Commercial Real Estate Apocalypse in 2011-2012

[Hdb]

oh you have to invoice tenants and collect rent? my investments are increasing in value without the need to do anything, so I have some free time on my hands . of course the original subject matter would be a touchy one for you, I certainly don't expect Australian commercial property to escape unscathed.

Maybe now would be a good time to compare notes with Dazz as to how your respective investments have fared in the two years since you posted this.

 

[Dazz]

....ouch....that's gotta hurt !!

I'm still here writing rent invoices to Tenants, who are still paying it. The properties are all still there, and the values have stood up quite nicely, the Bank certainly isn't getting worried.

Happy days from end of the stick.

I don't know if hobo-jo has finished writing their article ?? Two and a bit years ain't that long in academic circles....maybe just the outline and the chapter headings are done, and the flesh is still to be added.

Those that can do - do, those that cannot - teach.

 

[hobo-jo]

I'm still here writing rent invoices to Tenants, who are still paying it. The properties are all still there, and the values have stood up quite nicely, the Bank certainly isn't getting worried.

Glad to hear it. If you've seen a Gold and Silver chart for the past couple of years you would know they've done pretty well also

I don't know if hobo-jo has finished writing their article ?? Two and a bit years ain't that long in academic circles....maybe just the outline and the chapter headings are done, and the flesh is still to be added.

http://www.bullionbaron.com/2010/09/australias-2009-first-home-buyer-bubble.html

Never really got as far as I wanted to with it.

I'm not the academic type. I just enjoy writing things as I see it. Much as you do here.

 

[turk]

Glad to hear it. If you've seen a Gold and Silver chart for the past couple of years you would know they've done pretty well also


http://www.bullionbaron.com/2010/09/australias-2009-first-home-buyer-bubble.html


.

Question is have you done well, as you stated "Unfortunately I haven't had much of an opportunity to add to my own positions in this dip as used a majority of my ammunition in the correction 5 months ago when we saw similar prices" and prices are pretty much where they were 6 months ago?

Still with gold suffering a dramatic drop in the last 9 months there may be opportunities for those that are cashed up.

http://www.bullionbaron.com/2012/05/good-chance-gold-and-silver-have.html

 

[hobo-jo]

Question is have you done well, as you stated "Unfortunately I haven't had much of an opportunity to add to my own positions in this dip as used a majority of my ammunition in the correction 5 months ago when we saw similar prices" and prices are pretty much where they were 6 months ago?

What's your point quoting that line?

Still looking for ways to prove me wrong? Seems like your only goal.

Most of my buying was well lower than today's prices.

 

[Aaron_C]

Most of my buying was well lower than today's prices.

Same with my property purchases.

 

[hobo-jo]

Same with my property purchases.

Touché

Although I'm really only against buying (property) at today's prices/yields (in general, of course there will always be those out there who can spin a good deal regardless of the market). No issues with those who have a large enough equity buffer and can ride out the storm.

 

[Aaron Sice]

I'm not the academic type. I just enjoy writing things as I see it. Much as you do here.

....and that's great - but to be honest, nationally extrapolating how you see it locally seems to be moving further and further away from how others are realising it.

In the past, your data has been spot on. Even recently, you make very valid points but lately your economic data hasn't been backing up the claims.

Maybe your point of view is skewed by the fact that SA is not doing the best, being slung in neutral as the gap in the two-speed economy grows. I have no doubt that Adelaidians align themselves more with Melbourne than Perth and the SA media is....uh, "influenced" (?) by East Coast sentiment.

To be fair, this is an old thread and it's fine for people to get predictions wrong or not completely right.

To be fair, this may be exactly how it is in Adelaide.

But this isn't the case nationally and I honestly think your posts should maybe be titled as being centralised around your corner of the earth - because I know that if I wrote about Perth conditions in Sydney - I'd probably be called a permabull and subject the same verbal bashing you're currently on the end of.

FWIW - I value solidly constructed arguments for any case. Your posts are always a welcome pause in the bullish panic that tends to sweep people into making rash decisions.

 

[hobo-jo]

To be honest Aaron, this thread wasn't even about making a prediction, simply highlighting outstanding risks. turk tried to twist it into a prediction thread when he linked to it from another thread the other day (before this thread was necro'd). That said many of the risks I highlighted in the first post have seen further deterioration and pose a greater risk than they did 2 years ago.

Apart from keeping tabs on a couple of Adelaide suburbs in which I intend to buy down the track I don't really monitor the local data as it is largely irrelevant (from a national perspective). If house prices and economy deteriorate further in the eastern states then Adelaide is likely to follow their lead.

I'm not really sure what specifically the rest of your post is referring to... are you talking house prices or the economy at large?

Clearly Perth is a stand out economically at the moment and house prices looked to have stabilised in Perth (and perhaps Brisbane as well), but that doesn't mean they won't plateau for awhile and then fall further if we see the global economic downturn continue.

What claims am I making that aren't being backed up by the data? Can you provide some examples (apart from my expectation for an Australian recession, seems I was too early there)?

 

[Aaron Sice]

To be honest Aaron, this thread wasn't even about making a prediction, simply highlighting outstanding risks. turk tried to twist it into a prediction thread when he linked to it from another thread the other day (before this thread was necro'd). That said many of the risks I highlighted in the first post have seen further deterioration and pose a greater risk than they did 2 years ago.

but where...? comm in Perth and Darwin and soon-to-be Sydney never looked better, IMO.

Apart from keeping tabs on a couple of Adelaide suburbs in which I intend to buy down the track I don't really monitor the local data as it is largely irrelevant (from a national perspective). If house prices and economy deteriorate further in the eastern states then Adelaide is likely to follow their lead.

