The future of Australian property prices

[Glen48]

More chance of Howard running again and getting re-elected than house prices going up.

 

[wayneL]

yes, several of us got it right....no crash, slowdown (it is the GFC in action) rises in some places, 'and most of all the median figure that is touted' as the evidence of a drop in prices, can be a misnomer...
less high priced places selling, plus more median and lower prices, cause the median figure to drop... voila there is your price drops of what 3, 6% big deal
and I have witnessed huge increases in the bottom end of the price range....so go figure

dont expect things to change much, while there is so much political misery....

once it is sorted out, and we get some good conservative politicians back into office, watch for the change in attitude....as in when Howard was in office...

So conservative governments = rising house prices?

How do we account for the concurrent rise in house prices in the UK where the Fabians were in power?

I've dropped probably £200,000 in equity since the conservatives have been in.

Polly-ticks ain't got nuttin' to do with it Kinc.

 

[sptrawler]

Just a general comment - after 360 pages of guesses, estimates, opinions and good ol' speculation in this thread, has anyone actually got it right yet?

Well I've bought an investment property in the last month.
How about you?
Also I don't see a property rebound in the foreseeable future, however a bagain is a bagain. If you call it right.
The bad news can't get much worse, can it?
Time will tell if I've blown my money. C'est la vie

 

[Glen48]

sptrawler
Just delete the word " investment " and enjoy the ride down all will be ok

 

[Wysiwyg]

sptrawler
Just delete the word " investment " and enjoy the ride down all will be ok

Taxi business is doing a roaring trade lately I see.

 

[KurwaJegoMac]

Well I've bought an investment property in the last month.
How about you?
Also I don't see a property rebound in the foreseeable future, however a bagain is a bagain. If you call it right.
The bad news can't get much worse, can it?
Time will tell if I've blown my money. C'est la vie

Congratulations!! All the best with your investment.

Hope you have a thick shell, you'll be bombarded pretty soon

 

[Bill M]

Well I've bought an investment property in the last month.
How about you?
Also I don't see a property rebound in the foreseeable future, however a bagain is a bagain. If you call it right.
The bad news can't get much worse, can it?
Time will tell if I've blown my money. C'est la vie

Hello sptrawler, I think from memory you are at or near retirement age. I think you did the right thing as long as you really did get a bargain. I reckon as long as you can rent it at least 95% of the time you will do ok. It isn't a 10 bagger investment that's for sure but as long as that rent keeps coming in you will be ok. Hopefully you didn't borrow too much.

I would like to give you one great tip my Accountant got me onto. In my first year he asked me if I had my property "Quantity Surveyed". I didn't and he advised me to get done ASAP as I would have been missing out on substantial claims. I had to justify the $750 cost to do this but he assured me that my first claim would be way higher than the fee that I would have to pay.

With his advice I got BMT Tax Depreciation to do a full schedule for me. In my first year I got an 8k tax deduction that I thought I would never get. I now have a schedule for the next 20 years (I think). I strongly suggest that at the very least you give them a call. Here is their link http://www.bmtqs.com.au/Default.aspx There is no point is missing out on claims that are rightfully yours.

Good luck with your new investment.

 

[todster]

Well I've bought an investment property in the last month.
How about you?
Also I don't see a property rebound in the foreseeable future, however a bagain is a bagain. If you call it right.
The bad news can't get much worse, can it?
Time will tell if I've blown my money. C'est la vie

I imagine it's in WA,still plenty of big construction jobs
All the big mobs FIFO from east now i wonder if that will change things.
Looking at getting in myself but very cautious at the moment.
Has anyone had much to do with the National housing affordability scheme or NRAS.
100K tax deduction over ten years.

 

[KurwaJegoMac]

I would like to give you one great tip my Accountant got me onto. In my first year he asked me if I had my property "Quantity Surveyed". I didn't and he advised me to get done ASAP as I would have been missing out on substantial claims. I had to justify the $750 cost to do this but he assured me that my first claim would be way higher than the fee that I would have to pay.

With his advice I got BMT Tax Depreciation to do a full schedule for me. In my first year I got an 8k tax deduction that I thought I would never get. I now have a schedule for the next 20 years (I think). I strongly suggest that at the very least you give them a call. Here is their link http://www.bmtqs.com.au/Default.aspx There is no point is missing out on claims that are rightfully yours.

