The bear gang is out in force.

Depends on where the land is, if land is scarce... wont be the same in outer burbs.

 

"Despite predictions last year that Perth’s property values may be bottoming out – having endured their longest and deepest declines since the 1980s, with prices falling 17.8 per cent since their peak in June 2014 — experts are now warning they may have further to fall".

https://thewest.com.au/business/hou...rket-still-has-further-to-fall-ng-b881135449z

 

I only dealt with their designer but he came across quite well, I looked at a display home and it was very decent, shame for all.

 

@Perthguy shared this in another thread, interesting read......Westpac economist Bill Evans has the property market decline wrong: Hotspotting's Terry Ryder

 

I have not seen Corelogic say anything to suggest they think the Perth market "has further to fall" like that headline suggests. The content of the article also fails to address this. Corelogic recently noted the recent 2nd wind of falls Perth has seen, putting this down to tightened credit conditions. Sure, it might continue to fall for a bit, but they certainly have not predicted this for Perth in particular.

I think a lazy editor has affixed a clickbait headline to that article.

 

Cry me a river, I hated logging n to this forum during a once in a generation boom and seeing the smug comments on how easy property investing is and how easy it is to become uber rich of it. As @Simon Hampel stated, the overly optimistic positivity was just as detrimental if not more, than this negativity.
The bit that shocks me the most is the heard mentality, the one thing I have honestly learnt most from this forum is to go against the grain and really be a contrarian whilst taking into account the drivers of the rise/fall.
It's one thing so many preach but their posts clearly show otherwise.
I have said on many occasions and still maintain the fa t that I am a super 'bull' and very optimistic regarding property as a long term investment however in my opinion the KEY driver of property prices CREDIT is not blowing in the right direction to fuel an uptick in prices. With holding costs I.e land tax etc and rents also not on the friendly side of investors I can't see why you would rush into,property at this time.
I've noted many times, the quantity of discussion has dropped on this forum but the quality of posts and discussion in my opinion is far better. Two years ago it felt like every second thread was a 20 year old financed up to their necks beating on about a million dollar portfolio with a million dollars in debt, now we see level headed discussion with helpful topics and facts.
Pure example of the above, a previous post mentioned buying now could mean a hit to servicibility when credit conditions ease or swing the other way, great point, level headed, helpful, informative etc. In my eyes it's small examples like this that show a thoughtful discussion, not a shoot from the hip comment that helps no one. I will make a huge call and say.... For all wanting to start or grow on their investing journey, you will build a better foundation and knowledge now and learn more now from others as during downturns successful investors put their thinking caps on and make it work.



Disclosure: Property bull with an eye on drivers and fundamentals

 

My take re optimism/pessimism/positivity/ negativity.

Personally I see no value in being pessimistic and negative therefore I'm an eternal optimist. Does that mean I ignore the facts? Quite the opposite. Markets are correcting, credit is currently tight and property sentiment across quite a few markets is low. The optimist in me tells me there will be deals somewhere in Oz, and even more so over the next 24 months . So with this in mind how do you invest?? 1. Mitigate risks, 2. Mitigate risks and 3. Mitigate risks .

But never become a half glass empty negative type person or you'll miss some amazing value over time.

 

Hear...hear...I second that....

I find it quite amusing some of those smug property will make me uber rich in 2 seconds have gone to ground.

From what I have observed...riches in property...I am talking $5m plus net...takes 15 years ..as with any cycle what you make also recedes as markets changes...you need to be more than a 1 trick pony. You will make mistakes buy it is question of pressing ahead whilst learning from this.

 

Agree but with credit tight the only way to take these opportunities is to have craploads of cash/deposit and then in all honesty you might get one or two properties at best (I’m talking north of 750k properties) not many people have 500+k in cash unless you’re on pc where balances start at 1m hehe

 

I somewhat agree with your sentiments, in this challenging environment you need to at least have some things going for you eg commitment, decent job, some equity, perhaps 1 or 2 ips and some decent investment knowledge etc. My comments on PC are only ever made with that group or better in mind. For the other lot who have a marginal job, no ips, no equity, no savings , uninterested to change much and perhaps 6k left on credit debt. My advice to them is take the 6k and enjoy your next Bali trip.

 

Recognising the time to buy isn't being contrarian. If your not in a position to capitalise on it then you're still running with the crowd. The true contrarian play was to be paying down debt while everyone else was gearing up to the hilt during the those overly optimistic periods. Paying off the PPOR, paying down debt and having borrowing capacity when the inevitable downturn follows.
It makes me laugh when I hear people say that now is the time for debt reduction. The time for debt reduction was 5 years ago. The next few years will be a massive opportunity to build a portfolio if your in a position to buy when the majority aren't.

The next few years is the time to be overly optimistic...…....shopping time.

Willy

 

+1

 

You sound bitter?

Could their be other underlying issues?

 

Absolutely not, i have been very happy with purchases to date and am 100% offset meaning I have funds ready to go, I do however understand the current lending environment and just don't see how many will be able to 'go shopping'.
I have made it public knowledge and mentioned many times my plans are to develop two of the blocks whilst focusing one increase dividends from shares and once developments are complete continue to direct funds to even more share purchases.
I love property I really do, not a bitter bone in my body regarding property, I just however like to take a level headed approach and look at what's really happening and I just can't see where anyone on under 100k pa with any form of debt will be able to capitalise, by this I mean buy more then one 750k+ property. I do understand there are many opportunities to purchase properties under this and do well but example I gave was above that amount.
As for the sounding bitter comment, I think this is exactly what OP was referring to, if anyone has anything negative/realistic to say or is not a yeah let's buy everything kind of poster then they get ridiculed.

You don't have to agree with what I say but please play the ball not the man

Regards

 

Agree 100% if you look at my post from April '18 in the "end of property cycle" thread you wil notice I state -

"Spot on

I'll go one step further and say you make your money when it's not booming, you make your money when you buy not when you sell.
I made my last purchase in July 2013, great investor? More like dumb luck haha!
However I will be looking to buy in 2020/1 again. Possibly earlier if an opportunity presents but I think 2-3 years will be the time again in Melb."

Guess that makes me a contrarian then! Last purchase almost 6 years ago and just focused on paying down debt and increasing passive income stream from other asset classes since!
Again, agree with what you have said word for ford 100%

 

Sounds like your ahead of the curve. I wasn't really questioning whether you were contrarian, just making the point that talking about it and putting it into action are two different things.
Agree with most of what you write by the way, with both property and shares.

Willy

 

Generally I think all of us agree that markets are correcting and for those wanting to buy right now, the probability of waiting at least 12 months as opposed to buying right now will probably yeild a better deal with less risk for most markets . And at the end of the day its all about risk assessment for our particular goals/ circumstances. We are all a little different .


@Silverson I like your idea of planning to capitalise on your devs then moving the equity to stocks for greater cf via dividends rather then trying to get passive income all from rents. I have a few friends who have done just this and won't go back. But its no surprise considering how crap residential yeilds are.

 

I like the idea as well, the only problem is the effect that diversifying into shares has on borrowing capacity, especially at a time when capacity is already reduced. Straight away you reduce your security and serviceability. For someone who already has a mature property portfolio it probably doesn't matter so much but for someone trying to build one in the current lending environment diversifying into shares can really restrict things unfortunately.

Willy

 

I agree and my comments were made assuming someone is ready to transition from a growth focused approach to one of CF and doesn't need to aggressively expand their capital base.

 

In these credit conditions do you think income or deposit (lower LVR) is more important?
Also in your opinion how long do you think it will be before regulators loosen the belt a notch?