The future of Australian property prices

[trainspotter]

Hi All
I have a dilemma.
Very close to buy PPOR on Sydney's northern beaches, seller has come down in price but the last $30000.00 I want him to come down is going to be difficult.
1) Should I accept he's price
2) Wait for next year hoping he will not sell to another party "dont think he has somebody else interested"

I fail to see the dilemma other than the procrastination levels you are displaying.

 

[sptrawler]

I agree with trainspotter $30,000 shouldn't make or break a deal, if it's worth the extra money pay it. Otherwise if you think $30,000 makes the property overpriced, it must be a low cost property.
If the property is $1,030,000 and you want to pay $1,000,000 get over it you are being stupid.
If the property is $130,000 and you want to pay $100,000 that is a real percentage diference.

 

[MACCA350]

Last weekends amended clearance rate is 50%

This weekends pre-amended clearance rate is 53%

Last weekends amended clearance rate is 51%

This weekends pre-amended clearance rate is 55%


Looks like 300 odd auctions went unreported this week

Cheers

 

[medicowallet]

I agree with trainspotter $30,000 shouldn't make or break a deal, if it's worth the extra money pay it. Otherwise if you think $30,000 makes the property overpriced, it must be a low cost property.
If the property is $1,030,000 and you want to pay $1,000,000 get over it you are being stupid.
If the property is $130,000 and you want to pay $100,000 that is a real percentage diference.

I disagree.. why not $60k more then? $90k? This is exactly what makes fundamentals lose the plot as what did happen.

I would agree with you if Mr Buffet did, but alas he does not.. Don't get too caught up in your own passion

 

[sptrawler]

I disagree.. why not $60k more then? $90k? This is exactly what makes fundamentals lose the plot as what did happen.

I would agree with you if Mr Buffet did, but alas he does not.. Don't get too caught up in your own passion

Well I am assuming that finnsk has done his homework on the property. If he hasn't he shouldn't be buying it at all.
It reminds me of a friend who put an offer in on a block of land at $120,000. It fell through, then the next release came out at $150,000. He said there is no way I'm paying that. Well the next release came out at $200,000, he jumped in and bought one.
Well at the height of the boom, he sold it at $1.3m.
Now the block would struggle to get $750,000.
It is all about timing if it is a real bargain $30,000 shouldn't break it, if it does it isn't a life changing deal anyway.LOL

 

[medicowallet]

Well I am assuming that finnsk has done his homework on the property. If he hasn't he shouldn't be buying it at all.
It reminds me of a friend who put an offer in on a block of land at $120,000. It fell through, then the next release came out at $150,000. He said there is no way I'm paying that. Well the next release came out at $200,000, he jumped in and bought one.
Well at the height of the boom, he sold it at $1.3m.
Now the block would struggle to get $750,000.
It is all about timing if it is a real bargain $30,000 shouldn't break it, if it does it isn't a life changing deal anyway.LOL

You just said what I did, within your last sentence. Yes it should matter. At some point in time, there has to be a maximum price, otherwise the homework was incorrect in the first place.

If I go to auction and the max I am prepared to pay is $350k, I will not spend one cent more than this, as my research says that the $350k is better off spent elsewhere.

 

[sptrawler]

You just said what I did, within your last sentence. Yes it should matter. At some point in time, there has to be a maximum price, otherwise the homework was incorrect in the first place.

If I go to auction and the max I am prepared to pay is $350k, I will not spend one cent more than this, as my research says that the $350k is better off spent elsewhere.

+1 as you say it all boils down to homework.

 

[nomore4s]

For anyone interested.

http://www.htw.com.au/Month_in_Review/Month-In-Review-December-2011.pdf

 

[ROE]

I agree with trainspotter $30,000 shouldn't make or break a deal, if it's worth the extra money pay it. Otherwise if you think $30,000 makes the property overpriced, it must be a low cost property.
If the property is $1,030,000 and you want to pay $1,000,000 get over it you are being stupid.
If the property is $130,000 and you want to pay $100,000 that is a real percentage diference.

This is where human irrational comes in, 30K is 30K .... you still end up paying 30K more...here is a good one to compare to this scenario...

you buy a DVD player cost you $200 at local shop, then there is a 50% off on the other side of
the bridge, you would drive to that place and get a DVD player..

you buy a car, it cost 22,100K the other side of the bridge it has them for 22,000 people
dont bother to make the trip?

WTF ? it's $100 either way, you still save $100.

Just because you have 1 Mil does that make 30K more value or less value than when you have 100K? NO, same exact value...

This plays on the stock market and housing all the time.
if you understand this concept you can make lot of money

 

[nomore4s]

This is where human irrational comes in, 30K is 30K .... you still end up paying 30K more...here is a good one to compare to this scenario...

you buy a DVD player cost you $200 at local shop, then there is a 50% off on the other side of
the bridge, you would drive to that place and get a DVD player..

you buy a car, it cost 22,100K the other side of the bridge it has them for 22,000 people
dont bother to make the trip?

WTF ? it's $100 either way, you still save $100.

Just because you have 1 Mil does that make 30K more value or less value than when you have 100K? NO, same exact value...

This plays on the stock market and housing all the time.
if you understand this concept you can make lot of money

One of the best posts in this thread imo, $30k is $30k.

I find the whole concept of a "dream home" a bit flawed tbh. There are normally plenty of houses around that will meet the criteria for your "perfect house", no need to over pay, especially in the current market.

