nice one crashy!!!
but arrr yeah i'm thinking shares too at this moment, dabbling with property on the side. (i'm a student for life)
i mean there is there is truck loads of undervalued shares at the moment just coz the US is buried in sh@t and the atmosphere has transpired to the AU market, i dun think the Au market is so much in the crapper as the US is.all that being said, i still think Beth has some worthy comments, althought i wont tell her she's compleatly right, IMHO..
arr did i read this right, Beth you said you are experienced with a Reccession, how can that be?
i'm in my early 30's an i remember my father working his ears and tits off just to keep on top of the intrest payments during this period….>>>>>>
so unfortunatly i totaly discount your opinion of a Reccession……..
Undervalued shares, Undervalued to what ? People think they are undervalued because we think there earnings are still high.
Lets see what there earning are in 6-12 months
Then lets see which way the stock market has gone..
Hi, 1st post here. I would l.ike to comment on some issues raised in this thread. I am old enough to have lived and worked through a number of recessions so I hope that qualifies me to comment. First off this is not a recession despite the sensationalism of the media, 5 percent unemployment and 8 percent interest rates do not make a recession. The OECD has forecast that unemployment rates in Australia may reach 6 or 7 percent and growth will slow to between 1 and 2 percent, this is still nowhere near a recession. Lets put this in perspective, during the recession of the late 80's interest rates were 17 percent and unemployment was 12 percent. Despite this the drop in housing values in my opinion during that period was not extremely significant, big drops in housing values require a large degree of forced selling which did not occur and has little chance of ocurring in the near future. Median values need to be taken with a large grain of salt, what generally happens when the market slows is that previously overvalued areas experience large drops while the more desirable and stable areas will remain relatively flat. I know a few people who experienced substantial capital gain during the 80s recession while I also know others who lost. Also comparing our housing market to the US is completely invalid for a number of reasons, the difference in construction methods for one. Homes in the US are generally built much more cheaply than in Australia and to a lower standard , they require a much higher degree of maintenance. Demographics are also completely different to Australia, the US has a large number of extremely low income areas commonly known as slums which we dont have would be one point I would make.
I wouldnt presume to tell anyone where to invest but I would suggest first to regard a number of factors.
1. Interest rates are trending down, to some degree we have a crystal ball to look 12 months down the track. we know interest rates will be lower in 12 months than they are now, whether they will be lower in 2 years is a different story.
2. Unemployment will remain relatively low in the near future (sorry folks 7 or 8 percent unemployment is not a recession)
3. Rentals are trending up.
4. wages will remain high.
5. Australias population is becoming increasingly urbanised.Im open to debate and criticism of my comments.
-ianJMF, at no point in this Post did I state that I was 'experienced with Recession'? I am 25, far too young obviously to have experienced a Recession first hand… again, that's why I made this Post in the first place (for advise)!
Crashy, fyi (and your comments are seriously going no where, as per my previous Comment)… I was a member of PropertyInvesting.com 5 years ago when I first purchased property
Thank you to everyone who has given valuable insight – your Comments have helped out a fair bit! I'm off to invest : )
Peace x
Yep this is my second credit crunch crisis.
I remeber the 80's with 18% Interest Rates
I remember the 90's the recession we had to have Keating when prices were bottom. Bought my first property in 91 at bargain price.
Remember 87 Crash!
Now we have a similar credit crunch – But it is anyones guess to how it will pan out. You just have to have control of your debt and LVR to be in the game long enough to make it work for you.
Remember Monopoly
Where can I go to find the most current population growth rates mainly in the US for property investing.?I am trying to research properties in states and cities that have higher than average growth rates or ones that are steadily increasing. I am looking for as many websites and resources for any and all investment strategies geared toward real estate.Thank you for your time!
With this recession occuring, should I still invest in the stock market? I'm 15 and I want to get in early. I have been reading books on the subject of investing almost religiously. haha. Anyway should I get started at this time? I don't mind losing my saving if I learned something. Also what would you recommend investing in during this time?
