House prices to keep rising for years

[pepperoni]

Still, I'm happy investing in an asset class where all I need is 1% growth to be in the black after all costs are covered... Particularly given the potential for significantly more than this given basic demand/supply economics. In the postcode I'm invested in over 80% of properties are owned outright with no debt outstanding. And the median price is well over $1M. Who cares what happens with global credit markets when you can pay cash for properties at well over the $1M mark...

And, as for the "hit", I'm actually up already to the tune of some $300K profit over my purchase price of 18months ago (or a 28% annualised return over that period. That's the payoff from getting my DA approved). So, even selling today I'd pocket a nice little margin. No downside there...

Horses for courses, but property is a good game too if you know how to play by the rules. I don't expect there to be as many property experts on a stock forum though as there are stock experts. Its a different game, but a profitable one for those that know how to play it.

Cheers,
Michael.

I sold my property on edcliffe bvd collaroy for 1.4m a year ago. Owned outright of course. The sale included a sepp 5 approval (obtained by prev owner) for 3 dwellings that added $0 to the value. Ive built in golden grove beacon hill, norfolk ave, suffolk ave collaroy plat, barcoola place and minkara road bayview. All million dollar properties ... some over 3m by now ... I know the market. And I know development. From years of experience.

Once re investing and development returns were good but no more.

You wont get that return with a DA. And if you build it yourself you will find the only prices that have really risen are development costs which seemed to irrevocably double overnight. You will be lucky to have 10% return when all is done and dusted if you account for every cost including holding costs. Very lucky.

I do expect that area to outperform most of syd for years to come but outperforming going backwards fast aint that flash.

 

[robots]

hello,

10% return on what? pepperoni

thankyou

robots

 

[jet328]

i like to listen to the authority on these issues like the ABS who document that home owners worth 6x more than renters, a HUGE 6x

What If I told you Lear-Jet owners are 100x wealthier than the non-LearJet owners?

or

Rolls Royce drivers are 50x wealthier than non-Rolls drivers

or

Old people are 10x wealthier than non-old people





Off to the shops to pickup my Lear, Rolls & grey hair to make myself 100x50x10 times wealthier than average

 

[robots]

hello,

anything been happening today,

went for a ride early this morning into melb, its great getting some bargains at the cafe's these mornings,

can see why melb has plenty more run in it

couldnt believe my eyes when the stack of crispy bacon came out on my plate, surely to try and entice a few more orders

thankyou

robots

 

[numbercruncher]

Hows the " House prices to keep rising for years " theory going folks ?

Credit crisis turning the screws on bank lending

Many analysts, including assistant governor of the Reserve Bank Malcolm Edey, believe banks will be forced to adopt tighter lending criteria now that their access to international finance has been limited by the credit crunch.

http://www.abc.net.au/news/stories/2008/03/06/2182180.htm

Speculation that recent interest rate rises might start to impact on Australia’s property market was today confirmed in the latest RP Data Property Pulse. Over the past two weeks 34,000, or 17,000 listings per week of new properties for sale entered the market compared to just 26,000 for the same period in 2007.

http://www.rpdata.net.au/news/rp/20080225_media.html

Anyone planning on taking Ruddy up on his new offer and build a IP for the Juicy new incentives ?

 

[gfresh]

Funny how all this instant supply of housing comes onto the market soon as there is a slight wiff property values might not increase by 10%+ a year.

I wonder how the demographics shift will really change things in the next decade or more, above and beyond any short-term impact. When the bulk of the 'baby boomers' hit 70 or 80 in another 10-30 years, most won't be living in a large 3 bedroom family home. While our population is growing, it's not growing enough to replace those getting older.

 

[KIWIKARLOS]

Banks tightening lending standards is a good thing and everybody knows interest rates move in cycles. With the economy showing signs of slowing and people at the lower end starting to do it tough we could see a interest rate peak soon.

Besides that you are ignoring the fundamentals of the housing markets. Population growth and density can only lead to higher prices. Melbourn is hammering along, sydney is going through massive urban consolidation and i can tell you To highlight know development is not slowing.

How do I know this? I work for energy australia and plan the electrical requirements o=for the inner west and eastern suburbs. We are seeing unprecedented levels of consumption due to development. The once mainly industrial areas are been trtansformed into multi thousand dwelling + commercial areas. Zetland, Green Square, Redfern all are forecast to grow 25% over the next ten years. Macquarie Goodman and SOPA (sydney olympic park authority) are basically turning Homebush into a mini CBD. Rhodes, Turramurra, Hornsby. The list goes on and on.

No only are we seeing huge amounts of development but huge general load growth because of descretionary spending by people on things such as air conditioners and fancy lighting.

Sydney Ports are now expanding 50% and converting all diesel cranes to electric they are building new rail lines to distribute the cargo and remove trucks from the road. There forecast increase in goods traffic for the next 10 years is at least 50%.

Please show me any signs of significant economic factors that are going to make house prices decrease. Were not talking about property as a investment simply the fact that HOUSE PRICES WILL NOT DECREASE.

