The future of Australian property prices

[white_goodman]

Many people with income are buying positive geared properties in the US also. I think a big problem over there is that the minimum wage is so low, hence when people lose jobs and have to take new ones, the pay can be massively lower. So obviously you need to know the market you are buying in, and the liklihood of rental being maintained

would they be better at maintaining the rental if minimum wage was higher?

US is a thousand markets within one, personally speaking i think its a waste just buying one (in terms of all the effort - accounting etc), but if you can set it up for 3+ properties it may be worth it, tho foreign financing is bullsh*t hard - assuming people are looking at the uber cheap $70k per home markets. If i could find financing for Vegas id be stepping in, yields are juicy

 

[white_goodman]

I honestly don't think they could pay people to take on loans for new houses at the moment

id disagree in part, theres such a large foreclosure inventory in these depressed markets that prices will be stagnant for a while, but its still a good time to buy imo, people would love to buy, unfortunately their credit scores are up the sh*t and the will to finance/lend for resi purchases isnt there. Rentals are more then mortgage repayments, the only logical reason not to buy is confidence, which is a big factor.

 

[prawn_86]

would they be better at maintaining the rental if minimum wage was higher?

haha i am well aware of your position on minimum wages.

What i was trying to get at is that there is a wide spread between rich>average>poor in the US. Whereas here in Aus if you have a FT job you are generally able to service a 2 - 300k mortgage, whereas in the US you might have a FT job but only be able to service a 50k mortgage with the same % of income. Am i making sense?

So basically, as many of us have said before, it would take a lot of unemployment to see a US style crash here in Aus.

I agree with the pain in the ar5e for buying o/s, hence why i am not doing it, although many of my clients do and have bought properties in the 50 - 200k range in the US.

 

[sptrawler]

haha i am well aware of your position on minimum wages.

What i was trying to get at is that there is a wide spread between rich>average>poor in the US. Whereas here in Aus if you have a FT job you are generally able to service a 2 - 300k mortgage, whereas in the US you might have a FT job but only be able to service a 50k mortgage with the same % of income. Am i making sense?

So basically, as many of us have said before, it would take a lot of unemployment to see a US style crash here in Aus.

I agree with the pain in the ar5e for buying o/s, hence why i am not doing it, although many of my clients do and have bought properties in the 50 - 200k range in the US.

I think you are spot on with that analysis, prawn_86. Also I think that is what labor are talking about with the big Australia policy.
They want to get rid of this ability for plebs to ascend through to a comfortable lifestyle. The ironic thing is, the plebs think the coalition is the enemy.

 

[Julia]

Not a bad little bedsitter in Cairns for just $62,500
http://www.realestate.com.au/property-unit-qld-cairns-108323271

 

[Ves]

Not a bad little bedsitter in Cairns for just $62,500
http://www.realestate.com.au/property-unit-qld-cairns-108323271

Looks fantastic when you read this...

Some of these units are permanently let, this is one of them $160 per week returns. That is a gross return of over 12%

But not two lines later...

Body Corp fees which includes electricity close to $6000 per year

That is about 70% of the rent!

Wow! I have never seen them so high. It is amazing how lots of these holiday / strata type apartments are run for the benefit of the body corporate managers, rather than the actual owners. It never ceases to suspend belief that people buy them without fail, not realising the scam they are perpetuating.

How many pennies do you have left after you finish paying the council and water rates?

 

[white_goodman]

haha i am well aware of your position on minimum wages.

What i was trying to get at is that there is a wide spread between rich>average>poor in the US. Whereas here in Aus if you have a FT job you are generally able to service a 2 - 300k mortgage, whereas in the US you might have a FT job but only be able to service a 50k mortgage with the same % of income. Am i making sense?

So basically, as many of us have said before, it would take a lot of unemployment to see a US style crash here in Aus.

housing price declines before unemployment declines. Therefore the relationship and causality can be reversed even though it logically can work the way your saying

 

[Mrmagoo]

Not a bad little bedsitter in Cairns for just $62,500
http://www.realestate.com.au/property-unit-qld-cairns-108323271

I must find a way to live in QLD.

 

[CanOz]

Looks fantastic when you read this...



But not two lines later...


That is about 70% of the rent!

Wow! I have never seen them so high. It is amazing how lots of these holiday / strata type apartments are run for the benefit of the body corporate managers, rather than the actual owners. It never ceases to suspend belief that people buy them without fail, not realising the scam they are perpetuating.

How many pennies do you have left after you finish paying the council and water rates?

Yeah, this is weird. Why don't they raise the rent ?

 

[Ves]

Yeah, this is weird. Why don't they raise the rent ?

The coastal holiday / housing markets are really depressed up the east coast of Australia. No demand!

 

[moXJO]

Be very careful buying units in cairns. A very high % are vacant for too much of the year with very high fees attached.

 

[MrBurns]

Be very careful buying units in cairns. A very high % are vacant for too much of the year with very high fees attached.

Yes you have to get all the ourgoings, one I enquired on in Port Douglas had out goings of $500 per week

 

[Miss Hale]

Be very careful buying units in cairns. A very high % are vacant for too much of the year with very high fees attached.

These look like holiday lets that are not being used by holiday makers due to the downturn in tourism and so are being let out for longer periods. I've seen similar for sale/let in Mackay. Not sure whether they would be good investments.

 

[Julia]

Be very careful buying units in cairns. A very high % are vacant for too much of the year with very high fees attached.

I only put up the example out of interest. Probably only achieve full occupancy during winter which would render the yield unacceptable.

 

[moXJO]

I only put up the example out of interest. Probably only achieve full occupancy during winter which would render the yield unacceptable.

I'm sure there are guys making money out of these things somehow, I'm not really up to speed in that market. As with other investments I suppose the ratio is 90% suckers to 10% people that turn decent coin.

 

[CanOz]

Anybody have any opinions about Sydney CBD apartment prices? Have they come down much? Will they come down much more? I'm not looking for a crystal ball, just some decent perspective to frame a start on some research....

Thanks,


CanOz

 

[white_goodman]

Anybody have any opinions about Sydney CBD apartment prices? Have they come down much? Will they come down much more? I'm not looking for a crystal ball, just some decent perspective to frame a start on some research....

Thanks,


CanOz

prices have held up the most nationally in this market in recent times... so your not getting Noosa type discounts, still pretty expensive relative to stuff just out of the CBD

 

[CanOz]

prices have held up the most nationally in this market in recent times... so your not getting Noosa type discounts, still pretty expensive relative to stuff just out of the CBD

Yeah thanks, seems as though prices have turned up again, i guess that can be expected as rates turn down...

Just looking to buy our first place, an investment property that would be relatively easy to rent. We would like to hang onto it for long term too.

CanOz

 

[pilots]

Not the same here in Perth, rental houses here sell the same day they go on the market.

 

[white_goodman]

Yeah thanks, seems as though prices have turned up again, i guess that can be expected as rates turn down...

Just looking to buy our first place, an investment property that would be relatively easy to rent. We would like to hang onto it for long term too.

CanOz

from my personal opinion id wait for interest rates/cash rate to bottom and possibly have its first up tick, otherwise you could be catching a falling knife in terms of prices, the overhang of private debt burden and the balance of people willing to pay down debt compared to take up new debt means imo that potential cap growth will be restrained. Mortgage finance is predominantly refi market which doesnt put any upward pressure on prices, however with every central bank replicating helicopter Ben im assuming growth in asset prices.