I'm not really sure what specifically the rest of your post is referring to... are you talking house prices or the economy at large?

economy at large, i guess.

Clearly Perth is a stand out economically at the moment and house prices looked to have stabilised in Perth (and perhaps Brisbane as well), but that doesn't mean they won't plateau for awhile and then fall further if we see the global economic downturn continue.

i have no doubt about that, either - and i'm certainly not purporting anything else. indeed, my investment strategies now reflect this exact scenario.

What claims am I making that aren't being backed up by the data? Can you provide some examples (apart from my expectation for an Australian recession, seems I was too early there)?

you hit it on the head - the recessionary claims - i'm not saying your data is totally incorrect (because it is correct), it's just too broad-a-brush to paint in a national context IMPO.

just sayin', is all....

 

[hobo-jo]

Fair enough. As I conceded in the "recession thread" there is definitely a two speed economy going on. And the poor eastern states data hasn't had as large an effect on the economy as a whole as I would have expected (so do agree with what you are saying and some of the recent criticisms aimed at me have been fair).

I agree with a lot of what truong posted e.g. http://somersoft.com/forums/showpost.php?p=918469&postcount=257

Also open to the possibility that another round of global easing could kick commodity prices off again, ease credit conditions and perhaps even allow house prices to stabilise here (for now). However the actions I see the Fed (and some other central banks) taking are not sustainable forever, they are simply compounding the problem unless they can turn their QE programs into real growth (which is looking less and less likely with the huge debt burdens being accumulated).

 

[pieman]

Hobo Jo do you have many mates?
Every post you write is negative with a couple of kilos of doom and gloom mixed in.
Is your whole personality like this? Are you the one standing waiting for coffee with a grey sad face? Do people turn their backs when they see you comeing as you let forth with your negative diatribe?
Mate it's not the end of the world.
Cheer up

 

[hobo-jo]

lol pieman

I only talk with a few friends about my thoughts on things financial (those who have shown an interest). Although I might have a gloomy outlook on the global economy (e.g. returning to growth and avoiding the issues bought on by the debt bubble), I am consistently looking for investment ideas based on those expectations, so don't really see myself as a pessimist, moreso a realist/opportunist

 

[Dazz]

I am consistently looking for investment ideas based on those expectations, so don't really see myself as a pessimist, moreso a realist/opportunist

Nah, I reckon you're a perfectionist.

I think Rixter's saying is appropriate with you, you don't need to get it just perfect, you just need to get it going.

For me, your credibility is bumping along the bottom, as you own no property. With no skin in the game for quite a few years now, you really have no idea.

You're in that same bucket that I drop RBA Governors and university professors. Able to wax lyrical about all and sundry on a high level, but have no idea.

On the property road to wealth, you are an expert in road conditions, weather conditions, car performance details and safety features, and especially know where every pothole in the road is.......what you don't have is a car, and are simply left on the side of the road like a cop waggling their finger at drivers going past saying "Look out, there's a pothole up there, and there, and how much fuel do you have left, and hey - your seat belt isn't attached just right."

If you're expecting drivers as they go past to thank you as you waggle your finger at them, you're going to be sorely disappointed.

I left the end of the freeway 3 years ago and am now parked up in the holiday resort, so I don't think much about your pothole warnings....with you still standing on the side of the road continually warning other drivers heading down the freeway.

I'll give you a tip for free - go get yourself a pushbike with trainer wheels and start peddling like crazy....at least you'll get to see a different part of the road instead of being stuck in the one spot. Things start going crazy without a change of scenery. It comes out in your posts.

 

[DEC]

Classic post

Nice one Dazz

 

[HotRod]

hobo-jos reaction on reading Dazz's response.............

 

[stevec]

Dazz

I don't post much, but your a champion!

 

[hobo-jo]

On the property road to wealth, you are an expert in road conditions, weather conditions, car performance details and safety features, and especially know where every pothole in the road is.......what you don't have is a car, and are simply left on the side of the road like a cop waggling their finger at drivers going past saying "Look out, there's a pothole up there, and there, and how much fuel do you have left, and hey - your seat belt isn't attached just right."

That was classic Dazz.

But the way I see it the road to wealth is traveled by many vehicles. I see myself not as the cop, but simply a different vehicle on the road. I have skin in the game and I'm traveling a fair bit faster than those who recently decided to take the Holden Barina (resi property). My Yammy (Gold/Silver) is nimble, more volatile, perhaps somewhat riskier at times, but should get me to the destination faster. The B-Train driver (commercial property portfolio) probably doesn't have to worry too much about the pot holes as he has enough wheels that if one blows out the others will hold him steady on the road. For the smaller vehicles (car or bike) a large pothole could be the difference between life or death. The way I see it there is more than 1 vehicle you can take to get to the resort and different travelers will be bias toward the vehicle that is working or has worked for them.

But enough with the analogy.

Humour me. You've got $600k to spend on a residential property/s. Give us a link to a few push bikes on www.realestate.com.au you would consider.

 

[pieman]

Oh boy daz, thats one of your best

 

[Hdb]

Hobo-jo

From what you have told us I think you have done reasonably well with your strategy. Would it be fair to say that residential house prices haven't falllen as dramatically as you expected. However your precious metal investments may have outperformed.

I personally think having a high % of your wealth linked with a non yielding highly volatile investment is fraught with danger. However being relatively young you have plenty of time to start again if disaster strikes.

I'm interested to know what your future plans are. Over your life time you most likely will encounter a number of financial crisis. Presuming that you have accumulated significant assets by then do you intend to be as nimble jumping out of traditional assets such a realestate (even if it is only a PPOR) into alternative investments such as precious metals.

I know personally that the more I have accumulated the more conservative I have become.