House prices to keep falling for years

[wayneL]

FWIW

Pon·zi Audio Help /ˈpɒnzi/ Pronunciation Key - Show Spelled Pronunciation[pon-zee] Pronunciation Key - Show IPA Pronunciation
–noun
a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victim into much bigger risks.
Also called Ponzi game, Ponzi scheme.

Hmmmmmmmm

 

[xoa]

Where,..... I just re leased one of my IP's for $260 up from $240, There is only one other listed in that price bracket at the RE and it's not available till september.

http://www.theaustralian.news.com.au/story/0,25197,24079562-2702,00.html

The vacancy rate for inner-city Sydney is now 6.3%. Melbourne isn't far behind.

In recent years, capital gains have probably represented 80% of a property investor's windfall. Some haven't even bothered to rent their properties. Why stress out with tenants for a measly 2% net rental yield, if you expect 20% YOY capital appreciation?

This might account for the fact that there were 800,000+ vacant residential properties at the last census. As speculators realise that the capital gains bonanza is over, more rental properties will appear on the market. The government will also subsidise the construction of 100,000 affordable rental properties over the next 5 years, which will also help things along.

 

[Tysonboss1]

In recent years, capital gains ha...al appreciation? .[/QUOTE] rubbish,...

 

[wayneL]

rubbish,...

't ain't!!

Quite common over here, no reason it's not over there.

 

[Doris]

rubbish,...

't ain't!!

Quite common over here, no reason it's not over there.

Friends of mine in Calgary bought a condo off the plan four years ago for $130k and decided to keep it tenant-free as an investment. Friends and relatives from inter-province used it when they visited... and of course took care using it. This spacious 2 bed-2bath condo is now worth $600k and is in pristine condition should they decide to sell.

Good timing when world housing prices boomed on the back of 1-2% mortgages in the US!

Considering I had to replace $6k of carpet, wall oven, hotplates and a dishwasher in my IP when I rented it out for a few years, this was good management!

 

[Tysonboss1]

Friends of mine in Calgary bought a condo off the plan four years ago for $130k and decided to keep it tenant-free as an investment. Friends and relatives from inter-province used it when they visited... and of course took care using it. This spacious 2 bed-2bath condo is now worth $600k and is in pristine condition should they decide to sell.

Good timing when world housing prices boomed on the back of 1-2% mortgages in the US!

Considering I had to replace $6k of carpet, wall oven, hotplates and a dishwasher in my IP when I rented it out for a few years, this was good management!

There is no way that this is good management, missing out on four years rent is crazy, I would dare say that even if they had tenanted it for 4 years they would still get pretty close to the current sale price,.... any way 4 years rent would more than cover a repaint and floor coverings, not that you would have to re carpet after four years.

Any how if they had the cashflow from the rent, they proberly could have bought 3 of the same properties and made over a $1m in the 4 years.... leaving a property vacant is probally the dumbest thing I have ever heard,... you may as well just buy a large block of vacant land.

Not to mention that I don't think you would legally be able to claim the interest as a tax deduction if you are not generating income from the property.

 

[Tysonboss1]

Considering I had to replace $6k of carpet, wall oven, hotplates and a dishwasher in my IP when I rented it out for a few years, this was good management!

I think I would rather collect $80,000 in rent over 4 years and pay the $6,000 in maintence.

 

[Doris]

Not to mention that I don't think you would legally be able to claim the interest as a tax deduction if you are not generating income from the property.

This idea was the biggest mistake I ever made!


Three times I almost bought a block of land but decided not to as I could not claim interest and rates off my current tax.
A dwelling would be better.

But only recently I realized that when I sold the block I could have added these to my total costs for the land!

And of course the capital appreciation was not considered at the time.
If only...

 

[Spanning Tree]

In Melbourne, premier Brumby is now going to put the brakes on migration. This will mean a reduction in demand for houses. Natural fertility rate in Australia is 1.8 babies per woman, which is below the amount needed for population increase (2.1 babies per woman) which means that assuming zero immigration, natural death will outnumber natural birth and we will thus have population reduction. In other news, farmland around Melbourne will be converted into houses by the State Government, which increases the supply of houses. Higher supply and lower demand means prices must come down.

High interest rates and high property prices have been slowing demand for years, but immigration has been keeping prices high. With immigration to be cut, I can't think of any logical reason why house prices would go up.

 

[Tysonboss1]

This idea was the biggest mistake I ever made!


Three times I almost bought a block of land but decided not to as I could not claim interest and rates off my current tax.
A dwelling would be better.

But only recently I realized that when I sold the block I could have added these to my total costs for the land!

And of course the capital appreciation was not considered at the time.
If only...

I don't think a vacant block of land makes a good investment, It sucks tomuch cashflow from your portfolio and relies solely on capital gains which at best are unpredictable short term.

I wouldn't buy a vacant lot unless I had a detailed plan of what I was going to do with it, I wouldn't want to be holding a vacant lot for to long and to buy with the hope of selling it for a profit in the shorterm carries far to much speculative risk for me.

 

[Mofra]

farmland around Melbourne will be converted into houses by the State Government, which increases the supply of houses. Higher supply and lower demand means prices must come down.

High interest rates and high property prices have been slowing demand for years, but immigration has been keeping prices high. With immigration to be cut, I can't think of any logical reason why house prices would go up.

