House prices to keep rising for years

[Beej]

I had my auction today, not one bid. Amazing. An inner city townhouse priced between 450K and 500K and not one bid.

God help me when property does collapse.

Maybe they all read your latest posts on here and decided to wait because you convinced them prices are going to crash???

Seriously though - any pre-auction offers? Regardless if there are interested people you may still get offers through in the next week - FHBs in particular often don't like to buy at auction because of the unconditional contract (in NSW anyway).

Cheers,

Beej

 

[lioness]

Maybe they all read your latest posts on here and decided to wait because you convinced them prices are going to crash???

Seriously though - any pre-auction offers? Regardless if there are interested people you may still get offers through in the next week - FHBs in particular often don't like to buy at auction because of the unconditional contract (in NSW anyway).

Cheers,

Beej

Beej,

Yes, that's what happened. No pre-auction offers but 5 FHB's who were dead keen and turned up but all froze on the day(probably because it was bucketing down with rain!).

Agent is confident of selling over the next 2 weeks. I will keep you informed.

Cheers.c:

 

[Bill M]

I had my auction today, not one bid. Amazing. An inner city townhouse priced between 450K and 500K and not one bid.

God help me when property does collapse.

Auctions are not always the best way to go. I auctioned one of my properties once and didn't get a bid either, I had a gut feeling I wouldn't. A Month later I sold it for a fair price. I've seen a lot of auctions not attract any bids even in the boom times. It's just got to be that something special kind of place to get several buyers to jump on it, good luck anyway, this isn't that unusual.

 

[lioness]

Auctions are not always the best way to go. I auctioned one of my properties once and didn't get a bid either, I had a gut feeling I wouldn't. A Month later I sold it for a fair price. I've seen a lot of auctions not attract any bids even in the boom times. It's just got to be that something special kind of place to get several buyers to jump on it, good luck anyway, this isn't that unusual.

Thanks Bill, I agree with you. I probably should have went private sale in hindsight, but now hopefully the agent will flush out interested parties.

He seems confident. It is spot on in the price bracket where FHB's are in.

It is cash flow neutral with rent anyway, so no loss.

 

[robots]

hello,

what happened after auction?

is it a reasonably new place?

in todays market I see ANY property that has an "issue" just gets crossed off,

in the unit/townhouse market this may be main rd exposure, privacy issue, condition issue

most FHB's do not want to do any work on any place

thankyou
robots

 

[Largesse]

lioness,
do you have a weblink for your listing?
What city is it in?

We are looking at inner city townhouses up to $500k in Melbourne and Sydney, would love to have a look at yours.

PM me or post on thread if you wish

 

[Largesse]

In other news, a tiny 1 room studio in South Yarra went for $268k at auction today.
When i say tiny, i mean, my bedroom is bigger than the whole unit

 

[lioness]

lioness,
do you have a weblink for your listing?
What city is it in?

We are looking at inner city townhouses up to $500k in Melbourne and Sydney, would love to have a look at yours.

PM me or post on thread if you wish

Hi Largesse, send me you email address as a private message and I will send you a link. I am happy to keep it as it pays $425 per week rent and is a 2 bedroom with lock up carport.

 

[lioness]

Hi Robots,

it is not on a main road, it is in a good street and location.

I will wait, these FHB's are just nervous nellies with no money.

Can you post me your link for today's auction results. Many thanks.

Keep sucking down those ruskies. Have one for me, I could use one now.

 

[robots]

hello,

thats fantastic news Largesse, top spot South Yarra right next to one of ASF's kings, Kincella

whoever lives in that joint will probably be strolling to the gardens, running/or walking the tan, popping e's at Summadayze, sipping cafe latte's on chapel st, on the pushie down st kilda rd,

Australia what a place, but hey airport still running if you want to head over to Detroit and pick-up one of those $1.50 jobs (just get to Walmart straight off the plane to get the arsenal)

thankyou
robots

 

[michael_selway]

Interestign Stuff

http://www.globalpropertyguide.com/investment-analysis/Most-expensive-real-estate-markets-in-2009

Most expensive real estate markets in 2009
Global Property Guide

Last Updated: Feb 15, 2009

No surprise - Monte Carlo is No 1 in the Global Property Guide's list of World's Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.

Battling for the number 2 position are prime central Moscow and London. Prime central Moscow's US$20,853 per square metre price tag slightly outpaces core Prime London's US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.

London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.

