Don't Buy Property in 2019

Nah he can just blame it on China

 

I think you’ll find he rate cut is already priced in to the market. New or changing information will change the market pricing (E/R).
Correct though that it is the sign of a weaker economy rather than boom times when everyone is buying AUD for resources, products, services or investment.

The coming rate cut to stimulate the economy is not so much due to job losses as jobs are still growing, more the unemployment rate has ticked up due to the record participation rate. This could be argued as good - that those who want a job can get one, or bad - everyone has to work (double income families) to make ends meet.

But wage growth and inflation remain stubbornly low (as elsewhere in the world) and lower than the RBA 2-3% target so a rate cut to try and stimulate these is warranted.
Will it work with other factors in play, surprise election result, APRA easing? Time will tell.

 

What makes you say this?

Brazil had a massive iron ore mine collapse, global supply is massively constrained at the moment.

 

I believe Vale collapse resulted in 5% or so of the global iron ore market supply reduction. I would hardly call that massively constrained. Tropical cyclone veronica also reduced bhp and rios production slightly.

I expect Vale to sort it out in 2H19 and resume some production.

But that's just supply side, I am expecting a significant drop in worldwide demand with the recent escalation in trade war and lower than expected economic numbers coming out from china. It seems global markets had not expected nor priced this in yet, as they were expecting a trade deal to be done and dusted last month and were pricing that into both oil and commodity markets.

 

I’m a prospective first home buyer here for PPOR. Why is it a bad time to buy if prices are falling? In Melbourne they’re falling about 1K per week, surely this is a good thing for people like me who want to get into the market? Or are they forecast to drop further?

 

It’s just the length of the down cycle tends to be 4-5 years... most property investors make most money buying when prices start turning again.

Property market is like a big ship, IE takes a while to change direction

Prices are expected to drop another 10-15% over next 12-24 months, but if you find a place you love and negotiate hard, go for it.

 

Or they may not

 

Of course, but if they turn around now it will be a crazy V turn never before seen in a downturn... the shortest and most severe downturn followed by a radical upturn in the middle of a looming recession?

I don’t find much comfort in that scenario but each to their own.

 

If you are buying a PPOR to live in for 20+ years then provided it's a good price. Some say today is always a good day to buy. You are buying the security of a place to live.

Take you time no FOMO at the moment

 

No right or wrong, its your primary residence, but it would make sense to continue saving and just sit and wait as market is trending south.

All bets off if you find a home where you can add significant value

 

Just food for thought, last boom/bust cycle in Syd went for 7 years, and blue chip was not bullet proof as experts will like you to believe

Whats happening on the horizon that may continue to drive markets south??? Or flat for years

Recession???? Economy softening
Credit squeeze???
Immigration ??

 

I would think the down cycle (when price keeps falling) is often around 18-24 months and then follow by a stagnant period of 4-5 years (or more). Can you show me a graph which shows property price fall for 4-5 years?

 

The housing market is looking more certain to rise due to these 4 reasons:
1) Liberal won the election, no impact to negative gearing & CGT
2) Liberal policy to help first home buyer deposit scheme
3) APRA further loosen the lending standard (today)
4) RBA almost certain to cut-rate twice in June 2019 AND another cut in Aug / Nov 2019.

 

26 Haines Avenue, Carlingford, NSW 2118

This property got sold on 1st auction and had approx 20 register buyers. Moreover it was shown on channel 7 news (6pm on friday) as most viewed property.

Anyone attended the auction?

Above reserve price got sold

 

christopher joy thinks rba will begin QE sooner than anyone expects aswell. i see stagnation followed by perhaps an uptick if all these happen

 

With interest rates so low you may even see a lot more volatility in the housing market.
As its becoming very difficult to try and protect the economy should we see a stock market crash or something similiar to 2008 or a large downward movements in commodity prices.
In previous times you would see movements of around 300- 500 pts in interest rates to kick-start the economy.
Those days have all but dissappeared.

 

Sadly our economy is softening not good, an indication of this is AUD falling

APRA is still here and it is still very difficult to source finance, this wont ease overnight

 

Does the history has to repeat always? Couldn’t there be any surprises?

I have been actively looking in the Sydney Hills; Castle Hill/ Cherrybrook etc. I definitely see far more buyers active and bidding in auctions. Listings have definitely dried out.

I do see a remarkable difference all of a sudden. Sometimes, I fear the FOMO is back!

 

This time it is ScoMo’s FOMO

 

Yes it may be a dead cat bounce followed by a bigger V. No one knows obviously, but many on here are desperately HOPING Fomo will come
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