Help with my decision please... Put mini deposit down but now terrified about coronavirus recession.

Discussion in 'Investment Strategy' started by Silveyr, 27th Feb, 2020.

Join Australia's most dynamic and respected property investment community
  1. Silveyr

    Silveyr Active Member

    Joined:
    24th Oct, 2019
    Posts:
    29
    Location:
    Sydney
    Hi guys.
    Would like some advice because I'm really conflicted.

    Last week I put a mini deposit down on a apartment in Sydney CBD. This week with all the news of coronavirus, I'm terrified we'll all go into recession and house prices will drop massively due to closure of businesses who rely on China and mass underemployment when people are in quaruntine.

    I can still back out by losing my mini deposit.... Should I and just wait for property prices to fall in recession? Or should I go though with buying this property and taking on massive debt?

    Thanks
     
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    4,108
    Location:
    Australia
    The concern might be more about the choice of property, to be honest.
     
  3. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    854
    Location:
    Sydney NSW
    I do wonder how many people are thinking the same thing. Sydney CBA apartments I suppose would be one of the areas primarily affected.... but how long will this last? And how will you know when we've reached the bottom?
     
  4. Properwin

    Properwin Active Member

    Joined:
    5th Feb, 2020
    Posts:
    28
    Location:
    Melbourne
  5. Silveyr

    Silveyr Active Member

    Joined:
    24th Oct, 2019
    Posts:
    29
    Location:
    Sydney
    Sorry I forgot to mention, the original purpose for buying apartment is actually to owner occupy but it is currently tenanted as well so it will be a investment property first up until we move into it.
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,496
    Location:
    QLD
    What's changed between putting the deposit down and now?
    How confident are you that we're going to see a recession and what if we don't?
    As the apartment is going to be owner occupied, what's the issue if you're going to buy and hold the property for a long period anyway?
    How concerned are you about your job security?
     
    Perthguy, skater and MWI like this.
  7. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

    Joined:
    19th Jun, 2015
    Posts:
    3,369
    Location:
    NSW
    Boo!!
    Seriously? This virus has a recession named after it now? It's a version of the flu. 97-98% of people who get infected with it actually survive. Some have said they thought it was a cold.

    It's a great time to be buying while others are afraid.
    “Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.” Jean Paul Getty
     
    Codie, albanga, Sackie and 4 others like this.
  8. croseks

    croseks Well-Known Member

    Joined:
    9th Oct, 2018
    Posts:
    184
    Location:
    Melbourne
    What type of apartment is it? How many stories is your building?
     
  9. PandS

    PandS Well-Known Member

    Joined:
    14th Feb, 2017
    Posts:
    1,158
    Location:
    NSW
    Can you predict the future? if you can't then risk management is the only thing you can control
    so have buffer and prepare for recession if it comes, if it doesn't doesn't matter

    Recession maybe a good thing if you have a secure job, everything will be cheaper

    If it not virus it it will be something else, act on thing you can control
     
    kierank likes this.
  10. Silveyr

    Silveyr Active Member

    Joined:
    24th Oct, 2019
    Posts:
    29
    Location:
    Sydney
    It's a two bedroom in like a 70 floor giant tower...
     
  11. Silveyr

    Silveyr Active Member

    Joined:
    24th Oct, 2019
    Posts:
    29
    Location:
    Sydney
    So you think as long as I have a buffer it shouldn't matter if the recession comes since after the recession prices will go back up?
     
  12. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    4,108
    Location:
    Australia
    again your choice of property........
     
    mikey7 and Lindsay_W like this.
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,613
    Location:
    Melbourne, Nationwide
    If you're buying a property today, do you intend to sell it in the next 2-5 years? If so, then a recession might affect that plan. Otherwise the market may suffer a setback and then recover.

    That's probably your worst case scenario in the potential market.

    Like the other's I'm more concerned about your choice of property. High density apartments in high rise building have always been one of the most volatile types of property. If anything is going to be affected by any event, it's this type of property.
     
