The future of Australian property prices

[trainspotter]

Some of the members on here won't be happy Tspot, they seemed to want to have you completely blown off the financial map
Let the cutting of the poppies begin.

ASF LAW #1 :- The tallest blade of grass gets cut down first. :

LOL ...... one investment that does not go EXACTLY according to plan would hardly rattle my tin.

 

[Macquack]

Wrong again Macquack. The subcontractors and suppliers were all paid up. It was the creditors that got a touch up for a lousy 175k. It was the directors loans to the company to keep it afloat that was the cause of insolvency as they tried to claw back their initial investment in the original business BEFORE the name change to Voyager Homes. I personally got stung for 50k and am on the list of creditors.

If you want EXACT details and not dragged across the boards I am more than happy to tell you ALL about it if you PM me.

Thank you trainspotter for responding to the question of your involvement with Voyager Homes.

 

[So_Cynical]

I suppose 50K is better than nothing.

 

[cynic]

+1

Glad all will work out OK

+2

Glad to have you back TS!

Great timing too! This thread could really utilise even more of your experienced input given that it's been infiltrated by ASF's favourite inexpert poster in recent times.

 

[Julia]

ASF LAW #1 :- The tallest blade of grass gets cut down first. :
.

+1. What a disappointment for the knockers.

 

[medicowallet]

ASF LAW #1 :- The tallest blade of grass gets cut down first. :

LOL ...... one investment that does not go EXACTLY according to plan would hardly rattle my tin.

Good to see you address the questions posed, a good sign of character.

Great show of character TS (and good choice to use PM, although you should not have to answer too personal questions at all imo)

MW

 

[moXJO]

I suppose 50K is better than nothing.

You are a bitter piece of work sometimes. Funny how you harp on about the treatment of bob b on another thread then throw up troll posts.

 

[Joe Blow]

This thread has gone off the rails again and I'd like to see it back on track.

So, I will ask everyone to please dispense with the personal attacks, deliberate provocation and off-topic chatter and confine your remarks to the topic of the thread: The Australian property market and its future.

Thank you.

 

[Miss Hale]

I moved recently. Offered 15% below the asking rent and they accepted without even flinching. In Sydney also.

We are renting at the moment and we have to move soon because our landlord has sold the property and the new owners want to live in it. Hence we have been looking around for somewhere new. As far as I can tell rents have not increased in the year since we rented our current home, in fact I think they have gone down a touch. What I am noticing is that many rental properties are sitting on the market for up to a month, usually because they are sub-standard or overpriced (or both!). I am actually struggling to find something because the standard of rental properties seems very poor to me. We were lucky with the one we are in now as the landlord was originally the owner occupier and had done good quality renovations and there was only one tenant between us and the owner being in it so everything was in near new condition. However, some of the places I have looked at are absolutely terrible, you would think it was 1912 not 2012 when you look at some of them! I looked at one place in Camberwell (very upmarket suburb in Melbourne) on Saturday and it could only be described as a dump. It's been on the market for over 90 days and now I know why - you couldn't pay me to live there! I think a reasonably up to date kitchen is vital and if you are going to renovate the kitchen put a dishwaher in, it's pretty standard equipment these days. I also had two calls from agents this morning to see if we are going to put in an applications for properties I viewed on Saturday (we're not) so I don't think they are overun by applicants at the moment. Some of the OFIs I've been to have been well attended and there are people there that seem enthusiatic about the properties but then, weeks later, they are still on the market sometimes with reduced rent. The search continues....

 

[Caveman]

This thread has gone off the rails again and I'd like to see it back on track.

So, I will ask everyone to please dispense with the personal attacks, deliberate provocation and off-topic chatter and confine your remarks to the topic of the thread: The Australian property market and its future.

Thank you.

Perhaps you should be saying this to TS

 

[skcots]

When I moved into my rental property I asked for 5% off and it was accepted without fuss. I should have asked for 10% off.

I have been considering moving somewhere nicer and noticed what Miss Hale described, the average rental price seems to have come down in the last year but there is a heap of overpriced dumps which will sit on the market for weeks.

 

[StumpyPhantom]

When I moved into my rental property I asked for 5% off and it was accepted without fuss. I should have asked for 10% off.

I have been considering moving somewhere nicer and noticed what Miss Hale described, the average rental price seems to have come down in the last year but there is a heap of overpriced dumps which will sit on the market for weeks.

Not sure if rental rises/falls is directly relevant to this thread, but while we're here - what's the logic/reason for the falls? More people buying? I don't think so. The number of renters doesn't really go down unless all these 30-something's are moving home?

 

[Tink]

Thats a good question StumpyPhantom, why would rents fall?
Either people are buying to live in or investments, more rentals on the market, or they are moving back home.

