Counting eggs before they hatch (Part 2 of 4)

Posted to The Age (13/1/2011) on 13/1/2011 at 2:55 PM
Commenting on “Counting eggs before they hatch”
http://theage.domain.com.au/real-estate-news/blogs/domain-investor-centre-blog/counting-eggs-before-they-hatch-20120110-1pt5n.html

If there is a bush fire in a country town does not imply the whole of Melbourne is on fire. The crash in some regions is more evident and severe than others. Indeed, some suburbs do experience fall of 40%.

Many properties in certain suburbs are highly inflated, due to overseas investors’ coming to snap up properties in a rather uncontrolled manner – without requiring FIRB’s prior approval. This was an ill-thought out policy from Kevin Rudd who tried to avoid the GCF. This policy has now been reversed, and the overseas investors’ retreat stops further speculation, and the prices fall substantially and hurt many locals who follow the Joneses. Easy finance also attracted many who could not afford to fall into the mortgage trap and these people will be victims suffering from financial suffocation.

Life is more than just possessions and owning a property. During difficult times, people need to make sacrifices. My wife and I went without chairs for two years when I bought my first home. We used to sit on cardboard health drink cylindrical boxes.

End Part 2 of 4

More bleak times ahead for housing

Posted to The Age (10/1/2012) on 10/1/2012 at 11:32 AM (Not published by Newspaper)
Commenting on "More bleak times ahead for housing"
http://theage.domain.com.au/real-estate-news/more-bleak-times-ahead-for-housing-20120107-1ppiy.html

The unreasonable property price rise was a fault of the government policy by introducing FHOG, which indirectly put extra money in the developer's and vendor's pockets from its early introduction. The long term effect is propagated and felt until today.

In order to soften the impact of GFC, Rudd introduced policy in removing the FIRB approval on foreign investment, which unleashed a real estate monster. This policy is now being reversed.

One must not compare our real estate prices with Canada or USA. If so, why does not one compare ours with Hong Kong or Japan? Every country goes through different phases of development and the people value ownership of properties differently.

Investing in real estate is a business and requires business, financial and management skills. Decisions should not be made by looking through a crystal ball or throwing a dart on a special real estate dart board.

Rates and costs are published and well publicised, and buyers have no excuse in blaming anyone for making wrong decisions. The current fall is a painful lesson for investors who were impatient and followed the Joneses, committing to large loans that cause untold mental and financial stresses. For the live-in owners, you have not made any loss at all because you have not sold your properties; their values are just numbers on paper.