Houses in outer-suburban areas have been underperforming the market for years, I doubt newer developments in areas with pitiful infrastructure will come even close to tracking inner-city, established suburbs. Given a stagnation in prices in most (not all) suburbs over the next 12 months, even continuing immigration wouldn't help many of the outlying areas.
Governments by nature can't think beyond their next term, hence a nation-wide infrastructure shortage in both transit & industrial clases. Makes suburb-selection for investment much easier though

 

[CamKawa]

What are "auctions with no result"? Are these auctions that passed in but the REA has failed to report them to REIV?

Weekly Auction Results

Why wait until tomorrow? Get the latest auction and private sale results first from the REIV every Saturday and Sunday evening.

Saturday 2nd August 2008


Enzo Raimondo, REIV CEO said The number of homes sold at auction passed the 10,000 barrier today with 271 homes sold resulting in a clearance rate of 63 per cent, slightly below the year to date clearance rate of 66 per cent. There were 428 auctions held today with 271 sold, 157 passed in, 107 of those on a vendors bid.

TOTAL AUCTIONS
This week: 428
Last weekend: 445
This time last year: 491
S Sold at Auction: 211
SB Sold before Auction: 56
SA Sold after Auction: 4
Passed in: 157
Passed in on vendor's bid: 107
Clearance rate: 63%
Postponed: 0
Withdrawn: 2
Auctions with no result: 54

Source: http://www.reiv.com.au/home/inside.asp?ID=142&pnav=141

 

[CamKawa]

Looks like I'm not the only one questioning the ethicalness of the RIEV.

Split threatens real estate body

A MAJOR split has developed within the Real Estate Institute of Victoria, with its biggest member threatening to withdraw over ethical concerns that the industry group allegedly underquoted one of its own properties - potentially breaking the law.

The threat by Ray White Real Estate - the largest agency in Australia - comes days after a respected board member, David O'Callaghan, resigned, saying he had lost confidence in the REIV's top executive, Enzo Raimondo, and president, Neil Laws.

Andrea McNaughton, chief executive of Ray White in Victoria, told The Sunday Age the REIV's role in underquoting its Camberwell property "sends a curious message".

"As a large group that does not rely on the REIV for its training and support, but rather for its portrayal and leadership of the industry, (we believe) this incident does little to support that notion of value for its fees," she said.

"We believe it is the role of the REIV to challenge the long-held negative stereotypes of agents doing wrong things by the public. We expect the REIV to typify the principles of ethical conduct at all times."

 

[explod]

Looks like I'm not the only one questioning the ethicalness of the RIEV.

."

Could not agree more. Silence is assent.

The REIV have been a disgrace here in Victoria for years.

The value of a property is of little interest, turnover is. Lincensed thieves.

 

[wayneL]

Could not agree more. Silence is assent.

The REIV have been a disgrace here in Victoria for years.

The value of a property is of little interest, turnover is. Lincensed thieves.

Enzo is a villain from way back. Silence is not necessarily assent, silence can be the ignoring of BS.

Enzo is just not worth commenting about.

 

[robots]

hello,

i guess you have to dig and dig when there's not much to hang your hat on,

gee, the Q2 showed massive drops didnt it, the world was going to end, people are going to pick up front row blocks for 50k,

it all got smashed after march etc, hahahahahahahaha

thankyou

robots

 

[Smurf1976]

leaving a property vacant is probally the dumbest thing I have ever heard,... you may as well just buy a large block of vacant land.

I noticed plenty of empty houses during the boom. Apparently they were mostly owned by interstate "investors" who had never seen the house, or for that matter anything else in the entire state. They just totally trusted the real estate agent that it was in a decent suburb etc - it could have been in the middle of nowhere for all the buyer knew.

 

[explod]

hello,

i guess you have to dig and dig when there's not much to hang your hat on,

gee, the Q2 showed massive drops didnt it, the world was going to end, people are going to pick up front row blocks for 50k,

it all got smashed after march etc, hahahahahahahaha

thankyou

robots

The bottom line is a long way off. Younger people do not believe what isa happening. The problems we see now with higher costs across the board will not be in the stats for 12 months yet.

Those of us who have been watching the business for 50 years can see ahead, and it is going to hurt.

 

[wallyt99]

About me:

26 Year old Australian.
Masters Educated.
Engaged.
Combined Stable income: 100k.

Me and my Fiance are considering buying....although everyone advises against it. Perhaps I can get some advice in my situation?


We are looking at a potential property which is within walking distance of my Mum. (free childcare) The block has a delapidated 3BR weatherboard on it ATM, and plans and permits for a 2BR unit at the back. It is selling at 260+. House prices in the area range from 270 to 360.

Purchase 265k.
Develop Site. 100k.

There are then many options....Whether we sell, rent ect. is irrelavent.

2 properties each @ 200k+

I feel that now is a good time to buy, as the uncertainty in the market means we can squeeze a potential seller for a good price.

I consider this to be a long term investment, and the long term trend of an economy is up....so should I really wait on it?


Any advice greatly appreciated.





Oh.....and having been looking for 3-4 months now, I can say good value (position, price, layout) houses are still selling. However the ones which don't offer alot sit on the market for a long time.

 

[Macquack]

About me:

26 Year old Australian.
Masters Educated.



Me and my Fiance are.......

Should it be "My Fiance and I...."

Sorry to be picky, but you left yourself wide open.