The upturn stage of the property cycle??

Alex P Keaton

Alex P Keaton

What type of property investor are you

Michael Yardney

Exerpt:


Firstly I look for a state that is at the right stage of its property cycle – preferably in the upturn stage of the cycle. Currently all our capital cities other than Darwin and Perth are at this stage of the cycle.


Ok, this is probably a dumb newbie question, but here goes.


How do you know when a capital city is at the right stage of the property cycle? to be buying Preferably in the upturn cycle.


He is saying Perth isnt at the upturn stage. How will you know when it is at that stage. I'm hoping it will be by the time I buy late next year.
 
hi Kim5
interesting question and there is a very simple but true answer.
nobody knows.
we all have our own crystal ball you can buy one at kmart if you want.
and we all look at markets to see which is moving and how
some like me watch rentals.
some watch auction rates.
some read article after article of whats going in where.
some watch bhp rio and woodside and see where they have found gold or coal.
but we all don't know.
and anyone that says he does want you to take a dollar out of your pocket and give it to him/her and then they just found a rise.
a rise in there bank balance.
you need to find and area that you think will rise.
and then check out as much information as posssible about it.
or use a buyer agent that does this for you.
oh and even buyer agents for me have not got a clue they use a scater gun approach hit lots of areas and come back withlots of deals.
yes it works
but it does not answer your question.
why because there is no answer.
if there was and you find it I have alot of backers that can come along for the ride
 
Hey Kim5, the only dumb question is the one you DON'T ask!
You can try to chase the growth suburbs or time your entry into the market.
Or you can go in for the long haul and buy good quality properties in well located areas which have shown growth over time. The fundamentals don't change.
Like they say, it's time in the market NOT timing the market that shows long term gains.
The best time to buy property? Yesterday.
The second best tiem? Today.
Take the long term view.
 
Hi, yeah its a bit confusing when some say one thing and another person says something else. What I've been concentrating on is saving and just keeping an eye on the market.

I spoke to Bill Zheng today and told him about my situation, that I'd saved around $15,000 and that I am living at home with my parents and am able to save about $30,000 a year. I asked him when the best time would be to buy my first ppor this year or next year. He said this year. That i'd be better off buying sooner rather than later.
 
With Adelaide's prices having increased over 20% last year....we are at the upturn in the cycle? How much faster could things move? If you ask me, it's more likely closer to the peak (in Adelaide).
 
Hi Kim

in my notes from the Investor Direct seminar the actuarial data from Residex predicts ~ 9% growth for Perth over the next few years. John Edwards rates Perth as a 1 trick pony (heavily dependant on resource boom)and factoring this and the huge increase in prices over there he doesn't support his model's predictions on the 9%.

The model may have got it right however and the pony's not going anywhere

If you wait another 12 mo to get into the market and IF prices go up ~9%the hill's going to be that much steeper

For IP's I try to time the market (with mixed success:rolleyes:)for PPOR's/ first home I think the discipline of mortgage repayments and paying off capital (the human element) points to buying as soon as u can comfortably afford

Good luck
 
I found this somewhere (can't remember now)...but it shows some interesting indicators to give you some idea of how to judge the market...just another source of information to consider with all the rest.
 

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Kim5 said:
Hi, yeah its a bit confusing when some say one thing and another person says something else..
Click to expand...

You made an excellent analogy between dieting and budgeting in another post (it's in fact called the "money diet"!). Well, the analogy goes further - just as you get seemingly hundreds of (sometimes useless fad) diets and ways to keep weight off, you get hundreds of ways to save, keep and grow money.

Cheers,

The Y-man
 
sailor said:
I found this somewhere (can't remember now)...but it shows some interesting indicators to give you some idea of how to judge the market...just another source of information to consider with all the rest.
Click to expand...

Interesting clock thanks for posting, but we currently have rising interest rates, lower sales/volume (well as indicated by recent auction results), but increasing yields (bit out of place)...

Where do you feel we are sailor?
 
