Property Investors will sit on their hands in 2018?

Discussion in 'Property Market Economics' started by MTR, 12th Mar, 2018.

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  1. Otie

    Otie Well-Known Member

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    @MTR having said all that I may not even get an opportunity to buy again depends on what things are going for. There was a good one that’s coming up to auction next weekend but I couldn’t get my cash out in time for it. I’m planning to pull out equity so that I’m ready if something good comes up otherwise I’ll hold off and hope for things to flatten
     
    Last edited: 12th Mar, 2018
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  2. bobbyj

    bobbyj Well-Known Member

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    Do nothing... for now.

    Building up a big cash buffer
    Trying this ‘sit on your hands’ business whilst doing the usual due diligence on potential places.

    It’s always a time to buy. Just need finance.
     
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  3. Heinz57

    Heinz57 Well-Known Member

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    Too hard to bite my fingernails if I'm sitting on my hands
     
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  4. MTR

    MTR Well-Known Member

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    Obsessive compulsive disorder??? :p
     
  5. Heinz57

    Heinz57 Well-Known Member

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    Fear
     
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  6. MTR

    MTR Well-Known Member

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    Bump
    So with markets softening, and more stock coming to market... I am guessing investors are sitting on their hands in 2018 and 2019 may be the same....dependent if investors can source loans.
     
  7. Perthguy

    Perthguy Well-Known Member

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    I was planning to but didn't. This build has dragged on all year but should be finished in the next 6 weeks. I will have a break next year! :)

    Oh yeah, and I ended up taking out another loan this year. Good rate and didn't struggle to get finance as predicted.
     
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  8. sash

    sash Well-Known Member

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    Many markets...as Sydney and Melbourne go backwards....Brisbane and Adelaide will march on...

    Geelong still have another 18 months to go....so many markets not just Sydney and Melbourne.

    I would be more worried about the US stockmarket....and the implications on the US economy.
     
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  9. NHG

    NHG Well-Known Member

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    No IP plans this year, or maybe even next.

    Looking at Sydney PPOR. In 12-18 months. Something I can put an extension on and eventually sell CGT free.

    Looking to dabble more in the hotel space. On my bucket list / long term goal. So will take on a commercial lease.
     
  10. Redom

    Redom Mortgage Broker Business Plus Member

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    If I had to sum up the average mindset of 2018, you couldn't have said it any better to sum up consumer mindset: 'sitting and waiting'. I probably hear this line daily now on client calls. I would add that the strength in Sydney means there are more and more falling into this category waiting on the wings. This expands beyond investors, to homebuyers/upgraders and even lots of savvy FHB's. The savvy investors appear to be preparing themselves to pounce and 're-leverage' again when they see fit.

    2019 may be the same, not sure. I imagine a government change would steer it in this direction.
     
  11. MTR

    MTR Well-Known Member

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    Yes
    It will still come down to whether investors can source finance

    Lets not forget this is why property market has softened
     
  12. Redom

    Redom Mortgage Broker Business Plus Member

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    In general we haven't seen finance limitations part being a major issue or change associated with 2018. I'd characterise it as 'finance is taking longer' and this is having some effect, but not a major one.

    On mass, most people are nowhere near their borrowing capacities (PC community is a different beast). The RBA have done some great work analysing this in their latest FSB report in Oct 18. Only ~30% of borrowers take on more than 70% of possible leverage available to them. I.e. borrowing power @ 1mill, only 30% of borrowers take on more than 700k. Only ~5-10% take on the full amount.

    They're neither interested in pushing it that far, or likely more accurately, waiting for better opportunities.

    Screenshot 2018-10-30 13.41.10.png
     
  13. MTR

    MTR Well-Known Member

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    Curious, have you had any issues sourcing finance for development, with finance tightening???
     
  14. Triton

    Triton Well-Known Member

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    Or they are worried about downside risks and hence don't want to over extend
     
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  15. larrylarry

    larrylarry Well-Known Member

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    I haven’t looked at properties for a while. Should I be looking now or next year?
     
  16. Beano

    Beano Well-Known Member

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    Would you ?
    1: run the hotel
    2: own the hotel have it managed
    3: own the rooms lease the rooms
    4: own the land lease 1 to 3
    5: all of the above
     
  17. NHG

    NHG Well-Known Member

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    Ooo. Good questions. Are you in the industry?

    1. Yes.
    2. Own the building? Not at this point. If it makes sense to, perhaps in the future.
    3. Not own. Lease.
    4. Not at this point.
    5. Commercial lease, and run business from it. Have manager onboard. I would be there nights and weekends till it makes sense for me to take it on full-time.

    I'm already in a similar space and make 6 figures from it as a side business. I'm looking to grow and expand on a larger scale.
     
  18. sash

    sash Well-Known Member

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    What if you are doing both....depending on which market? ;)

    Por que no los dos? :D

     
  19. Beano

    Beano Well-Known Member

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    No not in the hotel industry just a mum and dad property investor
    I have been interested in the hotel industry since I became a landlord to a hotel especially where the money is made (actually I become interested in all my tenants business)
    The hotel industry has done very well over the last few years with cheaper travel.
    I can imagine the hotel business is very competitive and having to maintain a high occupancy rate and repeat business extremely important.
    The hotel I stay at (no it is not mine as I go for a business type hotel) are always offering "more " than what I contract (upgraded room, extra free cookies, free drinks , free dessert , recognition etc)
    The hotel business would require a lot more attention and skills compared to a semi- passive property investor (like myself)
    Although this property investment also earns a six figure profit (like yours) I suspect it would not earn as much as running the actual hotel.
    Both of us of course could also have a capital gain too!
     
  20. Duck1234

    Duck1234 Well-Known Member

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    This is from HLDA data. Not exactly up to date