post-election housing euphoria is starting to go flat

The post-election housing euphoria is starting to go flat
http://www.afr.com/real-estate/residential/the-post-election-housing-euphoria-is-starting-to-go-flat-20190607-p51vi6?


Good reading... I continue to hold reservations we can see much capital growth for the next few years or so in resi markets without wage growth.

At best we can aim
For preservation of capital with some gains through savvy asset selection, distressed purchases and an active value add strategy.

 

It says a lot that people were celebrating prices ONLY falling 6% a year instead of 12% down annually...

 

in a deflationary environment, poor
Demographics, cultural shifts away from Ownership, obsolence of many old products and business models, property is still doing great to only be losing 6%.

At least property doesn’t drop below its replacement / land value AND is heavily manipulated by govts and central
Banks ... hence still the most resilient and stable asset class in an era of huge disruption and capital risk ... just getting an income out of it sucks compared to buying/running businesses!

 

The Aussie stock market is quietly up 15% this year....

Property does drop below land value, at least as judged by local councils, as evidenced by some Sydney sales this year! Check the Post a Bargain thread for details.

 

IMHO, it has always been that way.

My strategy was to own property for growth and businesses for cashflow.

 

I’m a huge fan of property, clearly being in this forum.

However What do you mean property doesn’t drop below its replacement/land value?
Of course it does. Try buying in a mining town for 800k where land is ridiculously valued and next minute it’s worth 100k.

 

Um some on this forum would refer to that as a minor correction, and not a valid example because there are always markets within markets, besides clearance rates in that mining town just jumped up on 1 reported sale

 

Abc report last night ratified this in layman’s terms...data all still negative. Clearance rates down, listings down, prices falling, wages and economic outlook has worsened.

But RE Agents are hoping it will change soon and bottom is behind us

 

Since when have property or financial markets moved rationally?

 

We also saw properties in Perth fall below replacement value. Smart buyers picked up some bargains.

 

Yep that’s when good investors get very excited... when they see properties below land / replacement value...

 

Nah, buyers only get excited in this situation if they know the vendors HAVE to sell. Otherwise, it is “nothing to see here”.

We auctioned a property last year. Highest bid was 70% of replacement value. The property was passed in.

We were disappointed. The six bidders were supposedly as well.

One came back post-auction with a $30,000 increase. We told the REA to tell them to **** off and we pulled the property from sale.

Wasting our time