negativity of the market

[miket]

One way we're all doing alright with our investment strategies. We can see where we've been and just about where we're going.

On the other hand you see the media and other sources now more than ever going on and on about doom and gloom and the property bubble stretching to bust.

So what's going on? Are we to all throw our hands up in the air and listen to these crystal ball predictions or just ignore them and do what we know best and keep on keeping on?

Is it all to do with conditioning? What do you guys reckon?

MikeT

 

[see_change]

Remembering back to the Stockmarket, there was negativity for a long time before the bubble burst, and the property market moves a lot slower than shares.

Because you don't have your property revalued every day , the emotional rollercoaster is a lot less dramatic.

Even with 911 ( which I thought at the time would be the turning point ) took 2-4 weeks before the market reacted significantly.

I know that because we sold our house on 913 and bought our new one one month later so I was watching the market very closely.

see change

 

[Millsy]

Sensationalism.
Have you ever known about an incident and then read or heard about it in the media? The chances of the incident being reported correctly are about the same as winning lotto. The press are lucky if they even get the date right on the front page of the paper each morning!
My opinion, although based on my almost negligible PI experience, is that more couples in Brisbane are both working now days and people can still afford to pay higher home prices. First home buyers are thus left to renting for an extra year or two to save for the higher deposit. I don't think the bubble will burst yet based on affordability.

 

[MarkB]

A lot of the talk in the media about the "property market" or the "property bubble" is written in such a way that ascribes a set of core attributes to almost all property in general.

But of course there is not one property market in Australia, there are hundreds of "markets".

Just because some of the larger markets may appear to be reaching their vertex, doesn't mean that others don't yet have a while to go.

MB

 

[Aceyducey]

TV, radio & newspapers are entertainmenrt-focused media.

If it isn't entertaining, it ain't reported.

There's nothing entertaining about stable consistent growth in real estate.....it is entertaining to report booms & busts....

So even when there aren't any, the media like making out that there are.

Also keep in mind that the only experts that get quoted are the ones who say something entertaining....so if you want to be well known (and create a brand name) as an expert - say something extreme and controversial.

Listen to the market and your figures, not the media.

Cheers,

Aceyducey

 

[abcdiamond]

Millsy

The press are lucky if they even get the date right on the front page of the paper each morning!

Its not luck ! The computer does that bit for them !

No journalist needed for that bit, but I agree with everything you said about the media

 

[multi]

Another thing to always keep in mind when reading/listening to media is "Who pays?"

 

[gailh]

Hi

Well, who really knows? But I'm a little worried about the tenor of MikeT's first post. The implication seems to be that property investors should never worry about when they buy. The proposition that if you listen to the crystal ball readers (ie. connotation of unreliable fortune telling) then you are 'throwing your hands in the air' suggests that this is not what we should do

Look, I agree that its frustrating to wait when you are dying to enter the market. But waiting is not always wrong, or pointless or symptomatic of someone who has analysis paralysis. Can I just say this, the proposition that you should not buy on the crest of a wave (especially if you are negatively geared) is hardly novel. Kiyosaki himself in 'Retire Young, Retire Rich' tells of sitting out of an overheated market for some years while he waited for interest rates to go up so he could be sure he wan't paying too much and that he had plenty of money to snap up properties when the market slumped.

Of course its not easy to pick the top of the market. But consider that we have had historically low interest rates for an historically long period of time, that property prices have just gone through the longest and largest growth phase ever and that most households are maxed out in terms of debt. Hell, it seems to me that waiting is a reasonable approach for the risk averse. I wouldn't call it throwing your hands in the air. Simply implementing the time honoured philosophy of contrarian investing.


Gail

 

[abcdiamond]

it seems to me that waiting is a reasonable approach for the risk averse

I agree with that sentiment.

There are those who would rather not take risks, and this current market is now uncertain. If you would not sleep easy buying at the moment, then it may be best to wait.

