Australia housing bubble

[Yellow_Festiva]

Originally Posted by Citroënbender

That 12,5% are the liars who were honest about lying.

Yep, unfortunately I'm in that group lol. When the system in place can't think outside the box then you give the system the answers they need.

[GO FURTHER]

Originally Posted by Citroënbender

My parents did this, once my father was dead it was a fair pain in the whatsit to wrap up.

To me, the overarching requirement by your mortgagee that your life (income and prospects) situation is notified to them as it changes, negates any longer term use of a facility like that - the very small but undeniable risk of a loan being called in because the lender’s terms are not - and cannot be - met, negates any sense of real security.

True, but my mortgage is in joint names, with my wife as co-borrower.
Unlikely, but we would both have to die at the same time for this to happen.

So long as the monthly repayment is being made on the outstanding loan amount, and the loan still has its term to run... It would be extremely unlikely (or legal) for any bank to call in or close the loan prematurely.

Banks at the end of the day make money, lending money and collecting interest.

[Yellow_Festiva]

Got back into the hunt late Jan as predicted and found a place I really like. Will be there to bid this Saturday.

I went to two auctions last Saturday out of interest and there was a decent crowd of spectators and a hand full of registered bidders.

Not one bid... nil, zip, nada... Nice places too, but vendors still wanting post Covid / pre rate rise numbers.

So what does the auctioneer do? Announce the (high) vendor bid as if it will make people bid.

The second auction was run by the same mob as the first one. His spiel was a joke:

"Ladies and gentlemen, don't be like the last auction where no one raised their card, only for it to feverishly be fought over post auction by 2 very interested parties".

What BS. Both properties are now listed as for sale. The 2 very interested parties must have landed equal blows in the fight and knocked each other out during negotiations.

At least they didn't advertise that it was "Passed in at $1,XXX,XXX" to imply there was bidding like they used to do.

Let's hope there are no bids this Saturday for me

[FTE217]

Originally Posted by GO FURTHER

True, but my mortgage is in joint names, with my wife as co-borrower.
Unlikely, but we would both have to die at the same time for this to happen.

So long as the monthly repayment is being made on the outstanding loan amount, and the loan still has its term to run... It would be extremely unlikely (or legal) for any bank to call in or close the loan prematurely.

Banks at the end of the day make money, lending money and collecting interest.

yep spot on, ours is joint as well with both names on the doc are the borrowers.
As you mentioned never ever close it, its great to have the account still active just in case......
Through covid we near on paid out ours but left it open with something like $5/10k.......
Sat for a mo and considered what to do next - invest using the equity on another property but considering how the market has been going through to sit instead of going into large debt again but decided to do more renos on the current house and due to our past experience manage the tradies ourselves and shop for the deals on appliances/materials needed etcetc.....
So easy tapping in to our current mortgage - I could arrange turning up to a branch and withdraw in cash as needed.

[FTE217]

Originally Posted by Yellow_Festiva

Got back into the hunt late Jan as predicted and found a place I really like. Will be there to bid this Saturday.

I went to two auctions last Saturday out of interest and there was a decent crowd of spectators and a hand full of registered bidders.

Not one bid... nil, zip, nada... Nice places too, but vendors still wanting post Covid / pre rate rise numbers.

So what does the auctioneer do? Announce the (high) vendor bid as if it will make people bid.

The second auction was run by the same mob as the first one. His spiel was a joke:

"Ladies and gentlemen, don't be like the last auction where no one raised their card, only for it to feverishly be fought over post auction by 2 very interested parties".

What BS. Both properties are now listed as for sale. The 2 very interested parties must have landed equal blows in the fight and knocked each other out during negotiations.

At least they didn't advertise that it was "Passed in at $1,XXX,XXX" to imply there was bidding like they used to do.

Let's hope there are no bids this Saturday for me

Forgetting my previous post we have attended Auctions of late, more so supporting our son and daughter inlaw looking to buy their first unit for that was their budget pre Christmas..
Interestingly after all their research prior just last weekend we went to see 3/4 properties that now with pricing dropping 2 bed/2 bathroom apartments have come into their budget.

We went to an auction with them pre Chrissy for a unit they had hopes for but 2 bidders blew them out of the water counter bidding.
I suppose it all varies depending the areas.

What I find funny why do so many people turn up to auctions with no intention at all to bid, sure only 1 or 2 people will be serious but are there that many people hoping its bargain time ?!
What vendor agrees to sell so low unless they are really in the poop having to sell.
I hardly see or notice this kind of circumstance.
Can't agree asking pre covid figures from our experience to date, if they are the vendors are dreaming and hoping the sucker over looks everything else and willing to pay more that in the same area another property is 50/100k less for eg.......

[MITCHAY]

There is a house just up the road from me that was advertised for I think $2.8m closer to $2.9m+ which has been reduced to $2.5m flat.

