House prices to keep falling for years

[chops_a_must]

Well for a start, there will always be winners and losers in life - if you are on an average wage your whole life then you can't expect to end up at the top of the real estate heap now can you??

Having said that, there are plenty of starter places that can be had in Sydney for $200k-ish - eg decent 2 bed units in various western suburbs and so forth. Buy one, pay it off, live rent free for a few years, and then do it again and voila you are buying a median $400-$500k property (in today's money) as your 2nd purchase, on an average wage, and 5 years later again you own it outright and live rent free until and of course after you retire.

Now if you aspire to more, well then, you better figure out how to earn more than the average hadn't you?? Then you can start out higher up the ladder.

Not indicative of where I am in my life just saying.

And no, I would never buy in western Sydney at any price probably.

As for periods of potential unemployment, well it would be better to experience that at a point where you are living rent free in a property you own wouldn't it than at a time where you have to pay ever-increasing rent??

PS: CamKawa - interesting article!

Cheers,

Beej

Not always. You own a home and you wont get any benefits.

 

[robots]

hello,

you still get benefits if you own your own home or have mortgage,

Newstart payment and concession cards etc and so you should, most pay taxes all there life and should get benefits,

the bludgers should get nothing

thankyou
robots

 

[Mofra]

Not always. You own a home and you wont get any benefits.

PPOR is excempt from means testing for retirees, not too sure about Newstart (dole) but the only unemployed these days are generally the unskilled who don't aspire for too much more than to survive until the next paycheck.

 

[r34ztune]

The beauty of property is the ability to leverage
My last deal -
- bought a unit in Brisbane March last year
- had enough equity to borrow the full amount of 125k it didn't cost me 1 cent
- borrowed 125k @ 7% IO = interest payments of $168 p/w.
- unit was renting @ $180, after 3months lease ended so I increased rent to $200- so from day 1 the unit was cashflow positive.
- After waiting 1 year sold for just over 200k., gross profit of approx 80k, I can tell you alot better than working.

Of course I have to pay CGT however this property did not cost me 1 cent to buy or maintain, so you do the math
And yes the market has changed, and I doubt this kind of deal could be made right now. However this kind of opportunity HAS been available for the last 7-8 years.
I own my own PPOR so really I couldn't care if it falls in price, and it's comforting when all my mates are complaining about their landlords increasing rents

 

[jonojpsg]

The beauty of property is the ability to leverage
My last deal -
- bought a unit in Brisbane March last year
- had enough equity to borrow the full amount of 125k it didn't cost me 1 cent
- borrowed 125k @ 7% IO = interest payments of $168 p/w.
- unit was renting @ $180, after 3months lease ended so I increased rent to $200- so from day 1 the unit was cashflow positive.
- After waiting 1 year sold for just over 200k., gross profit of approx 80k, I can tell you alot better than working.

Of course I have to pay CGT however this property did not cost me 1 cent to buy or maintain, so you do the math
And yes the market has changed, and I doubt this kind of deal could be made right now. However this kind of opportunity HAS been available for the last 7-8 years.
I own my own PPOR so really I couldn't care if it falls in price, and it's comforting when all my mates are complaining about their landlords increasing rents

Are you serious??? Where did you find a unit in Brisbane for $125k??? Mate, that would definitely be worth buying - you can't even get a unit in Hobart for that price!!!

 

[r34ztune]

Are you serious??? Where did you find a unit in Brisbane for $125k??? Mate, that would definitely be worth buying - you can't even get a unit in Hobart for that price!!!

The suburb is Woodridge, 18months ago. Still plently within 30km of cbd North and South under 200k which would make them close to neutral geared. Lots of good buys coming up
Here is 1 example.
http://www.realestate.com.au/cgi-bi...r=&cc=&c=42383979&s=qld&snf=rbs&tm=1225657980

 

[Beej]

Not indicative of where I am in my life just saying.

Oh yea I meant to say that I was using "you" figuratively in my previous post Ie my comments were meant to be more just an example rather than being directed to you or anyone else specifically!

And no, I would never buy in western Sydney at any price probably.

Neither would I, but that's mainly because I don't have to. If my circumstances were different I would have no problem buying/living out west if that's what I felt I needed to do to a) provide adequate housing for myself and my family and b) get ahead in the long term.

Cheers,

Beej

 

[Indie]

[QUOTE=r34ztune;356987]The beauty of property is the ability to leverage
My last deal -
- bought a unit in Brisbane March last year
- had enough equity to borrow the full amount of 125k it didn't cost me 1 cent
- borrowed 125k @ 7% IO = interest payments of $168 p/w.
- unit was renting @ $180, after 3months lease ended so I increased rent to $200- so from day 1 the unit was cashflow positive.
- After waiting 1 year sold for just over 200k., gross profit of approx 80k, I can tell you alot better than working.

