Hello Passive 1 I am glad you see both sides well done. I certainly do. If your property is considered "capacity to produce" then you need it.
Somewhere to live might be considered this for a family. You are producing a life, kids - the next generation, a base for work elsewhere or even a home office. We have to live somewhere so, thank goodness, most property will not hit the market. Enough will to cause a very big problem that Australians will eventually have to fund.
Those with medium to high gearing levels and multiple investment properties will assist the fall in prices and end up bankrupt if they are not careful. Builders and developers that did not read the debt cycle correctly are going bankrupt already. This adds to supply from a position of weakness and drags down prices.
Job losses are gaining momentum as I expected. Forget about doctored job numbers also bolstered with the addition of 20,000 new public service jobs in 4 years (for us to support). People losing their jobs become non performing loans. If they cannot exit in time and go rent they lose their equity and end up in default. There have been more defaults than the banks can handle already and this is accelerating to their dismay.
So your capacity to produce may be losing you a lot of money destroying wealth in the process. Is it worth holding a depreciating - de-leveraging asset class? Not if it is for investment purposes.
Passive 1 perhaps a bull or two or potential buyers gave me a thumbs up for clarifying the situation and adding to their knowledge? I hope so as this would mean I assisted somebody with my time and effort. I am pleasantly surprised by the knowledge and understanding of various factors on both sides in there and learn at times myself. This is an excellent feature of HC IMO so I appreciate the posters that contribute.
