NSW Sydney Price Correction 2019 - post examples

I don't disagree, personally none of this bothers my investing strategy. I think it's a good idea too in general, and that nows a great time to upgrade/etc with most of the falls actually behind us and the data only catching up to that now.

I'm commentating on buyer sentiment as I see it.

They're asking why? What upside does courage in going first have in the long run vs waiting on the first qtr positive reading? Can you not just wait for patchy positive data and then go from there.

The above is the general mindset I think, especially from younger investors/buyers. I think buyers are looking for signals to jump in. They can, they can afford it, they can borrow it, but they don't.

On mass, buyers don't want to be courageous. They want to follow. It makes them feel safe.

 

What's the name of the 2nd guy to walk on the moon again?

 

But did he still get there?

 

It was filmed in a Hollywood basement. Just ask the Chilli Peppers!

 

143 Cecil Avenue, Castle Hill sold $1,076,000.
Sold 143 Cecil Avenue, Castle Hill NSW 2154 on 15 Dec 2018 - 2014798062 | Domain

I thought that was a good buy, especially given location near new station...

 

This is a weird block. Feels like not many options to DA or improve

 

Maybe that's why it got such a good price

 

Why is it hard to pick the bottom in property? Most suburbs only have couple of auctions a week, pretty easy to focus of couple of suburbs and look for change in sentiment. It's impossible to pick the bottom on stocks, especially with HF trading and all the fancy manipulation that goes on, hence why dollar cost averaging is a proven theory. The quotes from Benjamin Graham you quoted weren't directed at property investment, rather the equity market

 

E.g. you can buy a land with old house and build a duplex which can be profitable even in a falling market. If you earn 100K in falling market (compared to expected 300K in flat market or 500K in raising market) it is still better than zero. However risks to get a loss are higher, it's not for newbies for sure

 

Even if you see the prices started to go up, it doesn't mean it will go up further and you passed the bottom. Look at October Corelogic Data (bottom chart). In many cases the prices started to raise before it continued to fall further.

Looking at Sydney trajectory for 2017-2018 it's hard to believe we are close to the bottom. In most cases previous drops were ending at near flat trajectory.

 

Corelogic data is useless, much better to look at auction results and compare to comparable properties that sold in the last few years, very easy to do with REA and Domain apps. Also attending inspections and auctions..

 

A

Agree. Buying on the way down is the way to nab a bargain. Once the bottom is 'felt', the best of deals are gone. Knowing when to enter the market is the trick though.

 

Like your comment. Pretty sure market will be down another 1 year atleast that means -5 to -10% from current price. To gain this it will take another 3-4 years + holding cost+ negative gearing, etc... Any specific reasons for your buying suggestion?

 

I'm looking now, it's early but I want to get my bargain before the market turns....

 

He goes broke with no clients.

 

With all due respect, It makes zero sense to buy an IP in Sydney while it is falling.... having courage is just a silly statement because it makes no financial sense. Even if you got a “bargain” that perfectly timed the bottom of the market, your next 5-10 yrs will see...
- unlikely CG for years as it’s likely to go flat for a long time (refer to all previous cycles) and then go check APRA lending restrictions.
- low rental yields for years until rents go higher so your stuck paying the shortfall in mortgage repayments.
- low growth of wages so rents won’t climb quickly anytime soon.
- rising interest rates world wide which will flow on to increasing bank rates here (regardless of what Australian reserve bank does).

Any money you “made” with your bargain purchase would be eroded by holding a negatively geared property for years.

The smart investors won’t be using “courage”, they will sit back until conditions are right for CG and reasonable yields or they will invest somewhere else that makes sense.

You have a vested interest in people buying property, but at least keep your logic reasonable to drum up business.

Now is a good time to start looking to upgrade a PPOR, but a stock standard IP makes zero sense.

 

Thanks Jana,

A few reasons:

1. People are terrible forecasters, and no one on this forum (myself included) is any more clairvoyant than anyone else. We know the market is down over 10%, but we don't know it has another 10% to drop. That's speculation.
2. Buying into a property market that is 11% off its peak is doing okay.
3. Who wants to buy just one property if you can buy a few? I would rather buy three properties at a good price, than wait for the "deal of a lifetime".
4. We are not buying "the market". We are buying specific properties.
5. The decline in property came from an artificial tightening of credit regulation. It has been sharp and the bounce can be equally as sharp if regulation changes. You need to buy before such changes.

I would also refer to my previous quote suggesting buying when a market is on its way down rather than on its way up: better deals, more stock etc. None picks exact bottoms.

I acknowledge this forum's hostility to Sydney, and that's okay. However, Sydney is where the economic drivers are, and Sydney and Melbourne will perform differently to the other capitals.

Focusing on yield as many do, boxes you in to the regional centers, which don't have the same growth profiles.

But hey, property is not a "trade". I agree many parts of Sydney will fall, but who holds property for a few years? Property is a wealth preserver, and an inflation hedge over long periods of time. It plays many roles in different parts of the cycle. And most of us don't have forever to wait for a crash that may never come.

So as a property investor, you have to be both (a) in the game, and (b) prepared to be wrong.

 

Are you buying yourself right now?

 

I have bought recently. Time will tell if that was the right decision.

 

I'm buying for myself so it is a different scenario. If it was for an investment I'd wait too because it's unlikely for any growth to occur in next couple of years.