For those who missed the interview this morning on 'Sunday' with 'Aussie John' Symonds of Aussie Home Loans fame: http://sunday.ninemsn.com.au/sunday/cover_stories/article_1904.asp It was interesting John McGrath's comment that if John Symonds says something it will move the market. I wonder how many property investors will follow his warning and sell asap?
Buy ? The article mentioned : "Obviously a comment like that wouldn't help his own business so he is calling it as he really sees it and all credence to him because not many people do that." Don't really see how a heap of new mortgages drawn up for the buyers of the firesold properties (presumably savvy investors? ) , or a heap of punters rushing to fix their interest rates, would not help Aussie Home Loans ? The article sounds like it'd be more at home on Today Tonight or A Current Affair. Still, that's how it all starts I 'spose... the boring comments don't sell newspapers and TV advertising, hey ?
It was interesting John McGrath's comment that if John Symonds says something it will move the market. I wonder how many property investors will follow his warning and sell asap? Alan, I am not sure if below text is relevant to your post but it makes me wonder who all those " gurus " really are. " According to Comm Sec Research, over 20 years of historical data ending March 2003, Australian equities displayed a higher return and lower risk than Sydney residential property. Overall the return and risk of property investment, other than in direct property, are on par with other asset classes. A contrary outcome was presented by Atchison Consultants, in a study commissioned by the Australian Direct Property Investment Association. Atchison found that over 15 years to June 2002 of 11 major asset classes examined in Australia, direct property investment outperformed Australian and overseas share returns, with 1/3 less risk. Furthermore, residential property offered the highest annual return with a relatively low risk.".
Yes......is the price of some property falling and some 'investors' leaving the market necessarily a bad thing? Falling property prices may well lead to certain markets becoming more 'sensible' again and lead to buying opportunities. A number of 'investors' leaving the market may limit supply and help push up rents...........and isn't that long overdue! Past 'ridiculous' property prices weren't necessarily a bad thing if we accessed those valuations by LOC's etc and put the money to work.
A highly recognisable Hills REA, Peter Upton, was also on the programme and commented that, in three property cycles, this correction will hurt most of all. It's very unusual that ANY REA, let alone a prominent one like Peter, would talk the market down this way. It doesn't help his business, that's for sure! I disagree with TH's theory that John S, though, is using his comments as a business ploy to generate more business in loans. I really believe that he, along with other observers out there who are in the RE and loans industry, genuinely think the bottom is coming, along with a prolonged period of flat growth (I noticed that on the show he commented at one stage that he thought nothing would happen for a few yrs, then another he said several yrs!) and this may well be true. I've been tracking sales in my own area and several properties that have recently sold (particularly in the Kellyville/Rouse Hill area) have not even met their 2003 buying prices. The sellers have gone backwards and, in some cases, by tens of thousands of dollars. This is not to say that all of Sydney will suffer the same fate. After all, it's all about level of demand and supply, and tightly held areas that are predominantly owner occupied should hold their value, even through these correctional periods. A bigger levelling out would be noticed with even a 1% hike in interest rates and I believe the areas that would be hardest hit would be those with first home owners who bought 2-3 yrs ago, taking advantage of the FHOG and the 105% loans offered at the time. Then, I really believe we will begin to see buying opportunities and growth investors who can afford to hold on during these "gloom" periods for a short while at least anyway will benefit in the long term.
Sorry I might not have been clear - I assume John is smarter than coming out with something like this as a way to generate new business. What I really meant was I don't think the person suggesting the comments deserve more credence on the basis that they would hurt Aussie Home Loans business, would really know that to be the case. Aussie Home Loans got pretty good advertising and brownie points from a very well publicised interview - I have no idea what the equivalent ad.budget would need to be to generate the hype this story did ? Coming out to bat for the Aussie Battler might have been better timed at the peak of the boom when most people could see new investors over-committing to unrealistic purchase prices and poor yields, following the "sheep mentality" Steve talks about. I'm probably a bit cynical of any overly-hyped media announcements ... but then again here I am posting comments about it - so I guess I'm culpable ;-)
Ah yes now I see what you mean. Wrong translation on my part- sorry It will be interesting to see the outcome in the following mths after comments like this from well known RE and finance figures. As I've said before, I still think we're near bottom and NSW isn't exactly overflowing with property investors who are currently active. Most seem to be putting it all in the too hard basket and waiting for some more consistent cg increases before they reconsider IP's as a worthy investment.
