Now is the time to buy

[bluestorm]

I don't understand this talk about GFC2. There is no liquidity crisis like there was 3 years ago.

Maybe people are extrapolating a bit too much from the recent market nervousness.

This one is a sovereign debt crisis. Spain and Italy recently got help from the ECB, so they borrowing costs have fallen sharply the past 2weeks, but eventually the 10yr bonds will creep up again. I think one of the 2 will need a bailout by Dec 2011/Jan 2012. Then prepare for more market nervousness as it dawns on the world that Europe is slowly falling apart.

But like I said, up to you. If you think it's a good time to buy property, then buy. I disagree, and think there is still a lot more economic upheaval in the world to come, and that this will impact Australian property.


"Maybe people are extrapolating a bit too much from the recent market nervousness."
When you understand why shares have recovered a little this week, you know it's only temporary in the long run. More printing of money in the US to come (with Bernanke speech on Friday) to save the US from going under, which will kick the can along for a little bit more. QE3, then QE4, QE5...

Market sentiment this week has been mostly driven by speculation that Mr Bernanke will say a third round of economic stimulus from the US central bank will be needed to help the struggling American economy.

By all means, if you think now is a good time to buy property, then buy.

 

[locko24]

But like I said, up to you. If you think it's a good time to buy property, then buy. I disagree, and think there is still a lot more economic upheaval in the world to come, and that this will impact Australian property.

I'll keep buying and making money while you, chicken little, hide under your rock with your tinfoil hat and wait for tomorrow to come!

 

[skater]

By all means, if you think now is a good time to buy property, then buy.

Gee, thanks for your permission Bluestorm. I'll get onto that then.

 

[evand]

Thats like people saying "Warren Buffett does this and he does that". Slightly different circumstances to the average punter. So not really a valid comparison.

I'm sure Lee Shau Kee isnt a buy and hold buyer of 2 x townhouses in Logan area.

The other day Lee Shau Kee was on TV saying he only buys properties when they fall. That's how he made his first fortune, then his second, then his third.

Who's Lee? Oh just someone around 5x richer than Packer.

Promised to give citizens $1bn if the index hits 40000 points before he dies.

http://en.wikipedia.org/wiki/Lee_Shau_Kee

 

[evand]

You posted that i was preaching before i posted the last 2 of your quotes of mine. We can all play that game.

... only about dozen versions of:

"But buying low (but still high relative to past gross yield and affordability) and seeing the market falling while neg gearing does not make investing sense.
and

"Buying a property while the market is declining does not make sense. Why would you do that? It goes against all investing fundamentals (as opposed to mum and pop property investing fundamentals)"

and

"But what i'm saying is at this stage of the market, the trend is your friend. And the current trend is not your friend."

You have been heard alright!

 

[lizzie]

You posted that i was preaching before i posted the last 2 of your quotes of mine. We can all play that game.

Suggest you check your facts.

I posted #36 a request to stop the preaching. You had 5 posts before that - and they included the ones quoted at #17, #21 and #26 ... could've included dozens of others from other threads, but I think the point was made with the examples given.

Now back on topic ...

 

[Aaron Sice]

When you understand why shares have recovered a little this week, you know it's only temporary in the long run. More printing of money in the US to come (with Bernanke speech on Friday) to save the US from going under, which will kick the can along for a little bit more. QE3, then QE4, QE5...

are you suggesting that QE3 will end the temporary share market recovery? yes or no? that's what i read there, so please clarify?

because every time - and i mean EVERY TIME - there has been quantative easing (printing), the stock market (DJI especially) has gone into a another little bull swing. i mean, the DJI nearly hit 13000 again on the RUMOUR of QE3 coming as speculated.

this just shows you're extrapolating pin points of data to slurry up the crumbling footings of your position. god help you if you're basing your thesis on all this.

 

[BV]

I'll keep buying and making money while you, chicken little, hide under your rock with your tinfoil hat and wait for tomorrow to come!

