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Anecdotal From Australia

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It's about midnight here in Canberra and I've just had the most bizarre 2 hours of my entire life!

I'm reading the papers and having a quiet coffee at my club (which has a completely different meaning in Oz, think of it as the local) when a couple in a group I play bridge with came up to me and started a conversation. They've got badges on saying "Investor's Club" and their names, and a few others come into the main area from a meeting room and I get introduced around.

After a bit of to-ing and fro-ing it transpires that the group is really a Property Investor's Club that meet once a month or so to tell each other how brilliant they are, and reinforce the wonders of BTL. You will recall, no doubt, that even TTRTR calls BTL in Oz a mug's game; a dollar a thousand a week (I.e. 5.2% GROSS return) is regarded as exceptionally good in the big cities. <_<

But it's the numbers being thrown around that blew me away. Most of the people around the table had multiple BTL's, my friends had 10 between them :o (he 6, she 4).

Some of them actually had club sweatshirts with "Property Millionaire" printed on them, and the husband in the couple I know makes a joke about putting his order in based on his expectations for 2006.

I've been invited along to the next meeting, and when I said I would attend as a bit of a bear everyone laughed and the couple I know said they'd convert me. It actually did seem semi-religious, I threw out some counter-arguments and they were ignored, rather than debated.

What makes it so bizarre is that most of Australia peaked early last year, but this group are focussing on the areas which are still increasing in price at present due to regional factors. When I asked whether members of the group were looking to rebalance their portfolios by selling some to buy others the answer was 'no, you never sell, you just pick where to buy next'.

These are already wealthy people by Australian standards due to the run-up in prices over the last decade, but they think they have found the Fountain of Riches and that they can go on exponentially increasing their holdings for ever. One woman told me she had turned A$100,000 equity into A$500,000 over the last 4 years, and by extrapolation expected to have somewhere between 50 and 250 properties when she retires. Any talk about distortion of the overall economy by over-concentration on property, or asset allocation strategies; they don't want to know.

Oh, and did I mention that one of the proudest boasts of this couple (who from this post sound like real ogre's, they are actually nice people :) ) is that they're both members of Mensa.

Rant over, but if the investor groups in the UK have caught the bug like this group, the mentality behind this bubble is going to die a slow, painful death.

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Oh, and did I mention that one of the proudest boasts of this couple (who from this post sound like real ogre's, they are actually nice people :) ) is that they're both members of Mensa.

Member of mensa = I require external validation of my intelligence, because I lack self confidence and the courage of my convictions.

Probably the same reason they joined a back-patting "investment club".

Is there any way that someone could be taking advantage of your friends?

edit: maybe those sweatshirts cost $3000 each? :P

Edited by Smell the Fear

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Guest Riser

Do they have an Aussie version of Phil and Kirsty, perhaps ClassixUK could substitute their pictures and create an Aussie HPC video complete with Kangeroos for you to show them at the next meet :)

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Are these people paying cash for their properties or, as I read it, are they mortgaging against existing holdings?

If the latter, they do not own much at all, the bank owns most of it. All they own is risk!! And they are members of Mensa! :huh:

Oh, give me strength! How human kind ever got this far is beyond me!!

The sad thing is there appears to be 1000's of people like these all over the world, and they are all going to get absolutely smashed into the ground when the recession starts starts to bite!

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It's about midnight here in Canberra and I've just had the most bizarre 2 hours of my entire life!

I'm reading the papers and having a quiet coffee at my club (which has a completely different meaning in Oz, think of it as the local) when a couple in a group I play bridge with came up to me and started a conversation. They've got badges on saying "Investor's Club" and their names, and a few others come into the main area from a meeting room and I get introduced around.

After a bit of to-ing and fro-ing it transpires that the group is really a Property Investor's Club that meet once a month or so to tell each other how brilliant they are, and reinforce the wonders of BTL. You will recall, no doubt, that even TTRTR calls BTL in Oz a mug's game; a dollar a thousand a week (I.e. 5.2% GROSS return) is regarded as exceptionally good in the big cities. <_<

But it's the numbers being thrown around that blew me away. Most of the people around the table had multiple BTL's, my friends had 10 between them :o (he 6, she 4).

Some of them actually had club sweatshirts with "Property Millionaire" printed on them, and the husband in the couple I know makes a joke about putting his order in based on his expectations for 2006.

I've been invited along to the next meeting, and when I said I would attend as a bit of a bear everyone laughed and the couple I know said they'd convert me. It actually did seem semi-religious, I threw out some counter-arguments and they were ignored, rather than debated.

What makes it so bizarre is that most of Australia peaked early last year, but this group are focussing on the areas which are still increasing in price at present due to regional factors. When I asked whether members of the group were looking to rebalance their portfolios by selling some to buy others the answer was 'no, you never sell, you just pick where to buy next'.

These are already wealthy people by Australian standards due to the run-up in prices over the last decade, but they think they have found the Fountain of Riches and that they can go on exponentially increasing their holdings for ever. One woman told me she had turned A$100,000 equity into A$500,000 over the last 4 years, and by extrapolation expected to have somewhere between 50 and 250 properties when she retires. Any talk about distortion of the overall economy by over-concentration on property, or asset allocation strategies; they don't want to know.

