Don't Buy Property in 2019

FOMO is one thing, but amounts to nil if people don't have the capacity to buy.

 

I wouldn't either if I sold out of Sydney prematurely, and now can't buy (again) bc prices have dead cat bounced.

One can find great comfort if they executed on their beliefs and got it right. But if you get it wrong.....very uncomfortable.

 

Can you provide one data source that shows prices have bounced ever in last 2 years.

 

Lolz .

I was following a few auctions last Saturday and ground situation had slightly calmed down. It could be that the buyers who were in sidelines due to the election uncertainty was/is now active soaking up the supply. Seasonal lack of supply could have created a small temporary spike. As you pointed out Sydney auction clearance was slightly reduced this weekend...

 

Its too early to call it, the downward trend pretty much just started

 

It is a long weekend. That causes some people to put off either holding or attending an auction.

 

That’s the beauty of the property market, it’s a slow moving beast. Current trend in Sydney is downwards, people celebrating post election we’re hoping for change of direction or slowing of price falls but so far there is no data that supports this hope.

 

Anecdotally falls did slow down, mostly due to lack of new inventory. If that holds true once spring seasons starts I guess we will be bouncing around that support level for a while, I do not expect any turn around w/o demand from investors/developers. And at current yields and CG expectations there won't be any for a while.

 

Tbh I don't think anyone knows what will happen to real estate and when. I just buy when it makes sense for me. Two things most ppl forget with RE.

1. It's a very individualistic game. Whats best for 1 person doesn't depend on whats best for most or even the next person.

2. It's a long term game.

 

True, all comes down to strategy, no point being fanatical about it

 

Some of us use other strategies.
For example have you considered suburbs where there exists a disparity in values of properties let's say between 3BED 1BATH 1 or 2 CARS AND 4BED, 2BATH or 1 or 2 CARS? Or even between 2 Bedder to be converted to 3 Bedder?
Adding renovation such that it converts such property to more beds and/or baths, can generate a higher rental or valuation increase, which in turn can enable equity pull out or if not at least lower LVR.
It sounds simple but not easy to do. A lot of research required too!

 

Graph of only 46 years till 2016 though...
Although IMHO as prices increase so would downturn disparity in values, e.g 10% decrease on $100K s as opprosed say $1M or $10M property and so on....


from article below:
What we can learn from Australia's median house prices from 1970-2016 - Homely

So I suppose if one wishes to buy PPOR for a very long time one should enter the market when one can afford.
No-one can predict perfect time or perfect investment or perfect price all the time. What would be of benefit is whether one can add some equity via renovations down in time....

 

@MWI - Usually only every see this data in chart form. Do you mind posting the rows for 2015, 2016, 2017 and 2018?

 

Sorry I have posted the link this chart was copied from...it is not my chart.
Again the link to article:
What we can learn from Australia's median house prices from 1970-2016 - Homely
READ and scroll down in the article to see the chart till 2016!

 

This serves as a high level example about the disparity between say 3 BED and 4 BED property values and rents. Very high level much more research to be done but just food for thought!

 

Another example was in SYD quite few years from now I looked at this but passed someone else did a great conversion in very short time.
BEFORE:


AFTER:
So a 3 BED 1 BATH was converted to 3 BED 2 BATH and open plan layout.
So @MTR there are ways to add value or to buy any time if your finances permit and you know how to add/generate value whether in rental or equity or both.
Sometimes it could mean opening between kitchen and lounge, adding en suite or additional bathroom or even adding a bedroom.

 

Thanks for posting the data. It shows what I refered to in my post. The price falling period is often around 1-2 years, not several years like some here insisting.
Also fully agree with your point with regards to time to buy.

 

I would love to see interest rate changes and wage increases attached to each year for each city on that graph. There would be massive changes in both that provided the ability for people to radically increase their leverage right?

So to see a similar rise in future we would need either household wages to jump or debt to become cheaper or a combination of both. I guess you could have families all put in together to fund the family home. We went from single earning homes to double so there is room to expand there.

 

Yes I agree and I would also like to see other statistics like population growth, credit changes like Equity loans which may not have existed too. So it depends on quite few other variables...less land to develop in closer proximity to suburbs, or closer to say private schools...etc.
Demographics are important so I now do prefer to stick to suburbs where people are earning more, less land available, older properties which can be renovated or redeveloped.
As I say there are many ways in which to invest into property and then again to add value to.
If you just look at a general perspective of passive long term CG growth investing this would not suffice for the future (well who knows?) but the other factors make it attractive to me personally.
I think you could research yourself what the median wages were for each year as I think someone previously posted such data when I asked for specific year.

 

Going from single to double incomes from 1980-2010 was huge...

Multigenerational lending pretty insignificant in current credit environment as banks don’t value non-traditional arrangements particularly, and incredibly making it difficult for older people to access longer length loans