Should we worry about a crash of the housing market? Let's all take a deep breath

No it didn't really take 10 years.

US has been in up trajectory every year since the GFC.
In most asset classes not just property.

 

In real terms, U.S property value has not yet even surpassed it's pre-gfc heights. It definitely has taken 10 years. Some areas will never recover. I was there in California and the property market recovery was very slow to kick off. The banks were still unloading homes in 2011 when I was shopping, and short sales were everywhere. Didn't really bottom until 2012

 

The idea/notion that entire massive markets need to recover fully before investors can make great moolah on deals in individual markets is total nonsense.


I keep hearing in some threads Brissy hasn't boomed....but so F'en what . Still some great dollars have been made over the last 3 years.

It's totally beyond me why some ppl seem to cling to the belief that you need to have big booms in order to make money . There are heaps of smaller markets or the phrase some dont like ( probably because they can't identify them) markets within markets where some stellar deals can be found.

 

Because some investors can only make money in rising markets.

I believe great investors make money in all markets.

 

Land in Sydney’s west sells for $71m

Makes you wander why these guys spend $71,000,000 for land.grass paddock.

Must be stupid of them.

They should have come to PC for advice we could have explained to them not to buy it :/

 

I agree. There have been posts on this forum that Perth has been a train wreck. That may be true for unsophisticated buy and hold investors. There has been plenty of money made by more experienced investors in that time.

 

I think that's true for most global events. Share markets go down, WWII, casino, great depressions... some people/companies can still win. Sometimes it is pure luck, sometimes it is perfect market analysis, great experience, unlimited resources, good relationships with right people (insights), etc

Nevertheless, it's still correct to make generic statements like "market is going down", "Sydney/Perth is done" if it's applicable to the most people... Other generic statements which are correct in general sense but may be incorrect for an individual: the government says wages/salaries are stuck, start-ups are not profitable, app/game development is not profitable, etc

I think most people understand that and treat such statements/reports as a warning to be cautious, not as guide or rule

 

I agree. In my haste I didn't finish the quote. It has been claimed the Perth market has been a train wreck for the last 10 years, which simply isn't true.

 

Does perth have suburbs today that have grown in value beyond the peaks from years ago?

 

Yes, because many areas did not peak 10 years ago, they peaked at the end of 2014. Also, we had many areas of solid growth during the last 10 years. These are opportunities for smart investors.

One example:

Belmont Investment Property Market Data

Another example:

Embleton Investment Property Market Data

Check out those 2014 peaks.

Edit: by years ago did you mean 10 years or 4 years? The market has not surpassed the 2014 peak because it is in a correction not recovery

 

I only looked at embleton, but based on that example if you still own a place there and purchased anytime in the last 10 years, you have lost money. Especially once inflation and holding costs are included. Would need very good market timing to have made money there.

Tough way to make money investing in that spot.

 

ok, using your link for Belmont:
3br: 420K ==> 449K (over the last 8 years)
4br: 505K ==> 514K (over the last 8 years)

technically speaking, it's loss.
and it's big...big loss, considering inflation and other conservative investment options, e.g. NASDAQ index over the same period grew 300%+ (without leverage)

 

And no opportunities to make money during that time?

Either way, you can't say the market has been a train wreck for the last 10 years as claimed. Sure there have been better investments elsewhere but you can say that about any investment in retrospect.

 

what do you mean? To buy some house in Belmont in 2009 that wouldn't follow the 2009-2017 trend or sell at right (peak) time?

 

It wasn't for buy and hold, which is why I posted this?

 

I meant since it's peak which is 4 years from your data. For some reason I thought most of Perth markets peaked by 2011.
Wonder how long it will take Perth suburbs to go beyond its previous highs, same for Syd/Melb since the markets are now falling.

 

Well, if an investor bought in 2009 then prices peaked at the end of 2014, investors really had 5 years to sell at a profit. Making a maximum profit takes perfect timing but selling at a profit, and therefore making money, requires no such thing. It merely requires someone to sell at a price higher than they bought. Using this example, buying in 2009/2010 and selling in 2013/14. It's not a small window really.

I am no timing genius but I managed to buy a property in Melbourne and sell before the peak at a substantial profit. That's called making money in my book.

But then you are an intelligent investor so I know I don't need to explain the concept of profit to you.

 

Of course not. It would be very unusual for an Australian residential property market to recover and exceed a previous peak in 4 years. Sydney last peaked in 2003/4. Where were prices in 2007/8?

I would be surprised if it happens in under 10 years.

 

Going backward and timing buy and sell using the graph. I can buy at just under 400 and sell at 500 on perfect timing. By the time I pay stamp duty, costs, hold costs, sale costs, tax.

you can keep those gains.

 

Too busy closing deals and getting all the docs together that they darn well require now...