House prices to keep rising for years

[nth brisbanite]

What on earth makes you think the banks will offer you a long-term loan at 3-4% ? The US now has 0% central bank rates, and the lowest long-term rates are still around 5%. Rates are getting closer to the bottom than the average punter thinks.

Westpac were recently offering 4.99% fixed over 3 years. If the financial situation worsens in Australia, can't see why banks won't get down to 3-4%.

 

[chops_a_must]

Let's first remember it's a free country. You, they, them, whoever, does have access to these areas.

This concept that real estate investing is about averages doesn't work for me. I don't look for average situations or statistics...I look for exceptional opportunities.

I'm starting to see some in Sweden, Holland and Australia. But my deflationary expectations suggest there could be more and better when some of what we've seen in equity and money markets hits the real economy in 2009. Of course if I'm wrong about that I'm ready to move quickly either way, if it comes to that. Are ye?

I know what you are saying. But, most people aren't like you or I, and hence, the average.

Anyone expecting average returns that have got in over the last year or three, at average prices, are absolutely kidding themselves.

 

[noirua]

Amazing stuff, well not really.

Just had notification from the bank that some Brisbane property I had re valued last week, has increased by on average 12% on the valuation 18 months ago and the extra funds, if I choose to use them, are there for the taking.

Merry Xmas

Dropping house prices and credit crunch? Apparently only for some

Can you cite any property showing such an increase (12%) in Brisbane during the last 18 months?

 

[robots]

hello,

get on down to St Kilda, 14.8% for units and 14.7% for houses in one quarter

less than 30 sales in that quarter, fantastic

also many others Melton, Broady i think

they will be queing up out the front of my joints soon just to get a peek

thankyou
robots

 

[Glen48]

How many other can see the connection between house prices and say a XYGT having gone from 20K to 200k?
You will only win with current House prices if you have cashed in before now.

 

[Passive]

Yah, but at my age, I would not even be close.

I would expect within a couple of years to be able to buy some things in Perth that were affordable to me. But that is certainly not at current levels. Apartments between 120-150 inner city, is what I would be expecting. Otherwise, wont bother. The supply is going to be ridiculous here over the next few years. So unless the prices drop, I'll keep telling them they're dreaming.

You've given up before you started. Decent apartments between 120-150 will just not eventuate - at that price you will be competing with a lot of cashed up boomers and we have the equity and will get in to maximise our income. At these low rates , and lower to come buying units so cheap will be a no brainer if only from an income perspective. You would be looking at a drop of 50% on good stock and I venture to say someone is dreaming and its not them!

On a fixed loan , backed by other resi , I would be positively geared on stuff at that price so I and a ton of others would qualify well before many of the younger gen - that was the reality in the last boom and fortune will favour those with equity and serviceability more than ever. Best you can do is try and access the avenues available to FHB assuming you are one. But you will wait in vain for a collapse - cause it ain't comin - not this time anyway!

The regional migration is beginning, we still have high levels of external migration, for how long I don't know and soon the average property investor is going to start pulling their houses from the market as are formerly distressed sellers. Supply would be a problem if houses were empty but that is just not the case. The recession we had to have was infinitely worse than what we have here at the moment and everything is being done to turn this around. Then rates were huge and Keating was in denial. Rudd has learnt from the past.

 

[tech/a]

Merry xmas everyone.

Glen.
Its a business to me.
I have sold some properties and freehold others.
I have completed 2 developments in the past 8 yrs with another on the board now. Obviously funds were used to decrease gearing.

Passive has it pretty well nailed.
Gearing is very low and funds and equity are just sitting there to be used given the right opportunity. Serviceability is now the governing factor.(Always was really)

I have been where you and Chops are.
You have to start at some point (or never) and trying to time it perfectly just wont happen unless you fluke it and you wont know till after the fact.

Fear is a particularly powerful emotion.
Look for how you can do it rather than why you cant!

