The effect of Japan's neutralised economy.

[Intrinsic_Value]

Japan did not have any major infrastructure investments during the 90s and 00s.

Japan grew rapidly just after WWII.....primarily due to a huge investment programme.

Would be interesting to see if history repeats.

Though I agree the lower population growth will slow things down.

Time will tell.

Sash i think your cause effect links are too remote with regards to Japan and the australian residential property market.

However i noticed you focus on cash flow positive properties and are based in Sydney. So it could be possible for you to find investment opportunities when the time comes (but this wont be because of japan it may be as a result of your location and preference for cash flow positive properties).

Sydney didnt go balastic over the last 10 years (major peak was in 2003 from memory), so the downside shouldnt be as great.

Also you could play the interest rate fixing game: ie buy and then fix interest rates when the rates are low.

This is why its always difficult to provide generic opinions on an asset class.

 

[Intrinsic_Value]

I don't think we will see profit taking on bullion while the threat from a nuclear disaster is still high (e.g. wouldn't expect to see below US$1380 Gold). It seems the Japanese see things similarly with premiums on bars increasing:

QUOTE]

At times like these i think its risky to think like a fundamentalist if one is trading.
Gold could well take profit taking as hedge funds close positions in gold to offset losses in other positions.

One of the keys with many hedge funds is value at risk. The quickest way for a hedge fund to die is to incur losses. Therefore they are constantly looking at their 'value at risk'.

This is does not mean that gold wont continue to go up as things stabalise. Just that in the short term gold can be hit in a negative manner as well.

So the key in such circumstances becomes the focus on one trading window. For long termers such as yourself i am guessing the focus is still on the underlying major trend which is still upwards.

 

[tgarthe]

Gold down $40/oz to $1388 as we speak.....

 

[Intrinsic_Value]

Gold down $40/oz to $1388 as we speak.....

like i said in the above post.

 

[DEC]

Boy plunger

That sounds rather disturbing

 

[hobo-jo]

At times like these i think its risky to think like a fundamentalist if one is trading.
Gold could well take profit taking as hedge funds close positions in gold to offset losses in other positions.

I'm certainly not suggesting it would be impossible (infact some might say Aaron was right with the profit taking given Gold's modest dip last night), but I think Gold's status as a safety haven could also see it rise in the current circumstances. As I've suggested in the past, Gold is a crisis hedge and Japan is in crisis.

 

[willair]

As our second largest trading partner now has a frozen/stalled/neutralised economy, this will have effects here across everything - shares, lending, property etc.


These are just musings of an uneducated mind and are open to debate, but I do believe this could be another wet blanket on any hope of a recovery in property prices just yet.

I am confident that Japan will come through this,but too turn the vision that everyone once had in Japan into reality again is going to take time
maybe years,and how will this spread out into all world markets is anyones guess,gold and silver is on the slide so is the dow if all the
Japanese investors that control Australian costal-rural-properties start to move here as they will in vast numbers the Australia will not suffer,,
only the bump in the road we are about to go through in world equities markets..

 

[VYBerlinaV8]

That sounds rather disturbing

I'm glad I'm not the only one who thought so!

 

[Aaron Sice]

Some have planned for it!!, but were called D&G on here
Whether it was PIIGS, the US, China slowing, or now the Middle East, and Japan, there was always going to be a trigger for the next downward leg to more problems in 2011/2012.

nostradamus move over - we have a new psychic in town who can predict the world's third largest economy stalling because of an offshore M9 earthquake causing a tsunami.

and he knew it would happen - something had to, right? am i right? yeah, i'm right, i know it.

of all the gin joints in all the world, you had to leave class and walk into this one....

 

[InnerWestie]

Some have planned for it!!, but were called D&G on here
Whether it was PIIGS, the US, China slowing, or now the Middle East, and Japan, there was always going to be a trigger for the next downward leg to more problems in 2011/2012.
An earthquake and sunami 5yrs ago would have little impact of the markets. Now the world economies are so fragile, and on the edge as it is, that anything spooks the markets. Anyone who didn't see problems in 2011/2012 is a fool.

Property just lags behind, but will eventually be down 30% by the end of 2012. Enjoy the ride.

Anyway, going back off the forum now. Nothing to learn from the property spruikers here.

Down 30% by the end of 2012? Wow, so a $1m property in Sydney will be worth $700k by Xmas next year? Let's check back and see...

 

[sash]

I see little Piglets with curled tails with wings flying ......

Pigs ar$e !!!......a 30% drop in the Sydney market??? Can't see that happening at the moment....maybe later but not now. Though I can in some selective instances this can happen but not for the overall market.

People, if they are not in financial trouble will hold property rather than selling 30% under the market. For luxury property (i.e. over $2m in Sydney) that could happen. But not for bread and butter stuff priced in the 300k to $1m mark, unless it is a forced sale.

Down 30% by the end of 2012? Wow, so a $1m property in Sydney will be worth $700k by Xmas next year? Let's check back and see...

