Financial Armageddon!!

[Don't believe the Hype]

Not necessarily.

I did this last time around. Was cashed up when the s**t hit the fan.

Instantly the RBNZ lowered the OCR from 8.75% to 2.5%. My income dropped drastically along with it.

Anyone who owned property hung onto it for this same reason. The larger the mortgage you had, the better off you did.

A short while later a tidal wave of Chinese money hit the market.

I bought back into the market for more than I sold for i.e. I lost a bunch of money. Was like selling some shares at $10 each and buying them back at $20.

You just can't tell what will happen.

i don’t doubt this happened and just because you’ e got cash it doesn’t mean a good opportunity will arise but the likelihood of a good opportunity increases and I for one want to be ready. I keep my cash in off set reducing my loan balance so a reduction in bank saving rates won’t impact as much.

I can tell you of the opposite that happended to me. Circa 2008 with the merkets crashing a 5br house with views of the opera house, harbour bridge and obviously the harbour came to market for $1.5m - about 60% of what I thought it was worth at the time and about a 3rd of what it’s worth today even after the recent pullback in the Sydney market.

I had finance approved but given the uncertainty at that time they only wanted to lend 60% - I had to come up with $500k+ fast. The property got snapped up fast before I could free up the cash.

[eri]

it was obvious 2019 and 2020 would be more painful for Australia and the wider world than 2017 and 2018 had been

https://www.nzherald.co.nz/business/...ectid=12212776

[Perry]

Another self-promotional soothsayer:

That's according to tech entrepreneur Matt Barrie, from freelancing marketplace Freelancer, who told news.com.au the country's economy had now reached "crisis mode".

It gets worse.

"It's also my belief China and the US will enter a free-trade agreement shortly, and if they do there will be a permanent impact on Australia.

The notion that Trump would agree that with Chairman Mao's mate Zhing Bing Ping is ludicrous.

[Wayne]

The notion that Trump would agree that with Chairman Mao's mate Zhing Bing Ping is ludicrous.

Do you track anti-predictions?

[Perry]

No.

If that prediction had been made by a PT Forumite, I might've made a note of it, but perhaps I should, anyway?

Anyone care to put a number on "shortly," so I can make a note?

It's also my belief China and the US will enter a free-trade agreement shortly,

Given all the past sabre-rattling, if Trump ever did a FTA with China, I suspect it would not go un-noticed.

[Wayne]

Perry - I'm sure I saw you predict that Trump wouldn't enter into a deal with China.

[Perry]

Oh? Where? When?

[Perry]

July 2017 Prediction

Changing market and my prediction is quick Asian withdrawal at any price in the next 6 months. Lots of supply soon with no backing from banks to lend to investors unless prices drop which banks will not stomach. A standoff until banks come under pressure then all bad.

That six month period would be the latter half of 2017.

How's it looking, folks?

Another yawn?

[Davo36]

tricky across the ditch

Sydney and Melbourne were down 1.3 per cent and 1.6 per cent respectively over the month,

bringing their rolling quarterly falls to 4.5 per cent and 4 per cent

and annual falls to 9.7 per cent and 8.3 per cent.

The NSW and Victorian capitals are now 12.3 per cent and 8.7 per cent down from their respective peaks in July and November 2017

https://www.nzherald.co.nz/business/...ectid=12200033

It's still nothing eri.

A 100% increase over a number of years, followed by a 10% fall doesn't really hurt anyone. It's when it's 30% that it means anything.

[eri]

It's still nothing eri.

A 100% increase over a number of years, followed by a 10% fall doesn't really hurt anyone. It's when it's 30% that it means anything.

the thing with deflationary spirals starting on over-inflated values

is they tend to keep falling until the real value is reached

many sydney buyers will keep looking but are in no hurry to sign

as tomorrow a better deal will probably appear

not only will this mean agents working harder for less money

but the whole construction sector will slow if buyers aren't lining up for new houses

a slowing housing sector flows on to the entire economy....

is it a 10% fall that eventually trips an economy into recession

20%, 30%?

not sure anyone knows

but if you've bought in the last few years

it can't be fun watching the deposit you worked for years to build up

disappear as your new home sinks in value to the mortgage cost

in Ak prices seem to have only fallen a 2?%

but sales have fallen 18%...

personally i don't think nz prices can fall too far

as we are so crap at building new houses to a budget

[Davo36]

Well I don't think there's a supply problem. Even with the massive immigration numbers.

I think it was more about foreign speculation (read money laundering) coupled with super low interest rates. But the former has stopped now, and the interest rates don't seem to be heading much lower just now.

So I think prices COULD fall fairly far, if the government and RBNZ would let them, but they won't.

They'll come to the rescue with a lower OCR, relaxed lending rules, bailouts for banks etc. etc.

And they'll do it because no one wants a house price crash during their term in office - because they will be out come the next election.

But hey, all just guesses of course.

[Davo36]

Just saw this, very interesting, it seems Nigel Farge, some large hedge funds and polling companies may have worked together to make an (illegal - insider trading) killing on shorting the pound on Brexit voting day:

https://www.youtube.com/watch?v=Ht40yrt3VrY

[Nick G]

NZ, like many markets, is exposed to interest rates quite a lot and while it hurts some that servicing criteria are so much tighter it is honestly not the worst thing in the world.

[Chris W]

Davo36,

You might find this interesting also then.

https://www.youtube.com/watch?v=JEzsfPmh894

[Davo36]

So many crooks! All so intensely focused on making money they'll do anything.

The banks, the mortgage brokers, the ratings companies, the auditors, the stockbrokers. They're all guilty, and it will still be going on.