Mike Shedlock is on fire on this, in this comment taking to pieces a spruik in the Age.
Select Clichés from the Article
- "It's definitely a buyer's market" - Richard Wakelin, director of Wakelin Property Advisory
- "This is a really good time for people to be trading up" - Richard Wakelin, director of Wakelin Property Advisory
- "Buyers should be sitting back and watching for opportunities, looking for properties that have been passed in on the weekend" - Mark Armstrong, from Armstrong Property Planning
- Century 21 director Charles Tarbey suggests buyers focus on the $400,000 to $600,000 range in coastal and tourist properties.
Decoded
Alternative Mish Suggestions
- Trading up now will greatly increase losses
- Tourist properties will be especially hard hit
- Now is a poor time to buy in general
- Wait 5 years, then see what prices are
- In the meantime, rent
Our banks have borrowed over a $Trillion to make this bubble happen. Village idiots to NeuroSurgeons have made money from Real Estate over the last 15 years and "know where they are coming from when it comes to Real Estate".
You see, they, like me bought a house 15 years ago. It wasn't Warren Buffet or Bill Gates in insightfulness. Then the mother of all credit avalanches occurred and everything went to the moon. This is the problem. You aren't Warren Buffett and you/we got lucky. Steady growth (3-4% pa) is good and what we bought into, hyper growth is a euphoric bubble and it ALWAYS ends in tears because it becomes a Ponzi scheme that requires greater fools to participate so we can get our cut. See my previous, history never repeats.
The aphorism "A Rising Tide Will Lift All Boats" comes to mind.
A lazy $1,000,000,000,000 borrowed overseas in 15 years and dumped on you to play Ponzi Jenga with is a lot of tide considering our GDP is about that number.
The incentives to not be the Greater Fool* have never been better.
* http://en.wikipedia.org/wiki/Greater_fool_theory
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