Cognisant
cackling in the trenches
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- Joined
- Dec 12, 2009
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There are three things that could (and inevitably will) cause a correction of the housing market.
What you need to understand is that a lot of housing is owned by highly leveraged investors who are only able to afford ownership of that asset by having someone rent it, if the rent is too low that asset becomes a liability, if that liability is too great the investor is forced to sell or let it drag them down into insolvency.
If tenants can't pay rent or can negotiate lower rents, investor/landlords can't pay mortgages, investor/landlords hold on as long as they can until they're forced to sell, distressed sellers lowers the price of real estate, less people renting lowers demand for rentals even further, investor/landlords who cannot recoup their losses default on their mortgages, it's a full on financial crisis until the market returns to a natural equilibrium.
Both Albo and Dutton have cleared their investment property portfolios.
If I'm wrong, you sell and invest in something else and the real estate market continues to go up and you lose some potential gains, but we're already at a severe affordability crisis, how much further can it go? Indeed the further it goes and the worse affordability becomes the more likely any factor could trigger a market correction, it has to happen eventually.
If I'm right, and I'm right about most things, then I just saved your ass and you're perfectly positioned to liquidate your stocks or whatever else it was you invested in and pillage a housing market full of distressed sellers which will be massively profitable after the government bails out the banking liquidity crisis like they always do.
- Immigrants stop coming of their own accord as the costs are too high, opportunities too few and the economic uncertainty is too great.
- The ever increasing ratio of people renting finally reaches the point where it's such a large demographic of people the parties simply cannot ignore it lest they risk losing control of the country, we're almost there now, I predict we will be there next election.
- Literally any kind of economic shock that affects people's ability to pay rent, such as a recession, which is arguably already happening.
What you need to understand is that a lot of housing is owned by highly leveraged investors who are only able to afford ownership of that asset by having someone rent it, if the rent is too low that asset becomes a liability, if that liability is too great the investor is forced to sell or let it drag them down into insolvency.
If tenants can't pay rent or can negotiate lower rents, investor/landlords can't pay mortgages, investor/landlords hold on as long as they can until they're forced to sell, distressed sellers lowers the price of real estate, less people renting lowers demand for rentals even further, investor/landlords who cannot recoup their losses default on their mortgages, it's a full on financial crisis until the market returns to a natural equilibrium.
Both Albo and Dutton have cleared their investment property portfolios.
If I'm wrong, you sell and invest in something else and the real estate market continues to go up and you lose some potential gains, but we're already at a severe affordability crisis, how much further can it go? Indeed the further it goes and the worse affordability becomes the more likely any factor could trigger a market correction, it has to happen eventually.
If I'm right, and I'm right about most things, then I just saved your ass and you're perfectly positioned to liquidate your stocks or whatever else it was you invested in and pillage a housing market full of distressed sellers which will be massively profitable after the government bails out the banking liquidity crisis like they always do.