Peak oversupply in Sydney / Melbourne will hit in about 6-10months

Discussion in 'Property Market Economics' started by DowntownBlock, 20th Oct, 2017.

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  1. MTR

    MTR Well-Known Member

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    Perth road the mining boom from 2001-2007, mother of all booms.

    Not only residential but commercial markets were also booming.

    I was building and buying homes. I purchased blocks of land for around $165K and when the titles were issued 6 months later the blocks were worth $300K. Plenty of stories like this where investors doubled their money in a very short time frame, the place was nuts.

    Fast forward ..... 2007 Perth market tanked, today blue chip $1M+ has yet to recover from this crash. Mining towns have come back 50%, some with a median of $1M (Karratha, Port Hedland, South Hedland).

    Also know a couple of young savvy investors who made a fortune only to lose the lot. The market tanked but worse in 2008? low doc/no doc loans got abolished, investors were cut off at the knees. Investors could not access equity to service debt and some loans were withdrawn, it was ugly.

    On the flip side these were the golden days, if you road the boom you had equity you could borrow and keep buying, servicing debt with this product was no issue. My mortgage broker would give me the figure/income required and I signed on the dotted line.

    We all went hard, unfortunately some lost their shirts, did not pay attention and thought the boom would never end and continued buying in Perth, though the warning signs were there. Nothing changes I guess, investors not understanding that property is all about cycles and timing the market.

    Plenty of investors will have a million reasons why a market will continue to rise but history proves otherwise.

    MTR:)
     
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  2. DowntownBlock

    DowntownBlock Well-Known Member

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    That's a lovely overview, thanks.

    Yes - indeed it is human nature that those who ride it the hardest come unstuck the quickest.

    Also they squeal the loudest in the face of sensible, prolonged data that challenges their belief system ;)
     
  3. paulF

    paulF Well-Known Member

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    @DowntownBlock , you are disregarding the data that is in the links you are sharing yourself.
     
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