GopinathVijay wrote:With this recession occuring, should I still invest in the stock market? I'm 15 and I want to get in early. I have been reading books on the subject of investing almost religiously. haha. Anyway should I get started at this time? I don't mind losing my saving if I learned something. Also what would you recommend investing in during this time?15? In another post https://www.propertyinvesting.com/forums/getting-technical/legal-accounting/4326404?#comment-181648 you were bored of your employment after 1 year. Start work at 14?
carpe_diem wrote:Hi Beth et alBear in mind that house prices in Australia are at an extreme in terms of income to cost ratios. It is (or at least was) up there with the US, Spain and Britain. Not so many years ago you could buy a house in Australia for 2.5 times the level of income and these days you pay more like 7.5 times income. In the earlier days you could not borrow from equity so I guess it kept the lid on prices. Once this changed then more investors entered the market which was good as it created jobs and boosted the economy. In my view things started to deteriorate when it became ok for investors to take on more and more debt relying on escalating prices to cover their debt and provide them with more oportunities to buy additional properties. On top of that it became fuelled by the opportunity to borrow even beyond the price of the property (includes money for new car). They were happy days (for some) but it left in its wake for the people behind who had to borrow more and more for the same property that someone a few years before bought for a song.
So the above path we were on was on the basis that house prices would still keep rising notwithstanding the high price/income ratio we had reached. The bubble had to burst and it will burst a lot more than it has today….although unlike the US it will more subtle (won't go to $0 price tags). In some ways the credit crunch in the US (excess house debt and oversupply of houses) has no doubt put the world into a financial spin and perhaps Australia will be spared less the drama of worse off countries but at least in terms of house prices it has brought us down to earth perhaps softer than it would've been had more years gone by when the burst would not have been so subtle). Regardless of the economic woes coming towards us to be sure there will always be a property market available to astute investors. Houses at the lower end of the market will always be in demand wherever there is employment and a shortage of housing. Likewise, in urban areas in good locations where demand exceeds supply and of course in pristine/elite areas and areas where land itself is short in supply for future developments. The capital growth of properties in general is going to be off the boil for a long time but for long term investors the bargains are still there and always will be. Good investors try to keep the level of debt to a sensible level ……for me (and I have done very well based on simply land and location) never let overall debt become higher than overall equity ie no less than 50% total equity in your property portfolio.
Regardless of the prevailing world financial crisis, the bubble on house prices had to change re the points I made earlier on income/price ratio hikes. House prices are already spiralling downwards in the other countries like Britain and will probably get worse now that it is in recession and we know Australia house prices will be impacted further as we approach the door of recession regardless of our more secure economy (based on China).
Any investment has risks (our stock market!) but if the property is good and in a good location that at least provides a guaranteed rental yield then it could make for an excellent long term investment. Not a time now for the short term capital growth hunters in my view.
Cheers CarpeHi Carpe.
That is one way to look at stats.As you know.stats can tell many stories.
If you look at the % of income needed to service a mortgage then I think you'll find that it has dropped to below 30%. Servicability is the key issue.Can a person easily meet the interest payments.
There are many,many cities in the world that have high income to property costs ratio's.I could name many Euro and US ones.
It depends on whether that city is a highly sought after international city.You cannot compare sydney to Alabama and other low profile cities.which the report I assume you are referring to does.
Hi Beth, I can endorse the invest in recession strategy. Have done that several times over.
Old enough to live through 18% interest, last year I paid 10.79% [total monthly interest close to $10K at one stage]
Borrowed $170000 more in February @9.5%, ivested $10000 on shares & made $2700. Too chicken to spend the other $160K
Looking to borrow $440000 to pay off the $170000, leaving roughly $380-390K to invest in FY10 [from July 1]
Think I'm not nervous? I am, very. It's normal to be nervous.
Stick to your convictions. If you think you can, then DO IT.
You have a good head on your shoulders. A tip for you: check the past posts of the people who have responded. Draw your conclusions.
Good luck,
KYHello Gentlemen,
I was surprised when I cam across Beth's Topic and comments in response to users leaving messages. The thing that surprised me most is I have worked with Beth and gee can she keep a secret. I was of the belief that not only did she not own any properties but she did well to keep the fact that she owned a food & bevvy business quiet. If you knew Beth you would know it would have been super hard, almost impossible for her to keep that quiet.She does have some good points, but the order and timing are completely wrong. I advise that she see a financial counsellor who can advise her on how best to invest that cash of hers. The best kind of research would be researching an experienced and reputable adviser.
Reccessions are more a state of mind than anything else, IF you have a secure job. Once people are told they are in a reccession they panic and tend not to spend, this in turn means less money flowing through retail, building, & all other industries. From there people in those industries will be laid off , they don't have money to spend then and the nastey little cycle repeats itself.
I believe (and it is only my opinion – based on no research at all) that if you can maintain a consistent spending regime during a reccession that was similar to your spending habits before the reccession then you are doing your fair share to pull this country back into shape. This , as I said only works if you have a secure job and spend only what you can afford.
Crashy, I like your work mate.
Catch ya
You must be logged in to reply to this topic. If you don't have an account, you can register here.
