Join Australia's most dynamic and respected property investment community

Who lived through the last Aussie recession?

Discussion in 'Property Market Economics' started by qonyx_sydney, 14th Aug, 2015.

  1. qonyx_sydney

    qonyx_sydney Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    135
    Location:
    Sydney
    Im not suggesting that recession is imminent however it is inevitable at some point in the future that we will experience a recession.

    So im interested in the experience of those that experienced the last recesion and what actions you took to minimize the impacts of holding a large portfolio.
     
    Esh likes this.
  2. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,688
    Location:
    Brisbane..
    Which one there has been several under Labor,the jury at the time give you a large square peg and asks you as a investors on opm to chose between 2 round holes..
     
  3. KDP

    KDP Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    246
    Location:
    Singapore
    Important thing is to watch your cashflow.

    So keep a cash buffer, hang on to your job, make sure repayments are manageable etc.
     
    CDL and Be Developer like this.
  4. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    I took no action, other than to continue to pay down the PPoR debt; but I would have done that anyway.

    We had no IP's at that stage, and bugger-all fin education other than I knew to smash the home loan.

    Further to that now that I have a bit more of a clue; I suggest those who have a few IP's; get your ducks in a row and set up a 100% Offset account linked to the IP's (the MB's here on this site can help you) and put as much cash into that as you can spare.
     
    Last edited: 16th Aug, 2015
    qonyx_sydney likes this.
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    When was the last one?
     
  6. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    Fairfax newspapers have it as 1990.
     
  7. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    I believe it may have been around 1990
     
  8. Tranquilo

    Tranquilo Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    341
    Location:
    Mascot
    the recession we had to have
     
  9. Random Username

    Random Username Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    239
    Location:
    NSW
    1974 was the first for me.
     
  10. Aaron Sice

    Aaron Sice Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    895
    Location:
    Ocean Reef, WA
    i remember the recession well.

    dad went hunting to shoot rabbits and roos for dinner.

    shoes had to last so we played barefoot.

    second hand bikes cobbled together from the good bits at the tip.

    well - that was my childhood anyway. we weren't even middle class at that point.
     
    qonyx_sydney, Esh and willair like this.
  11. SeafordSunshine

    SeafordSunshine Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    373
    Location:
    Sydney
    OK OK so now you know my age....Interest rates went up to 18% from 14% and neighbours were selling up to get out of debt.. or refinance, every third month. Our bank was nice to us.. they extended our mortgage by years and years and years:confused: My suggestions are
    1. Have a cash buffer. (As mentioned )2 Buy good clothes and get them mended.( or do it yourself) 3. You can still have fun without expensive anythings! 4.We didn't have overseas holidays. 5.Credit cards were for paying off in full at the end of the month.
    I hope this helps!
     
    Doraemon, qonyx_sydney and willair like this.
  12. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,327
    Location:
    Perth, Melbourne, USA
    Sign of the times, more negative threads, bloody APRA
     
    qonyx_sydney, Esh, C-mac and 2 others like this.
  13. spludgey

    spludgey Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    679
    Location:
    Sydney
    A sign of the times or a sign of things to come?
     
    qonyx_sydney likes this.
  14. MGF

    MGF Well-Known Member

    Joined:
    13th Aug, 2015
    Posts:
    403
    Location:
    QLD
    It was like that for us too. We were poor and then we got really poor. My dad using rabbit traps, my grandfather turning up with day old bread he got from a mate for us, mum crying because there wasn't anything for us to eat.

    They kept the house but only because the banks didn't have the balls to repossess our entire country town. Many farmers faced losing the farms but then there was no one to buy them back in 1990 so people just prayed for rain and good crops.

    Not sure it would go the same way today. The farm would be a distressed asset sold off to a hedge fund.
     
    Aaron Sice and qonyx_sydney like this.
  15. jaybean

    jaybean Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    981
    Location:
    Melbourne
    I think I would just go overseas to work.
     
  16. spludgey

    spludgey Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    679
    Location:
    Sydney
    Globalisation is not going to be your friend, if that's your plan to get away from a recession.
     
    qonyx_sydney likes this.
  17. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    913
    Location:
    Adelaide
    I was too young to remember it but I think my family were fine because both my parents had secure jobs back then.
     
    qonyx_sydney likes this.
  18. Bunlee

    Bunlee Active Member

    Joined:
    18th Jun, 2015
    Posts:
    37
    Location:
    Sydney
    I was in my 20's during that one - only significant asset was a PPOR with approx $140,000 loan & interest rates topping 18% ( I recall that some bank customers had a ceiling rate of 14.5% if loan taken out before a particular date). I had a very secure job and a reasonable income but still, to this day, I hate the taste of 2 minute noodles :)

    Fast forward 25 years.......jeeeezzzzzzzzzzzzzzz!

    No PPOR loan but one on an investment property, fortunately fixed at 4.99% for the remaining term of just over 4 years.

    Average income but very little job security now.

    Noodles not on the horizon though

    Strategy is to pay investment property loan down slowly, buy more quality shares and put a bit into super.

    Will consider another IP maybe way down the track but strategy now is reduce debt slowly and build up shares at same pace.

    Jeez.....25 years!!!!!!!!!!!:eek:
     
    Nick14, qonyx_sydney and willair like this.
  19. LibGS

    LibGS Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    615
    Location:
    Melbourne, Australia
    Go Libs. Wages explosion which resulted in double digit unemployment, 12.5% inflation and 18% interest rates. The economy was far too hot. Without the recession, which was the price (hence we had to have) for bad economic policy and peoples proflegacy, who knows what would have happened. But we do know that as a result of the cooling economy, std varaible interest rates were back down to 8% in early 97.
     
    qonyx_sydney likes this.
  20. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    789
    Location:
    Sydney
    I was only 8 when the 1990 recession hit. My family did ok. Weirdly, it just so happened that the family business was in a sector that was - at the time - thriving!!!

    You would all laugh if I told you this but... the family business was... a video store!
    Think about it... pre-Internet, pre-cable TV, pre-movies being able to be purchased from shops at all for sometimes up to two years post-cinema-release!

    VHS piracy was difficult to execute and actually quite costly, so it only occurred in mild doses.

    Couple this with a recession-gripped target market and the budgeting cost for a family of spending $3 on an overnight new release video hire, versus actually going to the movies or a family holiday etc., and it was a thriving business during an otherwise awful time financially.

    Of course our family were broke by the mid 90's as easily-pirateable dvd launched, Internet and cable TV took on, as globalised players such as Blockbuster Video took hold.

    By the late 90's the video store industry was obviously floundering (other factors such as a dvd release of a cinema movie being available at big w for less than $20, only 3 months after cinema release, also took hold), and death was imminent. Any business brave enough to operate post-2001 was either lying to themselves or selling drugs under the counter or something.