Hi Lachlan
I'd be careful not to overextend with negatively gearing properties atm because prices in many areas could stagnate for a very long time.
Even positively geared properties can become negatively geared when rents fall and in a depressed economy it can happen

 

[locko24]

Hi Lachlan
I'd be careful not to overextend with negatively gearing properties atm because prices in many areas could stagnate for a very long time.
Even positively geared properties can become negatively geared when rents fall and in a depressed economy it can happen

Yeah I know bill!
it might sound like I just buy any old thing, but I really am very particular!! Just signed up with one of the local pms to advertise the orange place for 600 per week!
May consolidate a little after a couple more purchases

 

[BV]

May consolidate a little after a couple more purchases

Lachlan
Consolidation is important but when you consider these new purchases
remember that the US no longer have the tools to stimulate their economy and Europeans seem incapable to deal with their problems so something will give and China and Australia won't be immuned
There is this bad feel in the air atm....

 

[locko24]

Lachlan
Consolidation is important but when you consider these new purchases
remember that the US no longer have the tools to stimulate their economy and Europeans seem incapable to deal with their problems so something will give and China and Australia won't be immuned
There is this bad feel in the air atm....

Are you sure you're not getting too much of that European climate? Perhaps you should visit Germany for a few days to calm your nerves

Are you holding off with your purchases?

 

[BV]

Are you sure you're not getting too much of that European climate? Perhaps you should visit Germany for a few days to calm your nerves

Are you holding off with your purchases?

Maybe you're right but I doubt that the mood in the streets of Germany will be any better.

I can't buy anything till I get back in another 6 weeks but I'm now having 2nd thoughts .
Shares of Oz blue chip stocks will be the ones to watch.
Just wait for the big bang....

 

[locko24]

Maybe you're right but I doubt that the mood in the streets of Germany will be any better.

I can't buy anything till I get back in another 6 weeks but I'm now having 2nd thoughts .
Shares of Oz blue chip stocks will be the ones to watch.
Just wait for the big bang....

Wow, must be pretty rough over there...
Will be interested to hear your thoughts in depth when you get the chance!

 

[bluestorm]

are you suggesting that QE3 will end the temporary share market recovery? yes or no? that's what i read there, so please clarify?
.

No, I'm saying that the current market upswing we are in now (from 4000), is based on the expectation of QE3. When the excitement of the idea of QE3 dies down, and people realise that it will work as well as QE1 and QE2, then the market will head back into a bear market down.

 

[Player]

Hi Lachlan
I'd be careful not to overextend with negatively gearing properties atm because prices in many areas could stagnate for a very long time.
Even positively geared properties can become negatively geared when rents fall and in a depressed economy it can happen

These are sage words Bill.

Whilst it may be the right time to buy somewhere.........even a broken clock is right twice a day, my suggestion to those who are over-geared is to focus on building buffers and getting LVR's skinnier. Not advice, merely opinion in a generic sense.

There will be out-performing exceptions, however now is not the time to ramp up leverage, especially if negatively geared as Bill mentions. Rather leave the hyper-gearing for when banks start throwing money at people again. It's not that time right now.

If deals stack up in a positive sense, go for it, but not if it means maxing out the portfolio LVR. The times for the latter will come again.

 

[Iamback]

Since all the D & G's want to constantly post about the sky falling in and linking D&G media articles, I thought I'd share what I just heard on Today Tonight. I tried to share the link and to add the relevant page, but I think I'm just too quick and it's not showing yet.

For those interested in looking it up, they were talking about The Block at the time and mentioned that now is sure not the time to sell. However, Neil Jenman was mentioning that if you do want to buy property, now is the time to be gearing up and buying. He gave a couple of suburbs in Melb, Syd & Qld too.

For the record, I don't do my research based on what the media has to say about anything, but it is blatantly obvious that there are many that do.

Ironic to see threads complaining about the media drowing out positive news when this entire forum is based on principle of removing negative views.

