well done with this prediction... shame it was changed 1 day later by yourself,
then, there is the 2010 prediction you also posted elsewhere... 1M by 2013... opps.
Let me guess, that one was not a prediction.. because it was completly wrong ?
Will Australia's next property boom be the greatest boom we've ever seen?
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well done with this prediction... shame it was changed 1 day later by yourself,
then, there is the 2010 prediction you also posted elsewhere... 1M by 2013... opps.
Let me guess, that one was not a prediction.. because it was completly wrong ?
I dont want to weigh in on this too strongly - I dont pretend to have the answers, I just like asking the questions - but I must ask: Haven't we already observed the heights of lunacy in some property markets already, in the first 5-6 months of 2015?
I'm certainly no seasoned property veteran but I can confidently say that with 6 years of investing experience under my belt, coupled with watching the markets like a hawk during this time; I've got enough skin in the game to confidently say that in the last six years of investing, I've never seen more investor stupidity reported in the media; observed in the behaviours of some colleagues, friends, and acquaintances; and generally blogged about on this very forum; than I have observed in the last 6 months.
That tells me something.
I'm certainly no seasoned property veteran but I can confidently say that with 6 years of investing experience under my belt, coupled with watching the markets like a hawk during this time; I've got enough skin in the game to confidently say that in the last six years of investing, I've never seen more investor stupidity reported in the media; observed in the behaviours of some colleagues, friends, and acquaintances; and generally blogged about on this very forum; than I have observed in the last 6 months.
That tells me something.
Haven't you heard C-mac? It's only owner occupiers who pay silly prices (according to some on this forum), not rational investors who always need the deal's numbers to stack up before buying...
Lol!Haven't you heard C-mac? It's only owner occupiers who pay silly prices (according to some on this forum), not rational investors who always need the deal's numbers to stack up before buying...
That'd be me you refer to.
I still stand by it.
Think about it; with all this unbelievable CG going on in Sydney right now - and the rents haven't gone up parallel to it - how many investors can stump up the massive shortfall of cashflow associated with a purchase now?
Look at yourself as an example; you are an investor, yet you still haven't bought in recent times.
As a group, investors are less likely to be involved in full-scale purchasing unless the numbers and indicators are right,
And even less of that group will buy if the cashflow is going to cripple their wallet...no matter how enticing the lure of possible CG might be.
C-mac, I've been at this game five times as long as you have and to answer your very sensible question about lunatic prices. Yes, I have seen it sillier than this. It was the late eighties and money was being thrown around at all and sundry. In the patch I started investing in (Bayside Melbourne) prices doubled in 24 months. Following this silly period, those old enough to remember would know what came next. It was a fairly hefty recession. Prices dropped and property stunk for years until the next upswing. I am talking in a generic sense. I am sure a few markets here and there came out unscathed, but in metro areas, things were grim for some time.
I'm not saying this will occur again nor do I proclaim that this time is different. Can it continue?.....maybe for a while? How long? Don't know.
I wouldn't be buying Sydney property right now and I'd be careful in Melbourne. I don't see much value anywhere except S/E Qld on the east coast. I don't follow Perth or Adelaide. Let's wait and see what unfolds............
Those younger who have only known good times and bull market property conditions, feel free to rebut.
I have no doubt Sydney is in a bubble and you'd be nuts to buy something now. Wasn't old enough to see 91 recession, but remember friends' parents jumping off buildings in Hk in 97 Asian Financial Crisis.
So, there you go.Not due to lack of cashflow
Not even cashed up investors are going to jump in and pay more en masse for anything.
There will always be a few who might, but this would be the overwhelming minority, I'd wager.
The figures show that most investors only own one IP.
It is fair to assume that this section of the investors are not buying more due to a number of reasons - one is no doubt a cashflow issue; otherwise why would they not consider another?
The minority of investors own two or more IP's.
Either they are buying sensibly to maximise cashflow (not paying too much),
Or, they are higher earning folks who have lots of expendable cash to throw at an IP without much thought.
I'd wager the percentage of this group who actually would do that would be enormously small.
The statements that you and the media make would have us all believe that on any given week, half the volumes of buyers out there are mindless investors, swanning around and throw reams of cash at anything with a letterbox out the front.
Maybe it's just me who is the only investor out there who has never been in a position to freely whack down loads of money for the 5 IP's we had...none were bought at a premium; because we could never afford to do it.
Maybe everyone else is completely loaded, and can go beserk.
Maybe you're right, and I am completely out of touch with the world these days - maybe yer average investor isn't the Mom and Pop combo, but are now all yer fully financially educated and cashed up dudes on multiple 6 figure incomes who can buy up a storm, and to hell with a rent yield or whatever to soften the cashflow hemeorrhage.
