE? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAGE 26

https://www.home.saxo/-/media/documents/qua...ook-q1_2018.pdf



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 


blacksheep
post Posted: Jan 19 2018, 02:09 PM
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The Dangerous Reality of Australia's Housing Market
https://app.hedgeye.com/insights/64914-stei...-m?type=bearish
Attached File(s)
Attached File  UfVZ5_ys.jpg ( 30.36K ) Number of downloads: 0

 




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 
Mags
post Posted: Jan 15 2018, 09:34 AM
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I didn't see the piece, but have no doubt he's selling snake oil.

Let's see.... Who has a bank loan where it's no direct debit.........

Really? You get an invoice in 'the mail', and pay by a due date???? Lies, I suspect.

And at $55million, and 200 properties, that works out at 'equity' of $275k per property....... Sounds a lot, like a lot. I love these people and their 'net' positions. They never calculate a true 'net' position. How much CGT will be be up for??? How many early termination fees??? How much REA fees??? 200 X $20K = $4 million..... Ha, he will blow 10% of his 'net' position JUST on agent fees when he liquidates....

No doubt he's depreciated the living daylights out of his properties, which makes the CGT implications HUGE....

These days I don't know how I feel about it all.... I tried to save the world from stupid -ve gearing mistakes (it is a genuine strategy, but the money is made on the initial purchase, you can't buy in a bubble and expect to make money)... But no one want's to listen.

I always come back to asking how would packer (or other rich bloke) behave.... Imagine this conversation with the accountant:
Acct: Good and bad new sir
Packer: Bad first
Acct: We lost money on that new casino for the year
Packer: f'ing what...
Acct: now the good sir, you get a nice tax credit (fake smile)
Packer: someone's getting boned for this f up.......


Chasing a tax credit via loosing money, in the hope that a commodity will rise in value.... bloody dangerous.


Said 'Thanks' for this post: triage  nipper  
 
triage
post Posted: Jan 14 2018, 07:18 PM
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In Reply To: nipper's post @ Jan 14 2018, 05:30 PM

Skase, Tinkler, if not Birch then someone using a similar rationale about debt ... for each bubble there is a shooting star ...

This is a useful update of things to do with the property market in Oz (not the slickest presentation but who cares).

https://www.youtube.com/watch?v=IyZzbRzxVBE

(hat tip: desmodromic at macrobusiness)



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: nipper  Mags  
 
nipper
post Posted: Jan 14 2018, 05:30 PM
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In Reply To: nipper's post @ Jan 8 2018, 01:17 PM

On some (dubious) TV program tonight, (Sunday Night), some clown espousing the miracle of compounding, as applied to property. ....until the tide goes out. The 'identity' claims 200 properties and net worth of $55mill; I suspect less. Recently defaulting, he came up with this: ...
"Birch said the AFR story was “currently with the lawyers for misrepresentation”. “To confirm, I never got sued, the property never got repossessed, and the situation was that I had an overdue amount which equalled to one month’s interest which was paid immediately as soon as it came to my attention,” he said. “Having 200-odd properties, the admin side of things can become a bit too much and not seeing the mail on time meant I had no idea of this.”

pretty sure how this will end up



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: triage  Mags  
 
 


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