Will Property Really Plummet?

International travel, like schools will be reintroduced slowly with countries that are in a similar state of control wrt C19, and are similarly paranoid about not opening up their borders too early.

NZ will be first cab off the rank, then maybe Taiwan, HK, South Korea etc.

They may also do that in tandem, for example:

• 14-21 days self quarantine at home on return (plus signing up to be monitored via app etc)
• no kids under 12 allowed to fly
• everyone to wear masks and gloves on flights

 

Anyone else notice a resurgence of interest in Melbourne lately? Prices are still down but there seems to be more buyers coming back and putting offers on places compared to a month ago when the stock markets were in the gutter. A couple of places I’ve enquired on have mentioned more interest this week and offers albeit lowballs but still better than no offers at all they were getting a month ago. I feel like the Melbourne market will be very sensitive to positive information with interest rates at 2.1%.

 

Covid class (for their masses) - equivalent of current business class with more spacing between seats @ 3 times the price
Business class wider seats with more spacing in both directions
First class - is there anyone else on this plane?
Exec class - mini suites

Don't expect it to come cheap.

 

Wont be fully occupied either
Middle row seats vacant, social distancing

 

Starting to see signs of this in Sydney with increased supply:

 

Yes watch supply increase while demand fall off

will only equate to price drops

 

What is generally considered high LVR/high debt?

Anything over 80%/+$2m?

 

I think this may be too high for me? Its being able to service debt, neutral

 

I have a feeling in the US and UK they look more at your wage to determine what's too much. There's some multiple I think they often refer to.

 

Yes they do its called 1% rule
The One Percent Rule – Quick Math For Positive Cash Flow Rental Properties - Norada Real Estate Investments


in US you can buy cash flowing properties our market is different

 

Aus property is history as they say.

 

I still maintain that Aus property (well, some of it...) is a good long term hold prospect. As in, at least another 15+ years long term hold or more.

The next few years will be hard here and also if NSW and VIC stamp-duty-to-annualised-land-tax changes occur, that'll be another variable that will shake it up. But if it's a long term hold, the 10 year recovery it'll take, could easily coincide with a strengthening AU economy.

MTR, I follow the 1% rule in the US and have aimed for 1.5% where possible. Certain markets there will crash hard and deals will probably emerge at 2 and even 3% rules which, if you have the stomach for the risk, would be incredible returns.

 

Dont believe the long term fundamentals have changed. If population keeps increasing long term, mostly funneled into syd and melb, houses with land in areas with transport and small blocks will do well.

short term no idea. But that only matters if looking to buy or sell in the short term.

 

I think the issue with US property market will be lending. Apparently finance getting hard to source

Not seeing impact yet but it will happen and how hard will be dependent on State. Lots saying upper end going to get hammered

I am glad did not source finance in US now...... who would have thought corona.

 

Agree. Same story different day. This too shall pass. And some massive booms await us in the future.

 

Obviously survival in the short to medium term is important. Thats where buffers, jobs and risk management (done before, not after something like this hits), come in.

When the economy recovers, developers have gone bust, but buyers are still fearful, what might happen? Cyclically cheap property and rising rents.

look at how people describe the gfc. Not how did you survive the gfc, but you were so lucky to have bought during the gfc when property was cheap.

theres a line of thought that the gfc wouldnt have been as bad (esp in the us, which hit >10% unemployment) if central banks had put in backstops more quickly. Note that this time the backstops were put in almost immediately. No one noticed because it was put in and accepted before it barely surfaced as a risk.

 

I think you are being way too optimistic. Migrations will have to be cut. If unemployment
stays high, anyone running for the prime minister will try to cut migration.

And lets be honest, Australian properties are not exactly cheap. Affordability will become more and more of an issue.

 

Personally l do have some slight hope , because in a way it might be lucky this all happened when it did, gives us all winter to get rid of it and hopefully things and life moving again in some sort of degree anyway and just in time for spring . l mean yeah there'll be a lot of people with money problems or out of work , but there'll still be the same people as before still needing a house too and many will still be ok to buy , rates are rock bottom, l dunno maybe l'm dreaming buttt. Not saying boom by any means no way and prices will drop some for sure , buttttt , well we see.

Wish l was buying , well l was gonna be but l need to sell my place first and the plans been 3 yrs now to finish my reno this year and sell mid spring. This is my place not investment wise but l have had a rough expectation and need for a certain selling price give or take , and l'd still need something like that margin after reno , to move on soooo, everything crossed, really don't wanna be stuck here another 5 or 10 yrs waiting out a recession.

An older retired builder friend said to me a few mths back , been through it all , there's always people needing a house and people that needed one 6mths ago will still be needing one, sounds logical .

 

I hate to say this time is different but it maybe. We don't have much policy room left. I think migration will be the interesting thing to watch. Trump just banned immigration for 60 days, citing jobs should be for 'Americans'

 

in uk ,when credit opened back up, it was reduced down to 3.5times the main income & 1 x times the second if a couple LVR 80%