Is anyone preparing for the next downturn?

We're going to do that , but not at this stage . Once we have our next two steps in place and paying , I anticipate we will put the cash flow from them into the Marketsas we initially won't need it , But I want to spend some time reviewing things . Also know some people ( with good track records ) who do commercial property syndicates for sophisticated investors , so will look at those as well .

Cliff

 

Thats weird, same here with property syndicates. About 2 months ago we invested $100,000 at 7.5%, established with long term track record. We know these people
Waiting for more of their purchases, gets fully subscribed as soon as sent to clients

 

It's not as easy as that. They are all in different regionals.

 

Ah OK fair enough.

 

We had one come to market a week too late, years ago & it didn't sell for what we wanted, so we just put a tenant in there.

Yes, it does, but can't have them all in the same financial year.

 

imho we cant be anywhere near the peak after a measly 3 months of gains. No way in hell. Especially that the global economy is still in the recovering phase. Yes we are seeing positive signs and unemployment is on par now as pre-covid but there are still many industries and ppl suffering. Yes many ppl are also making a motsa but the RBA, the banks, the government wont dramatically change the current economic climate to curl the current boom.

Once again I would NOT be selling a single property if you are holding and in no desperate need to sell. This is the biggest boom anyone will ever see and probably ever has seen ever.

 

yes , i have been tilting towards 'safety' since 2013 , and in 2020 i had SOME dry powder , which partially deployed in the BIG dip , but i refrained from totally using the dry powder because i could not see a sound recovery process being implemented , so i am STILL calmly building up cash reserves again ( without resorting to panic selling )

should a second BIG dip occur , i will again assess how much cash to use ( physical metals might make better sense , or perhaps fine wines )

am i cash ready YES , will i splash wildly , maybe

cheers

 

Couldn't agree more.

We have very strong fundamentals - huge pent up demand, and property has never been this affordable before (hence why there is a bidding war on every property)

Why housing is very affordable - AFR, 9/4/2021

 

certainly agree it’s got a while to go and everything you say makes sense in terms of so many areas of the economy only just recovering .

Biggest boom ever ? We’ll see . Maybe but having lived through more than one “ biggest boom ever “ I’m happy to have watch . My biggest concern is that all the experts are predicting a boom and they’re rarely right .

Reality is normally the time most people predict a boom is near the top , but I think that’s more of a concern in Sydney and so much of the commentary is Sydney centric . Peak of the boom in 2003 was concerned the peak by many experts though brisbane kept on going for around five years ...

Cliff

 

The next downturn should be any day now according to Whirlpool now that Jobseeker is finished. I reckon up to 99% drops, maybe more.

 

Yeah, that's pretty stupid.

Money is practically free. And if the RBA sees any sign that the property market is slowing, it will lower rates by 10 basis points, making money FREE!

 

HAHAHAHA Whirlpool. Full of ppl that have been waiting on the sidelines since early 2000s and still ramping down property yet in these 20 years they could have become multimillionaires and retired. Ahhh gotta love the old Whirlpool naysayers and "do nothingers except whinge" types.

 

I am a gonna ......

 

Out of all the major cities I think Brisbane has the best chance for the longest boom and also for post boom prices to generally hold strong.

 

I personally believe we should be looking at gains of circa 20-30% by 2024. Anyone that purchases 2022/23 will not realize a positive equity position for over a decade in my opinion.

 

Thats a bit low imho and quite conservative. Pretty much everyone is in the ballpark of 17-20% gains just in 2021 alone (big banks and real estate economists) and if your following very closely to real sale prices I'm actually seeing prices increase by already 20%+ and some sales figures say compared to RP Data/CoreLogic estimated values, houses are selling for 30%+ of these figures.

All the figures on RE/Domain are seriously lagging as they are rolling 12 month medians - which is actually quite useless. If you look at medians on RE and then go shopping for areas at $1.5M well your going to get smacked in the face bigtime when you realise its actually $1.8M in the real current world.

A much better indicator is to use actual sale prices of comparables.

I think we will be nudging 30% across the board in 2021 alone! and hopefully at least 10-15% in 2022 with Brisbane having much better potential at maintaining 20% gains in 2022.

 

Better strap yourselves down. The Druitt is a booming.

 

IMHO RE/property to me is not stocks, do you realize if I was selling 'a few bits and pieces' of RE/property as you call it I would be paying selling costs, capital gain to ATO, less income coming from rent, etc....
Instead what I usually do is not sell in rising market, rather I look at my finances again. So just as example in October 2020 I refinanced few loans, pulled out a title, have extra equity in loans waiting.
Now my broker just asked for another valuation and on just one property had 11.4% increase and on all appraisals had $X.XX growth. SO if my serviceability permits again I am just pulling out more funds to use when I chose, it is up to me whether I will use it or not, but having that option/choice or as additional buffer is what makes it attractive to me.
Why would I sell rising RE/property when my investing strategy is to accumulate and never to sell? Only if some are lemons or if I wish for an exist strategy, but low LVRs permit even lower LVRs if one stops accumulating, then you can just sell one or two, or maybe even none, depending on your asset base.

 

Picking troughs and peaks is hard to do, IMHO. I think as long as you have that profit and wish to use it elsewhere then just go for it. I don't tend to look back, but I also just continue accumulating rather than offloading...
Perhaps my investing strategy is boring to most, seems a lot of you are doing so much more....

 

Yeh spot on. Just done this, with such large gains and resultant low LVR ( which helps get loan) over portfolio, a bit silly to sell and increase LVR( The alternative of also reducing loan is not good either) , reduce income, ( hard to have cashflow negative with low interest and esculated rent) reduce nett assets because you have reduced cost base and paid 30% of gains in tax and selling fees. Been able to pull about x 2 more cash out from equity than I can get from selling, so have more assets to produce more income, expect to drag more cash out again after this FY, figure's should be a lot better than the year before last that was used.