Covid 19 price correction: Place your bets!

If I were sitting on bulk capital , renting and came across a 20 % discount, I’d pull the trigger.

 

Mate, as long as your job is stable, it should be fine. If you don't mind me asking, where did you buy? Sydney should be fine in long term regardless.
Is it PPOR?

 

I think the guiding is pretty accurate. I don't know the area so well but it's near some premium suburbs and is a big block. A couple of weeks ago and I would say it sells for around $1.15-1.25m.

 

I'll inbox you the property, it's in the Eastern Suburbs

 

Livelihood disappear?

Its been a hectic three weeks. If a small/medium business cant cover a few months of little to no revenue without all the gov assistance then its a poorly run business.

Granted this could last well over a few months, but to call out a sinking ship so early is over reacting.

 

Thanks Matt, I reckon it will go just above 1m given how much work the kitchen and bathroom needs. We'll find out and keep this thread updated.

Any other bids?

 

At least the agent seems legit (although that could be based on their expectations of market changes). I went to some properties guided at a price where the reserve was almost 25% above the guide...some where the sale price was 30% above the guide. Ridiculous

 

Isn't that exactly what is happening to the major airlines though? Large organisations can't always withstand months of zero revenue. If they have a battlechest of cash, then sure, but not all do.

 

Cash flow and debt, none of the first and too much of the last... that’s the real problem.

 

They don’t have any cash, they dumped it into share buybacks to create yield for investors.

They (Qantas) spent 500 mill on buying their own shares, last year , and then asked for 700 mill hand out.

If you blew all your capital on falsely raising the paper value of your company saving nothing for a rainy day, should you be bailed out?

 

This is exactly how I'm feeling... but I no longer have work coming through

 

Thanks for this. I think you are right. Because we are going to also see the impact of this across the globe. That affects tourism and a lot of things.

 

Cash is king at the moment. My fear is this Australia will manage to flatten CovID then it will spike again. They have to do it once and do it right. And then it's going to be whack-a-mole with foreigners coming in. My neighbour over here in China just got back from Canada. He has packing tape on his door, and only authorities are allowed to remove it. For the next two weeks. Well, it works.
It's not just a case of how low it goes, does it permanently reset property in Australia?

 

No.

 

If it’s your PPOR and your renting now and have stable jobs don’t look back. It may be a case that in 10 years the value is the same but if your paying it down on P&I and living within your means in that time, then just move forward.

People assume (and bank severely on) +5 % yoy capital gains so they can refinance for new Rang rovers they can drive to the snow for weekend ski trips and and up-trade their house (and investment property) every 5 years. Those days are over, people are going to actually have to pay their houses off, not refinance , not buy them assuming it’s an upgrade pathway and start spending within reason.Especially the middle class, it’s the middle class who have this financially transmitted disease of spending tomorrows money yesterday.

Through 2014/15/16 the convo by the office water cooler was about how “my house earns more than I do,”.... “booked another trip end of year”.... “who drives an old car these days”. That’s not going to be a thing for a while now. People will need to actually do goods and service related value add things to get income.

 

well thought answer!

 

I think it will be more likely around six months and will steadily effect more businesses as the shutdown extends over more aspects of our life. Debt will kill a large percentage of small/medium businesses along with some large corporates I'm afraid

 

I'm interested in this as well, and what stimulus will be on the other side to kickstart things again. Even wondering will the way things work change if things reset? It would be the perfect time to change the rules if the government chose to do so. I still feel first home buyers should have first dibs in the property market, but I am biased as I am a FHB

 

I feel like the economy is going to achieve what Labor couldn't. Nobody will be rushing out to negatively gear property once highly leveraged investors get crushed. And you don't receive franking credits when the companies don't pay dividends.

 

LOL, true! And to think anyone would vote for them? This is tragic!