 

[Ausprop]

People, if they are not in financial trouble will hold property rather than selling 30% under the market. For luxury property (i.e. over $2m in Sydney) that could happen. But not for bread and butter stuff priced in the 300k to $1m mark, unless it is a forced sale.

IMO this is wishful thinking. prices are set at the margin and can work with you in a boom and against you now. the market is the market and if the last sale was -30% for whatever reason (e.g. one of the endles divorce statistics and they simply have to sell) then away we go. There was not a lot of discrimination when the property market in Perth collapsed, tho suburbs did perform differently that's for sure.

 

[Aaron Sice]

I'm certainly not suggesting it would be impossible (infact some might say Aaron was right with the profit taking given Gold's modest dip last night), but I think Gold's status as a safety haven could also see it rise in the current circumstances. As I've suggested in the past, Gold is a crisis hedge and Japan is in crisis.

yes absolutely and like i said - it won't affect the bull run in bullion but a short term profit take is very likely especially near these highs and with the nervousness about.

 

[sash]

If I could find properties discounted by 30% from a say a year ago...I would be buying everyone that I could lay my hands on.

Alas....this is not the case.

IMO this is wishful thinking. prices are set at the margin and can work with you in a boom and against you now. the market is the market and if the last sale was -30% for whatever reason (e.g. one of the endles divorce statistics and they simply have to sell) then away we go. There was not a lot of discrimination when the property market in Perth collapsed, tho suburbs did perform differently that's for sure.

 

[Melbournian]

Well.....I am of the view that IR rates are heading down!

With Japan's economy trouble due to a natural disaster and tensions in the Middle East....this is going to knock at least 1% off the Australian economy which was also affect by Floods and Cyclones. Thankfully this will only be short term.

The good news is Japan will need even more resources from Australia and rebuilding will stimulate the Qld economy on particular.

2011 will not be as good for the OZ economy....but suspect 2012 and 2013 should be very good if not stellar.

I for one is going to be buying more property rapidly as I suspect the Japanese economy is going to grow very fast....faster than the last 20 years...similar to the 80s when they were dominant.

Interest rates could possibly go down but i doubt the japanese economy is going to grow very fast. Yeah events like brisbane floods and asian tsunamis did not have a nuclear threat as well as extreme weather conditions like snow. If the nuclear threat can't be resolved and it contaminates the air, there is a going to be a whole lot worst and just flooding. All the food products coming from japan in some SE Asian countries have already been put on a scan and on hold. Already many companies are moving their staff away from japan. trust me - i work for a japanese company in Australia - staff here all scared stiff as to their future due to 1st April being the japanese financial year and their parent company in such as difficult situation.

I don't think property prices would drop by 30% that's just plain crazy but it wouldn't rise that much either.

 

[Wunderbar]

This is just panic and will blow over. Same thing happens with every major natural disaster. Let's just pray that the Japanese people will recover from this catastrophe.

 

[Beebop]

Destroying billions of dollars of infrastructure in no way creates economic growth.

 

[Wunderbar]

Destroying billions of dollars of infrastructure in no way creates economic growth.

The economists' reply to that is that destruction of infrastructure does not destroy GDP - but the building of the new infrastructure adds GDP growth haha......i love it how they make things up and people believe them!

 

[topcropper]

I'm deeply concerned not only for the Japanese people, but for the flow-on effect worldwide.
.

Even global grain prices have plumitted since the disaster?

Admittedly, good rainfall in China is half the reason, but what's going on in Japan is the other half. Funny how markets react. What's happened in Japan could only mean more demand for food, not less, and especially if this nuclear nightmare eventuates, but anyhow, markets will just do what they do and it's no use complaining eh!



Japan is the worlds largest food importing nation, and can supply just 39% of their own needs, with the rest needing to be imported. A massive amount of food was destroyed in the flood.

http://www.americanprogress.org/issues/2011/03/feeding_japan.html




See ya's.

 

[evand]

Sometimes i wonder if you actually think about your posts Sash.

As Ausprop says - very correctly - that prices are set at the margins.

If a family or a persons life circumstances dictate that they sell their Sydney property and they get less for it, they will still sell.

It has nothing to do with forced sales.

Most people sell because something in their life has changed. Whether they want to or have to.They still sell.

A 30% fall wouldn't surprise me at all. But not all at once, maybe over a 3-5 years. Ex inflation. In fact, i think that scenario is the most likely.

I see little Piglets with curled tails with wings flying ......

Pigs ar$e !!!......a 30% drop in the Sydney market??? Can't see that happening at the moment....maybe later but not now. Though I can in some selective instances this can happen but not for the overall market.

People, if they are not in financial trouble will hold property rather than selling 30% under the market. For luxury property (i.e. over $2m in Sydney) that could happen. But not for bread and butter stuff priced in the 300k to $1m mark, unless it is a forced sale.