For those who think this time is different (and Sydney prices will rise)

Most on here will agree that interest rates and credit availability are very important drivers for Sydney real estate. .

The data is definitive on this.

We are now close to 5000 year lows in interest rates globally (still negative in EU), and private debt is at record numbers everywhere including Australia

History shows that Long term credit cycles move in about 20 year cycles, so very long term . . . Expansion then contraction . . .expansion then contraction. We have had 17years of credit expansion in Australia


This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)

 

So what's the opinion that you are trying to express? USA collapsing, Australia collapsing or u just enjoy cryptic posts with little substance of an opinion?

 

First off let me premise this by saying I am not advocating to buy or not to buy in Sydney.

I am 100% certain that a handful of Sydney markets will continue to rise and then flatten out at some point, then come next cycle will start again to rise. Only need to understand a few markets very well to know where to invest in, regardless of IR, banking, etc etc. There are markets sensitive to those things for sure, and there are certain markets which are less sensitive to those factors.

Just my opinion.


This is one of the quickest, best ever advice I have watched.

 

you are wrong this time it is different the Druie will become a million dollar suburb....all this stuff about credit is rubbish.....

 

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Thank you for this Leo...

 

I find opinions overrated to be honest, I prefer facts and history!

To break it down for you.

- I believe that Sydney price growth is predicated on continued credit growth (ie low interest rates, and improved servicability by borrowers)
- History shows that credit cycles move in long cycles of expansion and then contraction
- I believe we are close to the very end of the credit expansion phase
- It appears there are significant numbers of people who believe that this 'goldilocks' scenerio of low rates and increasing prices will continue indefinitely.

Therefore I hope to provide some context by a quote from a seminal book which has stood the test of time regarding credit markets!

Whats your opinion on credit growth in Australia going forward?

 

No problem my friend.

 

We have sat through two years of credit tightening. Anyone hurting yet?

 

Evidence of this? This is not the vibe I get from this forum or anywhere else. If anyone really believes this they would be in a minority from what I have read.

 

Not hurting, because I knew it was coming and prepared. But I can't get what I want, in terms of borrowing more. #firstworldproblems

 

Hurting yes......I now have to submit 6 months loan statements across 24 properties with loans....have to even give the I/O term remaining....interest rates...and loan term left.

Has it stopped me...no yet........close but not yet...another 900-1.2m in the kitty...I have to spend it wisely....