This Housing Downturn is Over

Discussion in 'Property Market Economics' started by Redom, 23rd May, 2019.

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  1. turk

    turk Well-Known Member

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    Same here, and I just assumed that a property investor or would be investor would go to the source when he couldn't get an answer to his query else where
     
  2. Woodjda

    Woodjda Well-Known Member

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    I think that's what most "property bears" on here are doing. A lot of us seem to be in a similar position where we're being encouraged by family, etc to buy our first home. But when you look at it closely prices are truly insane by international standards. There are also plenty of global examples of similar behaviour preceding property crashes. So we'd prefer not to lock in a 30 year mortgage where if any economic shock hits we'll be in serious trouble. To me it looks better to invest in more reasonably priced options and wait to see what the next few years in the property market brings.
     
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  3. Redom

    Redom Mortgage Broker Business Plus Member

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    We had a little conversation about the big movements that happen in the daily index privately a little while ago when a few others questioned it. I think this may be because the data is tied to NSW LPI, where settlement data goes in batches and becomes available well after a sale is made (upon settlement). I.e. there's close to full coverage on a real time basis, but there's a stock of data points that aren't covered until they're registered by LPI. Given the timing of their registrations, there's often large variations (in both directions) roughly 6 weeks after each quarter end. I don't know how realistic this explanation is though.

    In any case, the data metric isn't about reading the daily data and drawing large conclusions from individual movements - that is nitpicking and missing the point. The richness in the data comes from the closest thing to real time insights of what is happening to the market. Looking at monthly/ quarterly movements is far more valuable, pace of change, etc.

    Right now, the data is very bullish on Sydney/Melbourne. It's rising at boom level pace. And it's only getting faster.

    Sydney/Melbourne is in the middle of a mini-boom. I.e. its recovery is sharp. Everyone will be calling it within the next few weeks when it price data begins trending above double digit growth. It was literally the complete opposite under 6 months ago (double digit fall trend). The real question mark now is how long will this last.

    This month will probably crack 1% (0.90% now). Next month will likely do the same.

    If you want the closest indicator of what will happen to the index next, just look at weekly clearance rates. It's clear the relationship to prices holds now that Corelogic is running at this pace again (which correlates to clearance data). 81% prelim's for the last two weekends, 75%+ finals. Corelogic price data will capture this in the next couple of months too.

    It will stabilise soon enough of course.
     
  4. marmot

    marmot Well-Known Member

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    Some generaions had it a lot easier than others.
    How about the generation or two that grew up around the great depression and just as they were reaching adulthood had to go and fight in one of the bloodiest conflicts.in the 1940s.
    Then you had a couple of generations that were born in the 50s and 60s that saw massive wage growth and development during their working years.
    Then the recent lot that are probably going to see an entire decade with virtually no wage growth and saddled with large debt even before they finnish Uni or Tafe.
    No wonder our economy is really struggling.and IR rates being forced down.
     
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  5. Oliver Shane

    Oliver Shane Well-Known Member

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    We get it mate... BUY BUY BUY.... if anything goes wrong the govt will fix it right?

    Again - have you ever met a mortgage broker who thinks it is not a good time to buy or refinance???
     
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  6. Redom

    Redom Mortgage Broker Business Plus Member

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  7. Sackie

    Sackie Well-Known Member

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    Don't bother mate.
     
  8. kierank

    kierank Well-Known Member

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    Absolute rubbish.

    Why are you limiting yourself to Sydney?

    There is a lot of property outside of Sydney. In 40 years of buying property, I have NEVER bought in Sydney.

    Man, take your blinkers and grow rich.
     
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  9. Timb89

    Timb89 Well-Known Member

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    Then don't be schocked someone discussing time horizon.
     
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  10. Oliver Shane

    Oliver Shane Well-Known Member

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    And will rise next month? What’s that forecast based. Prelim clearance rates... what’s the R squared of clearance rates with low volume and price movements...not much.

    I admire people’s confidence anyway... in a world where some banks are paying people to take on debt, Stockland just announced a 70% reduction in profits... and with various other headwinds... takes guts to just blindly take on more risk in an economic late cycle period.
     
  11. Timb89

    Timb89 Well-Known Member

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    Because some of us still have our first houses to buy and I can't commute 4hrs to work?
     
  12. Oliver Shane

    Oliver Shane Well-Known Member

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    For many on here, you can only be a true property investor if you believe in a massive revocery, soon...

