Calling all prophets - Where will the market be in...?

Speculation is currently running rampant with regards to the Australian property market. Whether your reading the paper, an internet article or your friendly PC forum, someone will be calling doom and gloom, someone else optimism (less of this now though).

No doubt there has been more happening these days to suggest the boom is over and future stale or dare I say corrections are on the way. Westpac's recent rate increase news with no doubt the other majors to follow will be a big scare for some.

As someone rushing to finish a renovation to get sold before the quiet Christmas period am for the first time a bit scared of what is happening. I originally thought If I don't make an early December deadline I could probably hold out until March when business picks up again. We now have some pundits saying March will see a 7.5% price correction which if correct could see me lose 50k not to mention the holding cost for 3 months.

Whilst this may be well of the mark I was keen to hear what my fellow experts on the forum believe is happening. No doubt everyone has their own point of view but none the less that is what makes these forums so good.

I am keen to explore:
Now - December
January - June 2016
July onwards

 

The wind is leaving the sails for sure - especially after the recent investor loan changes, and now the the rate rises from such places as Westpac.

A bit of Spring activity as usual for the main areas - up until late Nov..

Next year will be a stagnant year for the main Cities such as Melb and Sydney IMO and of course; Perth, Adelaide, Darwin, several areas of Qld are already on the slow down..

 

Where's your property? Some places have more demand than the others. If I were you, I will focus on finishing the reno, keeping costs controlled and assess the market.

 

Yeah I would agree..finish the reno. The market will not collapse early next year. Will slow down as can be seen by apra and Westpac + other banks to replicate changes and what is also happening atm. Might slow down even more early next yr, but not a collapse.

 

My property is in Melbourne's North/West. Do not want to give away too much seeing as though I have said i am a little scared, you PC folk can smell fear and will pounce! haha

 

I believe by mid next year, majority of markets are going to be flat or declining due to: oversupply; lending tightening; lack of confidence; declining employment & wages growth. I've sold my worst performing properties in past months and paying down debt with positive cash flow while rates are under 5%. The properties I sold were properties I didn't want to risk being stuck with for the next 5 yrs and I wanted to reduce my exposure to debt and property so my motivation to sell as soon as possible was high.

 

Of course depends on the area, target market and further changes from APRA and banks. Juts last week there was a record sale in Chatswood for a grand sum of $6 million due to the area being very popular for people with an Asian ethnicity. However, I have seen some prices for homes, where the vendor had to be abit more realistic and sale for below the asking price (personally thought the price was abit high to start off with).

I personally feel that there are still opportunities out there for investors but just a matter of having finances approved. I would like to do more renos on current properties and try to extract abit more equity out of that but at the mercy of the valuer and the market. If I can't do that, I have to play the waiting game I guess.

 

Get the reno done first. You can't sell if reno is not done to your expectations, whatever they may be.

 

Probably better if you can look at renting the property for 10 years or so until the market recovers.
If you've done a good reno, then you should be able to fill it.

You have to take into account that as far as selling goes, real estate agents can't eat wallpaper for long so they aren't going to be in your corner from the get go.

 

I feel the same, and also trying to decide whether to offload the worst performer at the moment. Been paying down debt since just over a year ago so I have a buffer of 3 years of unemployment in the offset account. Selling off unnessary sports car as it just sits there and can be used to pay off IP. Terry rider, many reports, recently indicating massive oversupply of properties in the Melb cbd, some 17000-20000 by 2017, this will affect all surrounding suburbs with rentals and prices. Although I haven't invested in cbd, these people that bought now or previously will need to fork over additional funds when the banks revalue prior to settlement. This I believe may cause I fire sale.
For the first time in 18 years of investing I'm worried about Australia's economy and affect for all of us.
Message from all of this, prepare a buffer, most will be fine. And don't let my doubts judge your own strategy.

 

I own the property with my brother and it is about 4 weeks away from being subdivided. He wants the money tied into the house and I want to use the profits to purchase the newly created vacant block from him so I can build.

Part of me being a bit concerned about the market is thinking to sell the vacant block as well and just be cashed up and ready to pounce IF prices were to fall next year. Even though the property is in a very good suburb already, if prices were to fall I could get myself to somewhere better such as Moonee Ponds or Ascot Vale (Little clue for ya @The Y-man )

 

That sounds like the best strategy, cash being king and all.
You will then be in a perfect position to take full advantage as the carnage unfolds.

 

I have been talking to a number of Melbourne real estate agents about the market. They are all fairly certain the market will hold until the end of the year. They are less certain about early next year. None are very confident about winter next year. That said, they could all be wrong

 

The year is nearly over, not much of a vote of confidence really.

 

I do hope the carnage will happen now.

 

I agree that the times are uncertain at the moment and need to have a buffer in case. Even though I am in the APS, I still don't feel safe.

 

Maybe I can ask this hypothetical question. If there was a correction of 30% on all property tomorrow, what would you do?

 

What about interest rate?