since my time on this planet has been limited, i would like to put this out to those whose seen a few things or more. Just how much does a threat of a recession affect the property market?
In the past, how did the market perform in the situation we're in now?
I hope some more knowledgeable people reply to your post.
My guess is that during a recession, interest rates are high so it becomes a struggle to hold on to your property. On the other hand, if you are cashed up and ready to go, there should be some bargains to be made as there will be a glut of people needing to sell. Properties go down in price.
On the other hand everyone needs a place to live. I think the govt will need to put some incentives in place to ensure investors stay in the market. They don't want 2million homeless people. I think people and families will 'double up' so instead of teh luxury of living alone, they will take in a boarder or if the house is big enough, families will share. Actually I believe this is already happening.
If you are a long term investor, you expect the low times and have to see it out.
Milly wrote:I hope some more knowledgeable people reply to your post.My guess is that during a recession, interest rates are high so it becomes a struggle to hold on to your property. On the other hand, if you are cashed up and ready to go, there should be some bargains to be made as there will be a glut of people needing to sell. Properties go down in price.
On the other hand everyone needs a place to live. I think the govt will need to put some incentives in place to ensure investors stay in the market. They don't want 2million homeless people. I think people and families will 'double up' so instead of teh luxury of living alone, they will take in a boarder or if the house is big enough, families will share. Actually I believe this is already happening.
If you are a long term investor, you expect the low times and have to see it out.
Well I haventbeen on this planet all that long either but I have spent a lot of time talking to those that have and believe me we are in for a shakey ride IMHO!! Dad was laughing the other day reminising how we are reading in the paprers now of a 'property shortage' and how it was the exact same thing he was reading back in the eighties. People can only support so much debt-and when the point is reached that they are no longer happy to bare it then they will sell….
Property shortgage…yeah right-there is hardley any land left to developin Australia huh…
it mite be very well true, but the situation is different to the 80s, ppl are more educated now, more financially stable and government interventions are more effective so to speak. well thats only my opinion anyway
i tend to agree with milly, that recession is short lived and if we have the capital to pull through this, then this should be a profitable period for us investors with the bargains to be found.
ume wrote:it mite be very well true, but the situation is different to the 80s, ppl are more educated now, more financially stable and government interventions are more effective so to speak. well thats only my opinion anywayPeople are more educated now?? This would have to be one of the more frightful comments-thanks to the media everyone is an armchair expert when it comes to property these days EXCEPT they all 'KNOW' that property will keep increasing at 20% a year!! AYou are one of the few who have even bothered to ask the more experianced people out there what the past was like. WHo knows property might just continue up forever, but if our current debt levels are anything to go on I highly doubt it. We have experianced unprecedented highs, which will most likely be followed by unprecedented lows.
Government are more effective? Nope there a scared poopless at the inflation geanie that has been let out of the bottle
ume wrote:i tend to agree with milly, that recession is short lived and if we have the capital to pull through this, then this should be a profitable period for us investors with the bargains to be found.I agree-if you arnt on the limit you will be in a win/win situatuon. Problem is sooooo many people out there are on the brink. Seriously how can so many people afford $600+ houses these days? Its allllll debt and praying that their equity will continue to rise, inflation will stay low and their head will stay above water…
blogs wrote:ume wrote:it mite be very well true, but the situation is different to the 80s, ppl are more educated now, more financially stable and government interventions are more effective so to speak. well thats only my opinion anywayPeople are more educated now?? This would have to be one of the more frightful comments-thanks to the media everyone is an armchair expert when it comes to property these days EXCEPT they all 'KNOW' that property will keep increasing at 20% a year!! AYou are one of the few who have even bothered to ask the more experianced people out there what the past was like. WHo knows property might just continue up forever, but if our current debt levels are anything to go on I highly doubt it. We have experianced unprecedented highs, which will most likely be followed by unprecedented lows.
Government are more effective? Nope there a scared poopless at the inflation geanie that has been let out of the bottle
when i said ppl are more educated now, i was referring to education as a whole not just on the property investing spectrum. e.g. how the education system for kids are better now, how a teenager now a days receive stimulants that ppl 60 years ago would take a life time to receive, new theory and knowledge to pass down.
and i said government are more effective now to some degree. compared to previous times, especially with the technology we have in telecommunication etc, its easier and more effective to implement policies, lessons learnt from history, better knowledge and development into policy making all makes the government more effective than previous times. that said, i want to make it clear that the government overall are not effective, and i dont thi nk they are, but in comparison they're more proficient than previous eras
ume wrote:when i said ppl are more educated now, i was referring to education as a whole not just on the property investing spectrum. e.g. how the education system for kids are better now, how a teenager now a days receive stimulants that ppl 60 years ago would take a life time to receive, new theory and knowledge to pass down.