Good luck with your new investment.

I second this - it's worthwhile doing, you can get some great savings.

If you get a quote and are still on the fence about it, jump onto the ATO website and look up Depreciation rules and schedules for investment properties. They have some nifty information there that you can use to make your own estimates - then you can get a rough idea of the potential depreciation you're entitled too which should help you justify the cost of a professional quanitity surveyor.

Note: you can use your own calculations as long as they stick to the ATO guidelines. But usually best to use a professional

 

[Bronte]

Just a general comment - after 360 pages of guesses, estimates, opinions and good ol' speculation in this thread, has anyone actually got it right yet?

lol
In the original 'Stagnation....' Australian property prices thread, we did make a comment that Australian property was cheap just before it went up 40% or more. Does this count ?
There is also an Australian property thread somewhere started by spitrader when we turned bearish.
Just before Australian property started this downward cycle.

 

[sptrawler]

Hello sptrawler, I think from memory you are at or near retirement age. I think you did the right thing as long as you really did get a bargain. I reckon as long as you can rent it at least 95% of the time you will do ok. It isn't a 10 bagger investment that's for sure but as long as that rent keeps coming in you will be ok. Hopefully you didn't borrow too much.

I would like to give you one great tip my Accountant got me onto. In my first year he asked me if I had my property "Quantity Surveyed". I didn't and he advised me to get done ASAP as I would have been missing out on substantial claims. I had to justify the $750 cost to do this but he assured me that my first claim would be way higher than the fee that I would have to pay.

With his advice I got BMT Tax Depreciation to do a full schedule for me. In my first year I got an 8k tax deduction that I thought I would never get. I now have a schedule for the next 20 years (I think). I strongly suggest that at the very least you give them a call. Here is their link http://www.bmtqs.com.au/Default.aspx There is no point is missing out on claims that are rightfully yours.

Good luck with your new investment.

Thanks for the tip Bill. I will look into it.

 

[sptrawler]

I imagine it's in WA,still plenty of big construction jobs
All the big mobs FIFO from east now i wonder if that will change things.
Looking at getting in myself but very cautious at the moment.
Has anyone had much to do with the National housing affordability scheme or NRAS.
100K tax deduction over ten years.

Hi todster, it is in W.A, 5% return, also lifestyle option if I want to move into it at a later date.
The NRAS sounds like it is just a negative gearing scheme, tax man gives you nothing for nothing.

 

[medicowallet]

"Saturday 11th February 2012

Today’s auction clearance rate was 66 per cent, compared to 54 per cent last weekend, and 63 per cent on this weekend last year.

This is a modest improvement on last year’s results, however the outcome of auctions over the coming two weekends will provide a
clearer indication of the state of the market.

A total of 270 auctions were reported today. Homes sold comprise 178 of the total. The remaining 92 were passed in, 57 of those on a
vendor’s bid.

There are 1500 auctions scheduled between now and the end of February.

Enzo Raimondo
CEO REIV"

WOW, sunshine and lollipops this weekend!!, Don't really know what happened to the more than 10% of auctions that weren't reported this weekend, but perhap Enzo submitted his BAS early this week.

1500 auctions over the next 2 weekends expected, should give more of an indication, so of the 1250 reported, it should give some indication about what is happening.

Keep working hard, and if struggling, then try pawning off some trinkets, or try hitting up the olds for a loan, take on a few extra jobs, or buy a bike,

Until next week, be excellent to each other,

MW
P.S. Where is Robots?

 

[prawn_86]

New survey shows that >30% of NSW residents are paying more than 40% of their income on mortgage repayments.

http://www.abc.net.au/news/2012-02-12/nsw-residents-dreaming-of-queensland/3825136

 

[greebly24]

What are you trying to prove? You are using 2 extreme cases to show that investing in real estate can cause untold damage. There are thousands of property investors (like myself) who are not having any problems with their investments. Mine may have gone down 5% over the last year or two but over a long time period, I have done really well.

