Who are the Fools and who are the Suckers

Radson

One thing I've learnt over the time I've been on this forum and Somersoft ( since 2001 ) Don't listen to the economist ....

They consistently get it wrong . They are a good counter cyclical predictor of when to buy . If fact I don't think I've seen one overseas commentator / Expert or organisation get the Australian Property market right .

We are different . We have a different mentality to the US and to the UK and that leads to different results .

Cliff

 

totally agree @MTR
Stats are only there as a guide and this is really year 10 mathematics. You can go macro level and say hey my property has gone up or micro level which say area 1 is high but area 2 is low.

For e.g.

Property 1 : gone up 100K (high end area)
Property 2 : gone up 30K (low end area)
Property 3 : gone up 25K (low end area)
Property 4 : gone up 30K (low end area)

Say the average property is 400K, with these 4 sales assuming in last 2 months the average growth is 46K and hence the growth median wise is around 11.5%

There are markets within markets and suburbs within suburbs. a real life example in victoria which i have experienced is doncaster a property price growth there can 200-300K movements but a price movement in pt cook could only be 40-50K within the same period.

 

If you position today and look back at 2013-2015, yes it's obvious...

However if I was position myself in 2013, it wasn't obvious. Not that obvious even it boomed in my backyard.

The media, the agent, this forum, the taxi driver all talk about properties in Sydney during those time.. I question myself then, am I too late? has the market boomed, do I believe what the agent saying..if I buy today will it fall 10% next year and stagnate for the next 10 years.

A work colleague asked for my opinion in buying in Blacktown in 2014. I advice that it has gone hard in the last few years, and he should avoid. He went against my opinion and purchased a property for $440k. Today it's probably worth $600k, so a 36% in 2 years is pretty good.

For example, in 2013 era, Mount Druitt, aka "2770" was biggest hyped up area in Sydney.. If we look back some of the SS post few years ago, we still see senior SS members to stay away from Sydney

 

Yes, but the boom cycle in Syd started around 2013, we don't need to get in at the beginning as long as we don't go in close to peak, your colleague went 12 months into the boom, boom cycles generally go 3 years?
I guess we should not listen to anyone on the forum, including me. Its just a forum and very much commercial now, lots more spruiking.

The bottom line is there were 3 booming markets during this period and they were all mentioned on both SS/PC, if we don't ignore this and do our own DD then could certainly work it out.
If investors jumped into one of these markets the outcome would be far superior than buying in either Adelaide or Brissy during this period.

MTR

 

I think we should listen to various opinions (occasionally statistics ), probe and prod to flesh out the knowledge as well as conflict of interest and then make up our minds.

 

At the end of the day its up to the individual to decide whether to buy somewhere or something or not. I bought in Sydney late 2014, well into the boom but it was a heck of a good deal imo. No competition from other buyers, and a very solid property, no issues. Could be worth 100-150k more than purchase price, though I haven't tested the market and cant say for sure. But I know properties with half or two thirds of my floor space go for similar prices.

And so while there is a boom, there are still opportunities, you have to know your markets. But I would be very very cautious buying now, especially units. I am happy to be more in an offloading phase than purchasing in Sydney now. I'm happy to go away with properties doubling in just a few short years. Still a good time to sell units. I think selling anything with land is a no though.... I feel long term they'll stay strong. There's just too much demand....

 

What areas/suburbs if you care to share?

 

The late 2014 purchase was my Darlington purchase near Redfern. Love the location! Easy walk to UTS, Sydney Uni, new CBA workplace in ATP to name a few places. Extremely good for transport and walk to Broadway... 15 minute walk to Central train station too. Low rise building, nice and quiet, small pub and cafe across the street, organic tea shop nearby....
I'd love to have a terrace around that area or at Alexandria near Redfern Station but I would be looking at a min 1.1m for something... not an amount I am so willing to pay for an investment property....

 

The time it takes to grow in value is very important especially if there is no value adding being done. If you want to build a large portfolio asap then its not enough to just buy somewhere knowing that long term it will grow. If the time it takes to grow is not important then that's another story. Just my opinion.

 

Isn't that the truth !

 

I can see what your airbnb tenant doing from my apartment lol. We go to Brickfields cafe a fair bit, but mostly cafe towards Surry hill side. Cafe Oratnek, a Japanese fusion cafe on Pitt street gets a bit of line on weekends as well. Few close to the Central station like Haven, Le Monde worth trying.

I am out about tonight catching Pokemon with my daughter. Dine out the Spice Alley, then a game of table tennis and pool at Central Park. Have you been to Spice Alley, just behind Central park? Would be good let your tenant know....

 

But everywhere gets mentioned.
There is sure to be some booms and some busts in there.

 

yes, but don't we have a brain.... does that mean we buy in Adelaide or wherever because someone on the forum tells you its about to boom, lets ignore employment figures, and lets ignore economy and market sentiment, lets ignore demand, and how they want to spin etc etc.

Seriously this is what I mean about doing your own DD

 

Yeah we do (well, you and me), but I'm sure that mega Elizabeth thread has convinced plenty of people to buy over there regardless.

 

9 out of 10 predictions by economists are wrong. and the 1 who got lucky suddenly gets praised for making the right call.

Problem is, any monkey can make a prediction especially when there are no consequences attached. I'm sorry if i sound angry but it just annoys me people get paid to predict the wrong thing, and doesn't get any penalty.

any other job you get a warning at most then your fired.

 

Here go again, posted this a number of times..... and why they get it wrong

"Ten Reasons Why Economists Always Get It Wrong."

 

Most important rule with property investing is..... DONT LOSE MONEY.....

 

I agree. Everyone is saying 'don't buy in Perth' but I just bought in Perth (well 50% of an IP anyway). That's because the project meets our specific needs right now. If you it suits your needs, the numbers work and you have done your DD, why not? Then it doesn't matter what anyone else says.

 

I thought it was to make sure you MAKE money...

Just teasin

 

Excellent point.
Economics is largely a study of the past (you analyse what happened and how it might have happened). There's no such field called predictive economics as far as I am aware but many economists (specially those on some sort of an industry payroll) take it upon themselves to start 'predicting' the future when theres really no theoretical basis for such analysis. Just imagine if Doctors started predicting (with ego and conviction) about the possible life spans of their patients.

As you said most analysis and so called expert opinion is almost always proven wrong and nobody should believe it yet internet is filled with predictions. I think the key is to go against the mainstream advice and you will always make money.

Examples:

Mainstream advice since 2007 about Sydney is that it's going to crash. Those who went against this made a lot of money. The current mainstream advice is to be cautious about Sydney which makes me think it's time to stay bullish on Sydney.

There's a consensus that Perth isn't going to see a recovery soon and price might tank further. May be this is the time to go against this advice and invest there right now.

Brisbane is being hyped for last 2-3 years and mainstream advice is to buy. I think those who go against mainstream in Brisbane will profit more.