There are those who dont mind some risk, and can sleep well even if things do go the wrong way. To them this market may well be OK, especially if they look for the RIGHT property.

If your finances can stand a 5% interest rise, and a 20% property drop, then you have the choice.

If that scenario would bankrupt you, then "maybe" buying anything thats going would not suit you.
It would not suit me, BUT it would not stop me looking for the RIGHT property somewhere. Bargains can almost always be found, it can happen, even in the worst market.

I feel that some areas will still get a good CG even when other areas stand still or go backwards. And I am hoping I have picked the right areas.
If I have, then I win. .
If I haven't, then I will still win, but it will take longer to get back to the win positon.

 

[Cosmo]

Absolutely Gail !

 

[ger]

If I haven't, then I will still win, but it will take longer to get back to the win positon

How True
I think personally as a Property Investor I look at the long
term so a fall NOW does not matter as the market will
rebound eventually
and as i can tell by the forum not many people are prepared to sell their IP's
I know I DON'T

 

[Cosmo]

Hi ger,

How would you feel if an IP purchase today saw basically no capital gains for a decade? Happened in the last boom with many IP investors who got in towards the end of that boom. How about, for example, the thought of the stock market exploding during this time……….

…….could you have done better with your money?

I believe that purchasing at ANY time is a bit reckless.

 

[Aceyducey]

Originally posted by Cosmo
I believe that purchasing at ANY time is a bit reckless.

Cosmo,

Um - are you advocating NEVER buying property?

If so, why do you hang round the Somersoft PROPERY forum?


I agree with your point about assessing differen types of investments, there are no investments I've found that ALWAYS do well...(and if anyone else knows of one PM me I want in!)

Cheers,

Aceyducey

 

[Cosmo]

Hi ya AC DC

Chuck some inverted commas around the word ANY if that helps ya ……..

cheers

 

[ger]

How would you feel if an IP purchase today saw basically no capital gains for a decade? Happened in the last boom with many IP investors who got in towards the end of that boom. How about, for example, the thought of the stock market exploding during this time……….

Hi Cosmo
What If the shares hit rock Bottom There are a lot of Ifs
I remember a few years ago I was investing in my 4th IP
a lot of my friends were rubbing their hands and they thought I was stupid for putting my money in to property
THEY were investing in dot coms shares
guess what
I still have my properties maybe a few years they did NOT apreciate as much I was still receiving Rents though and the last 3 years my properties have gained 4 Times their original value
my shares on the other hand have not
BUT they were lefted empty handed after the dot com collapse
I Do Not say that shares are not a good Investment ( I have some myself ) but i like Property better.
Just an opinon

Thanks

 

[Cosmo]

Hi ger,

I'm with you all the way mate. My comment is more for the absolute newbie that have been bashed about the head with how lucrative property investing ANYWHERE is without ever seeing how property can stagnate in value for years just after a boom………

IMHO now might be a dangerous time for the absolute newbie to enter the market.

 

[ger]

I know what you mean
a current affair and today Tonight are telling us how easy it is
I can understand how newbies can get sucked in to it
NOT that easy Especially starting out

My comment is more for the absolute newbie that have been bashed about the head with how lucrative property investing ANYWHERE is without ever seeing how property can stagnate in value for years

 

[Alan H]

They say nobody ever rings the bell at the peak but I've had 3 people say to me in the last couple of weeks that they want to 'buy an investment property now before it's too late.' Guess what, with that sort of attitude, unless you choose VERY carefully, I think it's already too late!........for now.

These were people who never normally think about investment but all the media hype etc. has really got people going. It seems to me that people are still listening to media capital growth reports MUCH louder than the Reserve Bank etc.

Neither do I think that taking a backseat with investment property at the moment is somehow being negative about this wonderful investment medium. There are times to sit and times to play.

Not that we stop actively investing, but there are always other opportunities during peaks. Indeed, almost by definition, if all this money has been flooding into property........it's come from somewhere........