Is now the worst time to buy?

With Sydney prices dropping, negative gearing and CGT discounts on the chopping block, changes to lending making it much more difficult for foreigners to buy, etc, etc, is now the worst time to be buying in the Australian market? It sorts of feels like a perfect storm is brewing, and it's got me nervous.

For reference - the place I'm considering is in Fitzroy North, VIC. Agents have all reassured me "Fitzroy North will always be desirable, especially the Victorian heritage listed properties on good streets, and won't be negatively impacted - or only mildly - by a pull back from foreign buyers." Of course they are agents, and they'll say what they need to in order to maintain my confidence.

What do you all think? Is this an okay time to be buying, or is it a better time to be on the sidelines waiting to see how things work out over the next several months (election, etc)?

 

Not sure.

I'm biased and think that housing in Sydney will be headed downwards. I also think that this will have negative effect on other markets as there will be common factors at play: restricted finance; fewer foreign investors and increased supply.

Having said that, I am still looking at properties. The ones that I am looking at are relatively cheap compared to Sydney prices i.e. in the $350-500K range. Why? Well:

1. Large losses don't happen overnight
2. A property that is already cashflow positive is easier to "save" than a cashflow negative one
3. Governments have a way of pulling all stops to arrest any sort of deflationary spiral e.g. GFC in 2008

I think that if a correction were to occur, it would be in the 10-20% range over a period of 1-3 years. Meaning that if I purchased a $350K property today, I stand to lose anywhere between $35-70K at a rate of ~$11-25K per annum. Certainly a significant loss, but not one that would financially destroy me.

 

I don't think it's a good time to buy. An excellent time to buy would have been 3 or 4 years ago jut before the boom started.

This is just generally speaking. You can still make money now if you pick up a bargain or you can do some development where the numbers stack up.

 

The election is only a few months away and Labor could get in. That's going to change the investing landscape significantly.

What's the rush? Why not wait to see how the election goes?

Another quarter of price drops in Sydney might show how the trend is going, too.

 

Keep on offering low values in the desired properties in desired suburbs.

Who knows you can grab a deal that turns out to be good for you. Else its wait and watch.

Regards

 

Melbourne is not Sydney.

 

Typically their growth trends very similarly... Melbourne may have a little bit more growth left in it than Sydney, but ultimately both will probably roll over to downside soon enough.

 

Should have another option.....

Its about timing the market, not time in the market

 

Melbourne was down for quite a while and has had a less dramatic boom - my crystal ball says it won't behave like Sydney. If you want to live in the house that changes everything. I think there's more growth in Melbourne but what would I know? I voted bad time to buy.

 

Why would you trust an agent?
What would they know about the economy?

Theyre experts at selling the property
Unless theyve been in that suburb for 30 yrs and never seen it drop

 

Yes - I tried to make that point above. I don't trust them. I was just sharing what they said.

 

Thing is, the best time to buy is a way off yet, I would say. Also, if you want neg gearing ....

 

No one had a crystal ball

I'm no expert but are we following typical cycles at the moment? ??

I got the vibe that Sydneys boom was a bit of a surprise in terms of how big it was.

For example.. the Melbourne market if it follows normal market cycles is supposed to plateau and drop a few percent.

Unless the government decides to change the rules i can't see it dropping at all. I think it will just plateau.

And after the metro boom is supposed to be the regionals . With the Sydney market slowing down i don't see the regionals heating up...... i just can't see the regionals having their turn next


What does everyone else think? ??

 

The best time to buy for us was about 20 years before we finally stopped dithering and got on with it. So don't wait too long.

 

You answered your own question - "all of the above".

Fitzroy North is Blue chip, but history proves that when cycles change blue chip also falls back in price, blue chip is not bullet proof. You also need deep pockets to hold these properties.

I would watch this market closely, if there is a possibility of securing a property in this area where you can add value then perhaps its worth looking at it closely. Otherwise just watch and wait, I think 2017 will be a very interesting year where property markets Australia wide will be out of favour, of course my crystal ball is working perfectly.....LOL

 

It's always a good time to buy

The questions are:

• What do you want to achieve?
  What's your goal?
  
  
• What is your timeframe?
  When do you want to achieve it?
  
  
• What is your risk profile?
  How can you work toward your goals and still sleep at night?
  
  
• Where should you buy?
  Where you buy should be dictated by the answers to the above questions. If you're after results in the short term, Melb may not be best as it's had a great run and close to done for this cycle. If you've got a 20+ year outlook, why not?

You will find people on this forum (and its predecessor) have been––and will continue to––buy every day of the year, and do quite well for themselves.

 

Not for me, I don't like buying property in a falling market, it means what I think is a bargain today is a loss tomorrow. Call it a paper loss, but a loss is a loss, unfortunately banks will also take the same aproach.

Call me silly, but 20 years is a long time.

MTR

 

I think you have melded a few separate points I made into one

Just to clarify:

Are you suggesting that every street in Australia is currently in a falling market?

 

Not at all, I am stating it is not a good time to buy when markets are changing/falling, clearly this is happening in certain areas/suburbs/States. Many markets are also close to peak, after peak you get a bust cycle, this has never changed since I have been investing in property.
What and where .....is up to investors to work out. If investors decide to ignore this then they could quite easily lose money. We all discuss making money, we never hear about those who lost money.

The market has been mentioned, it would be foolish to ignore what is happening at the moment.



.

 

Pretty optimistic on the areas I'm following.