They said the R word! *gasp*

on Monday: http://www.smh.com.au/business/the-...isk-say-investment-banks-20151012-gk6pjz.html

on Tuesday: http://www.domain.com.au/news/sydne...75-per-cent-bust-economists-20151013-gk7kxz/?

What's today guys? LOL

 

I think they also said that in 2007/8, with 50% falls in housing market across Australia.

Now we see what they predict property market will fall back to ??

 

let's wait and see but doubt it.

 

There's a lot of money to be made in being negative. People love to read it. It sells.

If you say it often enough, one day you'll be right.

However, recession is looking likely at the moment. We've had an amazing run, but with commodities, china, even SE Asia....things do look a little shakey.

What and how it affects us is impossible to predict, but prolly wouldn't be a bad idea to have a buffer on hand. Just in case.

 

There was a similar thread on SS from May this year, covering some of the past recessions. In some of them, property vales actually increased.
http://somersoft.com/forums/showthread.php?t=109243

 

While investors can't afford to be negative they can't also afford to be in denial. When there are signs of slowdown/falling market it is best to buckle-up and have some buffers to ride out the [potential] storm rather than [encourage everyone] to keep buying, IMO.

 

A slowdown is normal, it's called a cycle for a reason.

 

It is always good advice to have buffers in ANY market conditions. Either to fund a new-found opportunity that just 'pops up' or to fund a defensive strategy if things turn south.

What I have a problem with is some media predicting - bubble, crash, falls of 7.5% by a certain date, a Westpac bank interest rate rise of 0.2% ushering in the end of the property boom and so on.

When we have:

1. 94% employment
2. The lowest historical mortgage interest rates ever available @ 3.99%
   
3. 70% auction clearance rates and higher in some areas
   
4. Stock shortages of good, quality property in some areas
5. Volatile share markets (which often see flight to the safety of bricks & mortar investments)
6. Rising prices (at a more moderate level than boom times, which don't last forever)

 

You forgot the $20k small business incentive - because small business is not going well/not employing much, etc

Offering things such as that should tell us something.

But I've been bangin' on for a few years now about all that - not just 'cause my joint is crap - just listening to folks.

 

Yeah, one of the problems as I see it, is that the RBA has only one lever labelled interest rates. It needs to help business by lowering IRs and at the same time avoid more housing boom stimulus in the Sydney & Melbourne RE markets.

Personally, I'm pretty comfortable paying current IRs + 2% or more (having been thru 9-11% pre-GFC).

 

People also forget investment is not just a house. It's a portfolio of balanced vehicles. You plan for the worst.

 

What happened to property prices during the last recession?
http://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf