Comments on: Are We There Yet?

By: Steve McKnight

Steve McKnight — Thu, 13 Jun 2019 22:57:10 +0000

Exactly H Man! But for investors speculating on growth (and no or negative income), it’s a dangerous time to be investing.

– Steve

By: H Man

H Man — Thu, 13 Jun 2019 20:57:42 +0000

If a property is a good buy in a good market that produces a good cashflow, which is what this web site is mostly about, then should it matter so much what is happening on the macro scale.
Assets can make money in any market if you know where to look and proper due diligence is carried out. Is this not the McKnight philosophy?

By: thisbe200114481

thisbe200114481 — Fri, 07 Jun 2019 05:21:17 +0000

Property price down!! A well known Melbourne Property & Financial analyst said: Property price will hold – at lease equal to interest rate mortgage payment % plus inflation rate % This is the mini holding cost. Not many people is willing to hold on a property with diminishing value for long. Hope the price fall is only transitional. Steve, what is your view of his theory? Thanks. (Good to read your article above ‘ are we there yet’.

By: Clive

Clive — Thu, 06 Jun 2019 23:50:59 +0000

Here in WA it has been over 12 years since the party ended and it doesn’t look like restarting any time soon. Personally I am holding property that is down over 40% so it is a long way back and rents are down too. Don’t think it can’t happen in Victoria or NSW, gloom is contagious.

I believe the structural shift in the nature of employment is a large contributor to this. So many folk that I come into contact with are in part time, casual or contract work and will therefore not be taking out large loans for real estate purchases. This too looks to be an established trend.

Bottom line is it could be a very long journey until “we are there.”

By: Jane

Jane — Thu, 06 Jun 2019 09:38:13 +0000

Great article Steve, as always. I always love reading your opinions. Entertaining and educational. Thank you!

By: uppitt

uppitt — Thu, 06 Jun 2019 04:28:08 +0000

I think people would be silly (perhaps that is the Govt) to think that the recent drop, and likely continued drop in interest rates would mean the property market would magically turn a corner (quickly) and go back on a similar rising curve as before. I feel the downturn and flattening of housing has some years to go before things really pick back up again, especially when the banks are not going to necessarily make it super easy to obtain finance as before. They copped alot of stick and rightly so, so don’t think they will be all open arms and lower standards again. The risks to jumping into the boiling pot are definitely higher, since falling interest rates are not a sign of good times ahead but bad times. Inflation is one thing, but increase in unemployment is where the sting in the tail will really be felt.

I’ve spoken to real estate agents in the end of 2017 and early 2018, and they couldn’t believe their eyes at the prices they were achieving. That speaks volumes to have stir crazy things got. I’ve easily seen prices in my area in Sydney that have fallen 20% in just over 12 months time.

By: fxdaemon

fxdaemon — Thu, 06 Jun 2019 04:21:33 +0000

We will be there when no one asks the question “are we there yet?”. LOL

By: Phil

Phil — Thu, 06 Jun 2019 03:20:26 +0000

Hi Steve, Brisbane and Gold Coast have been in the doldrums well before the Melb and Sydney correction haven’t they? Gold Coast especially from 2009 on seems to have been nothing but decline and would have thought should be one of the first on the upward path, when it does pick up?

By: Benny

Benny — Wed, 05 Jun 2019 21:35:31 +0000

Hi Steve,
Your comment -> “that’s what the Federal government is promoting, isn’t it, by deciding to underwrite the debt of some homebuyers borrowing 95% of their house price? Madness!”

Hmm, thinking back, wasn’t that one of the early drivers of what turned into the GFC? The USA Govt was allowing anyone who could draw breath to take out loans at “stupid % interest – like, zero” – enabled by their FreddieMac and FannieMay loan groups? The crunch then came when the holiday period ended, and these housebuyers (who couldn’t afford them in hte first place) faced a rate increase to 3% Interest or similar. They handed in the keys and left the Banks with a host of unwanted homes (no recourse loans there, right?) and the values of houses sank through the floor.

I think your one final word summed up well our Govt’s recent stated intention (it is not policy yet, is it?) – “Madness” !

Benny