Will declining market be bad for investors with NO PPOR

[GIDDO]

At the moment i have no PPOR; but I do have some RE investments.

I keep thinking that if the values of my portfolio declines a bit, it will not affect me too much because I want to buy a PPOR soon and it will then be cheaper to buy.

Am I thinking right; or am I dreaming - rationalising a bad situation and trying too hard to make it a better one. ?

 

[sailor]

At the moment i have no PPOR; but I do have some RE investments.

I keep thinking that if the values of my portfolio declines a bit, it will not affect me too much because I want to buy a PPOR soon and it will then be cheaper to buy.

Am I thinking right; or am I dreaming - rationalising a bad situation and trying too hard to make it a better one. ?

What makes you suspect your IP portfolio will decline a bit?

 

[alexlee]

Two edged sword. If prices decline, you can't access as much equity to use as a deposit. However, properties are cheaper.

Declines are good for you if you have money for a deposit. Either cash or a settled refinance. And you can afford to buy and wait until the next boom.
Alex

 

[Panorama]

Sorry, can you tell me what PPOR stands for. RE ?real estate, IP - is investment property. Thank you.

 

[sailor]

Sorry, can you tell me what PPOR stands for. RE ?real estate, IP - is investment property. Thank you.

PPOR = Principle Place of Residence....ie your own home.

 

[Peter Parker]

Two edged sword. If prices decline, you can't access as much equity to use as a deposit. However, properties are cheaper.

And/or the banks may become more conservative in their valuations (affects LVR).

However cheaper properties might mean higher yields, which helps serviceability (affects DSR).

Except for investors who are (i) on a high job income, (ii) are already over-geared or (iii) just starting, DSR is generally a bigger constraint than LVR to expanding the portfolio.

Peter