I might be having a "senior's moment"
but your reasonings below are just so staggeringly stupid to my mind (This is not a personal assalt on YOU just your reasonings) that I felt driven to say something.
I think the plan would be to wait 12 months to see what the state of the world economy is.
If you take the time to unbury your head from the sand, you will see that the world actually survived the GFC. We are in recovery mode now. The worst is over. The sky did not fall in. Sure it may be a bit bumpy here and there but look what happened THIS week: Dubai's government Monday said it received $10 billion in financing from Abu Dhabi. 6 months ago this news would have wiped hundreds of points off the Dow Jones & the ASX. The market has already priced this stuff in. It will not be the last announcement of this type - but I'm sure you know that.
It seems to me that our housing market is unlikely to collapse in the absence of a further global economic trigger which leads to job losses here.
Are you stuck in a time warp or something? This was the mantra being sprouted by the D&G brigade 12 months ago. Not going to happen. Steve Keen has his runners on. He's admitted he was wrong.
Prices may stagnate, or rise, but won't fall significantly unless unemployment goes up significantly. That's my theory anyway, although I take my theory with a big grain of salt as I am entirely unqualified to make such pronouncements.
Look, rising unemployment (if it happened) and its effects were commented on in April 09's Westpac Market Insights report of April '09 which (in part) said:
The housing recovery is already on track and the last two recessions confirm that the housing recovery will not be derailed by rising unemployment.
If in 12 months the world economy -- China, US in particular -- is looking healthier, then it might be a better time to buy.
Why??
Sure join the herd. Buy only when Hot Property & Location location are back on the TV. You'll miss 25% of the growth. You have already miised 10% of it in Sydney by not buying in Jan this year.
But yes, this strategy could play out for several years without making a purchase. If I was to wait for significant price drops I could be waiting a while. I'd more likely just wait for the general economic gloom just to lift a little bit more.
aha
Having said that, undoubtably we won't see the next crash coming either. It will probably be some bubble bursting in China, which will hit us hard in Australia. Who knows!
Probably not. Chinese buyers are already buying our RE. China doing badly = more Chinese investment in "safe" Aussie RE.
Similarly, I'd be more than happy to jump into the share market with some more money right now, as I think shares are good value at the moment. However, I've come to the conclusion that I'm not going to get wealthy through stock market investing because I'm not willing to leverage into something which can crash overnight.
OK so buy some shares and don't leverage. If you don't leverage into an investment then you are right - not going to get wealthy
(much)
The monetary opportunities in property seem much larger due to the leverage which is available.
Oh but what about a crash? Oh that's right - even people with negative equity in property did not get a margin call from the Bank....not so with shares AND the banks did a deal to waive repayments for 12 months for borrowers on property that lost jobs.
Of course, the leverage applies to the risk side too. I'm just trying to be cautious because losing the odd $100,000 would really hurt (I've only got about $130,000 of assets!).
Well congratulations. I only had $32K of available equity when I started out to invest seriously.
Look I understand the emotion involved in losing $100K - been there done that - know how it feels.
Example: If you buy a property and it goes up from $250K to $350K and you manage to get that $100K out and blow the lot on some investment becuase it was a poor investment, how do you feel? bad - why?
What did you do to make that $100K? answer - nothing. The market went up and you refinanced and got out $100K. So what? Why are you treating your "precious" $130K like you'll never see it again if you invest it? Am I saying 'be frivilous with money"?, no in no way. Just don't hold onto it so tightly that you become afraid to do anything but protect it.
I know this has sounded harsh but really, you need to "toughen up" by taking the proverbial concrete pill - in my opinion - and start investing again.