So when was the last recession that we had to have? 1991! So how old were the younger crop of investors when this happened? They hadn't reached high school! What can they remember of the strategies that were put in place to ride out the last recession. Will the apron string be there to hold them up?
Our good times have enjoyed an unparalleled run of good fortune. But it still is a very strange market.
I remember a good friend saying to me, the Gold Coast is the last to go and the first to fall. In other words our market could be gauged on the fortunes of the Gold Coast Unit market. Having a look up that way the other week, there appears a lot of reasonable priced units on the market. I know that Goldie has matured, but I have these past voices in my head that reflect what the market place is doing. (That sounds a bit paranoid!)
All I am saying here is that for the last 20 years history has not repeated itself, but as some are saying, 'there is a change in the wind'. Our boom/bust cycles up to then were 5,7,9 year cycles.
Just looking at rentals in Sydney southern suburbs $600-$800 is going to get a 3 bedroom modest cottage. We still have a shortage of rental properties.
So if entering the market, I would be avoiding the 95% borrowing of funds for a mortgage, and restrict myself to as little exposure as possible to the borrowing urge.