 

[skcots]

In my area there are a lot of rentals, which makes sense due to its proximity to transport and facilities.

The overall quality houses is rather poor. Units and townhouses on the other hand are mostly new so they might be seen as a better option. I suspect many people who have families would rather move to another suburb for a better quality house. If this is the case then rents in the outer suburbs are likely to be rising.

There are plenty of old houses around for sale and for lease. The real estate agents might be encouraging people to buy an old house, do it up and rent it. In fact I know they are encouraging it as my Mum recently looked at buying a townhouse in the same suburb. Easy money. The thing is renters won't pay for rubbish when there are alternatives and proper renovations or demolitions are expensive. From what I can see the people who have done these renovations have no chance of getting a reasonable rental return. Hence the stupidly high prices of some property.

I guess the smart property investors know this but I don't believe all property investors are smart.

 

[Starcraftmazter]

Thats a good question StumpyPhantom, why would rents fall?
Either people are buying to live in or investments, more rentals on the market, or they are moving back home.

Because aggregate demand for housing in general would fall (due to unemployment).

Also, why housing is not an investment, and what sorts of things have brought about this flawed way of looking at property.
http://pragcap.com/robert-shiller-housing-is-not-an-investment

 

[wayneL]

Because aggregate demand for housing in general would fall (due to unemployment).

Also, why housing is not an investment, and what sorts of things have brought about this flawed way of looking at property.
http://pragcap.com/robert-shiller-housing-is-not-an-investment

Jeeeezuz!

I am generally a RE bear and even I reckon that article is bullshyte. Interesting discussions in the comments.

 

[Starcraftmazter]

Jeeeezuz!

I am generally a RE bear and even I reckon that article is bullshyte. Interesting discussions in the comments.

It's true when you think about it. Property never ever ever goes up in real values, central banks merely inflate the artificial nominal price. And to make matters worse, governments tax this artificial inflation.

Housing is no investment, just a way to speculate.

 

[wayneL]

It's true when you think about it. Property never ever ever goes up in real values, central banks merely inflate the artificial nominal price. And to make matters worse, governments tax this artificial inflation.

Housing is no investment, just a way to speculate.

If this is true then Buffet style value investing in stocks is also a non investment.

There was some analysis done that the real value of stocks only increases via the retention of earnings, so same thing.

In addition, this is one of the hopes of long term investment, as a hedge against inflation. Ergo, if it keeps keeps pace with inflation, especially with regards to yield, then the investment is worthwhile as it outperforms cash.

Returns in excess of inflation are cream.

Both stock and RE 'investment', if well selected will outpace inflation. Gearing enhances this.

The great advantage of RE is that even when leveraged is that it is not marked to market. As long as repayments are covered (by whatever means), one can hold for the long term and allow inflation to diminish real debt.

I agree that RE investment has been rather more speculative of late, but this does not detract from the intrinsic good sense of RE as an investment class as at least part of one's total portfolio.

 

[Starcraftmazter]

If this is true then Buffet style value investing in stocks is also a non investment.

How can that be true? Companies invest earnings in R&D, equipment, factories, stores, etc - whatever it may be. Company add value by growing, they can legitimately increase they produce.

A house cannot.

There was some analysis done that the real value of stocks only increases via the retention of earnings, so same thing.

In addition, this is one of the hopes of long term investment, as a hedge against inflation. Ergo, if it keeps keeps pace with inflation, especially with regards to yield, then the investment is worthwhile as it outperforms cash.

Returns in excess of inflation are cream.

If people want to hedge against inflation then just buy gold - it's really not hard. Why bother with property or stocks if that is all you want to do.

Both stock and RE 'investment', if well selected will outpace inflation. Gearing enhances this.

The great advantage of RE is that even when leveraged is that it is not marked to market. As long as repayments are covered (by whatever means), one can hold for the long term and allow inflation to diminish real debt.

I agree that RE investment has been rather more speculative of late, but this does not detract from the intrinsic good sense of RE as an investment class as at least part of one's total portfolio.

Leverage is speculation. I bet nobody would ever use leverage if property rose in step with broader CPI. Only in some markets, and only some people and only under very favourable demographic and credit conditions, will they be successful for some unknown amount of time in their speculation. And in the end, it destroys the economy of whichever nation allowed it.

Now there's something which hasn't changed in hundreds of years.

If one was not a scumbag speculator intent to destroy his nation's economy, clearly there are better ways than property to hedge against inflation (gold) and invest with the aim to increase wealth (companies).

 

[skcots]

Leverage is speculation. I bet nobody would ever use leverage if property rose in step with broader CPI.

I don't think that is true. Tax deductions on investment properties make them cheaper then they appear. There are property investors only after an income stream, once purchased, they could not care less about the dollar value of the house just as long as someone will send them some pocket money every week.