Perth market

After reading the property clock and thinking about the Perth situation I would say Perth is somewhere between 3 o'clock and 8 o'clock:)
 
hobo-jo said:
Interesting clock thanks for posting, but we currently have rising interest rates, lower sales/volume (well as indicated by recent auction results), but increasing yields (bit out of place)...

Where do you feel we are sailor?
Click to expand...
Somewhere between 4 pm & 6 pm in Cairns.:p
 
I would put a Australia wide generalisation at between 6 and 7 o'clock. Which probably means now is a good time to buy. But like most, I am just guessing.
 
peastman said:
Which probably means now is a good time to buy.
Click to expand...

On 3% NET yield when funding is at 9%? Wow, that is very very ballsy indeed. But I suppose if everyone believes in the story, the next guy will pay more for it and what do you know, prices go up.
 
Kim5 said:
Michael Yardney

Exerpt:

Firstly I look for a state that is at the right stage of its property cycle – preferably in the upturn stage of the cycle. Currently all our capital cities other than Darwin and Perth are at this stage of the cycle.
Click to expand...
Michael put this in writing only a few days ago - 10th April 08 ? This would be a good one to pin for future reference.
 
yieldmatters said:
Michael put this in writing only a few days ago - 10th April 08 ? This would be a good one to pin for future reference.
Click to expand...
I agree! Would be nice to come back to this point in two years time and see where we are at. I don't follow all the national markets, but I put Sydney at around 7 or 8 O'clock. Add falling interest rates in 2009 and we tick over to 9 o'clock. Perth is probably at 4 or 5 o'clock I reckon. No science, all just gut feel.

Time will tell. I suppose it is possible for a clock to "lose time"... :rolleyes:

Cheers,
Michael
 
Don't worry Michael - I am with you.

You seem to be one of the few people aligned with my crystal ball. Sydney seems to have everything on that clock up until the bit where it says 'dropping interest rates' - so I reckon they will be the catalyst.

It will be interesting to see if Alex Lee's thoughts about further drops will pan out. I can understand that for Brisbane and Melbourne, which enjoyed a nice run in 2007, but Sydney really hasn't gone anywhere much, and so I don't think it will drop.

Not entirely sure when it will move again, but figure I'll just keep on buying until it does move. Hell of a lot closer than when I bought my first IP in 2004!!
 
Land said:
It will be interesting to see if Alex Lee's thoughts about further drops will pan out. I can understand that for Brisbane and Melbourne, which enjoyed a nice run in 2007, but Sydney really hasn't gone anywhere much, and so I don't think it will drop.

Not entirely sure when it will move again, but figure I'll just keep on buying until it does move. Hell of a lot closer than when I bought my first IP in 2004!!
Click to expand...

I'm planning to buy my next IPs in Sydney, because I also believe Sydney (especially the cheaper areas) will be one of the earlier areas to move in the next upturn. I'm actually actively looking and plan to buy in the next couple of months.

I also think that a number of factors (higher food prices, higher interest rates, credit problems, falling share prices) will cause a significant downturn in consumer spending. At a more basic level, I just don't believe economies can avoid recession with the sort of excesses we've had especially in the last couple of years. A look at the sort of spending that goes on every Friday night in the bars and restaurants tells me that it's not sustainable.

But I emphasise that I'm still looking to buy even though I wouldn't be surprised if the market fell further. However, this is in the context of: I've tested my portfolio with fairly high interest rates, and each property I buy from now on is a smaller and smaller % of my gross portfolio.
Alex
 
YM, of course, will see falling prices as vindication of his views. But what he still doesn't get is that it's not about ONE property, and whether you catch the highs and lows. That still doesn't amount to much. So you save $100k on a $500k property if you sell at the peak and then watch it go down 20%. So what? The selling and buying back costs will cut that down. And more importantly, you go from one property to zero, and then have to buy back. Build your portfolio to a couple million dollars or more, and $100k is a flick on your LOC.
Alex
 
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