In either case I believe it will be both a suburb and district record if it goes for around that but that is a huge drop, maybe hoping to get in a multi bid situation.

[Yellow_Festiva]

Originally Posted by Yellow_Festiva

Got back into the hunt late Jan as predicted and found a place I really like. Will be there to bid this Saturday.

I'm effing ropable at the moment.... Went to inspection last weekend, told agent I was very keen and would go to the auction.

Instructed my solicitor to do their usual review and clarification of the contract on Monday. Monday afternoon vendors solicitor was sent a bunch of questions and amendments to the contract.

Agent called on Tuesday asking for follow up. Instructed then I was very keen and that I had already got my solicitor to get to work. Will be at the auction to bid next weekend.

No reply from the vendors solicitor by Wednesday morning so my side called to follow up and went to voicemail. No reply so she called again Wed afternoon and the secretary promised they would reply and call back when done.

Today - still no reply by 10am so I called the agent directly and asked them to get in touch with the owner to respond to my solicitor. Agent apologised and told me they would get onto it and call me back.

4pm - notification on the app "Under offer - Auction cancelled".

What an effing joke... Even it was obvious I was a very interested party not even a call to ask if I had an offer or if I could beat what was on the table.

4:30, final kick in the guts, money for deposit that was transferred into my account appeared, only for it to be returned to the account it came from 5 minutes later.

Oh well, back to the open houses I go...

[Citroënbender]

I’m honestly not surprised. I can understand your disappointment, but the conduct you describe is almost par for the course now. (What ethnicity of agency?)

If the vendors are also occupants why not pay them a visit to advise of their agent’s laziness?

[fordomatic]

I don't understand that conduct because it is the agents duty to get as much money for the seller as possible. More money they get, the more money they make. It makes zero sense that they didn't contact you.

[hayseed]

Most Agents are Lazy pricks.
Particularly Ones who've only being the Business the last 5-8 Yrs..Some Old school Agent who cut his teeth back in the '90s early 00's would've been playing everyone off each other & squeezing as Much as Possible out of You...

[jstanovic]

Just wondering why your lawyer is involved at all? Possibly the lawyer involvement put you into the too hard basket?
In saying that I've never seen an agent ignore a potential buyer either, usually the other way round!

For some reason you seem to get your fair share of agent issues...

[GO FURTHER]

Originally Posted by fordomatic

I don't understand that conduct because it is the agents duty to get as much money for the seller as possible. More money they get, the more money they make. It makes zero sense that they didn't contact you.

Yes and no... While an agent has the "moral" duty to get as much as they can for their client's property, in reality, they are sometimes lazy and just interested in making a quick sale and moving on to try and sell the next property.

They "pretend" that they are working in the vendor's best interests, but in reality, they don't really give a dam and only want to make a sale as quickly as possible to line their own pockets.

They put up the public "front" that they are working for the client, but they are actually working for themselves.

The other big factor in play is also the agreed commission they will receive on the successful sale of the property in the contract they have with their client.

There is no "set" rate of commission to sell real estate in Australia, and it is by negotiation between the client and the agent, which can vary widely from agent to agent and area to area.

For example... The average real estate commission rate in NSW is 2.1%. Sydney real estate commission rates range from around 1.8% to 2.5%, while in regional NSW the range is generally between 2.5% and 3.5%.

However, what further complicates this is also the commission structure.

There may be a "fixed" rate of commission agreed on the sale of the property once it reaches a certain price. Then an added incentive (or different rate of commission) for each dollar achieved over that. Called a tiered commission structure.

Sometimes, the extra commission an agent would earn from another buyer offer, over a sure unconditional offer (but slightly lower offer) they may already have in their hand, is not worth the extra work involved for the small extra commission they would get. (Lazy agents here).

The wealthier an individual agent is... The more the above factor may come into play, whereas the poorer agent may fight for every extra dollar of commission.

If the agent is on a set rate of commission and the property sells for say $2.8 million... A higher offer of another $20,000, may not be worth the agent's time and effort for that extra small commission they will make, over and above what he or she will already receive.

Their time is more profitably spent trying to sell another property on their list.

[Yellow_Festiva]

Originally Posted by Citroënbender

I’m honestly not surprised. I can understand your disappointment, but the conduct you describe is almost par for the course now. (What ethnicity of agency?)

If the vendors are also occupants why not pay them a visit to advise of their agent’s laziness?

Nah, not worth my effort. Good luck to them. The whole thing stinks of an inside job. During the last open house the agent was obviously very good friends with one of the parties inspecting - talking openly about mutual friends, showing each other stuff on their phones etc.

Same agent I called Wednesday morning. She probably had a part in telling the vendor there was minimal interest and to accept the offer from her friend.