A friend once observed.
Better to risk your $50k than your $2 million!

 

[noirua]

Suburb profiles, Property prices* for houses and units etc.,
http://www.domain.com.au/public/suburbprofile.aspx?mode=rent&suburb=BRISBANE&postcode=4000

 

[kincella]

Merry Christmas to all
Some good posts and information from posters on this site....agree with Passive....the cashed up society are well placed ...it is real competition for the other buyers....and generally if they already own properties they have the experience to back them....versus the nervous, intrepid first home buyers...

Tech...you are spot on about...look how you can do it, rather than why you cannot....

I am not knocking FHB, and I dislike the competition between us oldies and the young ones on any subject.
But I do believe a section of society today has a very flippant attitude towards their finances...easy come, easy go attitude....which is not conducive to financial success.

Did anyone watch the TV series 'the nest' on SBS....you can catch it again on the website.
I only saw the 4th and 6th final episode....they took about 6 young ones who were living at home....sent them all into shared accommodation for 2 weeks, then sent them back home. The parents wre happy for the kids to stay at home,,,thinking the parents were helping the children out,,,and for the kids to be saving for their own homes.....

Bernard Salt said the parents were doing the kids a disadvantage.....the kids were not saving or learning to be independent....in fact the kids were doing the opposite,,,spending and wasting money like there was no tomorrow...they all felt they could come home at any time....they were not independent. It was also harmful for the parents...they were spending their retirement money on the kids, with no future payback or compensation for the parents investment.

My advice for the kids is to do it like we boomers did.....nothing was too easy, it was hard work (financially) for most of my early life and career, but we did party and have a great time, all within budgets and goals.....A home to me was a forced saving, we bought our first home when I was 21. It forced you to stop wasting and spending money, the great australian dream did eventuate, as although it was our family home, there was the payoff down the track. Sold for about 8 times the cost when we divorced.

In my late 30's I opted for a full time career, moved to Melb, my income doubled...I worked hard and I partied for about 4 years. New found freedom disease....then in 1987 stock market crashed and my reasonably young employers took fright (they had more work than they could handle, reality, but they were fearful, in their minds, and I could see the word DOWNSIZE coming)
I took the opportunity to start my own business (data confirms most start up businesses start this way in such a climate)
I missed buying property at the then, bottom of the market...simply because banks wanted a 5 year history....and mine was a new business. So I just concentrated on my business, gritting my teeth every now and again as to how I was missing out on the property market.
I started investing in stocks, and got caught in the tech wreck crash.....I had made some big gains but did not get out quick enough....

Then I looked around at property....Melb seemed too expensive, but I saw an opportunity in the region where I grew up....I figured people like myself would look for a safer option....the media were screaming tech wreck.....but were silent on property.. *** I have similar thoughts in today climate

By August 2000, I found some little bargains....noticed most people turning up at inspection times and auctions were the same age....and city people in regional areas means...tree and see changes.....They were selling their big city priced homes and opting for the country life, at half the price and with cash to spare.
The FHOG was in and agents were asking an extra $7000-$10,000 a piece, as soon as I told them not a FHO they dropped the price immediately....
By 2004, I had bought 4 resi props and 2 commercial props....I sold off 1 resi for triple the price and 1 commercial for triple.....
I recall the media screaming by 2001 that property was too high and would come crashing down....well they got that wrong.....
I must admit I was not looking for a bottom in property to enter....it was all about my circumstances and timing....and I did have a 10 year investment plan. Some of those plans paid off within 2-3 years rather than 10. I had no intention of selling any property under 10 years...however new opportunities arose, which I believed fitted into my longer term plans.

One of the longer term plans was to buy a retail shop, in a specific street and location. I waited 5 years for one to come onto the market (tightly held area, most shops are held in trust and passed down through 3-5 generations, which was also my plan) My budgets and plans, forecast downturns and un expected events, so cash flow was paramount together with sufficient funds set aside. So I sold the other commercial property....a sacrifice, but it was never going to match the returns on the new property. The sale of the other resi prop was made in order to re-develop another property, again providing better capital and income returns. Each time the profit on sale of one property was reinvested in another better performing property.