    This, in of itself shows the fragility of the market...

    So many hope hope hoping for a recovery
     
  13. Timb89

    Timb89 Well-Known Member

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    Yes, it would be nice if people had places to live! I'm not complaining, I work hard and save extremely well. Hence why I'm not about to throw my money into an inflated market that isnt liquid. But with this attitude, just ask yourself, what would have happened if Labor got in. And will you be so lucky next time? I'm not so sure.

    Rentvesting is an idea and on my radar. I'm not seeing anything that blows my mind though.
     
  14. turk

    turk Well-Known Member

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    I am not shocked at all, time is one of the basics of investing, I pointed out this your conundrum in regards to your timing.

    I suggest you re-read my posts as you seem to have very little understanding.
     
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  15. Timb89

    Timb89 Well-Known Member

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    And hence discussing this conundrum.

    It's like going on to a weight loss forum and someone discussing weight loss.

    And saying "well that's your problem isn't".

    Exactly, that's why I'm here.
     
  16. Timb89

    Timb89 Well-Known Member

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    Also seems you need to be ready to invest all your capital at a moments notice in the great God, the Australian property market.
     
  17. Timb89

    Timb89 Well-Known Member

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    Completely agree people are buying.

    I personally see that as pent up energy and that momentum won't be their once spring stock enters the market. Otherwise I'd be more hurriedly buying.

    My first question when I see these numbers, is that you mention boom time. We had a royal commission into the entire banking industry because of the boom times. And I just don't see sustainability. I can't help but remain cautious still.

    In your experience when do we see the spring season increasing volume on the market? Weeks leading up to? Or is the change in season when people start getting in the mindframe of "ok time to sell" and there's a lag?
     
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  18. Bunbury

    Bunbury Well-Known Member

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    @Timb89

    Mate, no one is forcing you to buy. If you are uncomfortable buying at the moment wait and buy when you can stomach it. However waiting till prices drop 30-75% based on what someone like Martin North suggests might not be the best course to take. People were saying the same things as you for as long as people have been buying property. I recall it in 2008 and again when I was buying as hard as I could in 2013. If you don't want to take advice from those with experience and success then don't but it really is getting a little repetitive.
     
    Last edited: 22nd Aug, 2019
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  19. kierank

    kierank Well-Known Member

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    I disagree. I believe all generations have it hard but, for each generation, it is not necessarily the same "hard". For some, it could be a depression; for others, a world war; for others, high interest rates, for others, low wages growth, ...
    Yep, my father was born in 1920 and my mother 1929. Both were born into farming families. They were the oldest children in their families and both were a source of cheap labour. Dad was pulled out of school in Grade 2 and Mum in Grade 5. Because they were from farming families, they were exempted from fighting in WW2.

    Before they were married in 1954, Dad had already bought his own small farm on the Darling Downs. By the time they left farming in 1972, they had expanded their farm to over 1,000 acres. Just because they weren't formally educated, doesn't mean that they weren't smart. But they took action, went without, worked hard, took risks, made mistakes, learnt from them, got up and tried again, ...

    I sometimes wonder whether education is a "wealth disability" for many folk in our society.
    Yep, that would be me (born 1956), my wife (1995), all of my brothers and sisters (4 of) and my wife's sisters (3 of). We all lived through this are but my wife and I are the only ones who have done well financially. I got absolutely no financial help from my parents (although I know my younger siblings did).

    But we took action, went without, worked hard, took risks, made mistakes, learnt from them, got up and tried again, ...

    Yep, that would be my two kids, born 1984 and 1986. Both are married and have children. Both have already brought two properties each (one each in Brisbane and one each in Melbourne). Neither has received any financial help from us.

    But they have already taken action, have gone without, are working hard (multiple jobs), are taking risks, have made mistakes, have learnt from them, have gotten up and are trying again, ...

    My three grandchildren are between 1 and 5 years old. I am sure they will have the same attitude as their parents, their grandparents and their great-grandparents.
     
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  20. Timb89

    Timb89 Well-Known Member

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    I don't recall saying waiting to prices drop to that extreme.

    So if it was hard in both those time periods, and if we can agree it's harder (no wage growth/higher deposits), we agree that there is an increase in difficulty in buying houses.

    So as to say our house buying difficulty index (let's call it hbdi) isn't constant and changes.

    My current thesis is that the HBDI is increasing and has a upper breaking point. That coupled with the weaker macro outlook all points to a no from me.