NSW Sydney - the facts

Good points mate. I would also have been worried if that Infra spending cliff coincided with the current resi slowdown in Sydney ..

However, as it is strong and moving up over the next few yrs (as are few other things due to global economy) while resi is slowing down, it will balance out somewhat.

When we do have a big property downturn / bust a lot of these things will culminate in short space thus affecting many of the main sectors of the economy etc..

 

Agree with you half of these ppl who post here just ramble on economics theories no diff that steve keen. Any data can be projected to favour an argument. Rather than work on strategy or thinking out of the square.

End of the day - you can't win a flag by being a bench warmer.

 

I would suggest that you try to get some accurate information as far as the Bond Market pricing in Australian rate rises.

As they say rubbish in, rubbish out.


Interest Rate Forecast

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
RBA Cash Rate 1.50 1.50 1.50 1.75 2.00 2.00 2.25 2.25

10-year Benchmark Bond Yields
Australia 3.00 3.05 3.05 3.30 3.40 3.40 3.40 3.40
United States 2.60 2.75 2.75 3.00 3.00 3.00 3.00 3.00

Last Updated 6 November 2017

Interest rate forecast

 

Thanks @trendsta you raise some great points on this thread.

 

That's one bank's view, not the consensus in markets.

 

Suggest you have a look at the 10-year Benchmark Bond Yields in my post, they are not one banks view, they are what the bonds are trading at on the 6th November.

They show a 5 point increase not a 50 point increase by June '18.

Perhaps you should put up your data source to support your position

 

The question I'd ask is not how much Sydney will fall.. Rather, what is the opportunity cost during that flat period, which likely seems to be large.

 

From my experience I would not remotely consider buying in Syd today, thats nuts

How long is a piece of string? Too many variables how can anyone know?

More important question is would you buy at current 2-3% yields while environment is changing, interest rates on rise....do you feel lucky?

 

I say that because it's more likely that Sydney will have a longer flat period than substantial falls. Most of the commentary here points to small falls followed by longer stagnation... As does various other forecasting.
The opportunity cost is an individual determination.

 

But why buy when down turn starts, its like catching a falling knife. Corrections can go for 7 years, no rush, what is a bargain today is a mistake tomorrow

This is the slow, long slog.... find another market, .. timing is everything, make money today.... and patience

 

I never said yo buy when it's falling.
The point I made is simply that there will likely be a longer flat period than a declining market (negative growth, not just a slowdown), and that carries an opportunity cost which is an individual determinant.

 

Hi Mate, I have given my opinion of the broad Sydney market and cannot answer what is the right investment decision for each person. Each person has their own opinion and is in a different life situation...

For example: in the scenario I provided it may be better for someone with a good investment asset to keep it rather than sell, refinance if they have the ability, and use proceeds to buy in a growing market...

In other cases not everyone is driven by money and investment - housing, life, family etc are also a priority. So during this correction it may present an opportunity for growing family to upgrade home etc..

Others may decide to sell up, and buy up elsewhere to take advantage of the opportunity cost and invest / move to other places.. So i think it's a case by case, deal by deal decision...

If an economic calamity like GFC2 or China collapse, or WW3 or whatever was about to happen then yes it would be a wise decision to sell up everything, or at hold-off buying until later... Also in that case it would hit all of Oz (to different extents) not just Syd ..

If you are expecting just Syd to be impacted by a prolonged downturn / or a crash, then essentially you are expecting NSW to be in near-recession (like 04-08) while rest of Oz hums along (e.g. due to mining super boom) ... Again based on various factors I personally don't see it...

 

Best calculate yield on current asset prices to determine opportunity cost.

 

Yep....who will buy at 2.5% to 3% yields....that means the market has to take breather for rents to catch-up or drop.

I believe it will be a combination of both....when picking up the magical seashells and fish when the tide suddenly retreats...one does not see the Tsumami forming....as I said before 2019 will be a very interesting time for Sydney

 

No, not in 12 months, and they prob will still be low compared to actual sales, but if it slips back enough for long enough, yes, it will drop, but I would not base anything on that, the gov wants $$$ and will start to panic when stamps pull back.

 

This is the key.
I don't get why so many whingers.

this is a property investment forum.

Has become a whine and moan forum.

 

Who wants this check it out.
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Can they really achieve these prices?

 

I've put a bunch of people on ignore... sometimes it makes it hard to follow the latest comments for some threads, but overall I think it's better for the sanity

 

Me too. Was destroying this forum. Not because they have a diff opinion but they were spewing it over and over again on different threads/posts. Mods should act IMHO.

 

If you have read Robert Kiyosaki among most other prominent investment speakers.
They differentiate that Employees working for a wage see an investment and
Expect to be paid now.
Investors and great investments buy/invest knowing they might not get paid for 3/4 years.

This is consistent with my other business transactions. My greatest investment didn't generate revenue for 4 years and now single handled pays more than all my Ips put together and does so every year for the last 8 years.