60 Minutes

Sydney 30,000 empty rentals. There is oversupply. What does this tell you???? further pain and lets be clear rents will drop

imagine 20-25% drop in rents???

its happened before

July 2020 Property Market Update: Staggering Sydney Vacancies | Property Insiders [VIDEO]


I am happy we have a stimulus package, lets see how our leaders manage our economy moving forward

 

In a scenario of lower rents and little CG for the foreseeable future, will this be problematic for holding property in a SMSF that could trigger a wider and ongoing event?

 

I will give you a proper reply in 2021, after March, when jobseeker is gone and we have at least 2 quarter results GDP and I see the number of listings, rents, sales, auction clearances and revisit markets???

 

No idea? I wonder if @Terry_w knows????

 

There is not a country unaffected by the economic fallout from coronavirus irrespective of their policies - which part of that situation do you not understand? It is only to be hoped that as time progresses Australia is the best 'least performer' on a global scale.

 

Not sure exactly what you mean, but SMSF is just a trust holding property, but it differs in that there would generally need to be a sale upon the death of a member as the members death benefits must come out. So SMSFs could just ride out the storm like other entities, but where there is a death of a member they could be forced to sell the property and this might mean a capital loss even.

 

I couldn't possibly explain my thought process in a few lines .

 

What does this have to do with Australia and our economy?

 

its all an unknown

The title of thread and subject refers to 40% drop in property And I am replying to this

Why I say wait till March 2021, it will be dependent on some of the items I mentioned.

While the government is propping the economy we are currently treading on water. Until then we wont know the true impact

2021 will be interesting??

 

.....I think you should start a thread on this, seriously..... it would be interesting to hear from everyone on this subject. I will post on this


i know what to do as an investor......

 

I think it could be around late this year once you combine the negative value of information on society in general ..
Robert Shiller in many of his books tells it in very simple terms once prices swing more then the fundamentals they reflect then who knows..

 

I was looking at projected CPI

we should know precise figure at end of month

Australia Consumer Price Index (CPI) QoQ

 

I know many of you follow the financial markets, and if you do, you will have noticed in recent times rising stock prices, rising gold and silver prices, and rising bitcoin etc. All against a declining USD, though all currencies are declining.

This is what we call an inflationary melt up. And I guarantee that the same thing is happening to the real estate markets - prices are melting up as well.

This is what happens when "money dies", and the CPI doesn't measure this because it focuses only on consumer prices.

60 Minutes and many other analysts always miss this when discussing real estate: they assume financial stress simply leads to lower prices. But they ignore the value of the currency that is measuring the asset itself.

When currency dies, asset prices go up. And this, along with some demographic shifts, will be the story of this decade.

 

I notice the AUD has been doing ok recently

However its been a rollercoaster ride, I think March 55 2020, now 71

Its also dependent on figures/what is reported

No idea where AUD will be next month? This is how volatile it is


What are you saying??? Property will rise???

 

Couldn't have said it better. There's more to economics or money? What is money? Is it just a piece of paper or plastic..the key is what that money/plastic piece of paper can buy you in a given point in time, its purchasing power?
So if I say a cup of coffee costs $0.10 you may say that's cheap, well why? Because you will compare to what you earn or generate in income and how much purchasing value you have at that point in time.
If I say a cup of coffee costs $100.00 you may say that's expensive at this point in time, again linked back to purchasing power at that point in time. But what if median earnings are say $1M then that $100 cup of coffee may not seem that expensive.
So it is all relative what that money, or piece of paper can buy you in given point in time relative to what you generate. Hard to get the head around it but it is not all about the price the $ amount, rather the purchasing power at given point in time.
But certainly interesting times ahead...

 

AUD is rising but only against the USD. AUD is falling against goods and services (which we can measure against gold and silver).

The way to think about currencies, is that they are always losing value, but at different speeds. It is like two trains going in reverse next to each other: the one that is going backwards less quickly is not going forward, though it might look like that from the other train.

Yes, property I think will rise from here, give or take a few months. The Fed and RBA have intervened to devalue the currency to mask the decline in real estate values. Real estate will rise in AUD terms, but fall in real terms.

Hope this makes sense.