Prices may drop to 2013- 2014 level?

It has been posted many times but here it is again
Positive plan to help housing affordability

from their own site... "All investments made before this date will not be affected by this change and will be fully grandfathered."

 

I guess plenty of people in Melbourne need to sell. Listings are up 25% compared to last year.

Via AFR: Residential listings in the Victorian capital leaped to 42,001 in March, from 33,624 a year earlier

 

So current investors still benefit from negative gearing & CGT discount of 50% on existing properties - all good. But when there are no new investors for those properties that may have massive impact on prices? no buyers price down.

 

While I don't believe we'll wind back to 2013-14 prices, I'm not sure about that.

Firstly, Sydney is down nearly 15% on average, so range is more like 10-20% and falling.
Percentages aren't linear, 500k house goes up to 1m, -50% wipes out 500k or 100% gain

Second, once you add stamp duty, transaction costs, holding costs, adjustment for inflation, CG tax and the likelyhood of more prices falls, I wouldn't call a 2013-2014 Sydney purchase laughing all the way to the bank... unless you actually managed to sell in 2017. Otherwise you're fast approaching a modest gain.

Now, a Sydney 2009 purchase sold in 2017 is a different story.

 

That was my impression as well,
yesterday I read some conversation about CGT discount gfd between @sash and @MWI and got confused, may be I misread.

 

Finally someone who is talking some sense....
Sydney prices are 70% higher vs 2009 as of March’19 after the drops. After u take into account all the costs associated with properties, most likely the return if u sell now will be close to 50-60% assuming no further falls....

The CAGR on the property despite once in a lifetime boom is not more than 6% over last 10 years ... if that is gona make u laugh to the bank than good luck....

Now with property markets only expected to go down at least in next few months, I won’t be shocked to see it going down to 2014 levels...

It’s people who bought and SOLD at the right time that are laughing, those holding will end up with an average return as of any other investor....

And looking at the responses, looks like most of the investors gona hold

 

Where ?

Perth would be happy with that

 

Not every property is the same.
Not every investment is the same.


Much like the saying the share market has moved 20% lower.


Their are properties I hold which are over 100% up.
Some 70%

A lot of interest in movements from non holders.

 

No one knows where the bottom is, so yes i will buy if i can score something at that levels.

 

Where exactly I picked one investment as my example...I said the prices are 70% up in March’19 vs March’09....

And then I said that most likely we will continue to see declines at least end of this year and potentially even in 2020...

You are the one using urs Two properties an an example.....

Oh wait.....I am smelling something......is this a worry on ur part?

 

Seems your entry points were around or before 2011 and that's why you are up 100% and 70%. Major part of boom started 2013.

 

Melbourne

 

Im positively geared and holding for 20+ years all on P&I

Im not worried about anything .

Im so not worried that I don't come to PC every day worrying and posting about the demise of real-estate as we know it every week like some posters here.

 

So being an experienced investor, u agree that over a Long term, properties give u a moderate return only....Unless u buy and sell at right time or u in business of buying, demolishing and construction and selling...

Looking at ur posts, u r a fairly active users and most of ur arguments sounds like a bullish property investors.....so don’t buy into ur argument ...

And I accept that I like to see more falls.....just difference of opinion

 

i assume you are not worried as you bought in very early and you don't care about prices going up/down as you may always be in positive against your purchase price.
But there are people who bought in last 5-7 years and want to buy in future.

 

Sydney was doing well from late 2009

I have an apartment that is 110% up purchase in 2009.
Although im not a trader where possible. For me the rental yield is so much more important. Due to the healthy yield it has allowed us to hold for the 9+ years.


I feel in Western Sydney where with small value adds and Granny flats we can attain very healthy yields.

 

I'm not into doomsday predictions. Besides, investors have different strategies, selling time frames etc. Its impossible to imagine one scenario will affect all investors the same. It wont.

 

If you take a simple example. 50k of capital leveraged into a 500k asset, assuming 50% growth over the last boom period (many have done better), then that's a gross return of 500% on capital over a few years. Not even taking rents into account. And that's on just 1 asset.

I think a lot of investors in SA, WA, NT would be very, very happy if their capital saw those sorts of returns over the last few years. As would all businesses that went bankrupt (which are many) over the same time period . As would all the folks putting money in the bank and receiving peanuts for it. And for the folks who stayed out of the game completely - ouch!

I often now hear of 'modest' return 'poor' return etc after correction etc etc. Like its SO EASY to just make hundreds of thousands of dollars else where. Often its the folks (not saying you) who have no idea how difficult it is to make a buck, who will minimise the success of others who have actually made money. The funny sheet is, many of those folks haven't made a cent!

 

I know slightly off topic but there was discussion during these times that the "new"property cycle would no longer be 7 years to double as per historically, and will be more like 10-15, I too subscribe to that theory