Property is always liquid - it's just a matter of setting the right price.
I guess no one else has ever thought of that.
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It makes more sense to do it that way, rather than trying to preempt the downturn, in which case you risk losing out on a lot more profit if the up-cycle keeps running. Best to wait until the up-cycle is definitely over, and then price for a quick sale without getting emotionally attached to what it was worth at the peak.
You have done this before?
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I would have no issues selling for 5-10% below market price in order to make a quick sale right at the beginning of a downturn.
Did you sell for 5-10% below market in 2010, or 2011?
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Problems occur when people try to sell for what it was worth at the peak, and then end up chasing the market down and never being able to sell it.
Anything will sell if you price it right.
Sure. Just post on the forum when you are ready to sell at a 50% discount, I'll be ready.
I'm thinking November. They need to prep the market first to make it look like a well considered decision. I think they would lose too much face going in September, given that the last three or four sets of minutes have said rates will be on hold for an extended period. I think they may use the next couple of months to gradually change the tone of the minutes to prepare us.
Some markets are already declining fast, like Perth and Canberra and reports are starting to look bad, our dollar has not dropped along with the iron ore price as might have been expected and they won't want to risk losing momentum in the Sydney or Melbourne market with others now slowing or declining.
But we are just getting closer to the bottom, will just be.25% here and there. It will not be enough to compensate increased job losses and business closures.And that is the reason why they are so low.
The fact is, they are so low because our economy is collapsing and exactly what I told you all would happen years ago.
The other fact is you have never had a clue about interest rates and thought they would rise ages ago and when and locked them in then. Now all of a sudden when the obvious comes out you want to start calling drops all of a sudden. Talk about change your tune. It this recognition that you now realize how screwed our economy really is, or are you just parroting the obviuos now that we have explained it too you. And I have years ago many times , very very clearly, right Peter.
No plans to buy until after the next correction - probably around 2018-2020. I bought a few houses between 2005 and 2009, so now I'm just riding the boom. I might actually sell one or two of them late next year or early 2016. If the Sydney median does hit $1 million next year then I think that will be the peak for some time, so I may decide to sell and buy back after the correction. It will depend on what the fundamentals look like next year, especially supply and interest rates. If the construction boom creates a big oversupply, and interest rates look like heading back up, then it will probably be a good time to get out.
basically my plan buddy, swap out the mortgages for 100% ownership on a couple of places and then leverage up again at the end of next downturn.
The other fact is you have never had a clue about interest rates and thought they would rise ages ago and when and locked them in then. Now all of a sudden when the obvious comes out you want to start calling drops all of a sudden.
I did think rates would go up sooner, but that's one call that I'm very happy to have gotten wrong! The lower rates go the better for me.
And like I said, locking when I did still worked out well, because at the time, and for about year and a half after, I was locked below the variable rate, and it also allowed me to borrow more than I could have done otherwise due to the buffer thing I mentioned before.
No panic, just cool headed strategy. Ride the bubble to the top and then get out before the herd. Much easier to do with houses than shares, since house prices don't crash overnight and there are always plenty of warning signs in advance - i.e. drop in clearance rates, unsold stock levels rising, rental vacancy rates rising etc.
i still believe in any asset class, pick a price target or a timeframe - dont get too greedy... and execute...... rinse and repeat every cycle...
picking tops and bottoms and trying to undercut the market is risky stuff...
I disagree... lots of people think of it, and actually do it quite successfully.
So this is third hand knowledge for you? You haven't actually done this yet?
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It's common sense really.
As long as events stay within the general range of the past generation or two, you will be OK. Unlikely this strategy will work in an outlier when the market suddenly gaps down or becomes completely illiquid. Outliers are, by definition, unpredictable so it makes sense to prepare for the normal course of event.
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But the longer the downturn goes on, the lower the sale prices go.
Exactly. So you do concede that people are able to sell early in downturns, and they do sell for higher prices than those who chase the market down. Glad you now agree with me.
o2sd
24 Jul 2014, 08:48 PM
As long as events stay within the general range of the past generation or two, you will be OK. Unlikely this strategy will work in an outlier when the market suddenly gaps down or becomes completely illiquid. Outliers are, by definition, unpredictable so it makes sense to prepare for the normal course of event.
What's with all the socks Miles? This must be your 7th or 8th? What was wrong with the Curious Non Economist one? I know I trumped that one in quite a few debates but you still ditched him rather quickly.
Massive
24 Jul 2014, 08:45 PM
i still believe in any asset class, pick a price target or a timeframe - dont get too greedy... and execute...... rinse and repeat every cycle
How far out do you pick that target?
I have said since 2009 that I think Sydney houses will peak close to $1M in 2015, but I might be wrong, they might keep rising. I'm not going to sell unless the fundamentals at the time say so. If prices hit $1M, but auction clearance rates are still 70%+ and vacancy rates are still low, and interest rates show no sign of rising any time soon, then I won't be selling yet regardless of some target set six or seven years prior.
Exactly. So you do concede that people are able to sell early in downturns, and they do sell for higher prices than those who chase the market down.
People, or you? I don't know anyone personally who has done it. Do you? Have you?
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Glad you now agree with me.
When someone asks you a question, you think they are agreeing with you? I guess that probably means you don't answer many questions, so I will stop asking you then.
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What's with all the socks Miles? This must be your 7th or 8th? What was wrong with the Curious Non Economist one? I know I trumped that one in quite a few debates but you still ditched him rather quickly.
Shadow, along with some other posters here, find it completely incomprehensible that people might disagree with them and thus all the people who do disagree, must be the same person. It makes it easier to ignore new information.
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