All Topics / General Property / Is property investing going to poo

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  • Profile photo of Johnwilly1000Johnwilly1000
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    @johnwilly1000
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    Hi does anyone else feel this. I for one starting too feel like selling up my investment and just paying off my own home. No stress no worries simple life. Nothing seems to b happening in the market. My ip is in brisbane for last 2-3 years. Maybe the time has passed. Only time was near 2000-2006 and now that’s all gone looks all down hill from here. Maybe we all missed our boat.

    Profile photo of streamlineinvestingstreamlineinvesting
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    As a lot of people will tell you, property value travels in cycles, up and down, over periods of time. 2000-2006 was simply an up cycle and at the moment we are basically in a flat cycle (although it may go down if compared to inflation). Basically, property prices wil go up again some time in the future, however they may go down significantly in the first place. Timing is everything.

    There is always oppurtunity to make money out of property investing given any cycle, it is just a lot easier when everything is going up, basically whatever strategy will work in turning a profit if property values skyrocket as they did over those 6 or so years.

    To make money these days you simply have to be more creative, perhaps more riskier, such as property development, renovation, or just going for an area which you think will develop significantly over the next decade or so.

    Most of the time you cannot expect to see great returns in a couple years, and long term gain is what you should be looking to achieve.

    Profile photo of ktastrphektastrphe
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    This is a pro-property forum so you will be told to hang in there, whereas if you posted on a property bear forum you will be told to get out now. Noone can see the future. I was in your boat last year and sold up 3 properties and now rent with cash in a high interest bearing account and dabble a little in the share market. I havent regretted it so far, but everyone's situation is different.

    There is still big money to be made in property if you put the time and effort into it and buy/sell smart. Im too lazy for that, lol.

    Profile photo of Johnwilly1000Johnwilly1000
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    @johnwilly1000
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    Part of me feels that everyone is talking about this cycle thing. But now after hearing it few times I wa thinking and the only time it ever boommed soo much was during those years mentioned I think that is a one off. Itt never happened before that. So a lot of ppl base it on those years. before those years I’m sure investing was way different in that ppl prob didn’t think of cycles then as much. Soo whoever got in those years made a killing quadruppled there money. All luck. Never will happen again for looooooooooooong time. Only if does will go slowly like all years before that.

    Profile photo of cuteyoungchiccuteyoungchic
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    Johnwilly1000, cycles have been around since Adam was a boy.
    This part of this cycle just happens to feel slightly uncomfortable for the moment.
    I'm hanging in because I hear over & over from those with many more years of property investing experience than mine, that "this too shall pass."  :)

    Profile photo of ferdinandchferdinandch
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    I hope it will still be flat until I purchase mine :)

    Profile photo of ummesterummester
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    There are cycles within cycles. Last up cycle was bigger than any up cycle in quite a while and got a boost when it started to wind down in 2008.

    Anyone who brought in before 2004 is sweet.

    Profile photo of simplesimple
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    Johnwilly1000 wrote:
    Hi does anyone else feel this. I for one starting too feel like selling up my investment and just paying off my own home. No stress no worries simple life. Nothing seems to b happening in the market. My ip is in brisbane for last 2-3 years. Maybe the time has passed. Only time was near 2000-2006 and now that's all gone looks all down hill from here. Maybe we all missed our boat.

    Generally speaking I think RE cycle is just getting started! Some more correction and it's going to be worth buyng rentals as returns will match interest one get in the bank on the money.

    In your case, well it depends on your personal situation. If you purchased some time back you should be getting resonable return from rent. If not, then I would not count on capital gains for a while.
    There are many already selling, it will be hard to sell without discounting.

    Profile photo of Scott No MatesScott No Mates
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    sell up quick, get out whilst the going is still ok. Buy into something less risky & market-priced, like cfds or futures.

    Profile photo of Johnwilly1000Johnwilly1000
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    @johnwilly1000
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    If I sell up I’m not going into anything else until I pay off my ppor, that’s for sure. Lol

    Profile photo of MrMagoosieMrMagoosie
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    Hi Johnwilly1000,

    Everyone's situation is different, but if selling your IP will clear your debt and reduce stress, then it's definitely worth considering.  No point having a mountain of debit if it's going to stress you out.

