Anyone care to explain what a crash in the stock market would mean for real estate?

Discussion in 'Property Market Economics' started by DrunkSailor, 6th Feb, 2018.

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  1. hobartchic

    hobartchic Well-Known Member

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    Early 2000s. At least. 25 per cent youth unemployment about 2004 ish.
     
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  2. Perthguy

    Perthguy Well-Known Member

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    :eek:

    That is a long time to have youth unemployment that high! How long did it take to really recover?
     
  3. datto

    datto Well-Known Member

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    I don't think property prices crashed in 1989. Or maybe they crashed in late 1989. So the boom maybe lasted only 12 months. It must have been a wham bam thank you ma'am type of boom lol.
     
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  4. Ted Varrick

    Ted Varrick Well-Known Member

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    It was probably just a hangover from the Bicentennial in 1988...
     
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  5. hobartchic

    hobartchic Well-Known Member

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    And then female youth unemployment in particular was very bad in 2008 though I managed to secure work but they were high stress, low paid insecure work in the private sector. I was pretty well willing to do hard work and low pay though. Government jobs seemed to be fairly secure though. I know female unemployment was twice that of male unemployment at the time. Young men without qualifications seems to be a bit of pattern with the next generation, lack of male role models, and getting to 25 with out work experience or a qualification is a new thing really. I was shocked at home many single mothers seem to encourage their young sons to be stay permanently young.
     
  6. See Change

    See Change Well-Known Member

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    The Boom in late 80's in sydney was a double in roughly one year . We bought at the peak of the boom ... and then watched things go sideways .. A painful lesson , but well remembered ...

    In the past , I've seen property move up after a period of initial uncertainty when the share market has a significant down turn

    Cliff
     
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  7. kitdoctor

    kitdoctor Well-Known Member

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    I'm by no means an equity market expert but I've dramatically increased my knowledge as we approach early retirement at age 53 (yahoo goodbye public service!). We've been very fortunate and acquired 9 IPs and our PPOR across four states over a period of 20 years. Also when I started work in 1987 after graduating uni I just made it into the Commonwealth Superannuation Scheme. I resisted all offers to leave that scheme when it was closed and transfer to a new scheme that was said to be so much better. From day one I put away 10% of my salary. These decisions have been life changing. Fast forward 30+ years and here we are. I can leave before my preservation age of 60 and convert my superannuation into a pension that will be comfortable enough for my wife to also retire early.

    The main driver for increasing my knowledge is that we're just like many others and by default you're exposed to various asset classes/types through compulsory superannuation. If you're in a typical 'balanced' or 'growth' type option these are quite often invested 50% in equities. This component will then be split in half between the Australian market and established markets overseas in the US and Europe. No one wants to take a 20+% hit to their superannuation at any stage but certainly not when you're just about to retire.

    We subscribe to a few different regular newsletters that cover Asian-Pacific markets, European markets and North American markets. These newsletters cover equities, commodities, bonds, interests rates, currencies, real estate etc. Some of these focus on a technical analysis approach called the Wave Principle developed by R N Elliott in the 1930s and fine tuned by others, particularly Robert Prechter Expert Market Forecasting Using the Elliott Wave Principle :: Elliott Wave International I'm a convert to the WP and also the socionomic theory of finance Socionomics Institute – The Study of Social Mood and Social Action The basis of the WP is that markets move in predictable waves and the basis of socionomics theory is that it is the prevailing social mood that drives markets. Forget about what any economist or expert says about interest rates, natural disasters, balance of trade numbers, conflict, terrorism, equity earning rates, oil prices, quantitative easing, quantitative tightening, job numbers, etc. etc. are doing. There is no connection between these and what markets do. This was a revelation to me. I even struggle with it.

    Anyway I'll get to the point. All of us have witnessed the biggest bubble in history - cryptocurrencies. Bitcoin rose 32 million percent. The likelihood is very high that we'll also all witness the biggest financial crisis that we'll ever see in our lifetime. It could have already started. The GFC won't come close to what's coming. I don't know exactly when it will happen but the recent correction is potentially the warning bell. The wave patterns forming in many equity indices like the Dow Jones Industrial Average, Dow Jone Transportation, S&P 500, NASDAQ Composite, etc. and many European indices are taking the form of an early collapse. The current re-tracements are playing out exactly as they should before the next more severe downward moves start. By mid next week or the end of the week we might even have the answer but the markets may keep teasing us.

    Could their analysis be wrong? Robert Prechter published a book in 1978. He predicted the 1987 stock market crash in that book. EWI has picked every crisis since then in every asset class; equities, oil, gold, bonds, real estate etc. etc. How's their timing been? Well from the start of 2017 they were narrowing in to the period July 2017 to January 2018 being the starting point and as the year progressed the period around October/November 2017 became the most likely time. However, in August 2017 as this period approached, January 2018 became a chance because the current bull market just has so much momentum. Yes they could be wrong and I'm open to this and follow another very clever advisor Martin Armstrong Armstrong Economics | research the past to predict the future His blog is worth following. He's hard to understand but stick with reading it. For us, we sleep peacefully having parked our superannuation is cash and have an accelerated plan that we can initiate to sell the IPs we're not going to keep.

    Happy to answer questions as best I can. All the best.
     
    Last edited: 17th Feb, 2018
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