IN or OUT of the market?



From: Jim Kouta

Hi all,

It is has become apparent over the last couple of months, many people on this forum believe it is the wrong time to invest in the property market due to ridiculous prices being paid over the country, mainly Sydney and Melbourne, perhaps waiting 6-12 months for things to slow down. It has become even more apparent with the Ansett collapse and the "Holy war" just around the corner.

Apart from the numerous posts about finding "nooks and crannies" and "I'm always looking for a bargain" my question to you is, generally speaking:

Are you in or out of the market for the next 6 months assuming a bargain doesn't come your way?
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Reply: 1
From: Michael G


I'm in the market, but not regional, I'm working on buying/selling 4 small IPs at the moment. I feel with the moving market, I may be cashed out sooner than later.

Deals abound, and yes once I build up some cashflow and support from my lenders I will target larger properties. Its all about one step at a time and doing nothing too big that the fear will stop you from moving forward.

Michael G.
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Reply: 2
From: Colin Mills

Depends on the market. All the mugs paying top dollar in Sydney and Melbourne right now will be crying in their milk shakes in 12 months time. Of course those markets are over-heated and definitely over-priced. The rental market is saturated with vacant property and rents are falling as my fingers hit the keys. Prices will surely follow.
I'm out of Sydney until the next cyclical low although I might add I would never sell my existing Sydney property.
But what about Brisbane? OK prices have risen somewhat in the inner suburbs but nowhere near to the extent of Syd/Melb over the last few years. The market will continue to increase because rents are not falling as in Syd/Melb. Furthermore when the inevitable price correction comes next year Brisbane will keep rising or at least stay firm.
I still advocate (see my previous posts)buying in the inner suburbs of Wilston/Windsor with limited city views up to the $300k mark. Of course I'm looking for value adding opportunities but I'm so bullish I may even buy passive as a last resort!!! I figure 15-20% appreciation next year WITHOUT a price correction is as good as it is likely to get.
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Reply: 2.1
From: The Wife

I'm OUT of basic 'residential' property, for the moment.

Rest of the market is still fairly lively.

~Life is a daring adventure, or nothing at all~
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Reply: 3
From: Yuch .

I believe the market is over heated at the moment, so I am out of the major cities. However, there are always alternatives and there are opportunities everywhere.

I am currently buying in reginal NSW and VIC and they give me pretty good cashflow!

~ The secret to success is to start from scratch and keep on scratching. ~
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Reply: 3.1
From: Michael Yardney

We have been pretty active and taking advantage of the opportunities in the market for the last 18 months. We’ve put together at least 1 multi unit development each month for the last year or so for either ourselves or our clients.
But we stopped buying about 3 months ago.
I guess having traded through 3 cycles over 25 years I saw the end in sight and didn’t want to be left “standing” when the game of musical chairs finished…and it always does.
I thought low rents and poor demand from tenants would end this cycle next year.
But looking back over previous cycles, no one knew the X factor- that unknown factor at the beginning of the year that would finally slow down or end the cycle.
I guess this time it is the terrible disaster overseas and the resultant slowing US economy as well as the disastrous collapse of Ansett locally and the fall out from this.
Now is the time to look ahead and to get set to make money in the next cycle. I’ve always found it easier to make money and put deals together in the quieter times than in the boom.
So we are out for now and have been for a few months (fortunately), but we are keeping a close eye on t the market and will take advantage of the opportunities that are bound to arise.

Michael Yardney
Metropole Properties
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Reply: 4
From: Anonymous

I wouldn't have a clue.

But I know that 8 months ago plenty of people on this forum, & professional forecasters like BIS Schrapnel (have they ever got it right ? )were forecasting price falls or at best a static market throughout this year.

So I held off buying a $300,000 Newtown IP & missed out on maybe a 25% capital gain.

We'll see.
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Reply: 4.1
From: Paul Zagoridis

That's why I live by William Goldman's edict
"Nobody knows anything". After the event everybody can tell you why.

I went broke thinking I was an expert ("No federal Labor government would allow first mortgage interest rates to hit 18%"). Now I look at a deal and have exit strategies for good, bad and neutral scenarios. That way I deal with "what is" not "what should be". If the unexpected occurs, I throw out the strategies and get creative.

BTW Goldman's quote is referring to the movie biz. He wrote, among other things
Butch Cassidy & the Sundance Kid
Marathon Man
The Princess Bride

Paul Zag
Oz Film Biz is at
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