Why we're not in a bubble

[see_change]

Thought this was an interesting article .

Not sure if it's been linked already .

First thing is it's having a look at Harry Dent' track record at forecasting .... Not that great

Secondly , he makes a couple of interesting observations about bubbles in terms of discretionary spending . My perception for a bubble to occur, lots of people are paying more for something than is realistically justifiable . In order to do this lots of people have to have money available for discretionary spending . They have to be able to a pay a price that they can't logically justify .

So are we seeing lots of discretionary spending ? For many people in Australia the ultimate discretionary spend is a weekender or a boat . So if we were in bubble territory , I would expect these markets to be moving . Not an expert in the boating market , but our personal experience is that it's not hot .... Any one want a couple of boats ....? Seriously ....

I do know that the weekender market north of sydney , while it is stronger than it was 18 months ago , prices haven't moved . We saw someone pick up a large solid brick waterfront house at north arm cove a couple of months ago for around 450 . If lacked charm , but had good bones , including a boat ramp . No competition at auction , forced sale . Our neighbour , the local agent also reports prices haven't gone up , though some people are moving to pick up places at " good " prices .

http://www.propertyobserver.com.au/...taken-to-account-charles-tarbey/2014022067852

Cliff

 

[The Fence]

Hubble bubble toil and struggle.....

Bubble talk is just that.

Hot air.


Sorry for the cliche...

There is some urgency for property in several markets around Aus, but it is coming off the back of long years of nil to neg growth.

Soon as some markets heat up a bit it's all "Bubble" talk.

Look what the Res Bank is doing.

 

[Dazz]

I don't think there will be a bubble.

I don't think there will be a crash.

I can guarantee almost all property writers will use both of those dramatic evocative terminology in almost every article they write to appeal to both your greed and fear emotions.

None of what they write will mean diddly squat out in the real world.

 

[Scott No Mates]

greed and fear

The two most powerful tools in the agent's toolkit.

Build up their expectations, then pull the rug out from under them. They will take the offer for fear of losing out.

 

[see_change]

I don't think there will be a bubble.

I don't think there will be a crash.

I can guarantee almost all property writers will use both of those dramatic evocative terminology in almost every article they write to appeal to both your greed and fear emotions.

None of what they write will mean diddly squat out in the real world.

There will be a bubble and there will be a crash if you take these to mean the irrational exuberance that occurs at the end of each cycle and the slump that invariably follows after . If you're talking a Tulip type bubble , incredibly unlikely.

The first one's I mention occur with every cycle ( well so far ) and as the underlying emotions that drive those are the fear and greed already mentioned , and as these are basic human emotions and the emotional make up of human race isn't changing I expect them to happen.

Cliff

 

[CherryRed]

Hmm. I am just new to the forum. Having second thoughts now to buy a IP - looking at Baulkham Hills, NSW - 800 k.

 

[Deltaberry]

Everytime people think properties will only go up (a bit like 12 months after now), there will be a downturn.

Everytime people think properties have a long way to fall, they've already hit rock bottom and are about to turn.

Warren Buffett told us the key to success a long time ago. Funny how so many people can recite what Buffett says, but can't put it into practice.

 

[see_change]

On thing to remember is that the forum is representative of only a small segment of the community and doesn't reflect the interest of the wider community .

I don't see any widespread stampede where large segments of the population are talking about property investing.

Cliff

 

[see_change]

Hmm. I am just new to the forum. Having second thoughts now to buy a IP - looking at Baulkham Hills, NSW - 800 k.

Hi cherry .

You will always find excuses not to invest . My 23 year old son ( studying commerce ) has told me we should diversify , we're too exposed to the property market , and he's concerned about a bubble .

Luckily for him he knows everything , and I don't ...

Our daughter bought an OTP late last year and is already at least 50 k up .

I think now is a good time to invest . We currently invested up to our sleep at night comfort zone , so we're not buying at the moment . Not familiar with where baulkham hills is in terms of cycle .

Personally , we bought our last sydney property ( in current cycle ) mid last year
And then went to buy in Brisbane , but I know nothing .....

Cliff

 

[Propertunity]

Hmm. I am just new to the forum. Having second thoughts now to buy a IP - looking at Baulkham Hills, NSW - 800 k.

Good . That is one less competitor we have to worry about. Step aside and let the real buyers, buy. Hesitate and miss in this market.

 

[impala67]

...Warren Buffett told us the key to success a long time ago. Funny how so many people can recite what Buffett says, but can't put it into practice.

very true.

Buffetts main rules:

1- Don't lose money
2- Refer to rule #1.

 

[see_change]

good :d. That is one less competitor we have to worry about. Step aside and let the real buyers, buy. hesitate and miss in this market.

roflmao ....

 

[see_change]

very true.

Buffetts main rules:

1- Don't lose money
2- Refer to rule #1.

Mmm , can't remember the exact quote , but I thought it was buy when everyone's selling and vice versa .

So not everyone's buying .

Cliff

 

[impala67]

Mmm , can't remember the exact quote , but I thought it was buy when everyone's selling and vice versa .

So not everyone's buying .

Cliff

They're both there.

 

[John_]

Yes are are not in a bubble, truth is when China tanks Australia is finished.

 

[CherryRed]

@See_Change
Thanks, Cliff. I will let you know how it goes.

 

[Roachy]

Yes are are not in a bubble, truth is when China tanks Australia is finished.

I'm going to make an obvious quote too.

When a terrorist attack happens on Australia our sharemarket will go down by atleast 500 points.

 

[XMW]

We maybe not in a bubble. However I suspect just one or two 25 basis point increase in interest rate will change the sentiment in property market suddenly. To me current market at least in Sydney is at its peak, similar to that in 2003.

No rush in buying now, plenty of chances ahead in the next couple of year.

 

[see_change]

We maybe not in a bubble. However I suspect just one or two 25 basis point increase in interest rate will change the sentiment in property market suddenly. To me current market at least in Sydney is at its peak, similar to that in 2003.

No rush in buying now, plenty of chances ahead in the next couple of year.

Can I quote this too year in a couple of years time ?

Cliff

 

[sash]

Smart ....a lot of lemmings are jumping in.....will wait for fallout in about 2-3 years...particularly in the off the plan segment.....

Hmm. I am just new to the forum. Having second thoughts now to buy a IP - looking at Baulkham Hills, NSW - 800 k.