NSW What is you risk management or exit plan for Sydney?

Cool. Thanks for the clarification.

 

Many new members lately, buying in Sydney it seems.......

People do it, every time, pile in at the end. I was just reading something about timing the market and how it is impossible, but is it ?

 

didn't get that ??? are you agreeing with me?

 

PPOR?

 

i am saying the market is overheated there also

 

I don't think you can time it but you can certainly look for signs. Honestly I can't see any good signs of further growth in Sydney. It's only growing because of speculation.

 

I was being a bit cheeky, it seems so obvious as to what to do & not do when you hang out here, not always 100% right, as none of us can pick the top, but the mood here for last year is do nothing in Sydney (or sell) & basically I feel that to be correct.

 

Let's say the Sydney has not quite peaked yet. Generally speaking I would characterise the Sydney market as overvalued. Not knocking specific deals, which could stack up, but generally I would not wanting to be buying in Sydney right now. I don't think I need to be a timing lord to say that. It is said that it is impossible to pick the top or bottom of the market. Do you need to be that precise to not lose money? Sydney is near enough to the top for me to stay away. Pick it up in the next cycle.

 

It depends. The I/O loans expiring is not something that has emerged from nowhere. @Terry_w has been writing about this issue since April. Some investors listened and have cash buffers in place for when that happens. They will do well. Others didn't listen and some will struggle.

 

IP mate. May be closing in on another one in the same area shortly.

 

According to Roger Montgomery, the sell off has begun... Hold on tight: the great property sell-off has begun (he's an interesting guy, very respected in economic circles but damn did he ever turn bearish on property a year or so ago... I suspect much shorting going on) and according to AFR's contribution today it's time to look at property alternatives Time to look at property alternatives. Media meltdown or sentiment souring? Interesting times...

 

Look, I started having interest in RE in 2011 and every one was saying don`t buy...I bought the first one in 2016, lost 5 years of boom. My recommendation is manageable investing, doesn`t matter where the market is. If you listen to the no-sayers you will never do anything in life.

 

Agree with this. Good quality properties will always do well in the long term and even if you were to take a hit in the short term, isn't property investing meant to be a journey?

 

The negative person who never takes action will do this
2016 - Sydney is going down
2017 - someone bought in Sydney and posted. YOU MUST BE CRAZY. Prepare to lose money and years of stagnation.
2036 - you were lucky to buy in Sydney back in 2016. Pure luck.

 

It's very possible to time the market if you know how to fundamentally value an asset.

 

True but in 2011 we had record high income growth at over 5% per annum, we were in the midst of our largest ever economic boom, private debt was nowhere near as high as currently, rates were falling, population growth rate was almost double what it is now, and chronic undersupply (we now have emerging oversupply). Prices were also barely in a bubble Australia wide and the bubble was largely contained to Sydney. Now? Fundamentals have become far, far less favourable. So people were "wrong" in 2011 for very good reasons. They might be wrong now too, but then there were many factors giving strong support to the market that simply aren't doing so now. Most of the price growth of the last decade in Melbourne and Sydney has occurred very rapidly, since around 2012. Based on very little fundamental support.

 

I wouldn't sell from an A grade market and invest in C grade markets.
That's like selling a diamond to buy a lump of coal. So, I wouldn't have an exit plan for Sydney.

 

What I have found ironic is the more some users on here nag and sob about Sydney going backwards, the more it goes forward.

 

I think the topic is managing risk? all asset classes have risk regardless.

With property It becomes a higher proposition if you are highly LVR and buying close to peak. Has nothing to do with a property being blue chip or not, all property will be effected when markets change, this is fact, just look at historical data. Boom/bust cycles are real and they happen, part of investing.

When the cycle changes the only thing we don't know is how low it will go, and will vary.

At the moment in Perth I believe we are seeing anywhere from 10-20% drop in values from last peak cycle, dependent on product and area/suburb.

For me reducing risk in Perth market is just not to develop because I have no idea whether the end values will remain the same on completion, would rather just sit on my hands until I see some confidence back in the market, and values holding up.

Another thing that some may not realise is that rents don't continue to rise, when markets tank they can also fall back, same as what is happening in Perth because of an oversupply of rental properties, investors could not sell so they hold property and way too much stock, renters have choice. We have seen at least 15% drop in rents...ouch

 

The irony being that from a value perspective Sydney is far far from being an A grade ...