THE MOOD OF THE MOMENT
But how quickly the wheel turns. The new year opened with some enthusiasm and confidence and now, with the stock market tanking in free fall, the sentiment out there is very wary indeed. All this talk of a recession is self-fulfilling and it is interesting to watch people ducking for cover. I had a couple of property clients pull back from purchases and taking a wait and see attitude. I think property will be the winner from all this in the long run as it usually is. People look for a safe harbour in a storm. The combination of a nervous stock market and imminent threat of ongoing rate rises is understandably making people nervous.
I feel sorry for all those who sold an investment property, at the government’s urging, to sink their up-to-$1M into a super fund. I am sure that investment decision is making a few people feel a bit woozy as they scan the morning papers. They were hammered in August and now at the time of writing, over 1500 points or 22% has been wiped off the value of the All Ords since November with the worst one-day fall since 9/11.
But for most people who do not panic and/or sell at the bottom, order will be restored in due course. But with all the talk of recession, it may take a while to recover. As they say, the market goes up by the stairs but comes down in the elevator! It could repeat the 80’s bear market that kept dropping for two years after the crash of ’87. The other interesting thing to remember is the absolute property boom that began after that slide.
The Byron Bay hinterland is still a great place to buy, build and settle. The top end of the market is as strong as ever. It is also a great place to write about. Many of the financial journals and some of the tabloid rags have had their Byron Bay gossip sessions. The financials have been running stories about how big money has been coming to town with silly prices being paid for prestige property. It is a worry, as I believe that cashed up idiots come here and measure their penis size on how much dosh they can spend on a pad as an exercise in ego gratification. The sad thing is that it gets a spiral going and they can’t help but make more money. I don’t think it bodes well for the culture of a small town like ours. People like that don’t really get “It”. The Daily Telegraph was running a silly story on how Byron Bay doesn’t really like tourists and that they should stay away – bollocks.