Most expensive property markets
(based on 120 sq. m. apartment in city-centre )
RANK COUNTRY CITY/REGION AVE PRICE (US$/sq. m.)
1 Monaco Monte Carlo 47,578
2 Russia Moscow 20,853
3 UK London 20,756
4 Japan Tokyo 17,998
5 Hong Kong Hong Kong 16,125
6 USA New York 14,898
7 France Paris 12,122
8 Singapore Singapore 9,701
9 Italy Rome 9,166
10 India Mumbai 9,163
Source: Global Property Guide (For the complete list, see below)
Tokyo and Hong Kong come in fourth and fifth, respectively.

New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.

Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.

The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy. Data were collected during 2008. The US dollar exchange rate used is that of January 27, 2009.

Bargain hunters' dream
For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia.

Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m. Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.

Least expensive property markets
(based on 120 sq. m. apartment in city-centre)
RANK COUNTRY CITY/REGION AVE PRICE (US$/sq. m.)
112 Egypt Cairo 574
111 India Bangalore 657
110 Chile Concepción 669
109 Ecuador Quito 820
108 China Chengdu 999
107 Nicaragua Managua 1,080
106 Indonesia Jakarta 1,102
105 Jordan Amman 1,150
104 Peru Lima 1,154
103 Chile Santiago 1,221
Source: Global Property Guide (For the complete list, see below)
Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia.

Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China.

Indonesia was the last country to recover from the 1997 Asian Financial Crisis. However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth.

Five Latin American cities complete the list of 10 cheapest cities for property buyers - Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru.

The same countries also tend to earn good rental yields.

Highest gross rental yields (%)
RANK COUNTRY CITY/REGION ANNUAL YIELD
1 Moldova Chisinau 14.17%
2 Egypt Cairo 12.00%
3 Indonesia Jakarta 11.27%
4 Philippines Manila 10.99%
5 Macedonia Skopje 10.11%
6 Peru Lima 10.09%
7 Panama Panama City 9.98%
8 Jordan Amman 9.73%
9 Malaysia Kuala Lumpur 9.22%
10 Colombia Bogota 9.19%
11 Nicaragua Managua 9.12%
12 Chile Concepción 9.04%
13 Netherlands The Hague 8.97%
14 Chile Santiago 8.87%
15 Argentina Buenos Aires 8.85%
16 Jamaica Kingston 8.80%
17 Ecuador Quito 8.77%
18 Bahamas Nassau 8.37%
19 Russia St. Petersburg 8.15%
20 Trinidad & Tobago Trinidad 8.14%
Source: Global Property Guide (For the complete list, see below)
Overvalued
Rental yields are generally below 5% in most European cities, suggesting that property is still overvalued.

Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2% and Athens at 2.7%.

Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva.

Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi, and Mumbai)

Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%. The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima.

High returns can also be expected in Latin American cities. Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador).

Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%.

House price movements
The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions.

The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries. This is complemented by the relatively lower cost of international air transport. Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union.

The result of these changes has been a remarkable increase in cross country real estate investments – helping make the boom, and the bust, truly global.

Most expensive property markets
(based on a 120 sq. m. apartment )
COUNTRY CITRY/REGION AVE PRICE (US$/sq.m.)
1 Monaco Monte Carlo 47,578
2 Russia Moscow 20,853
3 UK London 20,756
4 Japan Tokyo 17,998
5 Hong Kong Hong Kong 16,125
6 USA New York 14,898
7 France Paris 12,122
8 Singapore Singapore 9,701
9 Italy Rome 9,166
10 India Mumbai 9,163
11 Ireland Dublin 9,069
12 Finland Helsinki 8,404
13 Bermuda Bermuda 7,861
14 Greece Athens 7,858
15 UAE Dubai 7,151
16 Spain Barcelona 6,523
17 Montenegro Montenegrin Littoral 6,184
18 Switzerland Geneva 6,178
19 Luxembourg Luxembourg 6,165
20 British Virgin Islands British Virgin Islands 5,843
21 Barbados St. James 5,767
22 Spain Madrid 5,672
23 Russia St. Petersburg 5,527
24 Andorra Andorra 5,379
25 Germany Munich 5,255
26 Romania Bucharest 5,184
27 Slovakia Bratislava 5,088
28 Australia Sydney 4,994
29 Turks & Caicos Providenciales 4,963
30 Netherlands Antilles Sint Maarten 4,889

 

[Beej]

Interestign Stuff

http://www.globalpropertyguide.com/investment-analysis/Most-expensive-real-estate-markets-in-2009




Most expensive property markets
(based on a 120 sq. m. apartment )
COUNTRY CITRY/REGION AVE PRICE (US$/sq.m.)
1 Monaco Monte Carlo 47,578
...
28 Australia Sydney 4,994

Good article - that fit's in pretty well based on my own perusing whilst travelling around the world over the years and visiting many of the cities on that list.