Yeah, sorry dude. The Wiggles guy and the Irish Quinns are extreme cases. I was just using them of examples of how investors shouldn't put all their eggs in the one basket. But many RE spruikers used the opposing argument, the outrageous claim that all other investments (like buying shares in a productive exporting company) are bad, and that leveraging up and borrowing as much as you could to buy as many properties as you could, was the only smart strategy to wealth creation. And for 15 years at least, it worked really well. It was a very smart investment strategy during that period.

But now, as the world deleverages, this once-sacred strategy is slowly being proven as possibly ill-advised. It has proved spectacularly wrong in places like US, Ireland & Spain. There are endless tales of property developers & RE agents who put all of their money into property, and nothing else. When those property bubbles popped, they are the people who lost everything, and they are the angry ones you see on the news, angry at their own gullibility for believing that property was the only asset to be invested in.

Thats why I mentioned the Wiggles guy. He was worth well over $50m. So what did he do? He put it all into leveraged property. When upmarket RE in Sydney didn't continue booming like the RE spruikers said it would forever, and underwent a minor correction, he lost everything and was forced to liquidate assets including his family home and Elvis memorabilia collection and go back to work despite his ongoing illness.

But what if he diversified among asset classes? Imagine if he only put $10m into property, and also put $10m into shares, $10m into bonds, $10m into bullion, and $10m in cash? Would he be coming out of retirement? I doubt it. He'd probably have made money. There's something called the Permanent Portfolio that describes how to do this. Its the reason old-money families like the Rothschilds have kept their wealth for centuries. They never put everything they had into just one thing, like property.

Its great to hear you've made good money on your IPs, despite the recent drop. But in the present and going forward, would you really now advise your children to leverage up as much as they could now and take on as much as debt as they could now, and buy as much RE now as they could, to the detriment of every other investment? What if they didn't have the most secure jobs? Still tell them to take on as much debt as they could? Right now?

I guess that's what we all want to know? Does the positive past behaviour of RE being a good investment, still hold true in the near future?

In other news, more banks raising rates independently, whilst laying off more staff. Residex house prices figures just out too, showing 1.7% median drop in January (20.4% annual rate).

 

[young-gun]

But now, as the world deleverages, this once-sacred strategy is slowly being proven as possibly ill-advised. It has proved spectacularly wrong in places like US, Ireland & Spain. There are endless tales of property developers & RE agents who put all of their money into property, and nothing else. When those property bubbles popped,


In other news, more banks raising rates independently, whilst laying off more staff.

deleveraging? bubbles? you are misinformed - australia is immune. must rush out to buy a house now, i hear its just about to boom again. great time to invest aswell, government has never handed out so much money to keep things afloat!

oh no, sounds like OUR banks are finally finding themselves in a spot of bother now, luckily we have the strongest banking system in the world, and they too are immune. surely australia isnt going to follow the path of every other developed country in the world? i read somewhere that we are different!!

*end sarcasm.

 

[Wysiwyg]

surely australia isnt going to follow the path of every other developed country in the world? i read somewhere that we are different!!

Surely interest rates would lower, house prices would lower and present opportunity for those with secure employment to finally buy a house at an affordable price.

 

[trainspotter]

http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0

Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1.0% in the December quarter 2011.


Which would equate to 4% annually

December 10 to December 11 overall downward spiral is wait for it ........ wait for it ................ wait for it ......................... 4.8%

 

[So_Cynical]

http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0

Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1.0% in the December quarter 2011.


Which would equate to 4% annually

December 10 to December 11 overall downward spiral is wait for it ........ wait for it ................ wait for it ......................... 4.8%

Average for Melb, Bris and Adelaide about -6.4% = 32 thousand dollars on a half million dollar property...even if next years fall is half that, it will be close to a 10% loss in just 2 years...and that's one of the better case scenarios.
~

 

[trainspotter]

Average for Melb, Bris and Adelaide about -6.4% = 32 thousand dollars on a half million dollar property...even if next years fall is half that, it will be close to a 10% loss in just 2 years...and that's one of the better case scenarios.
~

Melbourne overpriced to begin with.
Adelaide has just had close to 23% increase in 4 years.
Brisbane has just been flooded.

Just like shares ..... ya gotta know when to buy. Would I buy a house in these (metro) areas now? Ummmmmmmm ..... nope. Would I buy a house in "CERTAIN" areas ..... you betcha. But I am repeating myself yet again ....... Zzzzzzzzzzzzzzzz