Prices may drop to 2013- 2014 level?

Property is good due to LEVERAGE
Its not the best growth vehicle in our arsenal.

Their are many other great reason to invest in property.

1. Personal Housing(place to live)
2. Store/preservation of wealth
3. Accumulate wealth
4. Leverage
5. Prestige
6. Value add
7. SMSF
8. Control
9. Perpetuity

 

I wouldn't be surprised but tbh I have no idea. I look to buy what I perceive to be undervalue, then be able to add value. That, together with CG and buying within my own risk profile with a long term timeframe - I am more than happy.

 

Buy when you can, Putting a firm number or date is not smart.
I can show you a property for sale in Melbourne today that is 40% off the 2007 levels. Does that make it good value?
More profit is made by the smart investors in falling markets. The trick is to look for value or where a change in circumstances can dramatically increase the value.

 

Buy when you can- I was in position to buy in 2017. If i bought at that time i may have been in negative equity. So smart for a change!

I am assuming this is an apartment?
I am looking to buy a house approx 600 sq.

 

I am not only laughing all the way to the bank, I am laughing at some peoples lack of understanding of what property investing is. It is about tax effective finance, once the loans are in place it doesn't matter an iota if property falls, it can be beneficial. The equity I used to buy shares ( which I named at the time) in 2014 has grown 300%. If property falls I could pay cash for 3 more instead of 2 more, if I want. Those who sold might not be laughing as they may not qualify for as much finance as they had before, and so had their available funds reduced, and ability to leverage and grow wealth severely ******** . If I find a better place for my capital I might sell. The current or past price of an asset is irrelevant, put your capital where it will get the best future returns to determine how you allocate it. I am holding I have had 75% return on the equity in one property by investing it in shares, the security has increased in value 10% and the yield has gone up 25% since June 2017, 21 months. I think that is a little better than average return.

 

and what would you be saying right now if those shares had not changed value or even dropped 15%?

 

Simple thinking in a complex world is a recipe for disaster

We also simplify complex decision-making by using received wisdom. This includes following simple rules of thumb (“a stitch in time”), following the advice of people we respect or trust, and conforming to the beliefs and attitudes of whatever group we belong to.

 

nice graphy!
well there you go! 66% and 70% for the best 2 cities, melb and syd, which isnt a doubling, given that prices are falling now, it maybe be another 4-5 years before these recent drops recovery

so 15 year cycle this time around is realistic

 

Perth is a great snapshot of too many speculative investors all sitting on IO loans just expecting over time for property to keep rising.
10 years with nothing to show , just puts on more people trying to sell , and it stops property prices going up as many are just trying to offload.

 

If it did, below would remain to be RBA response:

"The board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time"

 

I will be more than happy with a return of 6% per year NET for an IP. Remember the power of leverage.

 

But it's a leveraged gain. So 6% becomes 30% at LVR 80%. Thems laughing words

 

Keep in mind leverage magnifies gains, it also magnifies losses.

What about another example, 400k leverage into 2m asset near peak. Include stamps, interest, -15%+ price fall, selling costs.


I agree, if you just hold for 20+ years it will all be good, pretty solid strategy for any asset class and pretty much one I adhere to myself. I just think people sometimes exaggerate the wins and minimize the losses.

 

It's the same with any type of investing. Invest before a stock falls and start singing Cry Me a River. There is always risk with investing . The less educated, the higher the risks .

 

We need a Royal commision.
Gains should be guaranteed.

I vote for a government guaranteed 5% return.

 

Finally, a Royal commission I can support!

 

There is no easy wins in properties people just wont admit it
everyone love to boast massive gain but rarely mentioned loss and cost involve and the true number is some where in between.

In-experience investors see it as easy win get into the game then realise ****, it not as easy but they will come out and boast the same thing cos human doesn't like to admit failure

 

I don't agree.

Historically it has been fairly difficult to time the property market over the last 20 years. Just ask all those who missed the boom completely and have been trying to get in ever since. Just ask all of those who got in too late and are now heading towards negative equity. Exactly how late was too late still remains to be seen.

The property market has been artificially reset. There is no mistaking where the market is in Sydney and Melbourne at the moment because it has been engineered to be that way. For the first home buyers that were priced out of the market and the investors who are still looking to grow a portfolio there has never been more clarity as to what is happening with the market. Will the market still be artificially restrained in 15 years time.....of course not. We'll look back and recognise the opportunity that is playing out right before our eyes.

Willy