House prices to keep rising for years

[Lancelot]

The property market wont have bottomed until everyone including all of you and I just aren't interested any more, all the spark will have gone there will be no rush and all the fever of the boom will have been forgotten.

Some of us are always interested, was last time, dont see why not this time

 

[robots]

hello,

its been that way for 12mths now, many temporary developers gone down, slashed staff etc

those with $(relationships) have survived

this is why its great to be in property, look at construction levels the slide is on and on,

only those with the income ($) will last or return in the near future, fantastic

slow and steady she goes, who knows

thankyou
robots

 

[chops_a_must]

Im not familar with the Perth market, but here is adel we rent a 2br apartment for just over $200 pw in the nicest suburb, and within walking distance to the unis.

Why doesnt your son get a mate with $150 pw each and get a $300 pw place?? Save them both $25 pw and have more room and less people probably....

It's 140 pw here. Very close to a bus that goes straight to the uni. 4 minute bus trip.

Two yellow thumbs up MrBurns.:iagree:

Last time this happened (in WA atleast) was 20 years ago and probably won't happen again for another 20 years.

Try 99/00. But property was absolutely rooted here for the better part of 15 years here after 87.

 

[robots]

It's 140 pw here. Very close to a bus that goes straight to the uni. 4 minute bus trip.



Try 99/00. But property was absolutely rooted here for the better part of 15 years here after 87.

hello,

not rooted when you getting principle and interest paid off is it?

thankyou
robots

 

[Passive]

Chops

$140 - that is in the heart of suburbia - closer to UWA or ECU in Mt Lawley its dearer and if cheaper they are usually a depressants dive!

Property was not rooted in WA - the old ethos applied to buy quality and there was modest growth over the years. That is what I hope it reverts to for then that stability plus leverage allows for some good profit over the years. Don't really like this boom and bust bizzo as it forces you to sell to lock in inordinate profits and causes the hiatus we see now. In essence all this is just no different to most states. Was not long ago that Victoria was a basket case, now NSW - just cycles you work with and for the long term punter if it is 20 years of sane growth great, but if in the accumulative stage and a boom comes along - yahoo!

 

[kincella]

passive, when I bought all those props back around 2000- 2002, I had excel worksheets with lots of ifs and buts..different scenarios...a modest 10% cap growth column and a 15% cap growth.....and I was more than happy for the plan to take its time and just cook and simmer away.......little did I know what was just around the corner....
but hey, did the media do me a favour ??? they were screaming, sell sell sell its all going bust....at the same time buyers were saying...I want to buy your prop....one sold first day on the market....I just put it out there to see if it was for real
But then all hell broke loose from 2003 to 2004...the market was paying the estimated 10 year mv within 2 years, and triple the value on one within 2 years....I know what you mean about HAVING to sell....well they had come to the end of their life in my portfolio...achieved the results I was looking for...and I sent them on their way.....
I have more simmering away for the next time
cheers

 

[chops_a_must]

hello,

not rooted when you getting principle and interest paid off is it?

thankyou
robots

It was a good time to buy, if you had a good job. But wage growth was very slow here, hence little capital appreciation. The point being that property tends to wallow after big hits. And that patience potentially pays bigger dividends.

I doubt the way most specuvestors treat property now would have done anything but chew you up in that environment.

passive, when I bought all those props back around 2000- 2002, I had excel worksheets with lots of ifs and buts..different scenarios...a modest 10% cap growth column and a 15% cap growth.....

How on earth can you have a modest cap growth assumption that is well above long term growth rates?


And Passive, I agree completely about it returning to how it was. For mine, typical property investment should not used as a means for pure capital growth, unless you are an actual developer. Like I've said many times, property should be used for income, and anything else I don't think should come into normal strategies unless in an abnormal environment.

Too many property types have either forgotten that, or never experienced the need to adopt that strategy.

 

[Passive]

Good thing about being in - despite whether for income or capital - the abnormal environments arise and make you a fortune. That is reality and keeps defying the odds much to my delight.