 

[prawn_86]

This is where human irrational comes in, 30K is 30K .... you still end up paying 30K more...here is a good one to compare to this scenario...

you buy a DVD player cost you $200 at local shop, then there is a 50% off on the other side of
the bridge, you would drive to that place and get a DVD player..

you buy a car, it cost 22,100K the other side of the bridge it has them for 22,000 people
dont bother to make the trip?

WTF ? it's $100 either way, you still save $100.

Just because you have 1 Mil does that make 30K more value or less value than when you have 100K? NO, same exact value...

This plays on the stock market and housing all the time.
if you understand this concept you can make lot of money

There are usually other factors to take into account aside from just price. Service, ease of purchase, time etc. If i can save $100 but its going to take a few hours, i probably wouldn't bother as i value my time as being worth more than $30 an hour.

Also, the more you have, the less it matters in percentage terms. Sure 30k is 30k, but if you have $10m in the bank its 0.3% of your net worth. If you only have 50k in the bank its 60% of your net worth. I know i wouldnt bother over 0.3% of my net worth if it was for a major purchase like a property

 

[trainspotter]

Location, location, location is the key. I would happily spend the extra 30k for my "dream home".

By the way .......... remember he is holding out for the price to drop by this much !! Why does it automatically mean it is overpriced to begin with?? HUH ?? I don't get it.

I went shopping with my wife once for shoes. We went to one shop and she tried on some shoes. They were perfect colour/fit/price every damn thing ticked the boxes. Did we buy them ??? NUP ??? We went to about 14 other shoe stores and tried on shoes for about 4 hours. She did not like any of them. We went back to the shoe store where the first pair were perfect. Guess what ........ they had sold. Oh well. It's only 30k.

 

[wayneL]

Location, location, location is the key. I would happily spend the extra 30k for my "dream home".

By the way .......... remember he is holding out for the price to drop by this much !! Why does it automatically mean it is overpriced to begin with?? HUH ?? I don't get it.

I went shopping with my wife once for shoes. We went to one shop and she tried on some shoes. They were perfect colour/fit/price every damn thing ticked the boxes. Did we buy them ??? NUP ??? We went to about 14 other shoe stores and tried on shoes for about 4 hours. She did not like any of them. We went back to the shoe store where the first pair were perfect. Guess what ........ they had sold. Oh well. It's only 30k.

My wife could teach your wife a thing or two, Grasshopper.

My wife can have half of the stock in Lambton Quay locked up before she makes up her mind LOL.

PS Why the hell does it take them four hours to bey a pair of shoes FFS?

 

[againsthegrain]

I think the bigger question is WTF do you let your wife boss you around for 4 hours, I know who the boss is in my relationship :

 

[Julia]

There are usually other factors to take into account aside from just price. Service, ease of purchase, time etc. If i can save $100 but its going to take a few hours, i probably wouldn't bother as i value my time as being worth more than $30 an hour.

Also, the more you have, the less it matters in percentage terms. Sure 30k is 30k, but if you have $10m in the bank its 0.3% of your net worth. If you only have 50k in the bank its 60% of your net worth. I know i wouldnt bother over 0.3% of my net worth if it was for a major purchase like a property

Agree. Convenience and simplicity is worth paying for imo.
Different story if you're on a tight budget.

I think the bigger question is WTF do you let your wife boss you around for 4 hours, I know who the boss is in my relationship :

Ah, but clearly TS and Wayne are devoted, loving husbands for whom no amount of trailing after their wives is ever too much.

 

[finnsk]

Thanks to everybody for the replies.
My problem is not really with the $30000 but properly more the fact that we have not had any financial issues yet, and I know that I would hate to buy know, and the market will drop with say 20% that does not mean that that particular property would drop but at least the market would have moved, if I am wrong and market goes up then it is my bad luck.
Properties in Europe is dropping even in Sweden which is supposed to be a strong economy.

 

[trainspotter]

I think the bigger question is WTF do you let your wife boss you around for 4 hours, I know who the boss is in my relationship :

Man you have a lot to learn about relationships dude

 

[young-gun]

Thanks to everybody for the replies.
My problem is not really with the $30000 but properly more the fact that we have not had any financial issues yet, and I know that I would hate to buy know, and the market will drop with say 20% that does not mean that that particular property would drop but at least the market would have moved, if I am wrong and market goes up then it is my bad luck.
Properties in Europe is dropping even in Sweden which is supposed to be a strong economy.

put aside the fact that if you dont buy now someone else may.

if you dont buy now, and prices fall 20%, youll get a similar house elsewhere for much cheaper. however if the market starts to turn, you will be able to get in before it 'takes off'. if you buy after the market turns around, house prices wont have increased drastically and you would most likely get back in before prices got away from you too much. some people dont seem to care much for 30k so lets say between the time things start to turn and the point you buy the house its gone up 30k. 30k is alot of money, but when it comes to a home loan 30k is not alot when it comes to calculating repayments.

if there is something that everyone should be able to agree on its that house prices wont be reaching new heights any time soon. MO if i was in your shoes id sit tight for a while.

 

[Knobby22]

I think the bigger question is WTF do you let your wife boss you around for 4 hours, I know who the boss is in my relationship :

I know what you mean, I wear the pants in my house after my wife picks the ones I am to wear!

 

[nth brisbanite]

Back to the thread. What do forumites think will happen to property prices with today's decrease in interest rates? At this stage only the Bank of Queensland have lowered their rates by the full .25%. It'll be interesting to see whether the other banks will follow suit.