To sum up this post.....have a plan, with budgets and forecasts of different scenarios. You dont have to wait for the bottom of the market to make money, you just have to be in a position to recognize an opportunity. You need to do sufficient research for the market you are entering. And you need to position yourself financially to take up some of those once in a lifetime opportunities that present themselves from time to time.

I have probably spent more time researching and understanding the pitfalls and benefits of commercial real estate...to the detriment of my other business...however the commercial property is a business and earning a good income equivalent to any other form of income...and in time it will become a passive income....'.you reap what you sow' springs to mind.....or that old pc saying...rubbish in equals rubbish out.....
The same quality time spent on resi props should ensure you are successful.
Cheers
ps it seems well pathetic to be here on xmas day......but hey its my first by myself, by choice, a totally free day, devoid of any committments, and I am enjoying this.

 

[joeyr46]

You've given up before you started. Decent apartments between 120-150 will just not eventuate - at that price you will be competing with a lot of cashed up boomers and we have the equity and will get in to maximise our income. At these low rates , and lower to come buying units so cheap will be a no brainer if only from an income perspective. You would be looking at a drop of 50% on good stock and I venture to say someone is dreaming and its not them!

Passive if I'd suggested that a house in Brisbane would go from $150000 in 91 to $750000 in 2005 would you have believed that Especially if you knew wages would only rise 50% or so. I don't know how far prices will fall but the bias is to the downside at the moment and prices are dictated by too a large degree banks willingness to lend and the criteria they lend under(IMO) not our pricing model of costs or anything else because most of us don't really know the costs, and I have seen houses sold for much less than replacement cost and have bought a few myself. but you are right that cashed up people will put a bottom under prices at some point and then as banks start to lend again other people will follow. At this point banks have only tightened lending criteria but I have seen them completely stop lending on houses, interest rates were going up strongly at the time so there was pressure on them and their resources were stretched This could happen this time with falling interest rates and then watch the falls start . So I would,nt rule any prices out

 

[kincella]

Joey...I heard the talk about the banks clamping down....but 2 weeks ago, got angry with my lender for not passing on rate cuts...called CBA to gain infor and whilst talking to them generally....he said I had been approved for refinancing loans...took 10 minutes.....I could not believe how easy it was.

The other lender for the commercial prop was also not passing on the rate cuts...ING and BOQ were offering 6% fixed rates...so called my lender and said I am leaving...they dropped it that day to 7.65% which is the same as me paying another lender set up fees of 2400 and a 6% rate

In all my years of borrowing I have never seen it so simple and easy..all over the phone in a few minutes.....

maybe people need to be more specific ....banks will probably stop using 100% finance in the current climate.....or not lend to unemployed people etc or apply some risk re house prices...say lend only 80% etc

there are people out there with good credit history and equity and finances to back up their borrowings....it will not affect them

 

[Passive]

Joey

The comments you make really epitomise the nature of the market. Totally unpredictable and therein lies the danger. Often to buy a house in itself is one major accomplishment as you no doubt are aware. Once in, if budgetted correctly, the fight is then on to hold on until it becomes easier, either owing to increase in wages or inflation... Your first house is not an investment in the strict sense of the term - home first and foremost. Investment in housing begins with house 2 - not before!

My point is that 4 times in my life I have had to start again one way or another and it has never been easy. I actually had to be damn inventive, determined and downright resourceful as I don't have anyone in the family who had money. In the 90s I bought heavily , firstly primary dwelling, then 2 units, another number of homes and each one was a task. Never was easy!
I did believe I would treble my money and did - treble on the home value but at least 1000% on the actual money put down! Thanks to leverage and a belief Perth prices were horribly undervalued.

