Black Friday!

[donna]

Best not to listen to the news or read newspapers from now on in....it's all doom and gloom for the markets, property values etc.

Even the article by Mike Pero - is a spin on gloom re. investing in Kiwi Saver may prevent your ability to secure a mortgage here's the article

Cheers,

Donna

[ActionMan]

Tomorrows is Friday in the US so it'll be interesing to see what happens.

The Dow has already dropped 387 points today - the second worst this year.

[muppet]

DOW Jones down 31 points for the day to 13,239

52 week range 11,044.72-14,021.95

[Marc]

On CNN they had a news item on what is the cause of the down turn and it points back to the USA's version of "low doc" or "no doc" loans.

People who cannot afford "normal" mortgages are going for the loans where the ability to prove that you can repay the mortgage repayments is not a big deal. Thus many are defaulting on repayments and filing for bankruptcy thus taking down the lenders as well. Which in turn affects the share market.

All of this is mentioned in the "Maxed Out" book and from what the experts in the book talk about this is just the tip of the iceberg.

Its the greedy lenders giving loans to people that should have a better idea on how much they can afford that is causing this issue.

Cheers

Marc

[Propoholic]

People who cannot afford "normal" mortgages are going for the loans where the ability to prove that you can repay the mortgage repayments is not a big deal.

Sounds like New Zealand?

Its the greedy lenders giving loans to people that should have a better idea on how much they can afford that is causing this issue.

The trouble starts when the lenders get stung and then change the rules for a new game where they decide who the players will be....full disclosure!

[whitt]

News this morning has reported.
In NZ there is now an increasing level of bankruptcy's and inability to pay mortgages.

I wonder if this is the tip of the iceberg? It will take a little while for stats to flow thorugh into market place however.

[Marc]

News this morning has reported.
In NZ there is now an increasing level of bankruptcy's and inability to pay mortgages.

I wonder if this is the tip of the iceberg? It will take a little while for stats to flow thorugh into market place however.

I think its coming - just take a look at all the flash new housing developments around the country with a flash brand new car out the front.

Then check out "Harvey Norman" stores in the weekend with people buying the latest TV's, computers and other useless gadgets - I bet 99% of those purchases are done on credit. So they have a high mortgage and credit debit to deal with every month.

Cheers

amrc

[whitt]

Cheers

amrc

Whos he?

Maybe a new member to PT.

[Glenn]

I have just read todays article on downsizing to pay the mortgage. That property owner had to sell because of an increase of $150 per week increase in payments. Well I put the figures through my calculator and I think that person would have had a mortgage of $600.000. What sort of fool has a mortgage of that size on the house he lives in and apparently no other investments. Even at Aucklands prices they had a real nice house way in excess of most peoples ability. I guess their house would have been worth say $800,000. Now really for a young couple with no kids to have a house of that value.
They deserve to get what they have sown. Nuts.
What ever happened to saving and going without.
Sure investors can have these sorts of mortgages but then they should also have some equity.
I wonder how much drop in values / rate increases there will be before I can go in for the kill and buy up some under valued properties.

Do we have some ideas out there forumites.

What will be the peak interest rate this round.

What will be the average drop in values before the old guys start buying up.

[essence]

The coming tidal wave

It's been interesting reading this thread.

I am continually looking for properties to buy. Yes, I am particular but the properties that are cashflow positive are out there.

All this hu-haa about the US sub-prime market - really, did they expect that NOT to happen??!! Giving loans to people who don't generally qualify for "normal" loans, low start-up interest rates and credit cards to utilise - what did the banking nutters expect.

It's all very well the Banks using lo-docs turning them into Bonds, selling the Bonds to private equity companies etc etc etc when at the end of the day, if the mortgagors default on the loan, it just means there's less money in circulation.

It doesn't take a rocket scientists to work out there is a "credit crunch" happening.

It was created by Banks/investment companies with their "innovative" banking systems.

It serves the Banks right to get into this problem.

There will only be a period short of time (if it hasn't happened already) before the "credit crunch" leaks into main street America. When that happens, there is going to be HUGE problems for everyone.

Stand by to wait.

[Perry]

Of course, it's interesting to speculate about how 'engineered'
this all might be. Someone once said something to the effect
that this is the process by which the wealth of the many is
transferred into the hands of a few.

[Commercial Dan]

I agree with most thoughts on this thread, the credit crunch which is starting to happen will be disaterous for the world economy as it will flow throw to other areas of business and act like a domino skittling everything in its wake.

I think the kiwi$ is going to tank and we could see US60 cents by the end of the year. The property market is in for a correction so be damn careful out there, especially if you have made large sums of cash in the past 4-5 years and feel bulletproof, you don't want to give a lot of it back.

[spaceman]

I think the kiwi$ is going to tank and we could see US60 cents by the end of the year.

As an earner of US$, I promise to buy CD a bottle of wine or a case of beer if he's right.

Damm that high NZ$ damm it to hell


cheers
Spaceman

[captaincrab]

http://www.nbr.co.nz/home/column_article.asp?id=18719&cid=8&cname=News

I'm not so sure the US subprime will have any more effect than it has had now. I suspect that there is so much liquidity around that "losing" a few trillion might actually be a good thing. A correction is certainly due.

[alhoon]

Just wondering forumites thoughts on all this doom and gloom. I'm a builder and an investor so I look at properties in different ways - land prices, cost of building and return on investment. I think pretty much everyone is convinced that house prices are due for a correction but with the current changes in the Building Act I have seen a massive leap in prices for building which haven't come through yet-consent costs are up, perhaps double what they were 3 years ago, the price of wiring/cabling has gone up over 300% in the last 4 years, timber prices have come up 40% this year and I could list heaps more. The building registration is coming in at the end of the year and with all the new regulations from the council, I am not sure if many builders can either be bothered or will pass these qualifications. I can't get my head around how the prices are going to come down on a commodity that is going up so drastically in price unless the land prices take a massive hit or the councils stop being so anal about all their new regulations which after the leaky house debacle are not going to happen.

My thoughts are that is is basic supply and demand and that we are going to have a fairly serious housing shortage in the next 5 years. Especially in places like Auckland that still have large numbers of people coming in every day to live.