As far back as February 2010, someone posted a thread about how negative media are the problem, just like you are doing. In that thread, I warned that world credit markets were still on the fringe when I mentioned Greece, Spain and Ireland. I was saying back then there was no housing shortage and the GFC was not over.
/
When you consider this thread, from over a year ago where I warned affordability was a major issue, I find it amausing that you cant wrap your head arond the current negativity. You did your best to have me banned or daring to disagree with you Skater. What has happened since then? FHB's have fled the market, liquidity dried up and NO ONE IS BUYING

I warned over a year ago that the retail sector was going to get slammed as housing afforability was so problematic that retail spending would drop within 3-6 months, only to be lambasted on these forums as a doom and gloomer for something that came true.

I warned 7 months ago that the market country wide was headed down, purely because the fundemetals dont stack up I was banned for that. Banned for making a logical, rational post substantiated with economic data and news.

And then you want to help people seek out the positive news because you think that negiative news is given too much coverage?

I cannot help but wonder why the moderators and regulars on this forum continue to ban posters who disagree with their current views. Bunch of hypocrites, and I wont be surprised to see this post deleted too. I would be shocked to see the mods between them find the balls to leave this up.

I still lurk here, its a good central source for news. Its also a good source for bull sentiment on property. I take half the crap I read here with a pinch of salt because clearly this forum is moderated to hell and back ensuring a one sided view, but it has its uses.

I am chuckling though when I pop in once a week. Some real panic about eh?

 

[lizzie]

Some real panic about eh?

Nope ... only from one or two idiots like I'm Different (whom I gather you are one of them)

The rest of us are totally accepting that the current situations are merely part of the cycle and will, with time, also pass. And that some great buys can currently be found.

p.s. you weren't banned for informed opinions backed up by facts - you were banned because you were abusive, rude and attacking.

 

[see_change]

Personal opinion is that well located suburbs in Sydney are the place to buy at the moment .

Some of the suburbs we are looking at have gone sideways for the last 7 years and rents have gone up by 30 % .

Sydney is the underperforming capital in Australia over the last ten years .

When we first started investing and joined here ten years ago Sydney was the best performing capital and we were advised to buy there and not to buy in places like Brisbane and Hobart as they " never go up " . Well that's were we bought ( Brisbane , Hobart and ... ah ... Rocky ) but now they're the best performing over the LAST ten years and Sydney is the worst ...

Historically Sydney is alway more expensive than other cipitals but at the moment that margin is the lowest it's been for a long time.

We bought two units at the peak of the GFC , another one in April this year and we're just lining up for another one. All centrally located Sydney suburbs. ( last one and the current one in Super fund )

I think in ten years time we'll be looking back on sydney again being the best performing over the last ten years and then we'll buy elsewhere

and so the cycle goes on ...

Cliff

 

[Intrinsic_Value]

Personal opinion is that well located suburbs in Sydney are the place to buy at the moment .


Historically Sydney is alway more expensive than other cipitals but at the moment that margin is the lowest it's been for a long time.

and so the cycle goes on ...

Cliff

You are spot on.
I still focus on shares becasue i think the next cycle will belong to shares more so than property (because of the gravitational pull of the mean return within asset classes over long periods, see below), but if i was forced to limit my investing to residential property then i would be focussing on the Sydney market.

In 1987 the share market peaked at around 2400. 24 years later the market is around 4000. Whats the compound return over this period, and how does it stack up against the long term trend. Like any long term analysis, these sought of comparisons have no relevance when trying to forecast short and medium term future results.

 

[hobo-jo]

Historically Sydney is alway more expensive than other cipitals but at the moment that margin is the lowest it's been for a long time.

Of course anyone looking at this fact impartially would realise there is more than one way for this weighting to change (infact the rebalance is already occurring at the moment by stronger falls in other cities, rather than your implied room for stronger price appreciation in Sydney).

That said I wonder whether environmental changes may alter the reasons for higher prices in Sydney, for example I imagine one of the main drivers for growth/higher prices in Sydney has been from leading business activity, but new internet and phone technologies mean business can be performed anywhere more easily than 10 years ago... Why should Sydneys prices be higher if supply can catch up to current demand?