澳洲Australia property Offset property losses by shorting banks


在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m


Just read Keens latest article and he raised the interesting point that bank prices tend to move in line with house prices. He noted that some of the hit has already been taken by the banks. As an insurance policy against falling house prices owners could short the banks. thoughts?  

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The CBA is again reporting record profits. The general consensus is that house prices are falling.

My observation is that Keen is consistant in one respect - the accuracy of his predictions. There's a very good argument to be made that you could simply do the opposite of his recomendations and you'll make money.  

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PT_Bear said: ↑
The CBA is again reporting record profits.Click to expand...

Given what they are charging their customers....I'm not surprised in the slightest.  

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Didn't banks make record profits during the height of the GFC?  

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Ausprop said: ↑
Just read Keens latest article and he raised the interesting point that bank prices tend to move in line with house prices. He noted that some of the hit has already been taken by the banks. As an insurance policy against falling house prices owners could short the banks. thoughts?Click to expand...

In the absence of any index to short, the banks would normally be a good proxy, but no open ended derivatives, only put options.

Problem is, at what point do the Government step in?(or rather 'step in further) and bail the Banks?, you are not dealing with a market in any sense after all.

One of the reasons I will have nothing to do with the Australian property 'market' in its current state.  

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Electro said: ↑
Didn't banks make record profits during the height of the GFC?Click to expand...
shop front profits are only a tiny part of the picture where banks are concerned.

They also massage figures better than the REIV when balancing their book.  

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As has been mentioned above, if we take a look at the governments attitude worldwide as well as Australia when it comes to banking losses, I don't see their stock taking much of a hit (possibly even the other way around).

There is however some sort of financial product on the ASX (I forget the name - read about it a couple of months back) which proxy shorts housing as a whole for you. I'm forgetful of how it works, but long story short, the lower housing prices go, the more this stock goes up. If someone knows what I'm on about, please post it up, or I'll google later.

Logically speaking though, if you think that housing is going to go down, it's probably a bit more sensible (well. understandable to an unsophisticated investor) to purchase non housing income bearing assets, or, if you would like to bet that the RBA is going to emulate the US Fed by printing oodles of money, go down the physical gold path. A nice halfway is probably gold mining stocks - can't see those guys losing out in the short term  

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True, presumably if 1 or more of the banks go under (or gets to the point where it needs to be nationalised) then the AUD would be hammered? making physical gold very attractive. interesting - is so hard to envisage a rampaging commodities boom amidst a housing and AUD collapse. I suppose if China stumbles and the resources boom fails then it is far easier to conceive  

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woooooow!!!

shorting banks? Now that is a GREAT way to lose an infinite amount of money that you don't even have to begin with!  

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Bon said: ↑
woooooow!!!

shorting banks? Now that is a GREAT way to lose an infinite amount of money that you don't even have to begin with!

.Click to expand...
Has made a lot of people a lot of money.

I would never recommend going open ended on it, unless you are a big hedge fund, a couple of which are shorting the Aussie banks as we speak. Lets see how they go shall we?  

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Ausprop said: ↑
Just read Keens latest article and he raised the interesting point that bank prices tend to move in line with house prices. He noted that some of the hit has already been taken by the banks. As an insurance policy against falling house prices owners could short the banks. thoughts?Click to expand...
How much have house prices grown in Western Syd since he sold out? Have they doubled yet?  

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Ausprop said: ↑
True, presumably if 1 or more of the banks go under (or gets to the point where it needs to be nationalised) then the AUD would be hammered? making physical gold very attractive. interesting - is so hard to envisage a rampaging commodities boom amidst a housing and AUD collapse. I suppose if China stumbles and the resources boom fails then it is far easier to conceiveClick to expand...
The aussie dollar isn't that hard to hammer anyway, given the small size of our economy. All it'd take is a statement from china that they're slowing down commodity purchases and the dollar takes a nosedive as the carry traders rush to withdraw funds - which is why I kept on about that reindustrialisation stuff  

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I don't think small decreases in house prices is having much of an effect on bank profitability.

They also sell other products rather then home loans.

- Business loans, personal loans, credit cards etc.
- Wealth management
- Insurance

credit growth has fallen off a cliff for now, still growing but at very low levels. Their source of funding is actually getting better because of increased levels of savings, i believe this to be costing them less then some of the funds they are sourcing from overseas.

Keen is keen for media attention, let him have it if it makes him happy  

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XBenX said: ↑
How much have house prices grown in Western Syd since he sold out? Have they doubled yet?Click to expand...
I'm not sure, but I seem to remember a unit in the same block recently selling for not a lot more than he sold for, taking inflation into account.

So it probably wasn't such a bad move in his case, lets see where we go from here.  

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Here we go, not entirely sure of the pedigree of the author, but an interesting perspective none the less.

http://macrobusiness.com.au/2011/05/peak-profits/  

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MrCrumbpacker said: ↑
Has made a lot of people a lot of money.

I would never recommend going open ended on it, unless you are a big hedge fund, a couple of which are shorting the Aussie banks as we speak. Lets see how they go shall we?Click to expand...

How has this made a lot of people a lot of money? From what I can see, bank prices have continued to go up and are at record highs, as are their profits.  

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MrCrumbpacker said: ↑
I'm not sure, but I seem to remember a unit in the same block recently selling for not a lot more than he sold for, taking inflation into account.

So it probably wasn't such a bad move in his case, lets see where we go from here.Click to expand...
And when he wants back in at his hoped for 40% discount, he will be paying the extra stamp duty, solicitor, etc.....how much will he be bragging about his stellar move on the housing market ?

I have come across so many so called professionals (professors) in my game (construction) such as architects, engineers and every now and then a few show up as completely bereft of on the ground experience, you know, on site....virtually every plan drawn has to be amended in many ways until the end result is achieved.....and I might add that it would be a rare beast indeed if a job came in on budget....let alone less than 10% over budget.

The guy is a pen pusher and studying figures only...he is ignorant of sentiment and the homeowner who is attached to their dream home. And he is using the US as his yardstick.....I beg to be so bold and state that it "is different here" :D

Shorting banks....good luck with it...!:eek:

I would have thought that owning banks and being their customer was a better hedge...  

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Bon said: ↑
How has this made a lot of people a lot of money? From what I can see, bank prices have continued to go up and are at record highs, as are their profits.Click to expand...
I suggest you look at the charts, I personally know traders who made a killing shorting Macquarie last time it dipped into the 20s. Likewise some of the other retail banks.  

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Thorpey said: ↑
And when he wants back in at his hoped for 40% discount, he will be paying the extra stamp duty, solicitor, etc.....how much will he be bragging about his stellar move on the housing market ?



Shorting banks....good luck with it...!:eek:

I would have thought that owning banks and being their customer was a better hedge...Click to expand...
I don't know much about S Keen, but I guess time will tell, and it really depends what he has done with his money in the mean time, perhaps he invested in gold or silver, what were they trading at the time.

If he had leverage into gold via derivatives, he could have out performed property multiple times anywhere in Australia.

Like I said, who knows?

Re shorting the banks, it really doesn't have to be scary, a put option is a bit like buying insurance, you can limit your down side, and the upside can be...well....unlimited.

Too many people think the financial markets are only for professionals, but in a sense, it is no more the case than with property.  

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Relevant article...

http://www.news.com.au/business/short-sellers-hit-bank-stocks/story-e6frfm1i-1226061146832

must be property investors hedging their downside :D  

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