Housing market situation

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tiagoabner
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Re: Housing market situation

Post by tiagoabner » Wed Jul 31, 2019 12:05 pm

Nice analysis overall. I'll be looking forward to updates on the "mortgage as an independent getting paid from abroad" saga, as I may need to go through the same path myself some time in the next 2-3 years.

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fraggle092
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Re: Housing market situation

Post by fraggle092 » Wed Jul 31, 2019 1:48 pm

Britkid wrote:
Mon Jul 29, 2019 10:53 pm
I think me sitting on the sidelines not doing the research and waiting for prices to miraculously come down 20%-40% was probably wishful thinking.

Most loans are UF-based, which in turn is based on a retail price index, so the odds of property prices dropping, at least in CLP terms, is quite remote.

The last big drop was in 1985, I believe when the government eliminated the fixed CLP-USD exchange rate, and allowed the CLP to float, or rather sink. The rate quickly went from 40 to around 300, and fast movers with access to USD made a killing until the local prices caught up. Still, that was pretty much a "one-off" situation.

In your case, I would be more concerned about the UK Pound's future, given the ongoing Brexit farce.
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at46
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Re: Housing market situation

Post by at46 » Wed Jul 31, 2019 3:30 pm

fraggle092 wrote:
Wed Jul 31, 2019 1:48 pm
Britkid wrote:
Mon Jul 29, 2019 10:53 pm
I think me sitting on the sidelines not doing the research and waiting for prices to miraculously come down 20%-40% was probably wishful thinking.

Most loans are UF-based, which in turn is based on a retail price index, so the odds of property prices dropping, at least in CLP terms, is quite remote.

The last big drop was in 1985, I believe when the government eliminated the fixed CLP-USD exchange rate, and allowed the CLP to float, or rather sink. The rate quickly went from 40 to around 300, and fast movers with access to USD made a killing until the local prices caught up. Still, that was pretty much a "one-off" situation.

In your case, I would be more concerned about the UK Pound's future, given the ongoing Brexit farce.
The peso devaluation from 2013 to 2015 was pretty massive as well at well over 50% versus both GBP and USD. Property prices in GBP/USD terms only caught up in aroud 2017 to where they'd been in back in 2013. Hence my point about not buying a house when there's a possibility to have to sell it in the next two years. Simply drop a few grand on improving your current rental if you're so concerned about environment.

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eeuunikkeiexpat
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Re: Housing market situation

Post by eeuunikkeiexpat » Wed Jul 31, 2019 5:26 pm

Thanks all for the posts, I have learned mucho from the various points of view :thumright:
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admin
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Re: Housing market situation

Post by admin » Wed Jul 31, 2019 8:50 pm

I get what you are going through. been there myself. it is a big, life altering financial decision.

well you can go down that rabbit hole of analysis paralysis for just about anything in life.

luckily someone already went down that rabbit hole for us. Descartes in the Meditations basically came to the conclusion we have no good logical reason to believe we are going to exist from one second to the next. :lol:

yea, there is risk in investing in chile, but the big ones would apply anywhere in the world.

Chile did not suffer the real estate implosion in 2008, because the banks are not allowed to do what the american banks did. why? because chile went through it in the 80's, and rather than papering over it, actually implemented the banking reforms to stop it from happening. house buyer have to have skin in the game to get a mortgage, and banks have to lend to people with sufficient income to make the payments.

which, by the way, if you buy with a mortgage, it is really the bank that is mostly exposed to you as a counter party risk until you reach something like 50% equity or more. That is why among other things, they make mortgage holders have life insurance. they came to the same conclusion as Descartes.

so yea, prices could go down for a nearly infinite amount of reasons; but, are they reasonable?

as for china, i have been saying since I lived in china: if china fails to develop, if china implodes, the whole World is screwed.

I would still rather take my chances in Chile any day, than mainstreet U.S.A. , when that does happen.
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Baltimore
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Re: Housing market situation

Post by Baltimore » Tue Aug 27, 2019 4:47 pm

OMG I love this:

"Esto no se trata si vas a poder pagar o no un departamento, sino que tal vez con un buen margen de ahorro puedes tener varios a la vez”

https://www.24horas.cl/economia/cinco-c ... on-3538740

Pure wisdom

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Re: Housing market situation

Post by admin » Tue Aug 27, 2019 5:06 pm

well the rental / investment market is about to get a little more fuel on the fire.

the goverment just announced an additional about 500 million dollar economic stimulus package, of which about 250 million dollars is earmarked for low cost housing or housing subsidies.

FYI, that is addition to the previous package for total of over 3 billion dollars. they also pulled forward about a billion dollars of planned infrastructure from the first package from 2020, to this year.

add on top of that, there is a substantial tax break for building houses under 80 million pesos in the new tax law in Congress.

on top of that there will probably be a another central bank rate cut.
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Baltimore
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Re: Housing market situation

Post by Baltimore » Thu Aug 29, 2019 7:45 am


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Re: Housing market situation

Post by admin » Thu Aug 29, 2019 10:36 am

well the big construction companies are doing well, and will probably get a large chunk of the stimulus that is in the pipe:

https://www.latercera.com/pulso-trader/ ... re/799348/

I bought a little bit of stock in almost all the listed companies in that article, between the end of the bachelet administration and the pinera administration. I also bought the stock in any company that had a major construction / real estate development component, but was not an obvious construction company. for example, copec and concha y toro, both have major land holdings that they are in the process of developing outside their core industries that they are known for.
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41southchile
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Re: Housing market situation

Post by 41southchile » Thu Aug 29, 2019 11:08 am

Baltimore wrote:
Thu Aug 29, 2019 7:45 am
From D.F. today:

https://www.df.cl/noticias/empresas/con ... 27a079405b
Humm saw that, Australia is heading for a meltdown of house prices they say, binged on credit, now the time for reckoning is coming, it's their equivalent of 2007, 2020 will be like 2008 was in USA, foreclosures are starting. I wonder what situation is here, ? Saw figures yesterday that over 35 percent of Chileans are behind in financial payments, Im not saying doom times are coming, but its worth looking to see what's happening in markets that real estate is equally unaffordable for its citizens, could have ramifications and similarities here
https://youtu.be/AB6yM9puTY0
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41southchile
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Re: Housing market situation

Post by 41southchile » Thu Aug 29, 2019 11:26 am

Interests rates expected to go down again
https://www.emol.com/movil/
I think the infrastructure ideas and investments being bought forward are good ideas. But I dont think it's going to fuel much, bit of a stimulus for the economy, but as for upward pressure on houses and rents I doubt it . Interest rates are going down everywhere, but the attitude seems to be, "we have had a great last few years and made good cap gains, bank those and hunker down , even if interest rates are at historic levels". I've heard many comments in the last few weeks where people are trying to pay down their store cards and get rid of any unnecessary debts like credit cards. Like I said the other day , interest rates going down are just not going to cut it anymore.
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Re: Housing market situation

Post by admin » Thu Aug 29, 2019 4:30 pm

I looked at that report too. 40% of that 35% that were behind in their payments, were for store cards (e.g. paris, ripley, etc), and the rest seemed to be mostly consumer credit cards issued by banks.

I'll start worrying when it is 35% of the population is behind in their mortgage payment; or, 35% of companies are behind in their bond payments or bank loans.

It would be more helpful if they gave us a solid figure about how much money they were behind, and medium amounts, etc. I don't recall seeing it in those articles.

In fact, being spring, I am a little surprised there are not more property auctions. perhaps it is early. typically, after a long winter of lower economic activity, there is sort of seasonal uptick in the number of auction properties.
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