In 1991 I was suggesting to my friends with money to stack their share portfolio with cheap resource stocks, did not follow my own advice, but this time round, those shares that have the resources and are at 1c or 2c I will buy - next year or two and be it 5-10 years time I'll hit the jackpot. You just have to love WA - better than lotto if you play the game. The game is - How easily everyone forgets that when everything seems so different this time its just the same as the last. I am shocked at how history just ends up repeating itself - just the detail differs - and with leveraging real estate is an unbelievable deliverer of wealth - and the journey is as boring as hell.

With the speccies I am developing a useful network and hope to get in on the seed capital side of things and the real estate will give me the borrowing capacity. Real estate equity gives one so much scope.

When it comes to borrowing when opportunities arise you have to go to some of the most economic and financial illiterates on this planet to let you aspire to success - to wit your local bank manager - and what does he and she comprehend - colatteral - against what - real estate of course - anything else and they are out of their league. This asset class is far more than its intrinsic value - it is also what it empowers you to achieve - rightly or wrongly!

 

[kincella]

well the history charts were showing about 8% on average consistently, I like to round things up to easy numbers....and there was this big shift going on for the tree and sea change lifestyles....
You would have to be amongst it to recognise it...all these city people we kept meeting from Syd and Melb...told us they had sold their big city props and were looking for a tree change....meet them out having coffee/dining....the streets were packed with 'new faces'....I knew something big and different was on the cards.....the neighbours were buzzing, it was like it had become the hottest spot for tourists...it was like that for a couple of years....a surrounding town 100klms away doubled the population in 2 years from 3000 to 6000....all newbies/ retirees from the cities....and with money to spend....
it can take years for those changes to show up in ABS stats....
cheers

 

[chops_a_must]

ROFL.

You round the conservative figure for growth UP, above long term growth, and still call it modest?

That is seriously funny.

 

[robots]

It was a good time to buy, if you had a good job. But wage growth was very slow here, hence little capital appreciation. The point being that property tends to wallow after big hits. And that patience potentially pays bigger dividends.

I doubt the way most specuvestors treat property now would have done anything but chew you up in that environment.



How on earth can you have a modest cap growth assumption that is well above long term growth rates?


And Passive, I agree completely about it returning to how it was. For mine, typical property investment should not used as a means for pure capital growth, unless you are an actual developer. Like I've said many times, property should be used for income, and anything else I don't think should come into normal strategies unless in an abnormal environment.

Too many property types have either forgotten that, or never experienced the need to adopt that strategy.

hello,

5yrs gone, 10yrs gone, 20yrs is nothing man, year on year it appears to get quicker and quicker and some others may share that thought around more

and yes the "dividends" will be there for both property owners and the rent/invest crew out there with those time frames

what a great day here in Melbourne today, rain then sunshine fantastic, kept the pushie going strong on a massive tour around the streets, few latte's in there

thankyou
robots

 

[theasxgorilla]

And Passive, I agree completely about it returning to how it was. For mine, typical property investment should not used as a means for pure capital growth, unless you are an actual developer. Like I've said many times, property should be used for income, and anything else I don't think should come into normal strategies unless in an abnormal environment.

At risk of appearing anal, I'm guessing a developer can broadly mean those who embark on fixer-upper projects too, right? Large or small.

 

[robots]

hello,

even trailer park stuff is development ASX G,

thankyou
robots

 

[gav]

State house sales slump 25% (Victoria)

http://www.theage.com.au/national/state-house-sales-slump-25-20081219-72e8.html?page=1

In 2009 I will be a 1st home buyer. I have my deposit ready, and I'm adding to it considerably as each fortnight goes by.

I have 11 properties on my watchlist, all very nice places advertised at 20-30% below median house price for the beautiful suburbs I'm looking at. On my wage I'll be able to pay it off pretty quickly, even faster once my g/f finishes studying.

