Also read Universal Trader and agree - he is correct. The banks will not foreclose on all the properties of course that would be absurd as he points out.
If you bought at a good time (on a dip in the high interest end of the cycle) and enjoy a reasonable return via rent then you are well ahead. If your equity is high and you don't lose your job or suffer a major financial problem that necessitates selling during the bad years to come then no problem. If this is your position then all the very best of luck to you - sincerely you must have worked hard and made right choices so congratulations!
My discussion is not as important to you other than pure interest and risk assessment. I refer to opportunity and threats as seen graphically in the link from Pantry. The negatives I point out are not designed to pull down the value of your portfolio (as if this would affect values) or to make you wrong. Risk must be known and understood in order to manage - this is where I am coming from ...partly.
Builders, developers, people who lose their job, buyers at the top of the market and the 'bulk property on neg gearing' investors are in the high risk category. Risk does not assume it will blow up on any in particular however it is already pushing a lot of people and their biggest investment into very dangerous territory.
Tax payers, bank share holders and this later group are at risk based on the factors I correctly point out here. Some may be able to save themselves if they get the right data now. In that case my work is useful.
If Banks do their DD now the insurance companies will have to wear SP and profit decline as it should be as they have benefited from the compulsory mortgage requirement income from all of us. To step aside and avoid the risk would be repugnant to all of us. Mark to fantasy would unwind quickly and the investors that hold viable portfolios can then look forward to a more speedy recovery.
If it happens too fast we all have a major problem and better be well diversified with no gearing on shares etc and low debt.
If it goes bad or unwinds too slowly then you are at risk of holding a dud investment class for longer. I am not rich and have plenty of good causes to support if I make too much from this opportunity and my other investing activities.
From a property investor - I appreciate your feedback you may also take advantage of the stunning opportunity this will present UTrader. I am not kidding the distress sales are awesome if you can get them. They will happen on the "quiet" and most people will never be aware they happened at all but some will get rich on this if I am right and TSHTFan as indicated by risk factors and the current financial trends.
I hope this clarifies my posts further. The opportunity is the end game but I have to warn about the dangers for those at risk or I will not be comfortable taking the cheap properties off the banks later.
Take care and thanks for the input guys - appreciate all manner of discussion on this subject - it is a biggie. CW
