Surely if the GFC taught us anything it's that you have to be constantly looking at the worst case scenario?
Economists - Decade of house pain predicted
- Thread starter bluestorm
- Start date
Surely if the GFC taught us anything it's that you have to be constantly looking at the worst case scenario?
But if you planned for the worst case scenario you would never leave your bed.
I thinks it's more about arming yourself with information and take a calculated risk thats within your risk profile and add to this a buffer coupled with a plan B. This will give you atleast a chance of improving your situation above the average.
Also a "glass is half full" attitude helps you enjoy those long periods you are not actively investing.
Yes, spot on. The worst case for property is that it will go sideways for a while. The government have proven that it will throw every last dollar to support it as they know it underpins most of Australia's private wealth and in turn dictates, in many ways, how our economy performs. Don't forget the GFC was meant to be the end of the world, how much did property go down again? My super went down far more in percentage terms.
As a property investor, it seems you are smart enough too see that. I know I don't sit in a $2m+ house because I invested in shares/bonds/gold/stamps.
Taking your property investment advice from economists is like taking popularity tips from Julia Gillard.
economists are paid to be wrong and on that basis deserve every cent they get.
Go and research their past predictions , lucky to get one in 10 right.
How is Shane looking on this one?
"Oliver predicts the cash rate will be at 5.5 per cent by the end of 2011."
Likely to be off be 15%.
Blue I find your personal points more convincing than these clowns and at least u have some investment property
economists are paid to be wrong and on that basis deserve every cent they get.
Go and research their past predictions , lucky to get one in 10 right.
How is Shane looking on this one?
"Oliver predicts the cash rate will be at 5.5 per cent by the end of 2011."
Likely to be off be 15%.
Blue I find your personal points more convincing than these clowns and at least u have some investment property
Pieman
Technically the worst case for property is a 100% drop in values. So that is the worst case. Your case of flattening is not worse case it is a theory. Bluestorm has a different theory. I think the next 2 years will be quite interesting. A few people will make a lot of money and a lot of people will make few little money.
Technically the worst case for property is a 100% drop in values. So that is the worst case. Your case of flattening is not worse case it is a theory. Bluestorm has a different theory. I think the next 2 years will be quite interesting. A few people will make a lot of money and a lot of people will make few little money.
I dont understand how making comments on potential drops in value for property or flat lining is doom and gloom. It is just a perception and potentially real life.
It is like hoping for world peace and food for all. Might make you warm and fuzzy inside but no hope of hell it happening in our lifetime. Same as property might make you feel warm and fuzzy it will increase the same as the past 10 years but it might not be reality.
It is like hoping for world peace and food for all. Might make you warm and fuzzy inside but no hope of hell it happening in our lifetime. Same as property might make you feel warm and fuzzy it will increase the same as the past 10 years but it might not be reality.
I think you'll find the worst case is worst than property just going sideways for a while. The government might throw more money at property, IF it had any money left to throw, which is does not. Another global downturn would make credit harder to get (even for governments).
And another global downturn is what we are heading for. More bailouts in Europe, little growth in the US, a slowing China. This time Australia won't come out sweet. Property, like in all other countries will correct in Australia this time. There is nothing the government will be able to do about it. I'll be happy to purchase your $2m property for $1.5m by the end of 2012.
Europe will be the next trigger (like Lehmans and US property was for the first)
I give Spain until Dec 2011/Jan 2012 before it needs a bailout. Italy following. Bonds markets are already starting to concentrate on these countries. Their done with Greece, Ireland and Portugal.
Italy 10yr Bond
Spain 10yr Bond
yeah, yeah doom and gloom, end of the world, here it comes, all ip holders will be wiped out and the victors will be purchasing their Middle Park/Double Bay 5br houses with views for 300k.... after they leave mum and dads that is..
Yeah gotta agree Mike.
Personally my views aren't intended D&G or predictions . It's more just along the lines of an obvious scenario after this run to me.
We have to have views, reasons and theories in order to act in the first place, or not and I've just been making my choices over the last 5-6yrs based on my own concerns.
As said so often - economists aren't much help.
Cheers
Personally my views aren't intended D&G or predictions . It's more just along the lines of an obvious scenario after this run to me.
We have to have views, reasons and theories in order to act in the first place, or not and I've just been making my choices over the last 5-6yrs based on my own concerns.
As said so often - economists aren't much help.
Cheers
Although normally positive, I've been figuring on (and predicting) a long period of stagnation for soome time.
