This Housing Downturn is Over 2021

Discussion in 'Property Market Economics' started by Sackie, 20th Jan, 2021.

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  1. Sackie

    Sackie Well-Known Member

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    {Note from mods - this thread continues from here: This Housing Downturn is Over 2020}





    @John_BridgeToBricks more kudos to you. Have a read of that post folks and look at the timing, posted 12th, March,2020.

    @John_BridgeToBricks I too have been of the belief from day dot that , as you say so succinctly, "The Sydney market is liquid, it is deep, and it is stable". I had no idea what would happen in Sydney in 2020 and beyond, but I based my decisions to hold everything there basically on those 3 factors you pointed out.

    #goSydneyGO!!
     
    Last edited by a moderator: 22nd Jan, 2021
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  2. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Wow, great find! The macro view is easier than the micro view. In truth, nothing moves in a straight line, and even if "Sydney Property" has a bull run for a few years, that still doesn't mean every property and every suburb - not even every year during that period. The devil is in the detail, but starting with a clear macro perspective helps - in this case, "inflationary depression" is my overarching thesis.
     
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  3. thunderstrike888

    thunderstrike888 Well-Known Member

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    LOL

    Reading this thread is pretty hilarious compared to what has actually happened. Total opposite now.

    Covid caused property boom not a crash!!!
     
  4. Ummm

    Ummm Well-Known Member

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    I think you mean the government giving out billions in free money and no one having to pay back their loans, free grants to buy houses and people withdrawing all their super for a deposit caused a housing boom...who would have thought there would be a boom! Working out exactly as it was engineered...
    Property at this point is all about confidence and government subsidies made it bombproof!
     
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  5. Sackie

    Sackie Well-Known Member

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    Please show me how I can borrow money and never have to pay back my loan. I'd love to get a couple of those deals.

    All I seem to be doing is paying endless tax, provide subsidized living for my tenants and support/provide work for dozens of employees in many industries so they continue making a livelihood. While I take on 100% of the risk.

    But yeah, I'd love to get my hands on those free loans.
     
  6. Trainee

    Trainee Well-Known Member

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    Never expected the boom to come this quickly. When buying during the gfc, didnt expect the boom either.

    But..... Pessimism just isnt profitable most of the time.
     
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  7. fols

    fols Well-Known Member

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    Welcome back Sir
     
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  8. Redom

    Redom Mortgage Broker Business Plus Member

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    IMO Sydney/Melb experienced a big pullback in March/April - but it was patchy as many sellers wouldn't sell and waited it out. Going through some of the contracts we saw in parts of Sydney - I'm shocked at the prices vs todays level.

    Data shows it was one of the fastest falls/quickest changes in direction on record for housing too. Clients in premium OO areas are already up 10-15% when they bought in this period - most of this has been made in good purchasing + recent fast paced growth. Overall macro data doesn't show this, but individual data points do.

    Would have been a great time to invest/upgrade given the price falls - if stock allowed. A bit scary for those already invested though. In panic, there were some goldmine opportunities where sellers were forced/didn't hold on. Some expats have done amazingly - buying at this time and earning a big forex movement too.

    Now, property/assets prices are running where large swathes of money is looking for a home in a more confident marketplace.
     
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  9. 2FAST4U

    2FAST4U Well-Known Member

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    Low inventory and sub 2% interest rates are playing a huge role. If rents are also climbing then the prices are probably driven by fundamentals. As long as interest rates stay low, I see no reason why prices don't stay high. The government and banks have shown they are willing to intervene with stimulus and mortgage holidays respectively.
     
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  10. Player

    Player Well-Known Member

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    Pretty much anything, that isn't a sky box without land content, is going to be on a tear for the next few years. Money is nearly free. See you in 2025 give or take.
     
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  11. Silverson

    Silverson Well-Known Member

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    This real estate cycle is like clockwork, mid cycle slowdown then on and up until mid decade, same goes for stocks. Good time to buy this last year but I feel the buying should stop in 2021 and then one should really focus on paying down debt...
    Just my unedumacated opinion
     
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  12. albanga

    albanga Well-Known Member

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    My question is do you believe there has ever been more confidence in people’s outlook?

    Whilst it may still be way too early to call. 99% of people have come out the other side of the worst of the pandemic (In OZ) still with a job, more savings, a new work life balance and see interest rates below 2% with certainty of not moving for the next 5 years. Throw in increased borrowing capacity, the knowledge our governments will do pretty much anything to save us, banks the same and a vaccine around the corner with every second article I now read optimistic about an economic recovery.

    Point being this is the worst economic crisis nearly every human has lived through yet the vast majority are now actually better off. Again I know this is very premature but as it stands that’s the reality.

    I’ll be the first to say right now I was wayyyyyyy off on my predictions.
     
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  13. Trainee

    Trainee Well-Known Member

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    exposure --> outcome.
    Those who didn't own anything and didn't buy made nothing.
    Those who owned and kept or increased their exposure made money. Which is easier when the purchases were made in previous cycles, but at some point, they would have been new owners going through a downturn, or high interest rate period, or recession, or something.

    The predictions didn't matter, because no individual opinion moves the market.

    Property is a strange beast, because there is no direct way to profitably short, and even the best moves (selling at the peak and buying back at the bottom) requires you to own in the first place, pay huge transaction fees and probably capital gains tax (or rent, if selling PPOR), and buy back.
     
    Last edited: 23rd Jan, 2021
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  14. Sackie

    Sackie Well-Known Member

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    My 2 cents.

    Before the pandemic our markets were poised for a nice rebound and indeed many were doing just that. Then the pandemic hit and everything became uncertain.

    I heard the big R word being used. We are in a recession.

    RightyO.

    Now we are out the other end of the pandemic, it seems stronger than before as we survived quite well compared to other countries.

    I don't see people behaving like we're in a recession. Cafes are packed. Retail outlets are buzzing with cash being spent. Domestic travel is rife. People are just waiting for borders to open to travel and enjoy life.

    And our RE markets? They'll continue the way they were headed precovid. Covid was never a financial crisis ( and looks like it hasn't caused one either, thanks Scomo).

    Above all, you gotta be in it to win it. Like I have been saying from day one. Invest according to your risk tolerances, where you see value and your goals. our financial futures can't afford us to play crystal ball too much.
     
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  15. Harris

    Harris Well-Known Member

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    The auction clearance rates were 83% & 91% respectively for Melbourne & Sydney for yesterday- albeit with smaller volume but signs of things to come this year!
     
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  16. jaybean

    jaybean Well-Known Member

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    91%...sweet jesus
     
  17. Trainee

    Trainee Well-Known Member

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  18. wylie

    wylie Moderator Staff Member

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    This bit made me sit up...

    Are we "out the other end of the pandemic"?

    I think we've almost avoided the pandemic, but history shows how easily we could end up like Germany. They did well... until they didn't.

    If things do get out of control here, and the exponential growth of a few cases that become a few thousand cases happens, then things might look much worse than they do now.
     
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  19. MTR

    MTR Well-Known Member

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    But what’s so weird is the pandemic has in the main had zero impact on property markets, perhaps it stalled for one-two months??

    I think we seem to have booms happening in most States. More demand than supply..... boom
     
  20. Property Baron

    Property Baron Well-Known Member

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    I understand why regional towns are experiencing a shortage in supply but what is causing the boom in the major cities. If people are moving from the cities I don't get how they still have a supply problem?