    However, do also consider:-

    • Selling into the Brisbane property market at the present time would require you to discount.  It's a strong buyer's market as there are some desperate sellers out there. 

    • People generally lose big when they either "have to sell" or if they "panic sell" (whether it be shares, property etc.)

    • I expect the Brisbane property market to be flat for a while, so if you're holding on for capital gains in the short term, you could be dissapointed. 

    We took the decision a few years back to sell up our IP and reduce debt.  This put us in a strong position and we've managed to pick up a bargain property just this last week from a seller that wanted out.

    There's no right or wrong answer.  Just be well informed and choose what's right for you.  Good luck in whatever decision you take!

    Profile photo of Johnwilly1000Johnwilly1000
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    Very interesting mrmcgoosy. I’m keen to know about how did u decide to sell, was it too much for u to handle. Or did u think to hell with it I’m gona have less debt and pay off one thing more off before I get back into it?

    I’m in the middle of it all at the moment. I do have enough to service both ip and ppor but wudnt it b nice to have heaps left over each week to splurge and of coarse pay some to ppor. Later when debt redueced get into it again. Hhhmmm decisions decisions

    Profile photo of god_of_moneygod_of_money
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    The problem is people who recommended to sell properties have NO property or money to invest or sell.. Talking rubbish only in every forums

    Profile photo of ALF1ALF1
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    Australia currently has a housing shortfall, strong population growth, a robust financial system, low unemployment, improving economic conditions and a residential market that appears to be moderating in growth in a controlled fashion.   Importantly, mortgage arrears have not moved upwards suggesting that Australian borrowers are coping with the increased level of interest rates quite reasonably.

    Profile photo of ummesterummester
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    ALF1 wrote:
    Australia currently has a housing shortfall

    Surely increasing stock levels in every state disprove this. If there truly is a shortfall, how can stock increase without a similar increase in homelessness?

    Profile photo of devo76devo76
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    ummester wrote:
    ALF1 wrote:
    Australia currently has a housing shortfall

    Surely increasing stock levels in every state disprove this. If there truly is a shortfall, how can stock increase without a similar increase in homelessness?

    Surely you would agree that sonner or later stock must increase. It cant keep dropping endlessly until the last house in Australia has 21 million people bidding on it.( geez id like to be the owner if that happened).
    Stock levels may increase significantly from here and still be in shortage.

    Kind of like  the unemployment rates.
    they drop .They drop more. Sooner or later it will level or rise. Does that mean unemployment has gone through the roof. No.

    Profile photo of fWordfWord
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    ummester wrote:
    ALF1 wrote:
    Australia currently has a housing shortfall

    Surely increasing stock levels in every state disprove this. If there truly is a shortfall, how can stock increase without a similar increase in homelessness?

    Note that when houses are for sale and causing an increase in stock levels, the houses are simply 'on the market'. They are not 'vacant'. At one point of time there were three houses on my street that were for sale. The owners lived in it till near the time of settlement before moving out and the new family moved in.

    The current property market is in the stage of 'profit taking' at the moment, just like what happens to the stock market when there has been a recent run-up in prices. People are trying to take advantage of the increase by either trying to upsize or downsize, hence causing an increase of stock levels, or more appropriately, increase in turnover of stock. Key point of note however, is that regardless of the choice, people moving out of their current places will need another place to live.

    To discuss your statement using another analogy that we all know: just because the supermarkets are full of food for sale and there's people blatantly wasting food at massive buffets does not mean that we have an oversupply of food. There are squillions of people around the world who go to bed hungry each night.

    Can we then say, 'Surely, if there is a shortage of food, then the supermarket shelves should all be empty? Shouldn't there be no wastage at buffets? Or perhaps buffets shouldn't exist at all?'

    Not really.

    Profile photo of ummesterummester
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    devo and fword,

    your arguments are valid when taking into account demand that is not based on physical availabilty and I do not dispute them in that sense – especially fwords description of 'profit taking' demand, which is essentially what I term credit fueled demand.