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Well one investor friend I know is just a reckless mother of 3 who tells Centerlink she is divorced so gets $1500 per week pension money while her allegedly divorced husband earns $2000 cash in hand a week as a truck driver. They own 4 properties.
Wonder how some of these socialist pollies would feel when they realise their constituents are 10 fold wealthier than they are.
Wonder how some of these socialist pollies would feel when they realise their constituents are 10 fold wealthier than they are.
And, this would the the standard demographic of an IP investor too....not.
Look; I'm sure there are horror stories, but the normal would be Mr and Mrs. Smith trying to become like Jan Somers, or Margaret Lomas....realising their PAYE might not cut it, and are endeavoring to do it with a few IP's.
Marg Lomas has a hatful of IP's now, apparently.
I wonder how many folks she has edged out to buy her IP's?
One of my ex-Bosse's mates had a house in Doncaster at this time.
I remember my Boss telling me how he had to sell his house due to the IR's - it was worth approx $1mill back then, and he had to let it go for $650k.
I was staggered because I didn't know anyone who even owned a house worth $1mill.
well done with this prediction... shame it was changed 1 day later by yourself,
then, there is the 2010 prediction you also posted elsewhere... 1M by 2013... opps.
Let me guess, that one was not a prediction.. because it was completly wrong ?
edit: oh dear, Shadow edited his own photobucket chart to pretend he always had 2016 as the peak... sadly for him, the original chart he posted is still visable, on googlecache as well as his own photobucket account...
That is a pretty low act Shadow.
A friend recently purchased in Bondi and is now looking at auctions in Parramatta
Too hot for me though, I purchased in 2011
Isn't it bizarre they're not buying in 2012 and want to buy now?
"The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at its finest."
Gordon Gecko
You appear to be taking that chart rather seriously? You do see the scale that goes through the roof to moon, right?then, there is the 2010 prediction you also posted elsewhere... 1M by 2013... opps.
Let me guess, that one was not a prediction.. because it was completly wrong ?
Actually, the chart is 100% accurate, and further evidence of my awesome forecasting ability. Everything shown on the chart has happened exactly as I predicted.
Interesting insights on that period of the 80's/90's.
It got me thinking... And again forgive my ignorance here but can I ask - how long have offset accounts existed? I have three of them and have only had them for a few years. I give them workouts literally daily; squirreling money in/out as needed.
I can't help but wonder; if the offset account existed during that turbulent time, maybe people like that example of a $1mill house having to be sold for $650k - maybe these people could have weathered storms better?
My personal strategy has been to structure the portfolio and loans so as to have the equity sit as a buffer in the offsets. Nothing special with that, sure, everyone does it.
But I still think that if interest rates shot up to levels I do my 'max' calcs at (I do an 8% drama queen scenario for the next 24-month outlook, whilst planning my IP acquisition volume and strategy over that same 24 month period); having a sound offset equity strategy would mitigate much of this burden, at least long enough to see me through the other side.
PS I realise I just wrote 'drama queen scenario'. I just made that term up as it describes what I call creating a worst-case scenario that you never think will actually happen.
Not saying that the 80's couldn't happen again, just just thinking that most savvy investors have better backup systems in place these days to deal with it.
It got me thinking... And again forgive my ignorance here but can I ask - how long have offset accounts existed? I have three of them and have only had them for a few years. I give them workouts literally daily; squirreling money in/out as needed.
I can't help but wonder; if the offset account existed during that turbulent time, maybe people like that example of a $1mill house having to be sold for $650k - maybe these people could have weathered storms better?
My personal strategy has been to structure the portfolio and loans so as to have the equity sit as a buffer in the offsets. Nothing special with that, sure, everyone does it.
But I still think that if interest rates shot up to levels I do my 'max' calcs at (I do an 8% drama queen scenario for the next 24-month outlook, whilst planning my IP acquisition volume and strategy over that same 24 month period); having a sound offset equity strategy would mitigate much of this burden, at least long enough to see me through the other side.
PS I realise I just wrote 'drama queen scenario'. I just made that term up as it describes what I call creating a worst-case scenario that you never think will actually happen.
Not saying that the 80's couldn't happen again, just just thinking that most savvy investors have better backup systems in place these days to deal with it.
My guess is the interest rates caused them to run out of serviceability of their existing loan/s,
But it could also have been a change in lifestyle such as a new baby, etc
Wrong.
This place is a fishbowl where the higher level of financial education exists.
The average Joe out there doesn't know a quarter of what the folks here do.