Oh, and did I mention that one of the proudest boasts of this couple (who from this post sound like real ogre's, they are actually nice people :) ) is that they're both members of Mensa.

Rant over, but if the investor groups in the UK have caught the bug like this group, the mentality behind this bubble is going to die a slow, painful death.

Really sounds like the attributes of a cult?

Reinforcing the belief system with the like minded. Non believers will get shortshrift.

Danger is, of course, isolation from what's really going on outside.

Oh well, so what, they're all grownups.

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Really sounds like the attributes of a cult?

Reinforcing the belief system with the like minded. Non believers will get shortshrift.

Danger is, of course, isolation from what's really going on outside.

Oh well, so what, they're all grownups.

Sounds like you're talking about HPC.co.uk!! :lol:

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And they are members of Mensa

I used to know a couple who were members of Mensa: from what they said most of the others were idiots.

In general though, it seems to me that most smart people overvalue intelligence: particularly their own.

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Really sounds like the attributes of a cult?

Reinforcing the belief system with the like minded. Non believers will get shortshrift.

Danger is, of course, isolation from what's really going on outside.

Oh well, so what, they're all grownups.

So whats this place then? Sound familiar? :blink::P

Sounds like you're talking about HPC.co.uk!! :lol:

Great minds and all that..... :lol:

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Sounds like you're talking about HPC.co.uk!! :lol:

Hmm. Some do say do they not?

The difference is that here, taking account of what's going on outside is the prime thing.

Interpretations may differ but isolation, no.

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I couldn't concentrate on anything after that phrase... :o:unsure::blink:

You obviously missed last christmas's Housepricecrash fridge magnets, only 100 made and i have one on my fridge ;p

'What goes up must come down'

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Its always interesting to hear people from Oz and thier bubble.

However, with all the forces in favour of investors in OZ - exceptional tax relief and Howard's neck dependant on it, I still see little chance for the Oz multiple of 10 times earnings to move down to 3-4 times earnings.

I would not discount the bandwagon from ending yet either. There is no law of economics which says that government policy to give large tax relief to investors and force others into renting will make the economy come crashing down.

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Oh, and did I mention that one of the proudest boasts of this couple (who from this post sound like real ogre's, they are actually nice people ) is that they're both members of Mensa.

I have to say that without doubt, IMPO, the most arrogant and most stupidest people I have met through Life have nearly always ended up boasting about being in this particular club.

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A lot of the property investment 'clubs' in oz definitely have a cultish aspect to them. Does it stem from the rich dad authors books which did so well in oz. Even he has turned bearish on property apparently.

Just take a look at the somersoft forums to see many examples of gearing to the max, always dependent on ever increasing capital gains. No one seems to counter in that there 'investment/pension' may go down as well as up.

The negative gearing tax avoidance is a complete disgrace. How in the world can you continue to take on a deficit of tax revenue from BTL declarations! If it wasn't for the unprecendented commodities boom propping up the australian economy...

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Oh, and did I mention that one of the proudest boasts of this couple (who from this post sound like real ogre's, they are actually nice people :) ) is that they're both members of Mensa.

I had a psychopathic boss who was an Australian member of Mensa. Hope that cow is part of your investor's club!

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Guest Bart of Darkness
Really sounds like the attributes of a cult?

Reinforcing the belief system with the like minded. Non believers will get shortshrift.

Danger is, of course, isolation from what's really going on outside.

Oh well, so what, they're all grownups.

And when prices crash, maybe they'll have a mass-suicide pact.

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Are these people paying cash for their properties or, as I read it, are they mortgaging against existing holdings?

If the latter, they do not own much at all, the bank owns most of it. All they own is risk!! And they are members of Mensa! :huh:

Oh, give me strength! How human kind ever got this far is beyond me!!

The sad thing is there appears to be 1000's of people like these all over the world, and they are all going to get absolutely smashed into the ground when the recession starts starts to bite!

In short, mortgaging against existing holdings.

What worries me more than them 'getting smashed' is the possibility that they have enough collective clout to protect their interests from the impact of a recession. Nothing like a dose of inflation to retrieve a bad RE investment.

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A lot of the property investment 'clubs' in oz definitely have a cultish aspect to them. Does it stem from the rich dad authors books which did so well in oz. Even he has turned bearish on property apparently.

Just take a look at the somersoft forums to see many examples of gearing to the max, always dependent on ever increasing capital gains. No one seems to counter in that there 'investment/pension' may go down as well as up.

The negative gearing tax avoidance is a complete disgrace. How in the world can you continue to take on a deficit of tax revenue from BTL declarations! If it wasn't for the unprecendented commodities boom propping up the australian economy...

Just so.

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Guest Charlie The Tramp
Some of them actually had club sweatshirts with "Property Millionaire" printed on them, and the husband in the couple I know makes a joke about putting his order in based on his expectations for 2006.

Reminds me of a cult we had here in the mid eighties called yuppies, they would stand around the wine bars with their share portfolios boasting about the millions they were about to make.

Suddenly there was one almighty bang, and poof they were gone.

:)

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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