For this reason, I run a cashflow positive property investment portfolio. My plan has always been to let the property tick away in the background from about 2010 to about 2020 while I focus on other thiings (increasing my shares portfolio, paying down debt, paying off my PPOR, etc). The next big surge that will happen in 8-10 years time is the one I'm planning to ride into retirement.
For this reason, I run a cashflow positive property investment portfolio. My plan has always been to let the property tick away in the background from about 2010 to about 2020 while I focus on other thiings (increasing my shares portfolio, paying down debt, paying off my PPOR, etc). The next big surge that will happen in 8-10 years time is the one I'm planning to ride into retirement.
Well, I'll give myself a pat of the back. Posted this on Mon, and in the 2days since then, the bonds have spiked for Italy and Spain, and the world is starting to look at the possibility of Italy and Spain needing help eventually.
EU Revives Buyback Idea as Crisis Hits Italy
There is no doubt that all this will hit the Australia property market when Europe implodes. All going to plan.
, and the timing so far is accurate. Italy alone is 3 times bigger than Portugal, Greece, and Ireland combined. The early stages of GFC2. Keep the rose colored glasses on property spruikers.
I will! More opportunity now than ever.
You can have your "buy at low leverage and get nowhere slowly" model, I'll stick to my niche.
Enjoy. See you in 2014..... Or is it 2015 now?
Dear D&Gers,
Opportunities are everywhere at anytime. Gloom is by far the best time to invest. Everyone is too scared to get wet, but I'll have my wellies and heavy duty umbrella. I hope you're right, makes life easier. "Be greedy when others are fearful and fearful when others a greedy, Warren Buffet"
But you stay on the side lines and shout storm clouds, it won't help you buy that pink porsche, but it will give me one more person creating bargains.
Opportunities are everywhere at anytime. Gloom is by far the best time to invest. Everyone is too scared to get wet, but I'll have my wellies and heavy duty umbrella. I hope you're right, makes life easier. "Be greedy when others are fearful and fearful when others a greedy, Warren Buffet"
But you stay on the side lines and shout storm clouds, it won't help you buy that pink porsche, but it will give me one more person creating bargains.
As Niels Bohr, Yoggi Berra or someone else said, "Prediction is very hard, especially about the future."
Since the GFC hit property prices have risen in Australia; fallen slightly, but overall have been flat in the UK; dropped sharply but are still above their long term trend in Ireland; and slumped to be at or below fair value in the US.
That's quite a spread of outcomes.
My take at the moment is that there doesn't appear to be many bargains around (property in Japan is one, if you feel brave), and a lot of putative safe havens (gold, prime Central London property, the Swiss Franc) seem to be very, very expensive.
There still seem to be some pretty significant risks, but I'm not convinced that we're facing an end of life-as-we-know-it scenario as some of the real bears face.
Since the GFC hit property prices have risen in Australia; fallen slightly, but overall have been flat in the UK; dropped sharply but are still above their long term trend in Ireland; and slumped to be at or below fair value in the US.
That's quite a spread of outcomes.
My take at the moment is that there doesn't appear to be many bargains around (property in Japan is one, if you feel brave), and a lot of putative safe havens (gold, prime Central London property, the Swiss Franc) seem to be very, very expensive.
There still seem to be some pretty significant risks, but I'm not convinced that we're facing an end of life-as-we-know-it scenario as some of the real bears face.
And the report that rent growths are stalling. I thought rents were going to the moon. http://smh.domain.com.au/home-inves...slowing-in-capital-cities-20110711-1ha8r.html
ADJ. My view is that we were in the eye of the storm about 1 year ago and everything seemed calm. I think the storm is moving along and personally I am happy to remain in my bunker than run outside and find out the calm wasn't as it appeared and that things are in fact getting very ugly once again.
I've held the same view for over 2 years now. I think there are opportunities as well in this market but for the majority of people they do not do there homework and just purchase a property because it seems cheap, they read it will have good growth in a magazine or because they lived close to the area and it is "nice". Those people will get burnt in my opinion over the next 10 years and that is the majority.
ADJ. My view is that we were in the eye of the storm about 1 year ago and everything seemed calm. I think the storm is moving along and personally I am happy to remain in my bunker than run outside and find out the calm wasn't as it appeared and that things are in fact getting very ugly once again.
I've held the same view for over 2 years now. I think there are opportunities as well in this market but for the majority of people they do not do there homework and just purchase a property because it seems cheap, they read it will have good growth in a magazine or because they lived close to the area and it is "nice". Those people will get burnt in my opinion over the next 10 years and that is the majority.
live by the sword, die by the sword.
i was fearful when RE agents were overvaluing my house by 100k+.