My money will no longer be wasted on renting, and there will be one less fantastic tennant out there for landlords

 

[tech/a]

Gav

I think your being wise in investigating opportunity.

Those sitting on the fence seriously need to ask these questions and have some sort of answer.

(1) How long are interest rates going to be at 30 yr lows?
(2) How low will house prices in the area I want to live actually going to fall?
(3) How long will rents stay below the norm?
(4) How long will inflation be capped?

Sure there are "Better" times than others to buy for some.
Those who believe there are better times---for them---need to be able to identify exactly what these better times are and see them when they are in their face.

 

[chops_a_must]

Gav

I think your being wise in investigating opportunity.

Those sitting on the fence seriously need to ask these questions and have some sort of answer.

(1) How long are interest rates going to be at 30 yr lows?
(2) How low will house prices in the area I want to live actually going to fall?
(3) How long will rents stay below the norm?
(4) How long will inflation be capped?

Tech, with all due respect, some of those questions are completely loaded and complete BS.

For #1, going into debt at the start of a cycle of high interest rates in my mind is not smart. That is a question that needs to be asked of the people already in. As we can't fix for long terms here.

For #3... you could just as easily ask why rents have vastly exceeded wage growth, and are still not even in line with property prices, and how long it will stay like that.

For #4. Just buy gold. Seriously.

 

[dhukka]

Hello dhukka, good memory but I don't know why you bought up CBA in this thread. I made a wrong call but so did 90% of other people on 90% of other stocks available to buy. Who would have ever thought RIO would drop by 80% or even BHP by 60% or WPL by 60%, people on this forum were calling them good buys at their high prices.

I for one and plenty of others thought they could fall that much and have voiced opinions here to that effect. But that is not the point of my post. The point is, that whilst 30 years of investing experience is no doubt of value, relying too much on the past as a guide for investment decisions can lead to mistakes such as buying CBA at $50. Thus when thinking about future property prices, the last 30 years of history should be taken with a grain of salt.

 

[wayneL]

The Halifax has just reported that house prices are down 16.2% for the calendar year over here. No link yet.

That makes low interest rates irrelevant and can seriously impact future borrowing ability if purchases were made in 2006-7.

 

[wayneL]

The Halifax has just reported that house prices are down 16.2% for the calendar year over here. No link yet.

That makes low interest rates irrelevant and can seriously impact future borrowing ability if purchases were made in 2006-7.

Linky: http://www.dailymail.co.uk/news/art...ture-rate-cuts-house-prices-fall-16-year.html

Nationwide refuses to pass on future interest rate cuts as house prices fall by 16% in a year
By DAILY MAIL REPORTER
Last updated at 11:04 AM on 02nd January 2009

Comments (17)
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Britain’s biggest building society today ruled out further mortgage rate cuts for thousands of struggling homeowners.

Nationwide said it would not pass on any more reductions to about 250,000 families struggling to survive the recession.

Experts said other lenders were likely to follow suit ”” leaving millions afraid that they will not get the benefit from future rate cuts.

 

[dhukka]

Mooorrrning.

No hangover (I don't drink but so tiered need to get to bed!).

Some thoughts for 2009.
After recession and in worst cases depression there always follows---inflation and in some cases hyperinflation.

If you don't have property then---you'll likely never have it.
You'll all get your wish and rent for the rest of your lives as will your kids and their kids.
Cash will mean nothing as it is eroded by inflation.
That $300,000 home will become impossible to own as it will race away in price as your deposit becomes less and less in value.

You must have at least 1 home to keep in touch with inflationary trends.

Interest rates wont sit at 30 yr lows for another 30 yrs.
Those that have "ridiculous" loans will be laughing as they(The loans) diminish into in significance as inflation races away.

Serously, these inflation fears are farcical. 2009 will be a year of deflation, don't be surprised to see the RBA cash rate with a 2 handle on it. There is no urgency to rush out and buy property in the next 12 months.