Booming exports against recession

I am not as clued up as some people on this forum but after hearing all the info thrown about i too believe we are heading for a recession. As for when, thats the hard bit. I believe if it wasnt for the resources boom and a few other key things we would be in one now.People are going to be for ever poping up saying its only six months away and sooner or later someone is going to be right.But remember a recession isnt the end to all life on earth. Infact if you properly protect yourself and keep your job you will be in a great position to buy bargains. recessions dont last forever.
My guess is 2 years. The economy should hold it back until then.

Boom or recession I don't think property investors will be hit the hardest,

At the end of the day middle and lower income residential property is in my book almost defensive asset, When people run short of cash, they may cancel the family holiday to the gold coast, eat out less, buy less consumer products, but they will probally still be paying their rent, so in a resession your money is probally safer in property than in alot of other investments.

Property that can be hit hardest in an economic down turn is luxury apartments and top end homes as people will tend to trade down during a down turn there by leaving the homes at the top end of the market vacant or with much lower rental yeilds, Commercial property, if the small business renting your shop goes under, you are going to struggle finding a tenant during a down turn so it may be vacant for months, Property in areas with alot of first home owners if first home owners that have over extended them selves are forced into selling the price will fall it probally won't affect your rental yeild you just wont have any capitol growth for a while keep an eye out for good buys though.

As Devo said, in a down town the game is just really survival, if you only hold one or two properties then I probally won't risk trying to time the market buying and selling, just hold on to you investments and focus building your cash flow and reducing debt,

If you have built up a portfoilo of over 3 properties and you are confident that you have built up good investing skills and are capable of forming a decent opinon of what stage the property market is at then if you believe the market has gone flat and a down turn is coming then maybe sell the properties you feel will be hit the hardest or are neg geared and  will not perform well in the coming market so that you have reduced your debt there by protecting your portfoilo and freeing up some equity ready to snatch up any good deals that will be coming onto the market duruing the down turn,

Remember a good investor is playing this game "to win", a poor uneducated investor plays the game "to not lose" so often is fearful of things such as recession's and the like. a great investor has stratergys that will build value in any economic climate,

"I work out at BMA, a Mine in the Blackwater area of qld.
This Mine has spent millions on new machinery lately and so has a lot of other mines in the area, 1 hauler alone cost
the mine 4 million, and the Olypic Dam project has recently bought 139 new 797s worth 7 million each to work there, so they must think there is a lot of money to be made."

Sounds great can you count me in????

Just wondering if BMA is an Open cut or undergrund Mine??? R their any jobs for Haul truck Operators available??? A girlfriend and I want 2 be included in the resourses boom and have gone to WA to get our Dump truck tickets and are now looking for jobs, but its not as easy as 60 minutes makes it look. We r hopeful that with this higher income we can move into the property market and as long as we arn't overextnded a long and prosperous investment portfolio will be born. We r looking at property as a long term investment .

Hi Free man,

I'm just wondering why you think there is an undersupply of homes being built? Did you arrive at this conclusion based on your assessment of all available evidence or did you read it in the news? And if you read it in the news, did you check that the source didn't have a vested interest in convincing the public that there was an undersupply?

I've looked at the stats and come up with the opposite conclusion. I asked the question "does the net household formation rate exceed the building of new dwellings?"

The recent census results certainly don't show any undersupply. To recap the relevant ones:

• Average household size unchanged at 2.6% for both 2001 and 2006 census
• Vacant dwellings markedly increased from 717,877 (9.2% of all dwellings) in 2001 to 830,376 (9.9%) in 2006

Source: 2006 Census QuickStats : Australia

The first statistic shows clearly that the rate of construction has at least matched the rate of household formation. The second shows that the rate of construction has in fact exceeded the rate of household formation. Not only is there no undersupply, there is an oversupply based on fundamental measures.

It also shows that the 'immigration causes higher house prices' argument which resonates so well with the public is a furphy.
It also shows that the 'State government are undersupplying land' argument is a furphy.

Cheers, F. [cowboy2]

Hi Tysonboss1, I do invest in mining shares as I believe it's best to diversify my investments. As for what has a mining boom got to do with house prices, WA.

I believe there is a lot of other factors affecting the prices of WA property than the mining boom alone.

I'll take your advice on board. You just need to understand that I approach all aspects of life in the same way – with skepticism (this is a scientific method, not a dirty word. Google it, it's easily learned; "scientific skepticism" or "critical thinking" should get you started). It took me all of 2 minutes to dig up the facts and bust up a couple of the most prevalent myths about property. I think this is a better approach than basing decisions on the misinformation or misunderstanding of others.

Cheers, F. [cowboy2]

Foundation when I said you should get out more, what I meant by that is I believe in hitting the streets, talking to real estate agents, going to auctions and attending attending rental property inspections. For my way of thinking this is a better way of determining the current market.
I believe stats are important but they are a reflection of what happened and not what is happening.

Regarding vacant dwellings, I only concern myself with 2 types of vacant houses;

1. The ones that are available to rent, given most large cities are below 1.5% vacancy rate I'm happy with those stats.
2. The other number that concerns me are vacant houses that are for sale but the owner can't sell them, the areas I'm    looking in to buy my next IP haven't got this problem as houses are selling very quickly.

I think high levels of immigration have a direct impact on house prices but then that should be another thread.
At the end of the day we all approach investment differently and have different ideas, I don't believe you should be shooting people down in flames because their ideas don't match yours. The only exception I would apply to this rule is where someone has offered totally irresponsible advice to someone seeking advice. Then experienced investors should offer a wary comment?