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House Price Crash Forum

moit

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About moit

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  1. Tis true its possible that wages won't keep up for many. But just wanted to point out that that it is the difference between income inflation and interest that is key when it comes to servicing debt. Income inflation is pretty must as important as interest rates. There are other forms of income too for some (investments etc.) that may fair better than wages.
  2. Another thing you have to factor in is inflation. Inflation is good for a mortgage in that it reduces the size of the debt (but bad for the property value). If the difference between the inflation rate and interest rate does not change, then the ability to service the debt is also unchanged. Ok inflation is pretty poorly defined and interest rates are quite sharply defined, but its not too wild an assumption that an individuals income increases at a rate close the published inflation rate Its even possible that if you manage to fix your rates at a low rates and then we go through a high interest rate high inflation period then you could end up paying less interest in real terms than you did at the previous interest rates. Something to think about anyway.
  3. I totaly agree. That way you can safely judge from 1 mile away AND you have her shoes.
  4. I like Mark Cuban's definition of speculation: "If you spend the money and the only way you can earn a return on that money is by selling whatever it is you have purchased. You are speculating." Delightfully simple. By this definiton not all BTL is necesarily speculation, although in practice I think it usually is. Thr rents offset the holding costs (mostly the interest on loans), but the real money is usually made (edit: whoops, i mean obtained) in capital gains. That's speculation. Speculation is not inherintly bad - it is just redistribution of wealth. However I am of the opinion that large differnces in the distribution of wealth is inherintly bad. The annoying thing about land specualtion is that people need land to place dwellings and workplaces - two essential ingredients for the creation of real wealth. When land prices are driven up speculativley the creators of real wealth - workers and emploers - become priced out.
  5. Might as well link the actual report. Full of interesting pictures and tables, showing how overvalued UK and Oz are in particular.. http://www.oecd.org/dataoecd/41/56/35756053.pdf
  6. This article brightened my day.. "AUSTRALIA has beaten the world in over-valuing its homes – and property owners should prepare for price falls until late next year... The OECD found the estimated over-valuation of Australian homes in 2004 was 51.8 per cent. The next highest over-valuation was in Britain at 32.8 per cent. " http://finance.news.com.au/story/0,10166,1...424-462,00.html Finally some sense.. Just quietly, i think the OECD report is BIG NEWS. Time to post it on all the BTL sites..
  7. House prices are high. Assets are expensive. Job security is dropping all the time. Education is more expensive and degrees are less valuable than they used to be. Things are tough and will probably tougher, possibly a LOT tougher, before they get better. Good. Bring it on. It'll will make our generation tougher and more honest then the previous ones. We will be better people and we will happier when we die. Who is the more satisfied person? The one who rode their own pushbike to the top of mountain or the one who was chauffeured in a limo? out.
  8. Australia - 20m people in a landmass the size of continental Europe. Probably the lowest population density of any country worth mentioning. Yet Australia has about the highest median house prices relative to median salaries. A lot worse than the UK! Something is wrong with this picture! There are in fact few places to live in Australia. The population is very urbanised with almost everyone living in a state capital, of which there are few. Why does everyone live in a state capital? Access to work. Why is it hard to get work in regional towns? Well i can only guess that is a lack of infrastructure. No major update to rail infrastructure since the 30s! The captials are also very centralised. Big country - few places to go.
  9. Thought you guys might like this pic...
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