Who knows... Lets see if the cooling off period lapses. I may send the agent an email stating my interest should the sale fall through.

[Yellow_Festiva]

Originally Posted by fordomatic

I don't understand that conduct because it is the agents duty to get as much money for the seller as possible. More money they get, the more money they make. It makes zero sense that they didn't contact you.

Yep... I have received text messages from other agents along the lines of "We just got an offer on XYZ property and owner is willing to sell prior to auction, please call us if you are interested in making a counter offer"

Thats what they should have done at a minimum, but oh well.

[Yellow_Festiva]

Originally Posted by GO FURTHER

Yes and no... While an agent has the "moral" duty to get as much as they can for their client's property, in reality, they are sometimes lazy and just interested in making a quick sale and moving on to try and sell the next property.

They "pretend" that they are working in the vendor's best interests, but in reality, they don't really give a dam and only want to make a sale as quickly as possible to line their own pockets.

They put up the public "front" that they are working for the client, but they are actually working for themselves.

The other big factor in play is also the agreed commission they will receive on the successful sale of the property in the contract they have with their client.

There is no "set" rate of commission to sell real estate in Australia, and it is by negotiation between the client and the agent, which can vary widely from agent to agent and area to area.

For example... The average real estate commission rate in NSW is 2.1%. Sydney real estate commission rates range from around 1.8% to 2.5%, while in regional NSW the range is generally between 2.5% and 3.5%.

However, what further complicates this is also the commission structure.

There may be a "fixed" rate of commission agreed on the sale of the property once it reaches a certain price. Then an added incentive (or different rate of commission) for each dollar achieved over that. Called a tiered commission structure.

Sometimes, the extra commission an agent would earn from another buyer offer, over a sure unconditional offer (but slightly lower offer) they may already have in their hand, is not worth the extra work involved for the small extra commission they would get. (Lazy agents here).

The wealthier an individual agent is... The more the above factor may come into play, whereas the poorer agent may fight for every extra dollar of commission.

If the agent is on a set rate of commission and the property sells for say $2.8 million... A higher offer of another $20,000, may not be worth the agent's time and effort for that extra small commission they will make, over and above what he or she will already receive.

Their time is more profitably spent trying to sell another property on their list.

Agreed 100% there.

[Yellow_Festiva]

Originally Posted by jstanovic

Just wondering why your lawyer is involved at all? Possibly the lawyer involvement put you into the too hard basket?
In saying that I've never seen an agent ignore a potential buyer either, usually the other way round!

For some reason you seem to get your fair share of agent issues...

Because I'm not a lawyer and when I'm paying over a million dollars for an asset that comes with a 50 page contract of sale it's absolutely imperative that you get a professional to look over the contract.

Often the T&C's are favored towards the vendor and they will sneak in clauses that don't benefit the buyer at all should things go south.

In this instance my lawyer found several clauses that needed rectification and the contract also had no inclusions added.

It's called due diligence... It can't be done after the auction when you have signed the contract.

[Charliewool]

Originally Posted by Yellow_Festiva

Yep... I have received text messages from other agents along the lines of "We just got an offer on XYZ property and owner is willing to sell prior to auction, please call us if you are interested in making a counter offer"

Thats what they should have done at a minimum, but oh well.

Exactly what happened with the house we just bought…
Turned into a “dutch auction” between us and the other interested party that made the pre-auction offer..
Agent got every last cent out of us too (and kudos to him, would definitely use the same guy if I were selling!)

[hayseed]

Originally Posted by Charliewool

Exactly what happened with the house we just bought…
Turned into a “dutch auction” between us and the other interested party that made the pre-auction offer..
Agent got every last cent out of us too (and kudos to him, would definitely use the same guy if I were selling!)

Legend has it, that; Sometimes the Other Interested Party, Doesn't exist...

But as you say Kudos to the Agent for doing his Job..

[MITCHAY]

Inflation up (no surprise) but spending down. Still expect another 0.25 next week.

I have to love all the renters who think their landlords are the devil. Sure there are some proper ****s around but remember one thing.

No one ever buys an investment property to make the renters life easy. They also don't buy it to screw them either in most cases

[Itsme]

Originally Posted by FTE217

yep spot on, ours is joint as well with both names on the doc are the borrowers.
As you mentioned never ever close it, its great to have the account still active just in case......
Through covid we near on paid out ours but left it open with something like $5/10k.......
Sat for a mo and considered what to do next - invest using the equity on another property but considering how the market has been going through to sit instead of going into large debt again but decided to do more renos on the current house and due to our past experience manage the tradies ourselves and shop for the deals on appliances/materials needed etcetc.....
So easy tapping in to our current mortgage - I could arrange turning up to a branch and withdraw in cash as needed.

