Forum Replies Created
Can I ask you when those books were written…
because if not written since October 2008 you are using boom logic in a bust..
gmh454 wrote:Now who do you NOT beleive.
and how could I ever forget Gerry Harvey, the man who tells us that a Boom is just around the corner, …sure Gerry, sure……
Playa it is those at the margin who move trends.
Remember China, it had 1.2 kabillion people all who needed a car, that would create a demand for iron ore and coal that would drive Oz for the next 100 plus years of unending boom. The US market was only a small part of their economy, if the US hiccups China will be fine and so will we.
That is not an exact quote but it is here on this website in many forms from back in 2006 + 2007.
Yep, the US was only a small part and it only slowed a little, but the impact of small margin movements has a very significant effect far outweighing the % of that movement.
All you need is few to drop out of the market to kill your market.
To get a bargain on ebay be the only bidder. To pay far more than the starting price you only need one buyer, not hundreds. Same thing in reverse.
Playa Chicken wrote:I'm of the "buy now" camp if it is already positively geared, it's only going to get better as rents rise.Vicky
Saw your reply as this has been queried before but you forgot to add to your list
more people out of work
people in work, working less hours earning less
more people unloading deflating assets,you need to look at both sides of your equation.
jparry1 wrote:Basically, as far as what and when things are going to happen nobody has a clue. Everyone is just guessing, even the so called "experts". I can search the net and read at last 10 different conflicting predictions from an expert on a daily basis. Anyone who watches and believes any thing the media are predicting is just as silly as they are.
Actually lots ands lots of people called this, quite a few on this site.
Foundation called the property boom using good old stats and logic plus lots of other info. Oh how I miss him..
I called the "China will save us fallacy" as I am sure many others here called and that was back when the World bank called commodity prices as peaking back in around 2006. They also inferred we would have the odd cough as well (read cough up a lung style cough), also called the negative wealth effect in detail back in 2004, go back over the archives and you will see what is lurking round the corner, and there is no way back from that baby.
4 Corners in Aug 07 predicted the entire banking hedge fund property collaspe, and many people employed by Bear Sterns etc called it and were fired for their trouble.
Now who do you NOT beleive.
Firstly no-one who said "nobody saw it coming " because they are too deaf to have listened to the people who knew, and basically too ignorant to work out 2+2 .
No-one who has a vested interested in pedalling lies, such as property doubles every 7 years (although for a few years it created a self fulfiing prohecy, but the ones who benefited are the vast minority.) And you can put oh no….the housing shortage," if you can find a property to rent don't even waste time looking at it, just let the agent sleep with your wife, and give him your first born in indentured servitude, a vacant property to rent is the rarest of all commodities" Basically spruikers (although I don't put Steve in that catergory) and everything that has ever come out of the REI.
Journalists also deserve some mention, good old Ross (and he definitely did not see this coming) Gittens telling us early last year that we did not have personal debt problem beacuse our personal wealth matched our debt, whew, was worried for moment there Ross, wonder how the balance sheets of the boomers are right now, maybe the Storm clients….
Actually lots called it, many right here, enjoy your stay…
My favourite two sayings is "this is much worse than we thought" said by the same people who bought you that old classic of "nobody saw this coming"….
what they should really say is "don't listen to me I havn't got a clue".."why Aust Fin review" ANZ, Channel 7 etc continue to pay me when I am so hopelessly lost is beyond me"
kind of been covered above but Sydneys three speed market has been kind of reversed.
From 2004 to 2008 the top end was still alive and well. Middle market was moving sideways with a little growth, and bottom slipped some areas a lot.
Now it is the bottom kicking along, the middle shuffling, and the top is quite unhealthy.
During this whole period the RE industry has always had good spin, by focusing on the one moving
Come June, the bottom end should flatten out, as even if the FHG continues, the fact that the expectation is that it will finish is bringing purchases forward.
