Don't Buy Property in 2019

Thank you so much for your response. We paid 650 for the house four years ago, and in the years since- the local market has remained relatively flat. The house itself is beautifully presented, and we’ve made small improvements- replaced curtains with white shutters, redone roof, and installed aircon. I can afford to buy him out- but at what price he considers reasonable is anyone’s guess. We’ve had agents come through, and of course the young girl at Ray White assures him ‘it’s the best time to sell between Xmas and the New Year’, and threw out huge prices to get a listing. So he now believes it’s worth 700K, despite comparable sales not reflecting this at all. To have the mortgage myself- it would be a pretty big cut of my wage. So I’m not sure if it’s smart- or just better to look forward to downsizing and a new, fresh start? I’m so scared to make the wrong decision. I’m scared to buy him out and values to drop further. Decisions!

 

Thank you for your insight. I will definitely consider these factors.

 

How different will this bust cycle be with the huge amount of foreign interest in Australia with the massive middle classes growing exponentially in India China and other near countries that's the big difference that I can see. And I wonder how much of a game-changer that will be? If you look at the last Sydney bust cycle which did last for about 7 years the amount of foreign buyers was a heck of a lot less back then .China was a completely different place.
When looking at property prices in relation to Australian wages there has to be a period of no growth in Sydney for sure but when you're not actually talking about Australian wages and instead Chinese money that's a different story.
the Sydney market is almost in international market that's the big difference from the previous cycle. The government only has to open up those floodgates just a little bit or even if demand is reduced you still have so many people there with so much money that they want to invest in Australia.
Thoughts?

 

Interesting perspective. Is there still a huge amount of foreign interest though?
Foreign buyers were speculators and speculators usually dry up once the market has peaked and confidence is lost. In this regard we are probably in a worse place now than after the previous bust cycle as all that foreign money will dry up. An emerging Chinese middle class might have a lot of money to spend, but the world is their oyster and there is no good reason for them to spend it on Australian residential property of all things now that growth appears unlikely and they get so heavily taxed.

 

Looking at Sydney, you have crap yields, low growth prospects, high taxes/duties on foreign buyers etc

Can’t see why they would but here

 

Foreigners buying in Oz .... google this,

government has tightened policy on this, they have been cut at the knees

How can foreign investors soak up volume when they are limited to new stock/OTP

.... and more important as OP mentioned why would foreigners target Oz now that the market is falling.... are they dumb dumbs??

 

I'm not sure I would say they were entirely speculative they wanted to get money into property and they didn't want to invested in China Australia's seen as a pretty safe secure place to invest. of course they're not game to invest when everyone is saying that the market is crashing but what I'm suggesting is that perhaps they will be a force that will make this downturn shorter than the last downturn when foreign investment was not nearly as much. Australia's changed quite a bit have a look at Sydney during the last downturn just from a demographic point of view. it's very much more an Asian city. Hugely visible change in the last ten years. Previous cycles were more about what was happening with the Australian economy and Australian wages

 

I don't think they would specifically target it when it's falling (although some would see Australia is a very good investment at any time compared with their own country -without even considering the motivation that such a large amount of the money being "grey money" brings) but I think that they could be a driver that pushes prices up even before wages catch up. Overseas money invested in Australian real estate is a significant new factor that wasn't around nearly as much in the last downturn.
Additionally foreign money comes in through family members too that's the way non residents can still invest.

 

There is lots of good reasons for them to invest in Australia in, one being to gain residency and better life style and opportunity for their offspring. Another is as a place to preserve and store wealth safely. Australia being the best and most desirable country to live in is one reason for those with money to invest here rather than elsewhere. After all what is the point of having money? If they want to speculate their is better options than oz property, they have made their money, they want to preserve it and use it to improve their lives. What many Australians take for granted is an aspiration for many.

 

Seen a few overseas (Singaporean) Pty Ltd buy up some Perth inner city period homes...

 

Hi MissMel. Remember the people chatting on this thread are investors and you are talking about a memory filled PPOR.
Which has not gone up in 4 years during the boom times.
Which will take a substantial part of your future wage in these uncertain economic times.
Which is a large family home.

Do you need the stress and the debt at this time?
Are you happy to speculate on values going up or down at this difficult time in your life?
Do you think you are in the right mind frame to make decisions and negotiate with clarity?

Only you can answer this. Remember that your soon to be EX has to answer these questions as well.
Real estate negotiation cannot be done free of emotion for a win win outcome with everyone happy if one of the negotiators has unrealistic expectations. He is already impaired wanting an ASAP transaction. real-estate assets don't work that way. Not in this economic climate.

All the best.
what would I do? Cut my losses in assets and in relationships holding me back. Settle cleanly and finally and walk away with no looking back or any need to. There is always another house and another opportunity.
Peace of mind is priceless.

 

This has also been my thought process. The idea of a fresh start is very appealing. Right now, it is very difficult living here by myself. Everywhere I look there are memories of our years together here. And suddenly, it’s very lonely and depressing. The idea of renting after being a homeowner for years is difficult too, but I know it’s the right decision, as there’s nothing new to market lately, and I don’t want to make such a huge decision and buy something out of desperation.

With so much emotional upheaval, I worry that the selling process itself is going to be super stressful. Open homes, the agent communicating and negotiating between my ex and I, me needing to find a new place, moving my stuff out etc. I’m also very aware that the house could sit on the market for a long time. At times, I feel like it might be easier to stay.

So that’s the dilemma- to stay put and service a mortgage for a house that MAY increase in value, or go ahead, sell- and accept that it’ll be a crappy few months and look forward to a new start in a new place. I have fantastic neighbours around me, and my work is literally 3mins away but I know that’s not the be all and end all.

 

We know Australia is great

But numbers dont lie


Chinese foreign buyer boom over: UBS

 

And every 4 years we get to go and vote , as more and more younger voters stay in the rental market, not to sure if they will vote for the party that just allows foreigners with lots of money to keep buying up Aussie property, while they spend years trying to sort out a deposit

 

That may be your perception but is it reality?

Foreign property investment plummets as tougher regulations bite - ABC News (Australian Broadcasting Corporation)

 

.....but this wont be enough to turn the Perth market

In the main Perth has oversupply of properties

Inner city period homes in demand but still has not fully recovered to prices of 2007. Good time to upgrade primary residence

 

its a pause, whilst they wait out the CCP to loosen rules around getting cash out of the country or find loophole, and they'll always find a way. Adapting and thinking out of the box, is the way of life there, you have to be to compete and come out of billion ppl.

China's middle class wealth is massive and they are not ones to leave money sitting in the bank. Nowhere in asia is property as safe as that in Australia - where you actually own land that can pass on generations, it is protected by the law rather then worrying the gov may take it one day using the law. They know their economy bullrun won't go on forever, they know the stock market is facing hard correction and manipulated, they are keen to move their money out and convert into actual assets.

And this is without thinking of the social and work density competition their kids would face, the lack of govt support for aging pop exasperated by the old one child policy, the pollution etc etc

 

You may be surprised to know that US real estate is numero uno for Chinese investors

New York, San Francisco just a few of their top picks

 

I just don't know

 

yes but they aren't in asia, being close to 'home' is still a factor

US, UK, Canada - in that order, has been the preference for immigration too, since the 80s. There are plenty of those who can't make it there. The very strong and growing chinese pop here speaks for itself