Another bust prediction. .....

Discussion in 'Property Market Economics' started by TMNT, 2nd Apr, 2016.

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  1. Sackie

    Sackie Well-Known Member

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    I agree with you mate about being cautious.

    Personally I think shares are in a different ball game to property though. My personal approach is to buy below 'market' value, at favourable phases of the property cycle, buy in good demand areas and then add value. I am not waiting for the market to necessarly move in order for it to be a good deal for me. Can the places I buy into drop 50% in 2 years...well anything is possible. But its very unlikely.

    But definetly agree with you re being cautious and analyse carefully re DD etc.
     
  2. MTR

    MTR Well-Known Member

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    Exactly, those that manage risk will survive, this is just part of the property game.

    Those that have taken on too much debt, no buffers, buying at peak will feel the pain.

    No one can predict the future, however if you ignore what is currently happening in various markets then you are at risk of losing money.
     
    Last edited: 4th Apr, 2016
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  3. Sackie

    Sackie Well-Known Member

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    I agree. I have always believed that my job as an investor is not to be right or predict the future on every deal 100% correctly, 100% of the time. I look at all the facts, take into account all the DD, my risk profile, financial situation and then pull the pin and enter an opportunity that might have great results.

    The way I view it is each deal is an opportunity. And if you enter enough 'possibly good-great' opportunities then at least some should pay off, while you manage the risk of the overall portfolio/active deals.
     
  4. See Change

    See Change Well-Known Member

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    I agree with you . This boom isn't your typical boom .

    It's milder than at least the last two . Seriously , it is ....

    Cliff
     
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  5. MTR

    MTR Well-Known Member

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    I am not buying at the moment and just completing projects I have on the go.

    I personally think at this stage of the cycle you can not depend on growth because cycles are changing, falling back, or close to peak. This is actually fact, not a predication. Not to say there wont be some opportunities out there.

    Also another consideration - by the time you add stamp duty, closing/selling costs, if the plan is to capture growth and bail then you may be disappointed. Of course there will be those that will say they will never sell, that's fine, then you are holding properties in a falling market, makes little sense to me, just my opinion.

    On the development side of things, unless you buy your land at the right price I don't believe you should calculate end values on today's values because as soon as the markets fall so do those end values, and worse there are no buyers and there is an oversupply.

    Perhaps this is seen as too cautious but I am absolutely in no hurry to lose money. I can always find a deal, but I would prefer to sleep at night knowing that my market is strong/good.

    Developers/investors state that as long as the numbers work .... well that is TODAY, but we are talking about approx. 18 month timeframe from buy to build....this is what many seem ignore, the market conditions moving forward. I don't mean to be negative but I am seeing skinny profits at the moment,, similar to what happened prior to Perth going bust, this tells me close to peak.

    MTR:)
     
    Last edited: 4th Apr, 2016
  6. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    Looks like the building statistics agree with @MTR. Not that many approvals because there is less meat on bones and builders are pulling out.
    8731.0 - Building Approvals, Australia, Feb 2016

    upload_2016-4-4_11-44-56.png
     
  7. Propertunity

    Propertunity Well-Known Member

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    Property does not behave like the share market - it is a lot less volatile. With the exception of mining towns, I can't think of anywhere in AU that property has fallen 50% in 1-2 years.:eek:
     
  8. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    A 10% drop + transaction cost of (5+2) % on LVR of 0.8 > 50% fall in completely paid shares
     
  9. See Change

    See Change Well-Known Member

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    Fact ??

    Based on what ??

    Or is that just your opinion ?

    Not too many would dispute Sydney is peaking and maybe Melbourne is / could be getting closer , but Brisbane , Adelaide and Hobart seem pretty early in their cycles so I'd love to know how you can say that it's a FACT ....

    Cliff
     
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  10. TMNT

    TMNT Well-Known Member

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    of course, it was just an exmaple to illsutrate ignoring all market forces isnt the best thing,

    in 09 much property fell 5-10% and didnt recover for a few years, if you knew that was going to happen, you wouldnt go willy nilly buying every as much as you could afford
     
  11. TMNT

    TMNT Well-Known Member

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    I personally think brisbane has already done most of its growth, however I havent considered previous peak prices, if previous peak prices havent been met, maybe we are less then half way there and timing wise now is brilliant
     
  12. See Change

    See Change Well-Known Member

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    So , since when is " I personally think " a FACT .....

    Cliff
     
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  13. Kate Moloney

    Kate Moloney Well-Known Member

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    Absolutely agree. Even when you do stuff up though, it doesn't mean the game is over so to speak. Its just a matter of cleaning things up no matter how long it takes. Nothing can make a person bullet proof, not even buffers, especially if the market moves against you more than you anticipate. Life is unpredictable. Just got to roll with the punches and do your best to stay centred.
     
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  14. Sackie

    Sackie Well-Known Member

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    Personally I am of the opinion that Brisbane has at least some more steady growth to go, with some good/great opportunities around if you can identify them.
     
  15. Azazel

    Azazel Well-Known Member

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    They certainly are changing in Brisbane.
    I guess they're falling back in Perth too.
     
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  16. TMNT

    TMNT Well-Known Member

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    Where does it say fact??? I may be getting old but i still cant seem to find it?

    Or do i need your permission to have an opinion?

    If so i sincerely apologise
     
  17. MarkB

    MarkB Well-Known Member

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    Maybe you should re-read the thread @TMNT

    (You weren't the one passing an opinion off as fact).
     
    Last edited: 5th Apr, 2016
  18. See Change

    See Change Well-Known Member

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    Thank you mark :)

    Though I'm still waiting for MTR to respond with her justification for calling it a Fact ...:rolleyes:

    Cliff
     
  19. MTR

    MTR Well-Known Member

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    My research is based on what is happening on the ground, what locals are stating and more importantly re agents, my own properties and sales evidence.

    What I have been doing for years now. I am not too keen on relying on graphs etc. because what I have seen over the years is data can be outdated or can be misleading and wont tell you the true picture, if anything it can be very confusing.
     
  20. 2FAST4U

    2FAST4U Well-Known Member

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    I'm not that keen on Brisbane either.
    6354.0 - Job Vacancies, Australia, Feb 2016

    There's less job vacancies in QLD now than there was in 2014. Retail turnover also fell. Labor State Government is also going to be a drag on growth. Sydney houses are booming because the NSW economy is booming. All the current jobs growth is coming from Melbourne and Sydney.