Meanwhile, back in Sydney the long awaited property crash still does not appear to be eventuating with yet another very healthy auction clearance rate of 69% (126 sold properties) with a median price of $644k - higher yet again than the previous weekend.

Results can be found at: http://www.homepriceguide.com.au/saturday_auction_results/sydney_domain.pdf

As previously discussed, the FHB segment of the market seems to be almost in a mini-boom now by many anecdotal accounts (was a story on Ch-7 news as well; only about 3 months behind the actual trend as usual).

One thing I was thinking about today as well was the impact of the potential removal of the FHB grant boost (although given how successful the boost has been I reckon there's a better than even chance it will be extended). As interest rates continue to fall due to the worsening economic outlook locally, I am thinking now that the next "wave" buying is going to be self funded retiree's looking for a solid and certain cashflow going forward. With rental yields of 5%+ easily available, and cash account rates likely to fall to 3/2%, I am thinking that in addition to the "upgraders" (who incidentally are 75%-85% of the market at any time anyway), any drop off in FHB numbers will be offset by the re-emergence of the SFR as buyers post Jul 09. Remember this group in the economy are NOT impacted by rising unemployment etc either - in fact they have already taken their hit from the downturn through reduced cash returns, dividends and the tanked share market.

One more comment to make - for those who think the current market is only being artificially propped up by government intervention; whilst it has clearly helped, I think by far the largest factors driving the current FHB mini-boom is the pent up demand (people who have been wanting to buy for years but it was too expensive - but kept saving in the meantime) coupled with reduced micro-supply (due to many owners thinking the market sucks and the say is falling in). The FHB grant boost is just the icing on the cake.... IMO.

Cheers,

Beej

 

[kincella]

psst, off topic...its like a mini cyclone here in melb atm...huge winds and rain...winds look like the 100 kph same as black saturday...
what do you see Robots ?

 

[robots]

hello,

yes same here Kincella, the wind speed is enormous the tree's are going bezerk

gee the planet provides such beautiful stimuli

thankyou
robots

 

[MrBurns]

Same here, love the rain but this is a bit scary.

look at this -

http://www.bom.gov.au/products/IDR023.shtml

 

[kincella]

beej..I agree with you...
noted during the week a for sale sign on a unit nearby....today it has sold on it...another I never saw the for sale sign...its is sold...thats in one street alone...only 500m apart......think I noted during the week that Toorak is hot atm....hardly on the market for 2 mins and they are sold

the last time I saw any activity in the lower end here was 5 units for sale in May 07 and all sold within 2 weeks of my sighting them....otherwise you can go for years without one for sale...or so it seems...
I only watch certain streets.
May 07 was when you could dump 1 million into your superfund by 30.06.07 so I think people who had a loan against their units...sold them at a nice profit and took the cash to load up the superfund....
still not sure about the borrowings for the superfunds....and the ATO did not like any of the proposals doing the rounds at the time

some of those self funded retirees may be a bit cash strapped after the stock market rout...so they may need a small loan to buy a property now....others will buy straight from the superfund.....
well thats my theory
cheers

 

[MrBurns]

Looks like it's passed -

http://www.bom.gov.au/products/IDR024.loop.shtml

 

[kincella]

its Dorothea McKellar Stuff...My Country....careful of copyright...
but ...her beauty and her terror..the wide brown land for me....just about sums it up here lately...well across the east coast.
drought, fires and floods in Qld...so a cyclone would not surprise me....
they could do with some flooding rain inland , Vic/Nsw and the rest of the continent
cheers

 

[robots]

hello,

check check check, here we go:

http://www.reiv.com.au/home/inside.asp?ID=162&nav1=652&nav2=162

fantastic result 74% clearance rate

its all happening Beej

thanks Enzo for getting the results up quick smart, true professional of the industry

what a day all

thankyou
robots

 

[gfresh]

Why are self funded retirees going to flock to property, when there is no adequate yield? At best, they are relying on capital gains, which may not be existent for another few years. Pretty risky investment with no guaranteed payoff when you do need to pull the pin and cash it in. May as well just stick with term deposits.

Many retirees I'm sure also scratch their head at home much prices have gone up in the last 10 years, compared to the 20-50 before that, and would be a little more cautious. Many (conservative) people in their 50's and 60's are some of the more bearish on property that I have spoken to, they realise the best returns will not occur for possibly another decade. They've seen this all before.