The falling knife stops and quivers .... the turning point ?

Over the last years I’ve seen a few turning points in markets and while there are always factors that people expect to impact the market , usually there are unexpected events that catch ( most ) people out by surprise . Just like now .

First , the expected factor , we’ve had an expectation that interest rates will go down . This has been foreshadowed for a while and now there’s an expectation that there will be two falls this year and sooner rather than later . Ok , it hasn’t happened , but it’s certainly been talked about for a while and when it happens , I’d expect it to slow the fall .

Then there’s the two unexpected things . I’ve telling people ( not here ) reasons why labor might loose , BUT , given the consistency of the opinion polls , I didn’t expect it and i’ve been basing my plans of them winning for the last 18 months .

Today we have the news that APRA are considering changes to loosening up lending .

I seem to recall this has been raised , but there certainly no expectation it would happen.

They say things come in three’s .

I certainly don’t expect a sudden boom , certainly not in Melb and Sydney , but we might see a second wind in the hobart boom which has eased over the last 3-4 months , we might be closer to booms outside of places that have already moved and we might see a marked slowing in the descents in Sydney and Melbourne .

Q’land has an election in 18 months and if scomo is doing a half decent job , the libs / nats might get back there , increased state spending , immigration and who knows what them .

Personally I’m not about to rush out to buy anything ( we’re maxed out anyway ) , but we have taken two places off the market this week as a result of the election and a change in personal circumstances .

The turning point ?

Cliff

 

Headroom - who has the capacity to grow?

QLD and WA are the only markets i can see that fit the bill.. increasing population growth, falling new supply, low price point of entry. By EOY adding in the factors you mention, these markets should start to get a run. Keep an eye on rental yields in the mean time.

 

We bought in Hobart in 2002 . Our best buy yet . It’s only in the last couple of years that tassie hasn’t been considered a basket case in terms of fundamentals , so while I do pay attention to them .....

I’d add Adelaide to the list .

Hobart still has potential . One place we bought in the outer ring around 260 was renting for 320 , just increased the rent to 400 . It’s moved up but certainly hasn’t boomed .

Then , once Brisbane moves , the cycle moves up the coast , he’ll , maybe even to rocky ....

Btw , Rocky was considered a basket case by many back in 2003 .

Cliff

 

Iron ore prices have been on a tear recently. Might be good for ecoNomy and property prices in WA and QLD

 

Wonder how high iron ore can go. It will make this country much richer if it gets back to its highs. It'll make WA great again. lol.

 

When are you makin' the Druie great again Datts...

...and when are you comin' to do burnouts in the Wentworthville Leagues carpark?

 

I cannot face the general public whilst house prices in the Druitt have a sale price beginning with a 3 or even a 4. It's painful. This could take a few years.

 

I'll slap you outta of it.....a good thongin' will do da trick...

 

It's no good. The other day I was walking down Luxford Rd as the fuel pump in the commodore carked it. Anyway, a local agent drove by and yelled .."datto, wanna sell a house for 250, got someone interested! lol". I yelled out "Nah, keep on driving you mug".

 

Hi Datto

Haven’t been watching the Druitt much recently . Realistically , what’s your stock standard 3 bedder ex houso in letho , bidwell , Tregear selling for now days .

While I’m putting “ now “ forward as a possible turning point , I certainly don’t expect Sydney to have a prolonged boom for many years . More a stop of the descent , then a prolonged period of consolidation .

Cliff

 

One Million Dollarsssssss

Good thread btw and If anything is to happen QLD first to go then Perth! I think we will see some unexected things for Syd/Melb moving forward, due to looser lending, dropping rates, construction STARTS dropping, construction approvals dropping.

 

Depends on how quickly the supply from vales mines in brazil comes back online. It seems they had to shut all their mines for review. One big mine was allowed to open last month then now closed again as the dam there looks to be collapsing again. So in the next 3 months we could see iron ore at 120 or 150 if the traders go nuts

Nah syd/melb will have to work through the massive building thats been going on past few years and the subsequent deleveraging. Will continue a slow decline or stagnant prices for years at best.

Looking up for WA and QLD but commodity prices can collapse quick smart if trade war escalates and global trade goes into a big downturn.

 

Talking about basket cases, keep an eye on Darwin too.

Its by no means ready for investment yet, but there are some green shoots if you look.

The stock on market and the vacancy rates have been consistently dropping now for a couple of years.

The government has put a bunch of stuff in place that should start bearing fruit in the next few years. There's a rare earth mine opening up outside of town, a new uni campus in the CBD, and a full complement of 2500 marines.

Its not all peaches and cream (the place is still an investneni no go zone currently) but it is at least worth putting on the radar, as the foundations are now being laid for a recovery.

 

Have a client in Darwin
He said things are tough.
Implex complete not alot going on.

Alot of guys looking for work.

But its cheap.

 

In those suburbs you mentioned I would give a realistic estimate as 440K. Although, there are some houses with an asking price of under 400K, I think you'll find they need heaps of work eg one in Letho recently sold for 330K (hang on a sec as I wipe the tears from my eyes).

I don't want to sound like a one eyed Mt Druitt supporter, but I can't see house prices getting any cheaper out here. I think we have hit the bottom of the barrel. Things like the rental return will grab peoples' attention especially as banks are now starting to ease up on lending restrictions.

 

In WA, Perth is the only choice so no confusion as where to put money in WA. I agree with the others, QLD or WA are likely going to see some action next.

FHBs in Perth are having the time of their life. A 4x2 house built in this century in #Perth10k for $400k ish. The FHB grant limit is $430k for full rebate in Perth.

 

@JohnPropChat what would be your pick of suburbs in #Perth10k around 500k range for 4x2 house.

 

Can't go wrong with most suburbs for a 4x2 in #Perth10k. The closer you get the city, one can still get a 4x2 but will be a street front or battle-axe subdivision. In those cases, I suggest Vic Park.

A 10k radius map - Mapping the Market | CoreLogic

The borders are:
To the south, Ferndale/Cannington/Queens Park
To the East, Bassendean but I would stop at Bayswater
To the North, Nollamara/Westminister but have to be very picky cause they are flooded with supply and will put a pressure on yields
To the West is a bit misleading because of the proximity to high end suburbs and the beach.

 

thanks John, much appreciated

 

Datts....harden up mate.....nah tears.dems how it rolls......

More to come in the Druie...unfortunately.....it also looks like DoH have restarted some sales so more supply...those prices will also reset vals...and that in itself further adds to the da Druie issues...time to look further a field son......go west...circle dem wagons....