Will this latest Sydney lockdown be the straw that breaks the camels back?

Yes, seeing at least 5 of my English/American well-paid friends leaving this month, unlikely to return in the medium term. This coupled with construction workers losing capital, I think we're seeing a cursory correction, then a recovery in a years time

 

I've been tempted to head back to the UK recently, probably for similar reasons to the friends of @longtimelurker99. I haven't seen my family back there for three years, and it's possibly going to be the same again before the border reopens.

If you're an immigrant, then you're isolated from a lot of people you know by distance, and in my line (IT) there are much better career options in the US and UK, unless you've been lucky enough to get into an Atlassian or a Canva in the early stages.

 

…… not to mention Syd/Melb lockdown costing Australia 10Billion.
My kids will be paying for this

 

I should point out that $10 billion is just over 0.5% of Australia's GDP. I think that we can afford it.

 

This is how it was viewed back in September last year. More than likely it still holds true.

"Wouldn't be bad if people absorbed some elements of history. Bubonic plague, cholera outbreaks (The Great Stink), TB, Spanish Flu, Ebola and it goes on. Yes, many were severely damaged financially and lives shattered in a lot of ways but you know what? Economic activity still bubbled. Subdued for sure but it was still there. Anyone recognise some similarity with any recent events?"

 

What if the lockdowns continue, very much on the cards … can we afford this? Sydney is actually going from bad to worse.

More important…..can business’ survive/afford this?

I was wondering if anyone on this forum who has a business has felt the pain of this??

 

immigrants leaving in droves, no one coming in has to have an impact
has to have a plateau effect until borders open again
jp this morning said the previous 8 people were getting stat decs signed for a one way exit.

 

I speak with many local businesses on daily basis as part of my job. Many businesses are struggling restaurants business is 60-70% down, Club/Pubs are not allowed to operate, Beauty Saloon and Barbar shop not opened since late June. Australia Post increases overseas courier costs by 700% without any previous warning. The hotel industry has 2% occupancy rate. Retail business not opend since last 2 weeks. Many people lost jobs or forced to go on unpaid leave. People queuing outside the Centrelink offices. And in contrast.....

Sydney property prices are still expected to go higher (predicted by market gurus, agents, SM, banking reports). I don't buy into this. After the first wave of COVID market participants show opportunity and start accumulation and within 6-7 months we reach the Markup stage. I see so much euphoria in the market. People with no management skills talking about "money is cheap" "property is the best asset in Australia". Too Much greed will lead to price correction or out this cycle into a long distribution phase.

Challenging time ahead...

 

Property sales are only ever a small number compared to total number of properties.

While a lot of people are suffering financially, a lot of people arent. Talk to higher income office workers and the story is different. Smooth transition to wfh and sharemarket hitting new highs.

Mortgage holidays will blunt the forced sales while those whose incomes are rising, or stable, will look to buy.

Just a possibility.

 

So auctions all cancelled????

 

All Auctions are online. Agents are still doing open houses via appointment in my area (Parramatta). Not sure how they justifying it is emergency work.

 

thx
Be interested to see how it all pans out

 

Same here.

 

Speak to any agent there’s no signs of slowing down. I joined a zoom auction today for a 3 bedroom unreno house in kingsgrove on a 520sqm block. Went 1.725 and there was multiple bidders.

Market isn’t as frenzied as March but people who have stable jobs are still looking to purchase after losing multiple auctions.

Once lockdown ends more stock on market. Might go backwards slightly.

I can’t see this slowing down until APRA step in.

 

Prices are set by people and their emotions. Is there fear coming?

 

Market is made out of participants. Which includes all type of people (chef, barber, truck driver, small business owner, beautician, retail worker, hospitality workers, aviation industry staff and many more) and this group of people won't be buying houses after lockdown because they have heavily affected by the lockdown. Market need all type of buyers (crazy rush) to take all supply. People working from home can't buy all supply.

 

Some are starting to sell there suits as apartments.

 

Been hearing this view for over 20 years. Not just here but also in several other countries.

But when we dig deeper we realise the correlation with the money supply and devaluation of currency.

So are prices really going up or is property just an inflation hedge?

So unless the RBA decides to turn off the taps and decide to destroy the economy, superannuation savings, banks, businesses etc (they won’t and can’t), then there will be no meaningful fall in property prices. Nor will there
be an increase in interest rates for many many many years until debt has been eroded.

The system is designed to inflate away debt. Borrow and invest. Or get left behind.

 

Just on another point, my parents began investing in real estate in the 1980s. For all their portfolio, their lives haven’t changed that much. The same applies to many people. That tells me all I need to know about nominal vs real returns.

 

In the last decade my nw has increased four or five fold in nominal terms but my standard of living has improved only slightly. Still driving mitsubishis. Eating out more tho (pre pandemic).