how low can it go
- Thread starter zaph
- Start date
That is an interesting question because if things are going to go really really low like 40% lower then I am better off selling up asap. Better to take a small loss than wait around and make a bigger loss.
So it is a good question to start a discussion with.
I personally dont have a clue how low things can go.
I see the possibility that they can go a lot lower when affordability is compared with other countries. But that isnt my prediction. I really dont know.
So it is a good question to start a discussion with.
I personally dont have a clue how low things can go.
I see the possibility that they can go a lot lower when affordability is compared with other countries. But that isnt my prediction. I really dont know.
Blah blah blah long term proposition blah blah entry costs blah blah exit costs blah blah opportunity cost blah blah cost of capital blah blah falling interest rates blah blah negative real interest rates blah blah fewer cranes blah blah blah schiller index blah blah gold bullion blah blah blah negative gearing
Does that about cover it?
Does that about cover it?
Hmm... I don't think housing prices will fall much more in my opinion, at least not in the middle 500k range. The FHOG and dropping interest rates should be sufficient to tide most prices over for a good year or so. If anything I think now is a good time to purchase those 1 mil houses if you can afford them as they'd be more likely to drop heavily.
Zaph, ... no one can answer the above for you.
Work out your own strategy ..... then throw the details in a post and people will comment on it, .... but you are asking us to comment on the unknown.
Which area are you talking about? Are they houses or units? What price bracket? They're different answers depeding on a number of factors.
Really? Hmmm, I can recall many discussions on this issue.
Ah, yeah, I think so, too.I'm sure he meant to buy the $1M houses AFTER they drop in value, not before
If you want someone to tell you how many percentage points each suburb will drop, and in which month they'll hit bottom, you're just not going to get that kind of specific forecast. Or if you do, the margin of error would be so huge as to render it meaningless, anyway.
You're better off to get a "feel" for the market such that you can recognise a property that represents good value, or has potential, when you see it. The really successful investors that I know bought properties for a fraction of their current worth, eg $800K to $4M, $450K to $5.5M, etc, in less than 7 years. I don't think they really care whether they bought at absolute bottom or not. If they'd had to pay 10% more, I don't think they'd be kicking themselves.
From a macro view, I agree with some of the "D&Gers" that Australian property is way over-priced. But I disagree that we're going to see prices drop 40%. Australians are addicted to property and we all rush back in to buy the moment we see any drops in prices - "now must be a great time to buy" - thus preventing further drops. Just because housing prices are irrational, doesn't mean that they can't stay that way for a long time. I predict a long period of lower to no capital growth, similar to the market for much of the 1990s, resulting in drops in absolute value (but not in dollars, or at least not significantly).
Buy in a desirable location, buy properties with potential to add value or convert to higher use, negotiate hard, ensure you can afford any negative cashflow, and hold for the long term.
If you have to buy something, look at the affordability figures here
http://www.somersoft.com/forums/showpost.php?p=505314&postcount=12
The expensive properties in those areas could be coming down but entry level property is popular so buy entry level properties instead.
Those will soon be cashflow positive.
Lock in a nice fixed rate for 10 or 15 years or so and then wait for your golden egg to hatch
Just wondering whether you have actually read anything on here before posting, seems to me we have all been banging on about it for ages!
I am personally in buying mode.
I might sell my own house and buy a dearer one located closer to Sydney city. But at the moment I am still actively looking to buy positive cashflow properties in NSW, VIC or QLD. If the number stack up and the tenants are in droves, I'll buy them. I have strong bargaining power as less competition.
From what I see, houses under $300K is selling like chips in Sydney, but over $370K is starting to sell at discount.
I don't know how low the prices will go. But I use dollar cost averaging in acquiring our portfolio. We would ideally like to buy one at a time, every time. In ups or downs.
I might sell my own house and buy a dearer one located closer to Sydney city. But at the moment I am still actively looking to buy positive cashflow properties in NSW, VIC or QLD. If the number stack up and the tenants are in droves, I'll buy them. I have strong bargaining power as less competition.
From what I see, houses under $300K is selling like chips in Sydney, but over $370K is starting to sell at discount.
I don't know how low the prices will go. But I use dollar cost averaging in acquiring our portfolio. We would ideally like to buy one at a time, every time. In ups or downs.
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