A Confession

[wherebee]

So - been a long term bear happy railing against overpriced housing. I have just bought.

Feel like a bit of traitor to HPC, but the facts stacked up for me. Bought in Australia, and took a small mortgage which will be all paid off by next March (could do it now but do not want to liquidate some investments at this time). A near 1000 meter plot, with an established 4 bed family house in good nick. Very good area - buy the cheapest house in the best area was the guide. Under 400k English. Got more than 10% off asking price, after hard negotiation - had three properties in the running where all the agents knew we were serious about going for the one with the best discount - we didn't 'fall in love' with a house, just talked numbers. The agents talked the sellers down. Similar properties in the road have gone for >480k english in the past year.

By the way, the banks were all trying to push debt on me. I was offered over $2,000,000 by two different banks. I only took 10% of that. The salespeople genuinely, genuinely could not understand it.

The Australia people's reaction to the last budget really did it for me. First suggestion in 3 governments of turning off the magic money tree supply of benefits and freebies, and it was like someone had killed their puppies. I see Australia going the same way as the UK - voters not understanding or wanting economic reality, so more and more easy credit and gvt borrowing, plus non stop support for the housing market. Last time the housing market wobbled, Rudd opened the floodgates to the Chinese - I do not believe ANY gvt will let the market collapse now unless there is truely worldwide disaster. They will have studies the UK and HTB, QE, etc, are all on the table. Bastards.

The other major push factor is my worry that if it all goes Lehman style whilst I had 400k sitting in banks around the world, I could see the value evaporating through either theft or inflation/taxes. I wanted some assets outside the main systems.

So - the house is large enough for all the family, plus room in the garden for veggies and maybe a couple of chooks. If the world doesn't collapse in the short term, I can keep earning here in Hong Kong, and saving like a *******. If it does collapse, I will have a base with no debt and enough space of a bit of self sufficiency. Long term, it's close enough to a major Oz City (under 60 minute rail commute) and on a rail line that we can be up for employment in a range of industries.

Finally, yes, I am going to rent it out until we return to Australia. I am becoming "BTL scum landlord". However, you won't hear of me not paying for repairs or skimping on stuff - having rented for years I have empathy. This is not a money making venture, buying is a defensive mechanism against the rigged game. Yield is expected to be about 3%, taking into account 15% voids and a 5% sinking fund.

Another bear has turned. I'll still stay on HPC, for I do believe housing is the critical issues for my kids and grandkids...

*sits back and waits for the abuse*

[Venger]

..By the way, the banks were all trying to push debt on me. I was offered over $2,000,000 by two different banks. I only took 10% of that. The salespeople genuinely, genuinely could not understand it.

The other major push factor is my worry that if it all goes Lehman style whilst I had 400k sitting in banks around the world, I could see the value evaporating through either theft or inflation/taxes. I wanted some assets outside the main systems.

You get around given the strap under your avatar; in Hong Kong now, and were you not recently thinking of accepting a position in Geneva?

Good luck. I'm all cash, and already taken all the punishment of that for so many years building my savings up against lunatic rampaging hpi years/decade+ and won't buckle for fear of even more theft in the future, for that comes now, after all of this, then it's been nothing but a total cheat system. They may offer debt, but there are two sides to the lending equation. Not easy for them to get the debt into the system when there is debt revulsion on the borrowing side. My own view is the VI are all fattened up with what they think their assets are worth, and smarter predators are going to feast on them. Why is the Gov there now talking about cutting back on magic policies, and risking the wrath of homeowners?

Have you lived in Aus before, and is all good for you with residency there? Why Aus?

[Bloo Loo]

there is nothing to confess when a person puts a stake in the ground.

There is nothing wrong with Buying to let.

There is something wrong with speculation with housing.

[@contradevian]

I think it was Max Keiser that nailed it in his last show. Like the factory farmed chickens who are being given 'virtual reality' to think they are free range, we are now the factory farmed chickens in a virtual reality economy of 'growth' 'rising employment' and ever rising house prices and a green belt that is preserved for ever.

No need to apologise. Good Luck. Only wish I was able to get around like you have!

[Fully Detached]

[desertorchid]

Interesting Wherebee, Im here in Hong Kong too and have finally bought into the most expensive property market in the world. I think you probably do have to bite the bullet eventually because it is very hard to see how events can unfold to resolve this diabolical scam. We are in the chasing yield stage now in financial markets and a financial crisis will come someday but I also do not trust any government now to honour the stability of their currency over a liquidity dump to sooth the pain.

Depressing but I fear true!

[200p]

Buy a house that is affordable and have assets to match the liabilities.

[long time lurking]

- I do not believe ANY gvt will let the market collapse now unless there is truely worldwide disaster. They will have studies the UK and HTB, QE, etc, are all on the table. Bastards.

It`s definitely looking that way .. apart from a black swan event the only light at the end of the tunnel in the UK is the effect of the new MMR rules and what happens when the sugar rush from FLS runs out , though i`m sure the later will be replaced/extended if needed

Could the cheap credit from FLS already be running out ? hence the talk of rising interest rates resulting in the debtors paying the extra margin instead of the BOE

Edit : to add good luck with the house

Edited June 15, 2014 by long time lurking

[interestrateripoff]

You pay your money and take your chance. If you are happy whats the problem and if money becomes worthless its the best decision.

[cybernoid]

The achievable yield on the rent suggests its at least double fair value, but none of us can wait forever. You do what you gotta do, and it sounds like you can afford it. Up to you in the end, why not. The problem is in those that can't afford it but don't understand they can't afford it. This is not that.

[TheCountOfNowhere]

thanks for letting everyone know.

the crqash has been ongoing for 6 years and has 2 more to run....if you cant see that then its best you buy....after waiting 6 years for the worst time since july 2007....well done,

[macbeth79]

thanks for letting everyone know.

the crqash has been ongoing for 6 years and has 2 more to run....if you cant see that then its best you buy....after waiting 6 years for the worst time since july 2007....well done,

Wherebe is buying to park cash, i guess that makes sense probably hanging around that part of the world that kind of conversation from the locals has an effect.

[long time lurking]

thanks for letting everyone know.

the crqash has been ongoing for 6 years and has 2 more to run....if you cant see that then its best you buy....after waiting 6 years for the worst time since july 2007....well done,

In Austrailia ?

[wherebee]

In Austrailia ?

Thanks all -

someone asked why Australia? Because I think the UK is more buggered economically and socially for the next 50 years. Australia at least has natural resources to flog, plus less PC in government and media to stop the tackling of real social issues. I'd also like to have a retirement not affected by civil war type spectaculars, which is a real risk in the UK in my view (and Ireland in some areas).

And yes, I would NOT have bought now in the UK on economic grounds - I do think the market there has further risks. Plus, the same house 60 minutes from London would have been 700k GBP easy, which means if they do drop 50% I lose a hell of a lot more.

Anyway, most of you understand what I have done - diversify, and only borrow enough so it is less than my assets, so I am not exposed if the world collapses. My favourite quote from one of the bank staff trying to get me to borrow more was "interest rates have never been lower in my seven years as a mortgage adviser - it's the best possible time to buy".......