Increasing doomers and gloomers , another indicator to buy ?

I don't know if it's me , because they're always some around , but it seems to me that there are more doomers and gloomers around at the moment .

After a long period of inactivity , at the first sign of decent growth , they're pronouncing the end is nigh ...

There are certainly profound articles that they can draw on to support their views , as have been linked in recently recently , but the seeming upsurge in D & G activity , makes me wonder that I have finally found a use for their opinions . As an indicator for stronger growth to come .

Obviously it's hard to draw any conclusions at this stage . Might look back in a year or two

Both myself and Rixter have posted in the past about how an increase in forum activity tends to be a leading indicator to price increases . Maybe this is another indicator but in this case , that the market has only just begun .

There is a certain amount of logic to that ( at least in my mind ) . The first reaction to change is denial ( borrowing on Elizabeth Kubler Ross' s seminal work , which I have found very applicable to other areas of life out side the original area where she described it , on death and dying ...).

Cliff

see_change said:

I don't know if it's me , because they're always some around , but it seems to me that there are more doomers and gloomers around at the moment .

After a long period of inactivity , at the first sign of decent growth , they're pronouncing the end is nigh ...

There are certainly profound articles that they can draw on to support their views , as have been linked in recently recently , but the seeming upsurge in D & G activity , makes me wonder that I have finally found a use for their opinions . As an indicator for stronger growth to come .

Obviously it's hard to draw any conclusions at this stage . Might look back in a year or two

Both myself and Rixter have posted in the past about how an increase in forum activity tends to be a leading indicator to price increases . Maybe this is another indicator but in this case , that the market has only just begun .

There is a certain amount of logic to that ( at least in my mind ) . The first reaction to change is denial ( borrowing on Elizabeth Kubler Ross' s seminal work , which I have found very applicable to other areas of life out side the original area where she described it , on death and dying ...).

Cliff

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Just been looking at all the Government land values that came in a while back,and even the one that has been rezoned the land values did not go up that much,well a least they never went down,but from a journalists side it's all sensationalism and attention-grabbing punch lines..

The doom and gloomers are always around. They are louder when they can't afford a deposit, then as soon as they save enough for a deposit, they go buy.

Borrowing this from a local REA in Brisbane, always buy when it suits you, not when someone is telling you to.

This site those provide a good indicator though with the number of new visitors.

see_change said:

Both myself and Rixter have posted in the past about how an increase in forum activity tends to be a leading indicator to price increases . Maybe this is another indicator but in this case , that the market has only just begun .

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Yep yep yep, it's a great indicator. I have noticed this a few times over the 10 years I have been here. I remember just after the GFC you hardly saw any noobs, it was all discussions about the end of the financial world etc. Then the rates droppped and we started to see the noobs flood in then they went up and it tailed off, rates drop again and the noobs are out in force again now asking where to buy, doing their dough with developers, cases of my first tenants etc. It's great to watch!

D_One said:

They are louder when they can't afford a deposit, then as soon as they save enough for a deposit, they go buy.

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That's an interesting thought .

Cliff

"One can observe a lot by just watching",they tell me history is like a museum where one can see the past..

http://www.abc.net.au/news/2014-03-...alks-to-the-business/5357702?section=business

http://www.gloomboomdoom.com/

When the doomers and gloomers (like many people I know) start looking to buy, stop buying.

Deltaberry said:

When the doomers and gloomers (like many people I know) start looking to buy, stop buying.

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So, have YOU stopped buying?

Deltaberry said:

When the doomers and gloomers (like many people I know) start looking to buy, stop buying.

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Refer signature

Realists buy properties and make money; there is no perfect market or time.

There is a season for everything, and there will be a season when the D&G are correct.

Australia's property market increases over time have correlated nicely with the long term decrease in interest rates.

At the current RBA rate of 2.5% or whatever (im lazy to check the exact number), there is know longer much downwards fat.

If interest rates do rise, even back to a 'normal' rate I see quite a bit of pain. Not from overall housing repayments as many in the market are significantly ahead in their repayments (because they just kept repaying the monthly amounts on the older higher interest rate calculations).

Where I predict the pain will come from is the 'marginal' sale. If interest rates rise, then the affordability will decrease massively. Especially with property prices increasing.

This will price out the 'buyers'. Market pricing is not determined by sellers, its determined by buyers. If there are not sufficient buyers, then property will trend downwards.

Those with trading in the stock market will know very much what I mean by a lack of buying support.

I would be careful in this market, I am not suggesting a 'run to the hills', I am strongly suggesting that new buyers be very careful.

For myself as always its my yields that determine things (as income is my protection).

My Melbourne CBD high rise apartments are still getting their rent increases, regardless of what the media says.

My very large one bedroom with carpark apartment is now showing a 10% gross rental return on the 2007 purchase price.
A spent $7k doing a recent renovation, rented the car park separately to the apartment, and got a 25% rental increase to $510 per week.

The point of this storey is not to boast, but to highlight in my opinion the importance of income as a protection mechanism.

On the downside there has been no capital growth in any of the apartments for the last 4 years.

For Sydney, I think we are hitting the ceiling in many parts... may be except the North side.

DA's are high => Supply is coming.

US is recovering well which will push their interest rate higher => Our fixed rates would start to climb.

USD is increasing it's value slowly. AUD is under 90 cents now. Reserve Bank may want to keep the $ somewhere between 90-95 cents. => Rate increase => Break in our boom run

According to CBA, OO home loans is less than savings & deposits. More reason to increase the interest rate without damaging our economy.

But.. there is Brisbane, Adelaide and Hobart

oc1 said:

So, have YOU stopped buying?

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More or less. But if there's good opportunity I'd still consider it. Am now looking at other jurisdictions.

I always have a pulse on the markets I look at here, but there is basically no stock as of last 3 months, and in the off-chance there is a B-grade stock, I can't see much value.

I'm with Delta - no good stock at the moment. Just rubbish.

Aaron_C said:

I'm with Delta - no good stock at the moment. Just rubbish.

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Which market(s)?

impala67 said:

Which market(s)?

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Melbourne.

Aaron_C said:

Melbourne.

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...Richmond Hill not for sale yet?

impala67 said:

...Richmond Hill not for sale yet?

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Nor is the mcg :/

devank said:

For Sydney, I think we are hitting the ceiling in many parts... may be except the North side.

DA's are high => Supply is coming.

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So it's nice to buy in areas where they're not building lots of new properties .


Places like mosman and Manly will always do well as they are popular locations with limited potential for development. To a lesser degree the same applies to Manly Wynnum in Queensland .

Cliff

I think there could be something in this seechange.

The D&G'ers I know became D&G'ers right after they first attempted to buy a property, but then realised that little cute 2 bedder in Elwood they've been renting for $400pw/3% requires a $60k/10% deposit which they have just thought about saving towards for the first time at around age 30 (and they are currently unable to accept the thought of buying a place far out in the suburbs).

So yes, to me, most D&G'ers are people who tried to be first home buyers but failed, so they whinge and post on forums instead, and lots of first home buyers entering is usually what starts booms.