Property Crash 2 Years after Stockmarket Crash???

[Property Meister]

hey everyone, I might be completely wrong,

but someone told me today, that historical data suggests that there is always a property crash around 2 years after the stock market goes all crappy.

And then I recall reading this somewhere else a few years ago...

if I have read/recalled correctly, if this is the case, then we have about 1.5-2 years left before this happens..

can anybody clarify?

 

[urchin]

past performance is no guarantee of future returns.

historical data is really not all that useful unless you really understand the factors informing the historical data and can accurately gauge how relevant they are to the current situation. it seems that criticising academics is something of an olympic exhibition sport around here (but not just here) but there is something to be said for knowing what you are talking about.

as far as waiting 2 years for a crash... i don't think you will have to wait that long. it has already begun. 6 months should be enough to show the direction things are headed.

 

[lizzie]

crash or boom?

historically property has boomed after a stockmarket crash - take 1989 and 2002 as recent examples. property then overshoots (as it always does during a boom) and then has a period of resettling like the mid 90's and current - but with credit problems thrown into the mix this time around - who knows ...

 

[Sunfish]

It's illogical to think that Aussie property is the only asset immune from this train crash.

But I've decided to hold my two IPs because one is quite CF+ve and the bit of money I keep out of the share market will make the other about neutral and that sounds like the best thing I can do for now.

 

[Humphrey]

Not sure about the 2 year period.

Maybe take a look at the Investment Clock.

http://www.startrungrow.com/information/investment/6,2983,the-investment-clock.htm

A commentator on Sky Business last night had the opinion that we are now at about 4:30.

The interesting point to me is 5 o'clock "tightening money". We have dropping interest rates which would indicate maybe easier money but I think that lending criteria has really tightened up and may have some time to go.

EC

EC

 

[Property Meister]

Not sure about the 2 year period.

Maybe take a look at the Investment Clock.

http://www.startrungrow.com/information/investment/6,2983,the-investment-clock.htm
EC

ive seen a similar one before, but not for a while

very interesting..

it looks like we are anything between 7o'clock and 4 o'clock with tighter money, falling RE values, falling interest rates,

however my gut feeling and general sentiment feels like we are at 4:30...

just seems the order is a bit different this time!!

 

[AUSPROP...]

however my gut feeling and general sentiment feels like we are at 4:30...

just seems the order is a bit different this time!!

exactly - the clock is a piece of cheap Bali junk - looks ok but the time is wrong and the spellin gof the brand a bit off

 

[Humphrey]

ive seen a similar one before, but not for a while

very interesting..

it looks like we are anything between 7o'clock and 4 o'clock with tighter money, falling RE values, falling interest rates,

however my gut feeling and general sentiment feels like we are at 4:30...

just seems the order is a bit different this time!!

I remember being at uni and our economics lecturer presented the clock, or something similar. I asked him where we were on the clock. He couldn't give me a firm answer like "X o'clock" but rather a range like you gave, so you're in good company with your assessment being a range rather than an exact point.

 

[lizzie]

that's very interesting. at first glance i thought i knew where we were - around 5 - but then looking closer ... it seems like 3-7 are all happening at once. wonder what that means?

quicker exit from the "depression", or longer in it?

 

[Property Meister]

well I guess that there is no one rule applies to all , and hence the fundamentals will be the same but the finer detail might be different.

hence the range.. however, maybe we haven't seen the full extent of falling commodity prices or tighter money or falling property prices, so we may only still be in about 2:30!!!

thats a scary thought!

 

[Max Carnage]

exactly - the clock is a piece of cheap Bali junk - looks ok but the time is wrong and the spellin gof the brand a bit off

Try this one?

 

[josko]

I really do think the clock doesn't apply this time, if it ever did. What I am hearing over and over again is how different things are.

Here we are in the middle of a stock market crash, tight credit, dropping property prices, dropping interest rates etc etc. Suddenly everything is happening at once. What used to be the rule? Shares drop property goes up, and vice versa. Not so this time around. None of us know.

regards JO

 

[Dis]

that's very interesting. at first glance i thought i knew where we were - around 5 - but then looking closer ... it seems like 3-7 are all happening at once. wonder what that means?

quicker exit from the "depression", or longer in it?

Upgrade to digital? Analogue is soooo Fuzzy !

 

[joe jo jo]

exactly - the clock is a piece of cheap Bali junk - looks ok but the time is wrong and the spellin gof the brand a bit off

ha ha, nice one. You get what you pay for

 

[Humphrey]

exactly - the clock is a piece of cheap Bali junk - looks ok but the time is wrong and the spellin gof the brand a bit off

The clock is obviously not an absolute guide. If it was then every one would work off it and it would become self-defeating. Things do not go exactly as dictated by the clock and one phase does not start and end before the next one - there is overlap. But it's been around since 1930's and not a bad way to understand how some of the factors play out. For example 1 o'clock (rising interest rates) tends to end rising property prices.

The thing that is missing is time periods and I would guess that these will differ for different cycles.

 

[Aimjoy]

OK - lets all bag "the clock"

Here's another thing wrong with it - Perth was in a boom at the same time Sydney was in a slump. Melbourne is often in a slump when Sydney is in a boom. Where's that on the clock?

 

[Sailesh Channan]

This cycle was an extraordinarily long cycle. The 12:00 position is marked clearly by a stock market crash (a fall of 25% or greater)

Therefore the clock was last reset in October 1987 and went full circle to the present crash....which is exactly 21 years. I am not sure if there has been a cycle like this before in history.

The next cycle may be the exact opposite of the last. So hold on we may be in for a bumpy ride.

A property boom always follows a share market crash.

 

[Bill.L]

Hi all,

My economic clock is digital.

In 1974 both the stockmarket and realestate fell in real terms.

Inflation was also high.

bye

 

[Trogdor]

T
A property boom always follows a share market crash.

Yeah..... Maybe just with many, many years in between!!

With shares yielding around 10% franked and property in major cities around 4 - 5 % gross I think you're wrong.

Either shares are too cheap now, and they will "boom" first, or they arent so cheap and there is way more earnings pain... The later cant be good for property prices.

 

[Ausprop]

OK - lets all bag "the clock"

Here's another thing wrong with it - Perth was in a boom at the same time Sydney was in a slump. Melbourne is often in a slump when Sydney is in a boom. Where's that on the clock?

2 hour time difference between east and west. you eastern states guys always forget it!!