Bought strata commercial in Parra back in 1993. Back then there were new council plans showing the new growth. About the only thing here that grows, is the Council plans, always something new. Those new Family Law Courts will transform Parra they were announced what 3 years ago, no must be 5…
Parra always planning never building.
In 15 years here, I can only remember 3 commercial building of note going up and one of those is the Police complex. Lots of residential towers though. The eating strip is growing, the old DJs complex is dead, the old Church St mall is becoming a collectrion of $2 shops.
And all these business moving here sounds like the ones who moved out. In recession they bail out of town when things improve they will move back.
Parra is dominated and totally stuffed by Westfields. Think it is a good place to buy, but, it could be much better.
Oh and our building now has around 17% vacant space we were 100% occupancy for years.
SHales wrote:Rabbits, huh? For eating? Like a business?
Unfortunately our rabbits don't need help with breeding, but they do look so fit and healthy we are all very proud, except our 14 yr old Jack Russel, which will eventually die of a heart attack chasing them. ……..and they are so thoughtful they give him a fair chance, don't even move until he is ten metres away…
My wife was a huge Beatrix Potter fan, ….and she now is know as "Farmer Gibbs mean wife " to paraphase Beatrix.
Yep know how your parents feel, the Hills have that attraction I love it, just wish someone else would try and hold back nature and its relentless pursuit to take our property back..
wish your parents good luck..
harb wrote:They've made the mistake of waiting for a correction and refused to admit they could be wrong, its called being in denial and I'm guilty of it sometimes.
Harb the lights have just turned amber and that nice elderly couple who smiled so sweetly at my little dog, are quietly waiting for the green, and don't see the guy coming in the truck nailing the throttle which is not picking up as he expected….
oh no…………………………..
SHales wrote:wealth4life,
With your obvious knowledge of the Sydney market, can I ask your opinion on my parents PPOR?They bought 5 acres at Galston in a bush block.
Any insight you can give would be useful.
Cheers
SLive in the area and we breed rabbits, lots of and lots of Peters with bright blue coats and shiny brass buttons. (you would thinks the snakes would get down the burrows and finish them off…..damm lazy snakes)
My thoughts on the area are in line with the other 1/2 of wealth. Specifically unless a house has a certain value in presentation, the bells and whistles you are then looking a land only with investors who will put a value on the improvements as it will determine rent, but investors have a sharper attitude and do not make the emotional buy that will open up the pockets with a "just got to have it attitude"
Other point is that property in the area takes much longer to sell, than other areas as if you look at the houses for sale at any one time they all will be very different, appealing to very different tastes.
The Hills has mansions, land bankers and investors and your prorperty will appeal to the later two. If they concentrate on imrpovements aimed at those two they will not go wrong.
Sorry can't be of more help.
wealth4life.com wrote:Hi Hard,Yes this thread has been going since 2006 … because the bubble burst in 2005 at the peak.
Wealth think it would have peaked in NSW in mid 2003 except the "BLOCK" drove it onwards.
Harb good points, but we seem to be meeting at an angle not quite meshing.
Still think all my points will fall into line, though I do see your angles, and they will have some impact, and on Perth been waiting since 2003, and it is very very soon.
Not bragging but if you want a description of this mess go through my posts from the last 4 years..right then, though will say my time expectations were off at times, so I am happy to sit on my current predictions (who knows maybe they will cough up both), although on a micro level I am a very compassionate person on a macro level I will slow down and watch the wreck as I pass by..
Not just a naysayers but called China and the mines as did many others here years ago
Several years when the ABC asked a major long term economic forecaster who predicted the minerals prices peaking (this was around 2006 may be early ) they said "and what we happen to Australia" reply "well Australia is too small to run a model on …but ask yourself what do you sell the world.."
been watching the wreck ever since..
jparry1 wrote:Some good advice:"It is always a good time to invest in property"
If you are waiting for the right time to invest, that time will never come. It is like waiting for the new and latest computer to come out before buying, you will never own one because there is always a better one coming.
