What if the market tanks??

Love your style ... haha .... the world is falling nooooooo (I'm joking)

If you are too positive about yourself and the world you become cocky, and trust the wrong people, live in a fantasy land,

if you are too negative about yourself and the world, then you are too afraid too try anything, fearful etc

You need both positive and negaitive in balance, and truth is that pessimism and positivity are illusions anyway. There is only truth, its the meaning we put on things that makes us go crazy.

You see it here on this forum where people perceive that so-and-so was being XYZ ... even I am guilty of misperceiving things.

there are positives in the negatives..... and ....negatives in the positives ....

Its your life, your choice, how you perceive it things.

 

Some people take stuff too personally.

 

Sash, with this hypothetical purchase and with your renovations in Brisbane, it's one thing what we think the market value is, but getting them valued up to that amount to pull equity out is something completely different, right? Say, if you were to refinance your strathpine house that you bought this year for 301k and renovated with 8.5k (is that the one?), no way that can be refinanced now at 380k+ even though you could get that much if you put it on the market?

 

Yes that is true....in some cases you may need to look at another lender.

 

Your favourite lenders for equity release @sash and everyone else?

 

Haven't found one...but SunCorp worked well on some of my properties so did Westpac.

CBA in my opinion are the worst!

 

It's hard to share your views with people that have different beliefs. Also remember that most may not have the years of experience in investing such as yourself which has given you the tools to say what you say.
Don't stress, I hear ya, and so do many others.

 

It would be a shame if you could not exchange different views on this forum. In the end, you may be right, half-right or wrong...no one has a crystal ball. An economist doesn't hang himself if his GDP forecast for 2016 is wrong.

 

...

Problem is I think economists get it wrong most of the time, here I go again...
Dan Erwin - "Ten Reasons Why Economists Always Get It Wrong."

The forum is about sharing views etc, etc.
If some get threatened, or feel challenged by your views then I have to ask why? You will find its more about them than about what you had to say, and I am OK with this.

No one has a crystal ball, but this is not crystal ball stuff??

The question was - what if the market tanks???
I don't know when the market will tank, but I do know it will tank......because booms don't last forever, this is not a prediction, this is fact.

The reason I started this thread was to find out what investors are doing to protect what they have made.
Why would anyone be threatened by this question? I am sure many investors would be doing this all the time regardless of boom or bust cycle, look at worse case scenario ... what if and exit plans

MTR

 

For me, I just locked in 5 loans for 3 years, time to save cash in offset for a little while and look for opportunity's once things drop abit. Although I will buy in frankston Victoria, maybe one more in Brisi if equity allows, but I save 80 k a year in a offset account to create my buffer again.

 

The two best lenders( by far) for equity release are AMP and Macquarie - AMP asks no questions to 85% LVR AND ( importantly) if the security you are using is PPOR, but the funds are being used for INV purposes, their rates are not loaded for INV rates- unlike every other lender. Macquarie asks no questions to 80% LVR. Both lenders offer free up front valuations so you dont need to take a credit enquiry hit to find out if you can get what you want at either of those lenders.

There are several lenders where cash out policy is OK, but these two are by far the best.

 

What do you feel will happen in the 2016 / 2017 market ? I think Sydney is over and will drop in some areas, merrylands, ctown places like this. But I think central coast will still do little growth, some outer regions as well. Melbourne inner city will over supply and drop. Some outer regions will still do ok, Brisi will have slow growth only record 4 to 6 percent growth. Adelaide will do 4 percent and kick on ok to. Thoughts ?

 

Macquarie I think in my opinion. Worst is CBA

 

I just sold an IP in Syds west, in fact prices have already come off from values 3-4 months ago.

No idea what other areas will be effected, however auction clearance rates in Syd and Melb have come down and APRA has not helped the market.

Perth market has actually fallen back, most areas dropped by 10%, I see this market as rocky, we lost 10,000 jobs last month.

Adelaide? don't know, plenty of threads on this, it's not a buy for me yet

Brisbane, plenty of threads on this, not a buy for me either. From what I have read I believe some pockets have moved.
I personally prefer the Melb market for developing as infrastructure costs far cheaper than Brisbane and I also think it's better value, with more upside, Just my opinion

MTR

 

I dont know that Merrylands will drop like Campbelltown might.... it's very close to Parramatta, has excellent public transport / train line, lots of retail with the new Stockland, and still choc full of 700-750M2 blocks with old houses on them. A lot of Chinese starting to buy in the area as well...

 

Yes you could be right, might come off a bit then may stablize, also I still need to call you haha, sorry been so busy on holidays.

 

Totally agree. There is usually a correction after a big rise. It's not a matter of 'if' but a 'when'. Meantime I've covered myself by taking very little loans. Rental income from other unencumbered IPs will also cover the repayment of already CF+ loans, even if I lose employment income. I also always assess my properties, as I think it is very important not to be complacent. Something that performs well in the past does not mean it will continue to do so.

 

Um, if the market tanks as per the OP, I'd take a guess and say that anybody using equity (and, in context, I use the term loosely) to borrow even more, should consider that financial institutions could rapidly turn into "fair weather friends" and demand their umbrellas back.
That's assuming it's starting to rain....
Might be worth while getting the calculator out... or not, depending on your point of view.

Happy New Year.

 

This is why I have long argued for NRAS forming part of a portfolio... the massive tax free surpluses would act as a strong safety net in the event of a market collapse.

 

I only work off published medians - too hard to know what individual examples means.
I don't believe Sydney will have and a median house price below $800K again - low $900Ks definitely possible.