All Topics / Help Needed! / Best advice : Don’t invest into property : The australian market is CRASHING.

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  • Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    In answer to your question about “something bigger”, I guess that remains in the lap of the gods – any major world event will always impact on Aussie. But for me, I think the home situation (above) is far more relevant right now.

    Well, another year has flown by, and what a year.  And how’s the Covid19 pandemic for a “major world event”?  Didn’t see that one coming, but now it’s here, and the whole world is staggering right now.  Again, it is too soon for predictions about our housing market.  On one hand, the current Govt stimulus is providing extra $$ while many businesses are forced to shut.  For now though, many recipients are sitting on their hands and not spending the extra.  With borders between States shut, the usual trading that happens inter-state is being hamstrung – not stopped completely, but certainly nowhere near as “free” as it was.

    Thanks to Steve for his direction recently (see his webinar called “What’s your Pandemic Plan?” dated 8 Aug 2020).   Sobering words in there, but also so much wisdom and even hope.  Well worth a look for those who haven’t seen it (the Facebook page is here – https://www.facebook.com/pg/properinvesting/posts/ )

    I don’t have much more to add right now.  Could this pandemic thing be the catalyst that finally topples the housing market?  I’m not so sure – yes, there are pricing falls here and there right now, but these are after huge gains in the last few years.   With International borders pretty much closed, we aren’t inviting immigrants so no extra housing needed, meanwhile those building starts from the last 3 years are about to complete with a dearth of buyers.  That HAS to have a negative impact on prices – but just how much?  Too early to tell, and also with the pandemic, we’ve yet to see just how rampant it will be.  Worldwide deaths are growing – as yet these are nowhere near the Spanish flu deaths from 100 years ago, but then this thing could go on for years.  Who knows right now?

    Not me.  Borrowing words of hope though, “This too shall pass !!”

    Profile photo of HomeBuyerLouisianaHomeBuyerLouisiana
    Participant
    @homebuyerlouisiana
    Join Date: 2020
    Post Count: 17

    This thread has been very enjoyable. I think you are baiting people with your comments but do agree there are some strong headwinds. A good investor makes money in up and down markets. I am in the US now and the market is on fire due to low supply. This has been good for me flipping homes. I don’t think it can continue so if it turns I am ready to build on my rental portfolio and buy upside houses subject to the existing mortgage. So basically up or down it doesn’t matter, just keep your eye on the market and adjust the strategy accordingly.

    HomeBuyerLouisiana | Home Buyer Louisiana
    https://homebuyerlouisiana.com

    Aussie entrepreneur investing in New Orleans houses

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    A further year has passed, and what a year.   Early projections made when Covid first hit were saying that housing values would fall.  And I can see why that was said:-

    1.  With immigration stone dead due to covid, no new housing for them would be required.   Also, businesses and jobs were affected massively – the Fed Govt had to shore up the finances re supporting those out of work suddenly.   Restrictions re our activities and a massive change re any vacations led to major repercussions in all directions.

    2.  The above uncertainty fed through to many who simply “battened down the hatches” to wait out this world pandemic rather than to consider moving house.

    3.  Property viewings with RE agents couldn’t be done en masse – each person wanting to view a property had a private viewing to minimise the spread of Covid.  Point 2 perhaps even reduced the number of potential viewers anyway.  Values were seen to drop gradually.

    4.  Many jobs were encouraged to be “done remotely” so folks set up their homes to accommodate this switch.  Travel was lessened, fuel prices dropped, schooling was also (often) done from home – this made many consider “staying put” even longer, taking demand for property lower.

     

    Later on though, other factors came into play that have led to values booming once more.  Looking at Corelogic’s National Update https://www.corelogic.com.au/housing-update, it shows just five months since July 2019 that were nett loss months for house values.  Those were the months of Apr2020 thru to Aug2020.

    With Covid19 starting in earnest in early 2020, the winds of optimism were cold at first – but since Sep2020 to current day (Dec21) there have only been upticks in values each month.  Each of these were greater than 0.5% per month (6% per year) and have an average above 1% per month (>12% per annum).

    Why?   I’m sure the rapid printing of money has had a huge effect on the whole world, thus prices of assets has to rise to offset the drop in value of the currencies.  Also, with vaccines now allowing more folk to “go about their business”, this has allowed commerce to get working again.   Likely too, that the initial fear in 2020 of this “100 year pandemic” had many thinking this could be a repeat of the dreadful Spanish Flu that killed an estimated 50 million people out of a total population of 1.8billion.  This fear stopped the world in its tracks until we understood more about the real effects of Covid-19.

    As of today, the total deaths from Covid19 have been 5.5 million, from a world population 5 times greater than that of 1918 when 50m were killed.  Also, as Covid goes on, the succeeding strains have appeared to be less severe, thus leading to more confidence all round.   This confidence can only help the world economy recover.

    Could it be too, that Australia’s remoteness relative to much of the world makes our country more desirable for many folks’ futures once the world “opens up again”?   Could this be adding to the dollar values of existing properties even now?   Certainly hope is now higher than it has been since Covid came along.

    I’m sure there are MANY other factors at play….  What would these be?  Anything coming that would lead to another crash?   I’m not seeing it yet, but another major world event might be what’s required to topple the Aussie market.   What do YOU think?  Have a go, ;)

    Benny

    Profile photo of StevenSteven
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    @steven1982
    Join Date: 2017
    Post Count: 189

    With Covid19 starting in earnest in early 2020, the winds of optimism were cold at first – but since Sep2020 to current day (Dec21) there have only been upticks in values each month. Each of these were greater than 0.5% per month (6% per year) and have an average above 1% per month (>12% per annum).

    I reckon it is a combination of:

    1. Money are being massively printed and those money has go to somewhere. They are unlikely to go into things that will lose value over time in the long run. In fact, some even go as far as “if government keeps printing money with no limitation or intention to stop, then just buy” kind of thinking.

    2. Pandemic has caused people to spend less, and all of a sudden lots of people found themselves with a big amount of cash in their savings that can be used as a deposit (Whereas previously those cash saving wouldn’t be there due to they would have spent that money on — including but not exhaustive list of activities — holidays, entertainment, eating, etc….

Viewing 4 posts - 641 through 644 (of 644 total)

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