Right now is the best time to invest and always will be. Not tomorrow, not yesterday, not next week, not next year, RIGHT NOW!!!
Simple isn't it.
Cheers,
JPthat is sarcasm, isn't it ??????
In NSW there are 1800 properties with a asking rental of $1,000+ per week are vacant hmmmmmm
first home buyers bailing out investors exiting the market, and a record number of houses unsold from 2008 rolling into the current year..
going to be an interesting year..
SHales wrote:wealth4life.com wrote:So, Grinch, despite my enjoying your analysis of the situation and my preparedness to believe this could be a nasty downturn, I have to pull you up. Your favourite picture of yesterday could have had our best friends on it. And our joy at our good position, and our impatience about when to invest again, and our excitement about what cards played right on the way out of this down turn could mean for our own personal wealth is somewhat tempered by the heartache being felt by our freinds and family around us.
Sorry, ….. granted ….everyone of the stories are real. that was pushing a bit far….
Hope he bounces back and one day can look back and laugh..
I think you have to think big picture, not just IR.
Things for 2009
Unemployment up -whether it is 7.5 -8.5 or 4.5 to 5.5 it is still the upward movement not the actual % that is key. It is the changes that occur to that 1-3% that will loose jobs. Some will get employed quickly. For most that will be rare. In 1983 I beat the traps for 2 mths and only got a job when I worked for $5 or 20% less than before. Back in 1991 many bank Johnies pounded the pavement for a year and I will quote " not going to rush out and get a job right now, think I will take some time off, there are a couple of things I have been meaning to get around to…" they were not worried until three months later when they started their search.
For the working masses many without a house will bail, and head north or south for the coast, if you are on the dole, cut your overheads and enjoy the beach.
A stack of 417 workers will be going home, as Aussies will now do what they would not do before.
Housing shortage now solved …actually although the REI keeps trying to beat it up, we have not heard much about it for a while..Of course the ppl who lose jobs will spend less, less money going round will mean guys like my coffee shop owner downstairs will not replace "Mona", and so the slide will go on. More and more business's will slow with job losses, overtime losses creeping up
On top of the unemployment we are going to see the boomers cut spending like we never could have imagined. I have predominatly a boomer client base, and I don't ask but they tell me.
R@#$ how are you
" what do you think"
why what do you mean
"I mean my b#$%ly super went down"All my wifes friends spend time telling her how they are trying to put together a budget, "F#$d has got a small part-time job…"
This massive contraction in spending will have a much worse impact than unemployment initially, although one feeds the other.
In my office a key strategy among my clients was to help out the kids in recent years, by tapping into a bit of super, or equity and giving them a start in the market. Don't think I will here that as much this year..What effect does that have on the market ???
And it is only just starting as many of my clients in recent months, convinced that 3300 all ords must be followed by a rebound, keep putting money into the markets…..and thank god they do or the ones bailing will really test it..
Think the Funds losses are understated. I mean these guys get paid for results, now is not the time for honesty, you watch over the next two years everyone super will get worse even if the markets revived (hey a 20% increase next year, wow, 3,960 I can relax again…) Every accountant has chosen the more optomistic option of valuing assets. Only when a whole new group of CEOS and CFOs are in the chairs will we know the truth..
It will take a year of this before it sinks into most ppl.
Banks only have two lending policies (I have mentioned this before ) and they are
a) lend to homeless drunks
b) lend to no-oneGuess which policy is coming up
Right now the RE market is suspended, as sellers are holding back for recovery this year, and newbies are using whatever equity to snatch up a bargain, as they think this is Christmas, low rates, the market dropping, a boom is around the corner. Cannon fodder….Yesterday my favourite image (common we all enjoy seeing pain) was one of the BHP workers getting off the plane following loosing his job. What caught my attention was "and I just bought an investment property"
I mean I work in a mine, the global economy is tanking why not borrow a buckletoad and invest….Come on, who here would have done the same, hand up……..