Evertime I read that property was dead in the water I felt ill, everytime council rates time came around I felt ill, ad nauseum. Everyone around me thought I was daft. However as I had seen 3 times before , despite the naysayers I hit the jackpot and started to consolidate. Have been bored for last 2-3 years and all becoming interesting now. As Kincella knows I was going to buy set of 8 units to help kids but the change in the market and drop in rates is allowing me to refocus on Perth and am now watching to buy here again. There are the opportunities to buy - not across the board but when they do come up I will be contacted first because of my network and thats how it works.FHB are the last in the queue with bargains.

Interesting side point is that I do not really believe that for what you get houses have not really gone up that much allowing for inflation but leverage has allowed me to to very well and inflation is tearing down the value of my remaining debt and rates are making it all look good again.

 

[Passive]

Kincella

In Perth resi had dropped commercial on its head by miles. I sold one of my houses and was quite pleased with myself as I would have a tidy sum in the bank. Almost to the day my investment house settled my landlord over a business interest told me he was selling and under duress I bought - otherwise good bye business. Nothing available at the time. Begrudgingly I settled in full and mutter mutter had my titles and first commercial property which had gone up very little in the last 10 years but 6 months before I bought went up 30%.
Not impressed - however 12 months later it went up by another 60% and rents skyrocketted and is well placed in good area. Hence my intro and slowly becoming a convert as this will be my pension in my dotage. Not after capital growth here - leave that to resi. As for my super - stuffed - thank goodness for my property interests and that they are in Aus - and no their values may decline here and there but if they have not collapsed by now they never will. One of the biggest blessings is that we are a mere speck on the world economy and therefore will not follow other basket cases if it has not done so by now.

 

[kincella]

passive..so you fell into the commercial property....a left of field moment, that comes unexpectedly, you were lucky/or fortunate you could take up the offer. Were you able to negoiate it down ? Sometimes it turns out to be a godsend in disguise. Pleased it is working well for you know.

One of the links I sent to you today had news about Perth Office space....not sure of the date, but it was saying it was a tight market. Another article was about Sydney and Melb office space....all the big boys were leaving in droves....the ones that were in trouble recently...and a hive of activity in sub letting the premises....so assuming some of those miners go under or wind up, one might think there would be a surplus of office space coming up in Perth..

Sounds like you have been learning the hard way..you said had to start over several times...lets hope you have got it right by now.

My shops are in a trust, cannot be sold or split until the youngest grandchild turns 25, but the parents share the income in the meantime. Had to do the will with so much at stake. The children do not have my drive and need to be careful with partners, at this stage in their life. So its just about protecting them and ...hoping they will gain the necessary skills to look after it themselves.
It will be worth just so much more in another 20 years time
I was going to put it into a superfund for tax purposes, but in the event of my death it would have been sold and split up.

In the meantime I do consider it my superfund, its a nice earner, and the capital growth has been phenomonem.
Good luck with everything
cheers

 

[Lancelot]

Can you cite any property showing such an increase (12%) in Brisbane during the last 18 months?

Re: House prices to keep rising for years
Suburb profiles, Property prices* for houses and units etc.,
http://www.domain.com.au/public/subu...&postcode=4000

Not that I would use domain figures as they are unreliable IMHO. The only valuation that counts comes from a valuer based on previous sales, but, as you like to use domain......................................

http://www.domain.com.au/public/suburbprofile.aspx?mode=rent&suburb=Oxley&postcode=4075

http://www.domain.com.au/public/suburbprofile.aspx?mode=rent&searchterm=wynnum

http://www.domain.com.au/public/SuburbProfile.aspx?mode=rent&suburb=Windsor&postcode=4030

http://www.domain.com.au/public/SuburbProfile.aspx?mode=rent&suburb=Red Hill&postcode=4059

 

[chops_a_must]

You've given up before you started. Decent apartments between 120-150 will just not eventuate - at that price you will be competing with a lot of cashed up boomers and we have the equity and will get in to maximise our income. At these low rates , and lower to come buying units so cheap will be a no brainer if only from an income perspective. You would be looking at a drop of 50% on good stock and I venture to say someone is dreaming and its not them!