    In this case, the use of the word shortfall is invalid. A shortfall is a physical undersupply. Unless of course, AFL1 was claiming there is a shortfall for profit based demand. Yet, I would argue a shortfall based on what the market 'wants' as oppossed to what a population physically 'needs' is a misrepresentation of the word.

    To use fwords analogy – if there was a shortage of food, yes, the shelves would be empty. But food can be in high demand and the shelves still be stocked.

    Profile photo of fWordfWord
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    ummester wrote:
    …your arguments are valid when taking into account demand that is not based on physical availabilty and I do not dispute them in that sense – especially fwords description of 'profit taking' demand, which is essentially what I term credit fueled demand.

    Definition of 'profit taking' from Investopedia:

    "The action of selling stock to cash in on a sharp rise. This action pushes prices down temporarily. When traders are profit taking, the implication is that there is an upward trend in the security."

    The word 'demand' does not appear even once in all the posts above, let alone my own response. To use 'profit taking' and 'demand' as consecutive terms in a single sentence is seriously twisted. 'Profit taking' is the act of cashing in by selling, not by buying. Hence, 'profit taking' is not based on 'demand', or the number of people wanting to buy. It's based on the number of people wanting to sell.

    Without sounding direct, I'd appreciate if you didn't misrepresent my statements to substantiate your own.

    ummester wrote:
    Yet, I would argue a shortfall based on what the market 'wants' as oppossed to what a population physically 'needs' is a misrepresentation of the word.

    Well, this highlights the crux of the problem: it's about 'wants' and not 'needs'. There's plenty of houses out there, but everybody 'wants' a perfect house in what they deem to be a perfect area. That's not physically possible, hence the shortfall of certain kinds of property, in certain kinds of areas/ suburbs. Imagine 60 people boarding a bus with 30 double seats. The bus can fit 60 people, so there's enough seats for everyone. Yet, everyone 'wants' a window seat, and there's only 30 of them.

    So there is a shortfall of 30 window seats. So after all the window seats are filled, the remaining 30 people can choose to either sit in a non window seat, or stand. Or they can leave the bus and take their chances at the next one that arrives. They 'want' a window seat of course, but not everybody can have one. Same with houses. I admit, people need a roof over their heads. Housing is considered by most to be a basic necessity and a form of security. But when people unrealistically 'want' and expect to all be able to squeeze into a small area around the CBD, that's when the problem starts.

    I believe that in the context of the words 'oversupply' and 'undersupply', quite simply, there is an 'oversupply' of property in places where people do not want to live (or otherwise do not want that type of property) and an 'undersupply' of property in places where people want to live (or otherwise want a certain type) of property. And in this instance I agree with you. There is NOT a true shortfall, just a shortfall where people want to live. But for all intents and purposes, unless people change their mindset and buy what they can afford, they will continue to believe that affordable property in the areas they desire is in really short supply.

    ummester wrote:
    To use fwords analogy – if there was a shortage of food, yes, the shelves would be empty. But food can be in high demand and the shelves still be stocked.

    Same with property. Is property not in high demand? I believe so, considering the number of FHB out there trying to get themselves into a new home.

    I know of at least two old colleagues who chose to blow their chance at a first home. One of them was saving well, and then blew the money on a new car and a two week holiday. The other colleague also had great plans in mind, and then promptly got a new phone plan to get a fancy phone, and bought a sports bike together with all the other gear to go with it.

    Do they want a house? They sure do, but they don't want it badly enough I suppose.

    So why can food be in high demand and shelves still be stocked? Two possible reasons:

    1. There is not enough food where it's really needed or wanted.

    2. Food is expensive and not everyone can afford to buy them.

    Replace the word 'food' with the word 'houses' in both those points and we'll see this is exactly what's happening in the world of housing.

    And if anybody wishes to start a debate about housing being 'overpriced' rather than just being 'expensive', please read the following post in detail first:

    https://www.propertyinvesting.com/forums/property-investing/general-property/4336247

    Not gonna repeat myself again.

    Profile photo of ALF1ALF1
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    I could NOT have put that together better myself fword

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