  14. PandS

    PandS Well-Known Member

    Joined:
    14th Feb, 2017
    Posts:
    1,158
    Location:
    NSW
    No one knows, but that what I usually do if I plan to buy or do something I control what I can control and stuff outside my control I just prepare for them, I don’t know much about the properties you are getting so I cant comment on the price

    But if you done the home work and think it is a good buy, fear of recession should not stop you but then again it your decision so you have to be comfortable with them and live with that if the worse comes to pass
     
  15. MWI

    MWI Well-Known Member

    Joined:
    17th Jul, 2017
    Posts:
    1,273
    Location:
    Lower North Sydney NSW
    No one has a crystal ball but live today in reality, learn from the past history and try to influence the future.
    So in the last 50 or 100 years in Australia and around the world what was happening, was it all great and smooth sailing or did we have:
    • The Vietnam War.
    • The Cuban missile crisis.
    • The assassination of JFK.
    • The Gulf War.
    • The Paris attacks.
    • The Suez crisis.
    • The civil rights movement.
    • The war on drugs.
    • Year 2000: Bursting of the Dot.com, or Technology, Bubble
    • Year 2001: September 11 Terrorist Attacks
    • Year 2001: Enron, the Emergence of Corporate Fraud, and Corporate Governance
    • Year 2002: Stock Market Crash
    • Years 2001 and 2003 — Present: War on Terror and Iraq War
    • Year 2005: China and India Grow as World Financial Powers
    • Year 2005: Hurricanes Katrina and Rita
    • Years 2007 and 2008: Sub-Prime Housing Crisis and the Housing Bubble
    • 2008: Bernard Madoff and the Biggest Ponzi Scheme in History
    • Years 2007 - 2009: The Global recession and the Collapse of Wall Street
    • and so on..... so many global events have occurred over the last 50 or 100 years
    we can keep adding 1987 stock crash, wars, recessions, floods, fires, etc... yet please tell me why have property prices in Australia risen?

    Don't worry about what may happen, no one has a crystal ball, but if you have a plan or strategy to invest than do so, will we stop living? No, we may need to change things and adopt but why worry ahead what may happen of the things which are out of our control?
     
    KateSydney, Jaik2012, Codie and 6 others like this.
  16. croseks

    croseks Well-Known Member

    Joined:
    9th Oct, 2018
    Posts:
    184
    Location:
    Melbourne
    A recession is nothing to worry about here as you won't see any capital gains anyway.
    Sorry to be blunt.

    Think about it, there is 70 floors of other apartments which are pretty much the same, the location is the same, so buyers have a huge choice, it's a race to the bottom as if you want to rent/sell there will always be someone else in your building selling/leasing and you will have to compete on price, hence no capital growth and lowering rental prices.

    If the apartment will improve your quality of life (commute to work, great location for your needs, close to schools etc..) then don't worry and just go for it.
    If you are buying this apartment to improve your financial position, then there are better ways.
     
    Curoch, GythaOgg, mikey7 and 7 others like this.
  17. Silveyr

    Silveyr Active Member

    Joined:
    24th Oct, 2019
    Posts:
    29
    Location:
    Sydney
    This is very wise. Thank you.
     
  18. marmot

    marmot Well-Known Member

    Joined:
    12th Jun, 2006
    Posts:
    1,215
    Location:
    N.S.W , W.A
    If your going to live there , It shouldn't be a problem.
    As an investment in the current sitaution I would not go near it.
    Its likely tourism is going to get hammered, then you have airbnb owners, with apartments in city locations probably going back to traditional rentals as they face stiff competion from hotels that will see their occupancy rates fall of a cliff.
    Hotel operators will also probably try and pressure government to do something about all the short term operators that do not even have DA approval to do holiday lets , if unemployment starts going up to 7% or 8%.
     
  19. kierank

    kierank Well-Known Member

    Joined:
    10th Oct, 2005
    Posts:
    6,137
    Location:
    Brisbane
    The end of the world is nigh (AGAIN)!!!!
     
    Gladys likes this.
  20. Sackie

    Sackie Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    15,612
    Location:
    Bondi Beach
    Save me a beer up at your skyhome. You better have bloody aircon :p
     
    Gladys and kierank like this.