I love recessions or downturns in the markets.
Leo, I have just read your interview and if you are 32, you don't know what a recessions is.
Congratulations by the way on your accomplishments. Other young or new investors take note what can be accomplished by various means and the mindset required to do so.
That's where the best deals are gotten by savvy investors.
Or lucky investors. Also be careful what you wish for. There is a big difference between a downturn (softening) and a true recession. All young investors reading this please have adequate buffers and sensible LVR's. The b(w)anks and lenders can exercise all their rights in the contract we all signed called a mortgage document. Careful come time to re-finance or seek a reval. And, those reliant on a job for income, careful if you lose yours.
The best deals I ever got (and a lot of my friends) was during the 'doom and gloom' sentiment of markets. I just love it.
Unless you have purchased in the USA around 2011 or some select Euro countries, I doubt you have done well out of a recession as you aren't old enough to have lived and understood the late 80's and early 90's here. There is a difference between a shift in sentiment where property goes on the nose and a true doom and gloom scenario that a recession may manifest.
Markets will always bounce back. Our liveable land is limited. People love Australia. Immigration is good. Most people want to live in the major cities. So im not worried that the medium/long term demand for property in Australia will suddenly disappear. When they can start to make the desert liveable and comfortable with great jobs and infrastructure, then I might worry a little. I suspect i'll be dead by the time that happens though.
Leo
Those who trivialize the notion of a recession, should be careful what they wish for when they pronounce they love recessions. We don't know whether we will enter one here or by when or for how long.
This country has ridden the coat tails of selling its dirt for a decade whilst also letting go much of the innovation of bio-technology and other technology industries due to the immature venture capital industry here and the lack of vision of any government (left, right or ambidextrous). Outcome is the ideas and patents and intellectual property and the talent that invents/supports the new initiatives/products go overseas, ergo Australia's loss.
I won't start on rising unemployment, harsher re-financing scenarios, all monies clauses and banks calling in for cash injections come the end of fixed interest periods when they reval at their utmost discretion.
My glass if not half empty however I am a realist and as I accumulate birthdays a little more cautious. Please enjoy the escalating capital growth in Sydney (merely playing catch-up) and Melbourne of late. The rest of Australia's real estate prices (aside from some regionals) are barely moving. We may indeed see another interest rate cut that may fuel some further growth in housing prices, however when interest rates return to an equilibrium point (circa 7 % to 7.5%) there will be a rise in housing and likely commercial property that hits the market. If rates need to rise to circa 9-10 % levels then there will be many assets on sale. Those that were patient will have their pick.
My two cents worth is to muster up all the equity you can through re-vals now and stoke the off-sets. I wouldn't be buying residential real estate in Australia right now. My caveat this is a sweeping statement that covers the whole market as a general investment notion, not some specific sub-markets that may out-perform.
Do not over-leverage for the next few years................