Income? You're dreaming. Occupancy will be the biggest factor in inner city Perth in the future.

And if it doesn't drop that much. Pretty simple really. I'll buy and live in Melbourne. Last time I looked better locations in Melbourne were still cheaper than Perth. No way I would buy in Perth unless that came back into line, and it has a long long way to go when you factor in likely occupancy problems with all these apartments piling in.

 

[Passive]

Proportion of flats and high density in Perth is amongst the lowest in Australia and a lot of it is newish and that adds to the price. Top end is hopelessly overvalued but seems to be holding its own. Your idea re Melbourne is a good one and no malice intended. Sometimes it pays to move away and build equity where there is obvious value and potential.

Just can't see your Perth inner city scenario unfolding.

 

[chops_a_must]

I mean, if it doesn't get where I think it might, no biggie, like I say, I'll look at Melbourne instead.

Although Perth has the lowest density in Australia, it probably is also going to have the highest percentage change in supply in that market over the next 5-10 years as well - as current projects get finished and the various infill projects come to fruition.

And yeah... it is absolutely ludicrous that you pay 350k for something you can get in Southbank for 220-250. I mean... you'd be insane to buy that in Perth...

 

[Passive]

passive..so you fell into the commercial property....a left of field moment, that comes unexpectedly, you were lucky/or fortunate you could take up the offer. Were you able to negoiate it down ? Sometimes it turns out to be a godsend in disguise. Pleased it is working well for you know.

One of the links I sent to you today had news about Perth Office space....not sure of the date, but it was saying it was a tight market. Another article was about Sydney and Melb office space....all the big boys were leaving in droves....the ones that were in trouble recently...and a hive of activity in sub letting the premises....so assuming some of those miners go under or wind up, one might think there would be a surplus of office space coming up in Perth..

Sounds like you have been learning the hard way..you said had to start over several times...lets hope you have got it right by now.

My shops are in a trust, cannot be sold or split until the youngest grandchild turns 25, but the parents share the income in the meantime. Had to do the will with so much at stake. The children do not have my drive and need to be careful with partners, at this stage in their life. So its just about protecting them and ...hoping they will gain the necessary skills to look after it themselves.
It will be worth just so much more in another 20 years time
I was going to put it into a superfund for tax purposes, but in the event of my death it would have been sold and split up.

In the meantime I do consider it my superfund, its a nice earner, and the capital growth has been phenomonem.
Good luck with everything
cheers

Did a bundle in the recession we had to have! Migrant from Africa - anti-apartheid protester et al does not win you brownie points - volatile times and I got out-had to start again - all does shape you.They reckon its character building - have enough of that! Financially very well off thanks to my belief in residential real estate especially through leverage. Owe a huge debt to Jan Sommers - whilst I had a basic idea she through her books chrystallised it all for me. Not a plug just genuinely appreciative for the good advice based on experience of an average person. Perth is at a plateau but in the long term will reignite as the resources industry has a while to run with the China/India phenomenon. Can now afford to be patient.

Doing my due diligence on commercial - thanks for the heads up. Never too late to learn. Guess that is what leaves me flabbergasted is the rebuke you get from the know alls when its infinitely smarter to learn from successful practitioners. Will pick your brain from time to time on commercial.

 

[knocker]

hello,

get on down to St Kilda, 14.8% for units and 14.7% for houses in one quarter

less than 30 sales in that quarter, fantastic

also many others Melton, Broady i think

they will be queing up out the front of my joints soon just to get a peek

thankyou
robots

lol Who the hell wants to live in Broady or melton. or even st Kilda for that matter. Gees your a card robots Anyway merry xmas.: