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Is the market gonna bust?

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| 23 Nov 2010, 01:17 AM Agree 0

I keep reading conflicting stories about the market about to crash – including the Government - or the market going being fine. Which is right?
  • Hank Barker | 23 Nov 2010, 04:49 AM Agree 0
    That's why I don't pay attention to mainstream media anymore . One day it's doom and gloom and the next - boom!
    Australia's property market has better fundamentals than other markets, but it's not without risks. You still need to do your due diligence.
    But somehow, I don't think the sky is about to fall.
  • Rich Harvey | 25 Nov 2010, 05:01 AM Agree 0
    There is not one property market in Australia - there are macro and micro markets and each market moves in different cycles.
    If you made your investment decisions just based on media stories then this would be very confusing.
    I dont believe a crash is likely - I've written extentisively on this topic in my previous newsletters:
    Property selection is a difficult task and there are no short cuts for due diligence!

    Rich Harvey
  • John Lindeman | 26 Nov 2010, 03:20 AM Agree 0
    As Rich says, there are thousands of micro housing markets, each behaving differently according to their own local supply and demand dynamics. An overall fall of a few percent means nothing if you've invested in the right area at the right time. As a whole though, it is worth remembering that the biggest fall the housing market ever suffered was during the Great Depression - and it was an 18% fall over several years. The cause was a lack of finance for housing as the banks had no funds to lend. It is also worth noting that our housing survived the recent GFC intact - and housing prices are now 15% higher than they were in 2007. By contrast, shares (ASX S&P Top 200) are now 30% lower in value than three years ago. If our housing market survived the worst economic crisis in recent times so well, why do the critics keep saying it will crash now? It doesn't make sense.
  • Property Professor | 28 Jan 2011, 12:42 AM Agree 0
    There is no need to worry about the Australian property market collapsing. Our fundamentals are strong, as is our economy.

    However, in my opinion, this year will be a very slow one so far as capital growth is concerned. Some capital cities will go backwards in the short term but by the end of the year, residential property prices should be higher than they are today.

    2011 presents some excellent buying opportunities. I'd encourage you to do your due diligence and buy the right property as soon as you can.
  • alex41 | 28 Jan 2011, 03:20 AM Agree 0
    This might be pretty far out there, but does anyone think that the upswing in telecommuting could effect prices? Or will it be balanced out by population growth. I remember reading recently somewhere that in the US by 2020 its predicted that at least two thirds of office workers will telecommute, that would have to take the pressure off cities surely.

    Australia is certainly primed for it because of a high concentration of urbanised population in coastal cities and a high percentage of its well educated workforce is engaged in the services sector.

    The main reasons telecommuting hasn't taken off here is a lack of organisational awareness, and management inertia, i.e. backwards HR and management.

    It'd be interesting to see what effect it had on capital growth if it ever did become the norm
  • Tom | 25 Jul 2012, 03:29 AM Agree 0
    I think the best way to learn the industry is by being with it. Like anyone one says that experience is the best teacher. There are things that you can't learn from reading books or new write ups, rather you can learn those things through experience.
  • Brock Chewings | 25 Jul 2012, 03:54 AM Agree 0
    If telecommunicating ever become a norm, surely rural areas will be a choice for a better environment and lower living cost thus drifting previous population on cities on rural areas. As a basic principle of supply and demand, capital growth will always depend on the rate of demand by the people for a certain property or service. Like major changes, telecommunicating becoming normal, will affect many aspects. It is a term you can not subject to specificity regarding effect. I think you can invest on something, start at small when it turns big worry for the big issues affecting it.
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