So whats your point? Education a rich person it does not make!! Plenty of broke and or middle class uni grads mate!! Als plenty of rich 'uneducated' tradies…..just becasue we know how to use computers doesnt make us any more savy than our parents. I would hazard to say the education our parents recieved was of a lot higher standard, if you werent up to scratch you would fail, where as these days if you are breathing you pass-uni is a joke…
ume wrote:and i said government are more effective now to some degree. compared to previous times, especially with the technology we have in telecommunication etc, its easier and more effective to implement policies, lessons learnt from history, better knowledge and development into policy making all makes the government more effective than previous times. that said, i want to make it clear that the government overall are not effective, and i dont thi nk they are, but in comparison they're more proficient than previous erasThe problem is generally people dont learn from history. Greed as it always has and always will will be the undoing of the economy. Business cycles go up and go down, always have and always will
education gives us options, the more educated u r, the more options u'll have. as opposed to ppl say 100 years ago, education for the middle or poor class was near impossible to obtain the level we have now. people are more educated now, our living standard is way better, general well being is better, life expectancy is higher…. so whats ur point?
but what u said in ur last 2 sentences i agree totally. but u can not not take into account the amount of charity works thats being done. u cant just look at the bad side, rather the whole picture
ume wrote:education gives us options, the more educated u r, the more options u'll have. as opposed to ppl say 100 years ago, education for the middle or poor class was near impossible to obtain the level we have now. people are more educated now, our living standard is way better, general well being is better, life expectancy is higher…. so whats ur point?My point is that education is no barrier to financial ruin. People are largely driven by greed and emotion-how else can you explain people taking out mortgages they clearly cant afford based on the 'belief' or hope that their property will continue to apprciate when all the factors point to the opposite. People as a whole are imensley stupid creatures. They act like sheep, all pushing properties prices upwards at a rediculous rate, and then cry when interest rates go up that have been forced up in an effort to curb their out of control spending and debt levels.
Yes you are right, eductaion generally is a good thing and does give options but IMHO it has no corelation to barriers against going bust..
lol now we're on the same page.
Every buble bursts. Every bull run ends. The US is now looking more and more like a basket case. I don't think we are that we should be slapping ourselves on the back in the belief that the trouble in the US and UK will pass us by. More debt than ever, and interest rates increasing in a climate of rapid debt fueled inflation that shows no signs of slowing yet. People often mention increased immigration etc as pushing up demand. I believe its more about the rates of household formation (i think thats what the abs used to call it) where the number of households increase as people start living in smaller family groups. As rents increase and property becomes more expensive kids will stay at home and people will share. I don't think this kind of demand is immune from change.
Other newsworthy events – Mitsubishi pulls out of Adelaide to build cars in India/China. That will have a multiplier effect on related industries and R&D.
One other thing that no its worth pointing out in an uncertain climate is that no property can actually be said to have increased by 20% until it has actually settled. Until then its just numbers on paper.
This year is going to be an intersting one.
And to be really pedantic HW, "no property can actually be said to have increased by 20% until " it has been resold and settled on a "like for like basis" as we are otherwise only comparing median prices against the subject property.
It's not that people are more educated know, but information is more readily available thanks to the digital age.
dreaming wrote:It's not that people are more educated know, but information is more readily available thanks to the digital age.Yeah but how many people take any notice of it, instead wait for the 'news' to tell them after it has already happened….
hw wrote:One other thing that no its worth pointing out in an uncertain climate is that no property can actually be said to have increased by 20% until it has actually settled. Until then its just numbers on paper.If the value goes back the way and has not settled then it is a problem if you are running a balance sheet.
Life goes on in the UK with a new subprime lender in the market
"
NEW SUB PRIME LENDER JUST LAUNCHED – just as I predicted.WHITE LABEL LOANS will lend up to 95% with adverse credit, and 90% bad credit on a lie to buy basis for those who cant prove thier income!
See my loverlys, life really does go on.
FACT – 99% of people do not get repossessed.
FACT – lenders need to lend if they want to exist
FACT – even in the bleak 1970s with high unemployment, collapsing UK economy, strikes and OPEC crisis, life went on, people bought houses, the world did'nt end.Can someone let Chicken Licken know. Tell him he is self obsessed and unhealthily focused on his here and now petty time on Earth. There aint nuttin special about his time, he just has this great self obsession "
blogs wrote:dreaming wrote:It's not that people are more educated know, but information is more readily available thanks to the digital age.Yeah but how many people take any notice of it, instead wait for the 'news' to tell them after it has already happened….
My point was more directed towards researching property and stock deals. This forum is just one example of the digital age making it easier for people to make decisions on investments.
In the mid eighties when I brought my 1st property I basically trusted what the real estate agent said, pretty dumb hey.
Today I subscribe to online newsletters, I research local papers and council docs all from the comfort of my lounge. And the residex report dropped into my inbox.I'm not any smarter than I was 25yrs ago, but I do a hell off alto more research before I buy a property today.
it was interesting to read that you think people are more educated today, but what sort of education ahve they got? education to get a job or financial education to allow them to be financially self supporting , not reliant solely on a job or a pension (which won't exist when i am of an age to retire)
we need to be sure that we are educated financially in order to be able to be self supporting because we all know that the government is not going to do it. all you have to do is read today's paper to see that the people who helped to make this country what it is and worked so hard paying taxes all their working lives, thinking that the government would look after them in retirement, are now living well below what should be considered acceptable in australia in the 21st century.
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