To risky to buy in this market?

I sold my unit in Melbourne last week, got a bit more then asking price. I've noticed in Melbourne West, prices are soaring but rental yeilds are flat and there are so many vacancies. Then you look at places in Brisbane, the rental markets is nuts.

What's more concerning, is that your average family, can't save a penny and usually they are in debt to their eye balls.

Do you think the market will continue to grow ?

 

what are the areas in West??? Middle ring???

The Melb rental yields are pretty scary

I think something has to give, affordability, interest rates rising could change things

I dont have a crystal ball but I do think market sentiment will change as affordability will be the issue

 

Buying in a good middle-ring suburb in Brisbane with add value potential over the next 8 to 12 years has an above average probability of performing well imo.

'Will' the market grow from your purchase price ( requires a crystal ball). Work on stacking the odds in your favour with a realistic timeframe. That's all you can do.

 

Hello, I've noticed most western suburbs property are struggling..

 

ok interesting

 

Can you please give us some example?

 

To answer your question in the short term absolutely yes the market will continue to grow. These new lockdowns wont do anything negative for the housing market in Sydney/Melb - in fact I was reading just today that it will do the opposite.

Sellers will just pull the plug until lockdown lifts, the number of buyers are increasing day by day with investors now thoroughly back in the game. Its just going to add to the pent up demand and as soon as lockdown lifts its going to take off again. Come Spring we are going to see crazy rises in prices.

This is a global boom. Its because of low interest rates and housing being an essential necessity in life, backed by government and over the peak of covid has cemented itself as the single best investment asset to own for both resilience and growth. Property imho has overtaken shares or any other investment as number 1 preference for many.

I know guys who where 100% only shares now moving ALOT of their money into RE.

Its going to keep rising and rising until interest rates start to rise and that will slow or plateau the growth. Until then its up up and away.

 

Don't you think it's a little dangerous to talk in absolutes..?

 

Risk of what?
Risk of buying and the price falling after you buy?
Or not buying and losing purchasing power if prices go up further?

 

Talking in absolutes as if you can be certain of an outcome is just plan dangerous . While the probability may be high, to believe you know with 'certainty' is dangerous. Especially the more you do it, imo.

 

Are you saying we will see a drop within the next 6 months in prices? Absolutely not!!

Its not more dangerous than someone online following the guidance of strangers online without due diligence. Now, THAT is 100x more dangerous.

 

Nothing is absolute. Things can change overnight. A bad governmental decision, sudden dry up of funding, a natural disaster. Whatever. Things can change.

Are they likely to change? Don’t think so. Will property with good fundamentals outperform? Likely. Can we be absolutely sure? Unlikely.

 

The only thing you can manage (not control) is risk.

That's it.

Buy good properties, plan for the worst and buckle up.

I guess the question is can you manage the risk with prices the way they currently are?

If it dropped 10-15 percent...could you handle it?

 

And you didnt buy and priced went up 10-15%…?

 

I'm actively looking to buy. But I'm not buying with the attitude that price growth is guaranteed in the short term. That's the point I was getting at in my first reply to thunderstrike888, who said prices will absolutely grow in the short term. It's impossible to know that.

 

I reckon do a stress test on debt and if interest rates rise. ????

 

I know things that others don't!

My track record been pretty damn good. Look in all seriousness yes no one has a absolute 100% correct view of the future. As someone above said we could have world war 3 next month and housing collapses globally.

If you look at the next 6-12 months. Fundamentally look at it. Look at the monetary policy and look at what is happening globally. I'd be willing to wager a huge sum that we would see continual growth almost certainly short term.

 

What @thunderstrike888 is saying is... you can't trust anything he says. DYOR.

 

We deal in probabilities, not certainties.

So on that basis, it is probable that RE prices will continue to go up, but we don't know at what pace. The reason it remains probable that RE will increase is because there is likely no near term change to policy settings, which are very accommodating. There is also cycle analysis suggesting prices have a few more years to go up, but that is for another thread.

But let's say I'm wrong, and real estate is topping out now.

I would say, that the way to think about RE, is that you either invest now to catch the current cycle, or invest now and be early for the next cycle.

So let's say this is the top ... well you are just early, and will catch all of the upside when the next boom comes around.

On a slightly more serious note: don't give any time to thinking about timing - total waste of your head-space. If you don't own any real estate, you should buy when you get finance.