Mirvac plumets 11.6% in one day after sharp profit downgrade

[MichaelW]

Guys,

Just some more info to throw in to the mix, particularly for the pundits out there trying to pick the bottom of the cycle...

http://www.smh.com.au/news/Business/Builders-slump-may-stop-rate-rise/2005/05/03/1115092504495.html

The end of the housing boom has shaken one of Australia's largest builders and is expected to weigh on the wider economyWell, I could have told you the property boom was over. :)

Cheers,
Michael.

[see_change]

Was talking to the builder we're going to use for our new PPOR , and they're expecting to build about 25 houses this year compared to their normal 35 / year.

They're ringing us about every 2 weeks wanting to know when we want to start...

See Change

[grubar30]

Well, I could have told you the property boom was over!lol

Hmmm, of course, the property boom could only be over if a company like Mirvac starts to struggle. :p

I liked that article - it offered lots of read-between-the-lines information


As for this,Sydney house prices will have fallen for four straight quarters Ouch for vendors.

[Ausprop]

this is where the link between the share market and the property market gets interesting. As I have posted before, I have concerns for people that have leveraged against property to get into CPT's as I believe it is a game of double or nothing. The strong consumer demand that is fuelling the economy and boosting commercial rents will back off when the housing boom starts to ease.

Equally what will be the impact of a sharp correction in the sharemarket?

Resources could have been one of the insular variables but even they are losing their shine.

[Thommo]

Resources could have been one of the insular variables but even they are losing their shine.It's getting hard to find any place to hide, that's for sure.

In the long term precious metals and energy will "outperform" but they are looking over priced in the short term. Good time to be cleaning out the cupboard and paying down loans. I had a good '04 on the market but won't be able to repeat that this year, methinks. :(

T

[MichaelW]

Ausprop,

Agree. And when I say "put your money in the bank" people scoff!!

Anyway, my money is in my PPOR at the moment in Net Equity and sitting there for the time being. When the IP market bottoms and I think there's good potential upside in the short-to-mid horizon I'll free that equity and grab some IPs. Until then, its staying put and I'm about as low risk as I can get in this current environment... That reminds me, now I'm in to a mortgage and my spouse is about to take maternity leave I better have a look at income protection insurance! :rolleyes:

Cheers,
Michael.

[House_Keeper]

Come on Forumites! It's not all gloomy out there! :)

Nice Car Michael, What is it?

[Steve KKK]

Was talking to the builder we're going to use for our new PPOR , and they're expecting to build about 25 houses this year compared to their normal 35 / year.

They're ringing us about every 2 weeks wanting to know when we want to start...

See Change

WHat is the general concensus on building costs? Will they now start to drop to a more reasonable level? They seemed to have shot up during the 'boom' and now it is a major decision to either buy established property or to build. :cool:

[Ausprop]

I am still of the opinion that building costs have a long way to go and that base material costs e.g. ore prices, haven't fed through yet. Builders operate on thin margins regardless of the materials cost and labour is still so backed up in the form of lagged demand that I cant see rates dropping. All I can see is rising building prices that will make existing property appear cheap - a lot of inner city housing is already at below replacement cost. The decreased building orders will hopefully give the industry some breathing space and time to sort themselves out.

[MichaelW]

Nice Car Michael, What is it?House Keeper,

Nice of you to notice that I finally settled on an avatar. :) Its the 2006 model of the very affordable Mazda MX5. Due for launch in Australia in the next few months. I've got the previous model bought back in 1999 (and gee that seems like it was only yesterday).

Here's a link to Mazda's announcement which has some spec's and a link to the official launch website:

http://www.mazda.com/publicity/release/200502/0228e.html

:D
Michael.

[madmurf]

Hi

Building costs are still going up in WA. In the Southwest 1.5% per month.
Just about to sign up for another Construction IP and cant see building prices improving in the short term.

Cheers :D

[Thommo]

Come on Forumites! It's not all gloomy out there! :)

Nice Car Michael, What is it?That's interesting HK! Would you care to point us towards the sun?

As of today the all ords is off close to 10% and I can see nothing I wish to invest in.

Thommo

[Andrew_A]

Thommo, out of interest what was the last thing you invested in?

I would count short term trading of shares as speculation rather than investing.

[Thommo]

Thommo, out of interest what was the last thing you invested in?

I would count short term trading of shares as speculation rather than investing.
Yes! About as much commitment as a one night stand. But curiously I am trying to find something better.

A "better" long term commitment (reaching golden wedding status, actually) I am watching on someone else's behalf is off 30% from highs reached earlier in the year. So my query of HK to point me to the sun is legitimate.

Why do you ask, Two Dogs?

[pete_w]

A "better" long term commitment (reaching golden wedding status, actually) I am watching on someone else's behalf is off 30% from highs reached earlier in the year. So my query of HK to point me to the sun is legitimate.

if you buy now, you've saved 30%!

[Bill.L]

Hi all,

Not all is doom and gloom.

There are some types of property investment that are still going gangbusters, though it is not for everyone.

Record prices, 20-30% growth in the last year, and continuing. (maybe today is the peak :eek: )





I could tell you but many here don't want to believe me. :D :D :D

bye

[Ausprop]

spot on Bill - it's the deal that will make you money, not the market.

[Thommo]

if you buy now, you've saved 30%!
But if only investing were so simple.

Thommo

[gtcoglan]

Investing can be made simple only with the right knowledge.

Greg :)

[MichaelW]

spot on Bill - it's the deal that will make you money, not the market.Ausprop,

True if your buying to sell or developing to sell, but as soon as you factor the word "hold" in to your strategy then the market becomes a key component of your "deal".

e.g. A lot of developers such as Mirvac probably figured those shiny inner city appartments were a good "deal" when they factored their likely sell price against their costs. Now that the market has turned, either they, or the punters who bought up front, are stuck with a potential loss or a "hold" for the mid to long term.

If your deals are quick turn arounds then you can afford to ignore the market if the numbers stack up. However, most IP investors tend to have some aspect of "hold" in their strategy. I certainly do...

Cheers,
Michael.

[House_Keeper]

That's interesting HK! Would you care to point us towards the sun?

As of today the all ords is off close to 10% and I can see nothing I wish to invest in.

Thommo

China is still booming, as many other countries in Asia.

Cheers,

[Thommo]

China is still booming, as many other countries in Asia.

Cheers,
What's the ASX code for China?

[madmurf]

Dim Sim

Cat :)

[Sailesh Channan]

After a long period of growth it is easy to forget tha markets tend to correct themselves. The sharemarket is currently undergoing through one of those corrections. In this current business cycle we have seen a few 15% corrections and my feeling is that this correction will end up as being the same.

I have spoken to a friend who studies the market a lot more closely than I do and according to him we will see another boom in ths share market. This will be most likely the LAST RUN UP BEFORE THE FINAL CRASH....this is also the riskiest time to buy shares. Following this we will see the begining of a bear market.

It does make sense as we are currently in the 14th year of the current business cycle ( the longest in our history) and all good things must come to an end.

I cant wait for the next recession as this is the time to buy. :)