When the poor own two houses

Since when does owning two houses, admittedly one with zero equity, have people claiming poverty? I am constantly surprised at the property "investors" that place themselves in precarious situations, and then complain that they are poor.  Show me a property investor, and in most cases, I will show you a person ready to file bankruptcy.

I can not understand how banks allow people about to retire to take out a full loan, usually against a property that has been paid off.  People over sixty should not be allowed to take out twenty five year old loans.

This behaviour is unethical, both by those facing retirement, and banks.  Both are driven by greed and by the insane idea that house prices always go up.  All it does is inflate house prices.  Those of us with savings for a deposit, and a house price reflective of most not selling, find it difficult to complete.  It gives us a false sense of the value of property and makes it ever tempting to pay more than we should for an essential service, shelter.

I will struggle to buy a house.  People moaning they are poor when they own two make my blood boil.  If owning two houses puts them in financial risk, then they should be held account for their behaviour and banks should be held to account for writing a high risk loan.  As with the GFC in the US, both people taking out risky loans and banks are at fault.

Maybe I am being overly pessimistic?  Perhaps not, the following quote by ABC News should have us all questioning the economic sustainability of every second person "investing" in real estate:

"Put that into context, that's the biggest revenue shock government, state or federal, has experienced in Australia since the Great Depression of the 1930s. (It is) more than what impacted the revenue shock of the GFS in 2009 to the Commonwealth," Dr Nahan said.
"Any government, no matter what position it was (in), would have run a deficit given this shock."
Read more here:http://www.abc.net.au/news/2015-12-21/western-australia-deficit-blowout/7045374
Disclaimer: this blog entry is the opinion of the author only and does not constitute professional advice.


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