The best time to buy is when the opportunity presents itself. It could be any-time. You just have to be ready to pounce often the bargains dont hang around for long. Your are not buying the market. You are buying an individual property on its own merit. It should have merit regardless of what interest rates, economy, bulls or bears do or say as it can all change faster than Melbournes weather. You should have your risk management in place, plan A, B, and C. Transient circumstances should not be given too much weighting, if your in it for the longhaul. THERE IS ALWAYS A REASON WHY NOT. Assume interest rates of over 9% as there is a good chance that at some point they may get that high and anything less is a bonus. It can be a good time to buy when interest rates are high, when demand is sluggish, so that when they drop your cashflow is more positive, rather than vice versa. Look at the pros of being contrarian and not blindly following the sheeple.G'day All
i am looking into buying an investment property for the first time and being a complete novice to all the in's and out's of property investment and economics i have been wondering what the likely effects of another recession could have on the property market.
i would be interested to know what effects recession’s of the past have had on:
- interest rates
- property values/sales prices
- rental returns
- trends in people buying vs renting
- property for sale / for rent demand
- trends in what types of property are in demand and those that may be vacant for long periods.
my personal circumstances are:
25yo, single with a secure well paid job, so im not too worried if there is another recession.
looking to buy in either perth, fremantle or mandura areas at around the $550k mark, for a long term investment.
basically i am trying to find out when the best time to buy is, and what type of property may get the best results (of course that is what everyone wants to know)
any advise is appreciated
Effects of Recession on Property
baaaahhhmen to that brotherrrrrr
Just out of interest how much would it cost a couple each year to be driving around Australia in a Winnebago? Reckon I'd get pretty bored of roads, caravan parks, small Australian towns after a year.
Must cost a small fortune...haven't these people heard of south east Asia? Live like a king in Vietnam, Cambodia or parts of Thailand, even Indonesia vs seeing endless towns, pubs, service stations, RSL's etc ("number 72, number 72 your prawn cocktail is ready"). And you may get to learn a new language at the same time
Must cost a small fortune...haven't these people heard of south east Asia? Live like a king in Vietnam, Cambodia or parts of Thailand, even Indonesia vs seeing endless towns, pubs, service stations, RSL's etc ("number 72, number 72 your prawn cocktail is ready"). And you may get to learn a new language at the same time
Maybe they like to explore their own fantastic Country.
The grey haired nomads are more likely to be very Patriotic towards Australia than the more open-minded Gen XYZABCD's if you get what I'm saying.
I know 2 couples with grown up kids, both of whom set themselves up to go and do the grey nomad thing. Both spent substantial dollars (1 to buy a large caravan and 4WD, 1 to buy a bus and have it fitted out as a camper). The first couple lasted 6 weeks on the road before getting bored out of their brains and coming home (the caravan has been out of the driveway for a total of about 4 weeks in the 9 years since). The second couple managed to drive from Canberra to Queensland in less than a week, stayed in 1 spot for 4 months, then bought land and sold the camper.
Based on this, I'd say it takes a specific type of couple to actually enjoy a long time on the road, but it costs a shedload to find out if that includes yourself.
If you average anything over the long term from the peak of a bubble you can probably make it look like sustainable growth at those rates is possible
Does this graph mean that if you bought a house in 1892 you wouldn't have seen capital growth until 1950?
no it means that wages steadily kept up with credit growth and steadily kept up with inflation and steadily kept up with house prices in an "all in one" scenario - well, comparitive to post WW2, anyway.
the graph clealry highlights the 1897 crash, 1907 crash, WW1, 1920s boom, 1929 crash, WW2 etc etc.
and all pale in comparison.
the graph clealry highlights the 1897 crash, 1907 crash, WW1, 1920s boom, 1929 crash, WW2 etc etc.
and all pale in comparison.
Ok. So there was a qualitative change in about 1952 then another in the late 1990s in terms of house price growth outstripping inflation, according to the graph. I guess there are a number of factors that combined to cause these -breeding boomers, pop growth, increasing land scarcity, negative gearing, credit easing, double-income families, long period of economic growth, low inflation (recently).
Is house price growth - probably a few percentage points above inflation on average - sustainable or will it revert back to pre-1952 levels and track inflation? I wonder what rental returns were like pre-1952?
Cheers Ali
Is house price growth - probably a few percentage points above inflation on average - sustainable or will it revert back to pre-1952 levels and track inflation? I wonder what rental returns were like pre-1952?
Cheers Ali
I've been having one for the last 10 years!
Apparently I'm supposed to either:
1. Spend a fortune on a sports car
2. Spend a fortune on a boat
3. Spend a fortune on some 18 year old 11/10 supermodel mistress, and run off with her..
I opted for the very second hand sports car late last year, and put no.2 on raincheck, and don't even kid myself about no.3.
I've been having one for the last 10 years!
Apparently I'm supposed to either:
1. Spend a fortune on a sports car
2. Spend a fortune on a boat
3. Spend a fortune on some 18 year old 11/10 supermodel mistress, and run off with her..
I opted for the very second hand sports car late last year, and put no.2 on raincheck, and don't even kid myself about no.3.
# 1 and # 3 can be combined here:
http://www.somersoft.com/forums/gallery/showphoto.php?photo=3672
Attachments
Over time society changes, and changing house prices is a symptom. Don't forget that although houses are a lot more expensive than in 1952, lots of other things were a LOT more expensive (whitegoods, clothes, cars, travel, some foods, etc) than they are now - a fact conveniently overlooked by some. People also had lower real incomes, and credit was far, far harder to get.
Will house prices revert to pre-1952 levels? Anything's possible, but I think it's extremely unlikely. The whole country would pretty much have to go broke first.
A decent sports car IS a lot of fun, and doesn't have to be expensive. It's also lower maintenance than most boats and supermodels.
Ah - gotcha. Interesting question, I guess it's possible. The real question for investors is what such a situation means. We have to differentiate between market average and individual performance. Typically, I would expect well located, quality property to outperform the market average. The question would be whether that performance would be sufficient to justify purchasing property over another asset type (that may not be able to be geared as highly).
This wont help, another tax in the name of the green gods
http://www.heraldsun.com.au/news/more-news/threat-to-devalue-old-homes-and-mcmansions/story-fn7x8me2-1226114121243
http://www.heraldsun.com.au/news/more-news/threat-to-devalue-old-homes-and-mcmansions/story-fn7x8me2-1226114121243
My Grandfather bought a house in the late 19th century. One of the best houses on The Strand: Waterfront property. He was a classic Man of the house and kept things to himself, but I think I recall my mother saying he paid over 25,000 pounds for it.
Fast forward to Nov. '79 and the estate sold it for $60,000. In broad terms it doubled in 90 - 100 years. That is consistent with Hobo's graph. There were two world wars which decimated the young men and a depression which destroyed wealth during that time so maybe it's what you would expect.
Note: That property might have been worth $3 mill in '07 so you can understand why I don't put much faith in "averages". I have neither the time nor the patience to wait.
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