Pay off your mortage and get that title in your hands, great feeling and you will be surprised how much you can save of your own money.
BTW with your assets you will be surprised how you can secure cheap loans if needed, it is a fallacy keeping your mortage open for cheap loans.

[zilo]

Originally Posted by GO FURTHER

True, but my mortgage is in joint names, with my wife as co-borrower.t.

Oh man...I hope the title isn't in both names...all that lovey dovey nonsense really wrecks your land tax assessments if you buy a second property because you will both be paying half land tax on alternate properties.

In Victoria a good lawyer can fix it for a 120 bucks due to a love and affection thingey in the stamps act or thereabouts, dunno in your patch.

I know this from first hand experience,,,easy to pizz up thousands a year....

[blueoval]

the government is expecting at least another 0.25 per cent interest rate rise tomorrow, potentially higher.


https://www.skynews.com.au/australia...8124c34ceae6b2

Sky News Political Editor Andrew Clennell says the government is expecting at least another 0.25 per cent interest rate rise tomorrow, potentially higher.

“We know the economist Warren Hogan is arguing the Reserve Bank needs to go bigger now, maybe 0.4, to save the pain later,” Mr Clennell said.

“I think from the government’s point of view, they think Warren Hogan has ignored softer retail figures and jobs growth slowing.

“That’s going to be the number one issue this week for most people.”

[Citroënbender]

Cue for the ABC to run more articles on housing affordability, featuring the adorable Eliza Owen.

[hackney]

Originally Posted by Citroënbender

Cue for the ABC to run more articles on housing affordability, featuring the adorable Eliza Owen.

Factor in @ least another 1% rise within 6 months.

[anobserver]

Dont forget the articles on how hard the boomers had it, at 17% interest rates.

Or how the younger generations should lower their expectations.

Or how much avo on toast costs.

Or how rates will stay down until 2024 at least. Shame on you, Philip Lowe!

Or how you should be refinancing.
https://www.brisbanetimes.com.au/mon...03-p5chnv.html

Or how much we can save by ditching coffee and lunches.
https://www.brisbanetimes.com.au/bus...06-p5cib1.html

And on it goes.

Its going to be a long decade.

And i just love the opportunism. Like the scribblers on 150k a year, encouraging you to buy their book.
https://www.jessicairvine.com.au

(And who only reluctantly admit they cooked their goose by overborrowing, and are freaking at at a pending reversion to variable rates this year, bit still have the nerve to offer financial advice)

[Citroënbender]

Originally Posted by hackney

Factor in @ least another 1% rise within 6 months.

I’m in savings mode, there’s something interesting coming up nearby but I feel it’s not likely to be a profitable flipper - especially whilst carrying an injury. So the money stays in the bank.

Originally Posted by anobserver

Or how much avo on toast costs.

I’ve got a little avocado tree started, will be a few years off fruiting though.

[anobserver]

Originally Posted by Citroënbender

Cue for the ABC to run more articles on housing affordability, featuring the adorable Eliza Owen.

Dismal science, indeed.

[Citroënbender]

I wish Aunty would follow up some of their “impending problems” mortgage stories published last year. They’re big on poverty porn with respect to people who are really doing it tough but seem to cut the ones in the middle, excessive slack.

[T3rminator]

Originally Posted by anobserver

Dont forget the articles on how hard the boomers had it, at 17% interest rates.

Or how the younger generations should lower their expectations.

Or how much avo on toast costs.

Or how rates will stay down until 2024 at least. Shame on you, Philip Lowe!

Or how you should be refinancing.
https://www.brisbanetimes.com.au/mon...03-p5chnv.html

Or how much we can save by ditching coffee and lunches.
https://www.brisbanetimes.com.au/bus...06-p5cib1.html

And on it goes.

Its going to be a long decade.

And i just love the opportunism. Like the scribblers on 150k a year, encouraging you to buy their bopk.
https://www.jessicairvine.com.au

(And who only reluctantly admit they cooked their goose by overborrowing, and are freaking at at a pending reversion to variable rates this year, bit still have the nerve to offer financial advice)

Ah yes. Love the occasional lecturing from those who benefited from the biggest boom time ever. 17% back in those days is not the same as 17% today. Size of loan vs income + cost of living pressures, makes today's scenario very different. Forgoing a few smash avos, if that's your thing, and cups of coffee ain't going to make up $1000+ in extra repayments per month.

Rentals have also shot through the roof. I have had the same tenant in one of my properties for 5 years. At the start of the 5 years, I was charging 35% more per week than similar apartments next door, but fully furnished, and because my agent said I could . I haven't upped the rent in those 5 years. Now the same apartments next door are going for more than mine....unfurnished....crazy.

[anobserver]

Exhibit #472,738:

You should make sacrifices, says boomer who slummed it in downtown Coogee for years on end.

https://www.news.com.au/finance/real...7f5fd691ecc08d