Of course I have to pay CGT however this property did not cost me 1 cent to buy or maintain, so you do the math
And yes the market has changed, and I doubt this kind of deal could be made right now. However this kind of opportunity HAS been available for the last 7-8 years.
I own my own PPOR so really I couldn't care if it falls in price, and it's comforting when all my mates are complaining about their landlords increasing rents [/QUOTE]


That's a beautiful set of numbers, well done. You obviously timed things nicely.

No one can argue that huge amounts of money have been made from property over the credit boom phase and it's hard to get the same leverage and tax benefits from other investments. What can the govt do now to keep the bull running? Abolish CGT all together? They need something bigger than an increase in the 1st HB grant to prop this market up. Something for the investor market. Not sure that interest rate cuts will do it this time as banks are tightening lending practices regardless of where interest rates are heading. Remember, lending has to stay at or above peak levels just to keep prices at par levels.

 

[YChromozome]

Official ABS stats today show Australian Houses fell 1.8% in value over the September Quarter.

Updated Graph :

 

[Pommiegranite]

Official ABS stats today show Australian Houses fell 1.8% in value over the September Quarter.

Updated Graph :

Thanks Y, the Aussie property worm has certainly turned, and has now decided to follow the rest of the world.

I expect rate of falls to increase quarter by quarter. 2010 should be a great year to get a bargain. I'll have untold choice in St Kilda.

 

[gfresh]

Full stats: http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0?OpenDocument

Brisbane worst as at -3.3% for September quarter. As pointed out a couple of days ago, Brisbane is showing the warning signs. Gold Coast? really going to get thumped.

Perth down 4.1% over the year.

As the dying months of the boom roll off, going to be some nastier YOY figures appearing next year for the other cities too.

So far we've had...

1. House prices never fall, things are different here!!

2. Possibly final acceptance house prices are falling somewhat, heavier in some areas.

3. Stats starting to appear to show what some have been suspecting.

4. Realisation that Australia won't get off this credit crisis very lightly.. still 6-12 months time for the worst .

 

[Glen48]

Look up You Tube I. O. U. S. A and then decide what to do next.The list your house if it is not to late.

 

[sinner]

Official ABS stats today show Australian Houses fell 1.8% in value over the September Quarter.

Updated Graph :

If this chart is accurate it really proves that Australian RE market is not independant of the international one just like some people are claiming.

Aussie banks have been posting record growth and profits on the backs of foreign credit Fun times ahead.

 

[robots]

hello,

great news, down 1.8% yes 1.8% wow what a result

its a bit like stock picking isnt it, you just got to get on the right one

st kilda up 14.7% for the Sept08,

we accept all here at st kilda pommie, specuvestors, the affordability crew, renters anyone

well done to all the brothers in Adelaide, great effort over there for those doing the hard yards

thankyou
robots

 

[Happy]

hello,

great news, down 1.8% yes 1.8% wow what a result

Higher it goes, lower it will fall, only matter of time.

 

[saiter]

Higher it goes, lower it will fall, only matter of time.

I can't wait, if this happens in the next 3 or 4 years then I'll have enough for a deposit and be in a great position for a 23 year old.

 

[robots]

I can't wait, if this happens in the next 3 or 4 years then I'll have enough for a deposit and be in a great position for a 23 year old.

hello,

same here man, and with costs getting closer to rent every day another one could be on the cards next year, kicking it

thankyou
robots

 

[theasxgorilla]

st kilda up 14.7% for the Sept08,

Gains like this in a premium area like St Kilda explain why people who want to buy in these areas can be happy if they get a 5% discount off market value...10% and you got the bargain of a lifetime...IMO, of course.

 

[Reealjrd]

hello,

you still get benefits if you own your own home or have mortgage,

Newstart payment and concession cards etc and so you should, most pay taxes all there life and should get benefits,

the bludgers should get nothing

thankyou
robots

Hello Friend,

Are you serious about the falling market. Here the people invested in real state are scared about this news and falling real state sector.

 

[nunthewiser]

LOL i remember a time when STkilda , yarraville (melbourne), redfern ( sydney ) bayswater (perth ) and various other now in "vogue" suburbs could be bought for a dime a dozen because of the socio economic views of the areas ( junkies , crime etc etc ) funny how times change. well done to those that saw the potential and now are sitting pretty