Hi Malaga, strong person - comes on strong, I like that no worries at all. Such a short space to get a message across cannot replace Q&A conversation style exchange easily. This can cause all of us to be misunderstood.
Specifically:
*Long term / own home, not a problem but don't expect capital growth. If you are going to sell you can re-buy in same market. If you can maintain your payments you don't have an issue with market conditions. This is a large proportion of the market.
*Long term / investor, little or no gearing, comfortable mix of asset classes, in it for the income - then there is no problem either - however expect no capital growth, probably falls in majority of areas, if not all, for many years. You can afford to sit anything out.
*late comer to market, high gearing / private or investment - you have a problem; look at the contract you can be required to top up your mortgage / loan to remain in positive equity position or lose the asset. Banks will be selective and hold off as long as possible. If conditions improve with massive QE you might be saved for longer due to easier wholesale money conditions for the banks. If you can get a sale and get out without a loss early it is worth looking at but your call - I encourage you to do your homework this is a risk environment. If conditions continue to deteriorate - read; stuff up - then... I don't even want to go there.
*anything in between the above extremes you have to work out where you sit with your individual circumstances and assess, very carefully; what your risk / reward is - also your needs and time horizon are for the investment - and if your money might be better elsewhere for a while.
*Banks have reserve ratios - mortgages are 10% risk weighted assets if they are performing. If not, and become declared so then this becomes their problem and they shift it to you in the end because they have to. Basel3 is increasing the reserve ratio requirements and enforcing them more so, look out - I will not explain more here but this is major risk. Mortgage auctions are increasing as banks are over exposed massively to private property. They have balance sheet pressures. A couple of them even more so as they went for market share in the last few years.
*investors waiting to enter or add to your positions - you have a fantastic opportunity now and more so in the next few years IMO. Properties on Gold Coast for instance - a client just bought a $1.2M beautiful home on superb land with rent-able cottage for just under $700k a fantastic deal he will pay no more than $1000 pcm to service the loan as he had a large deposit as well. Banks not lending easily up there you need the big deposit. I have contacts with specific skills and vast experience to buy at minimal prices in the coming environment, this is what I have alluded to and don't or can't make any of this area or events and my knowledge too public.
*private buyers waiting - your cash is king, save a great big deposit and make sure your job is secure, the economy is not healthy. Take care with your selection time is on your side it is a buyers market. If you have a secure job then you are in a fantastic position.
*Chinese - their economy slowing and capital controls are 'possible'. Global lack of growth to add pressure to China as it is a 10 year cycle to move to internal consumption for their economy.
Too long winded already but to be specific this does not even cover it. Thanks for your post malaga and the question pinning me down it is an opportunity.
During the depression of the 1930's people with jobs were just fine and fortunes were made and lost. I love a good story and I bet the bulls in here have many. If anything my intent - my hope - was that my posts are here for you too - as you can add to your positions more carefully and protect your position if needed.
