Today is 1/1/2001 and I've decided to join this forum because the time has finally arrived. I actually waited until today. I am not a property bear just an astute investor who follows the inescapable boom-bust cycle. Living by the adage of buy-at-the-bottom and sell-at-the-top. Yep, I picked March as the bottom in the share market but I'll stick to property discussions in this forum.
I am like the midwife arriving at the ward when the screams have just reached ear-piercing pitch.
2010 will make Australian history much more than 2008 as it did for the US.
Until around mid 2008, few spruikers used the line that we have a housing shortage and high immigration. Universally they all said "no recession, no unemploymnet --> no housing bust". As it turns out from the US to Ireland to Spain to the UK, housing busts bring about recession and unemployment (not the other way around).
Then clutching a straw, Bingo! Housing Shortage. Now make sure we all repeat this and often enough. With Rudd and the RBA over panicking and now the violent reversal takes place, a inflated bubble suddenly becoming catastrophic in it's appearance.
I specifially serve notice to those who are in denial about the impending house price crash (which they label as doomsaying) that you can ridicule and counter with past examples where the doomsayers were wrong. The sad reality is all you need is to get this one wrong ONCE and you have learned your life time lesson. For almost all of the first home buyers, it is already too late. There is no jingle mail to simply hand back the keys in Australia unlike the US (you lose everything).
For property investors buying in 2009 will soon see red-ink (negative equity - all the while rates spike). Those who bought further back will see their gains rapidly eroded before they too see red ink.
Admittedly, some of the so called doomsayers are just that. They are wishful thinkers hoping for house price falls and are pathetically ignorant. No doubt many are priced off the housing ladder and feel frustrated and helpless.
But this should be no reason for comfort for many who about to lose thier shirts on Aussie property. I liken the unfolding sceario to be a bit like "The Boy Who Cried Wolf".
