Don't Buy Property in 2020

Discussion in 'Property Market Economics' started by croseks, 13th Mar, 2020.

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  1. croseks

    croseks Well-Known Member

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    {Note from mods - this thread continues from here: Don't Buy Property in 2019}


    Here we go, stimulus aplenty still to come. With the stockmarkets tanking, I think there will be a huge psychological shift into housing as a 'safe haven' over the next few years. Will take some time but another property boom is all but guaranteed to move us into the next cycle.
     
    Last edited by a moderator: 14th Mar, 2020
  2. MTR

    MTR Material Girl Premium Member

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    i hope your right

    Interest rate drop and another in April will be great

    my concern is small business and jobs?? Some industries will close shop and this will equate in job losses??
     
  3. Bill Williamson

    Bill Williamson Well-Known Member

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    Bank shares are tanking.
     
  4. Lacrim

    Lacrim Well-Known Member

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    On the contrary, I think what you really want to be invested in the next few years is stocks.
     
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  5. croseks

    croseks Well-Known Member

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    Stocks will do very well as well once the dust settles, will take a few years though.
     
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  6. Lacrim

    Lacrim Well-Known Member

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    That's ok bc I invest for the long term. Like Warren alludes, don't make 30 year decisions based on the last 30 mins.
     
  7. Bill Williamson

    Bill Williamson Well-Known Member

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    I can't see how housing will do the opposite if everything else is in a big downturn. People won't have income to support loans and banks won't have funding to lend against in order to support price growth.
     
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  8. MTR

    MTR Material Girl Premium Member

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    this is catastrophe, I believe 100 flight centre shops closing. There will be more to come and of course it will impact. Its not the end of the world, but scary stuff

    I have now decided to hold off on my development until I see how this pans out. Perhaps just get plans and permits approved

    Only light I see is the vaccine ....it cant come soon enough

    Daily reports of deaths is causing more fear and more lows, and business’ closing

    I am also selling 2 properties in US while market still strong and AUD now in free fall at 62.7. Just makes sense

    Just trying to protect my capital
     
  9. croseks

    croseks Well-Known Member

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    Banks will always have funding, we live in a debt based monetary system, debt is money.
    These kind of conditions will open new doors in the credit lending system, the government and central/reserve banks want us to spend and business to invest hence the interest rate cuts around the globe in the last week.

    In terms of income growth, there is helicopter money coming, interest rates have dropped and can drop to 0% or beyond, tax cuts are already legislated until 2025 (artificially increasing wages), Gov is guaranteeing first home buyers with 5% deposit (LOL), this is just what is already in motion not including what more will be introduced.

    Housing already had its 20% recession and it's primed now to continue the trend. RE market in Australia is $7+ Trillion for reference.

    This is all just my own opinion.
     
  10. Bill Williamson

    Bill Williamson Well-Known Member

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    Nope, forgot about the GFC already? banks do not always have money. Our banks are no different. Regardless of where RBA sets rates if overseas hedge funds that have lent our banks money on 90 day terms decide they'll take their money and put it somewhere else then our banks will need to offer a higher return.
     
  11. Bill Williamson

    Bill Williamson Well-Known Member

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    CBA share price is now down over 20% compared to the last 6 months avg.

    AUD now in free fall against the USD and EUR, making those offshore funds they've borrowed even more expensive to pay back.

    Things are about to get ugly in the world of banking and finance.
     
  12. croseks

    croseks Well-Known Member

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    Things have been ugly since about Nov 2019. Corona virus is just the catalyst.

    Check all major PMI's, entire US Bond Yields under 1%, 10Y Bund Rates near -1%, FED Repo Operations to step up $1.5T over next 3 days, US Corporate Profits, US Corporate Debts etc... The writing has been on the wall for months, there is still more pain to come.

    Money will transfer from volatile assets into real assets.
     
  13. Bill Williamson

    Bill Williamson Well-Known Member

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    Cash is king right now.
     
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  14. Bill Williamson

    Bill Williamson Well-Known Member

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  15. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    There was a debt bubble and the coronavirus is the pin. We seem to be blaming the pin, not the bubble.
     
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  16. KJA182

    KJA182 Member

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    Agree, debt dominos will fall. So many companies levered up to do share buy backs while execs cashed millions in options. Now they have no funds left for a rainy day. Mass bankruptcies will take place. US Shale, airlines, retailers..

    I dont know if cash is king. maybe at the moment. But if the fed can create 2 trillion dollars in a day, is it really worth holding cash ?
     
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  17. Bill Williamson

    Bill Williamson Well-Known Member

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    Cash can always be used in exchange for goods and services. Its also relevant in avoiding foreclosures. Can't pay loans back with dud assets.
     
  18. KJA182

    KJA182 Member

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    You can ask the people of zimbabwe or venezuela how much of their saved cash can be used in exchange for goods and services
     
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  19. Bill Williamson

    Bill Williamson Well-Known Member

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    2 ****** currencies doesn't mean much.
     
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  20. KJA182

    KJA182 Member

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    If you think its two currencies you should read a history book