What Happens If You Invest In Property At The WORST Time
b"https://www.youtube.com/watch?v=v2vJL_1Qaf4\\n\\n\\n\\n\\n\\n\\n\\n\\nI thought it would be interesting to have a look at what happens if you get your timing wrong in the property market. How much would you lose in the short term, and how would you look financially in the long term compared to someone who did nothing.\\n\\n\\n\\nBook a Free Property Strategy Session\\n\\n\\n\\n0:00 - Introduction1:32 - Every peak and decline in the last 50 years3:58 - The worst decline and longest recovery (1989 in Sydney)4:39 - How our portfolio would have been affected5:24 - How much money would you have lost7:06 - How do property values grow over the long term8:25 - An example using today's figures11:10 - What if you bought at market bottom?13:30 - Comparing investing during the peak or bottom of the market15:05 - Taking cash flow into account17:24 - Get a free strategy session https://onproperty.com.au/strategy\\n\\n\\n\\nTranscription:\\n\\n\\n\\nRyan 0:00I thought it would be really interesting to ask the question, what happens if you invest in property at the worst time, we always talk about market cycles, looking at the cycles of the different cities within Australia, buying at the best times and not buying at the peak of the market, but buying at the bottom of the market, when it's likely to grow, that obviously increases your chances of success, and decreases your risk. But what happens if you buy at the wrong time? What if you get into the market at the very peak, and then you see a massive crash the following year. So today, we're going to go through some statistics from the last 50 years of Australian property prices in Sydney, Melbourne, Brisbane and Perth. We're going to find this worst time to buy. And then we're going to map things out and see okay, what would our portfolio look like? How much money would we lose? How long would it take years to get back to square one? And what would our property look like in 1520 and 25 years down the track, versus if we just sat on the sidelines and did nothing. So it's a really interesting thought experiment to go through. And so as you can see, I've got a spreadsheet here with property data. This came from homely.com a few years ago, as you can see, it only goes up to 2016. But that doesn't affect our analysis, because the worst time isn't 2017 to 19. The worst time actually occurs back in the late 1980s, early 1990s. So if we go across the here I've kind of colored things in red is the peak of the market. Yellow is the recovery. So how long did it take to recover. And so we can see this first decline in Sydney in 1982. market went down by 2% took two years to get back to where it was, we can see here 1989, the following year, it dropped 17% 17% in one year, that is a huge drop for the property market. And it took seven years to get back to its peak and back to where it was. And why did it drop 17%? Well, this was obviously the recession of the early 90s. And look at property prices leading up to this recession, you go to 1984 1985, property prices of 84,500 or 92,000, so under 100,000. And then in the next 1234 years, you had property prices actually more than double in value, with 1988 property prices going up by a whopping 39% set a huge run up in that market, then we had the recession, which obviously led to that big decline. So this is the worst one that I could identify here, Melbourne, we've got a six year period here from 1990, to 1996. But the drop was not nearly as bad. We got some other drops here. There's one here from 2004 to 2010, in Sydney, where it took six years to recover. But again, the drop was not nearly as bad. If we go across to Brisbane, then there's been no less declines. They had one here where it took two years now the one where it took two years, another one where it took four years, but again, not as big of declines. And then purchasing is a bit more volatile to go up and down. And so we're seeing a bunch of periods of crazy growth, look at this 50% growth, as well as followed by some declines."