On the big picture there are a stack of major companies out there some listed and some not, whose expansion helped this boom, sitting on foreign oans no bank in Australia wants to touch unless the Gumnut, guarantees it. Now that is a tricky one, yes the bank should help the good companies and there employees, but should they come to the aid of every Eddie Groves, – that would be political suicide
So far only joke compaies have slid. In 1987 the market crashed, but when did Skase, Bell, Elliot and Bond dive.
maybe we should change this to the Economy Bust is not here yet…..
Ohh and Amex and St. George just announced lay offs
and by way of comparison the top end lead the RE market down in 1991 but everything eventually followed and if you drop was 20% you were lucky..this will be worse.
and Perth will cough up a lung…. ( I have been waiting to say that for so long..)
maybe I should change my name from GMH454 to "Grinch"
Harb, unemployment would have been higher than it is now, actual figures, could not say.
Wealth I can see several scenarios, but they are not as optomistic as yours..though overall I agree..
thanks for the news of the Gold Coast, the thing is not only has that sale carved $40M off that building but has also taken $x off every building withing reasonable reach, and probably carved a couple hundred mill off the gold coast…
any comments from our broking friends are appreciated..
WJH yep, I think those books were for the up part of the cycle, don't think books on the down part of the cycle would have sold that well..
Right now I am hearing the proprty market is holding up as people are holding back from sale as they are hoping for a rebound.
I have enjoyed the REI "news" feeds to the media in December showing that the market was BACKKKKKKKKKKKKKKKKKK.
Gotta laugh.Between 01/01/09 and 31/03/09 around 1% minimun of the workforce will lose their jobs, and that will only lift unemployment to 5.5% so at sometime later in the year around another 2 people in the hundred will also go, plus the contarctors will wind down, and the casuals phones will stop ringing.
We are stepping down, with each step leading downwards to the next, I was hoping last year for a short sharp recession, and although I was a so called doomsayer, I think following all conversations I have recently had, it will just get worse and worse.
My favourite right now is that I am betting the super funds last year took all the high value options on their portfolios expecting some rebound to hide the damage from the members. I am betting that if the sharemarket was to jump to 4200 (roughly 20% you will be lucky to see 2% in the super fund this year)
and the ABC just predicted 50k jobs to go in the building sector, they will be lucky if it is only 50K
I am a professional accountant with around 400 clients. I have had the luxury over the last 25 years, to see many many people make good decisions and bad.
the saddest ones I have seen in recent years were the retirees who with the buzz of greed in the air took the plunge and moved from conservative to high risk at the wrong time.
the worst was a couple in their late 70's who had 1M in their S/Fund who moved out of blue chip into Macquarie Mangaged funds. they dropped over 50% before the crash in October.
Your retirement years are not for learning new skills in areas you don't know.
Many on this site have ridden the roller coaster up without understanding the fundamentals. Go back and read the thousands of cult like quotes, that property cannot go down, it doubles very 7 years , it is not timing in the market but time in the market, the right time to buy your next property is now. Yep they made money but had no understanding of the fundamentals. They laughed and ridiculed foundation with his logical cyclical view of the market for years. and od course don't worry CHINA, until evryone in China has bought a car teh demand for iron ore will just rock on. Of course not sure how people who earn A$1.50.an hour will ever be able to afford it…., but don't worry Perth will just keep on booming ..Most of them have gone.
The book that helped drive the market and create the self fulfilling prophecy of the boom was written in another time and in another world.
As bad as things are (and for many it is great, low rates, cheap petrol and free money from 747 Kev) this will be a big one, and it has not even started.
Downsize, free up some capital, or sell your house and go to a casino, at least the casio may throw in a free night in the executive suite. (sorry …. that was a bit harsh but directed more at some of the entusiastic newbies rather than yourselves)