Our exports of coal are predicted to double in the next 12 months and iron ore by 60% our farmer are getting good rains and the demand for fertiliser is increasing. Our economy is showing no signs of weakness, the only companies that are have significant exposure to the US market or are up to their eyeballs in debt.

 

[KIWIKARLOS]

Sorry in the first sentence where I mentioned the economy slowing I meant moderating to a point where interest rate hikes do appear to be dampening consumer spending. The first thing people cut back on is discretionary spending.

 

[kyme]

Population growth is a factor in normal housing demand. Not really relevant now though with Australia's current record housing unafforability.
The USA has population growth of millions each year. So on that basis, one could have been arguing last year or so that USA house prices will never go down. If I was resident in USA I would now be a buyer of property with their big falls in prices. Overvalued prices in Australia at moment though don't demonstrate a compelling case of value to me at moment.

 

[robots]

Overvalued prices in Australia at moment though don't demonstrate a compelling case of value to me at moment.

hello,

whats overvalued, look at Melton here in Melb you can get house for 200k, frankston for 220k, plenty of others around

the US is being exposed for the place it is, ordinary, while aus keeps showing the world its style

thankyou

robots

 

[KIWIKARLOS]

Population growth is a factor in normal housing demand. Not really relevant now though with Australia's current record housing unafforability.
The USA has population growth of millions each year. So on that basis, one could have been arguing last year or so that USA house prices will never go down. If I was resident in USA I would now be a buyer of property with their big falls in prices. Overvalued prices in Australia at moment though don't demonstrate a compelling case of value to me at moment.

Mate I dont think you can compare the US to OZ they have the ability to sustain many millions more people than us due to climate etc. We barely have enough water and arible land for 30 Mill people. Supply vs demand they have millions of houses available and no demand we have little to no space available and moderate demand.

 

[KIWIKARLOS]

There is also heaps of cheap land available in oz hell they are basically giving it away in rural areas eg. broken hill etc.

But nobody wants to live there, everyone flocks toward the ocean especially after years of drought. There is just no prospects outside of the major cities (with the exception of mining towns) but those guys won't live in demountables for ever either. Where do you think the 100000's of peple making big bucks in WA will go with their cash after they get jack of 12 hours days in the middle of the desert.

 

[gfresh]

While our population is growing, it's not growing enough to replace those getting older.

Bzzzt.. Further to my earlier comment, population growth seems to be larger than I thought..

Right now, to the minute, according to the ABS our current population is 21,229,903..

Our population at June 2000 was 19,153,380.. So we've had +2,076,523M or +10.84% in the last year, or approx +1.36% each year. They need somewhere to live, and we need more places to house them. Therefore the next couple of years may provide a great buying opportunity to be honest.. if prices stay flat, or even decrease in some areas.

Lots of interesting stats and figures on abs.gov.au free to all. Worth a read!

 

[Snakey]

Bzzzt.. Further to my earlier comment, population growth seems to be larger than I thought..

Right now, to the minute, according to the ABS our current population is 21,229,903..

Our population at June 2000 was 19,153,380.. So we've had +2,076,523M or +10.84% in the last year, or approx +1.36% each year. They need somewhere to live, and we need more places to house them. Therefore the next couple of years may provide a great buying opportunity to be honest.. if prices stay flat, or even decrease in some areas.

Lots of interesting stats and figures on abs.gov.au free to all. Worth a read!

All you need is those 2000000 babys to save a deposit to buy into the ridiculously priced market and it will drive up prices

 

[tech/a]

Instead of whinning and whinging why arent you guys finding ways to be in the top 5%.
90% of these posts reflect the thinking of the 95% who will never be any better off than the other guy.
What are you doing even being involved in discussions on wealth creation.

To this statement

Funny how all this instant supply of housing comes onto the market soon as there is a slight wiff property values might not increase by 10%+ a year.

House prices dont have to increase 10% BUT.

Its pretty simple to get 10% return on your money in a leveraged product.
Property is one.
At 20% down 2% increase in pricing is a 12% return on investment.
And if it does that in the next year its a 30% return in 2 yrs.

Your freezing your self out of opportunity with fear.
I'm not saying buy anything thats got a for sale sign on it I'm saying search out opportunity and grab it with BOTH hands.

Do the numbers above on 5% then 10%.
Anyone can do it evidently Morons like myself who do this for a living.

 

[explod]

Instead of whinning and whinging why arent you guys finding ways to be in the top 5%.
90% of these posts reflect the thinking of the 95% who will never be any better off than the other guy.
What are you doing even being involved in discussions on wealth creation.

To this statement


House prices dont have to increase 10% BUT.

Its pretty simple to get 10% return on your money in a leveraged product.
Property is one.
At 20% down 2% increase in pricing is a 12% return on investment.
And if it does that in the next year its a 30% return in 2 yrs.

Your freezing your self out of opportunity with fear.
I'm not saying buy anything thats got a for sale sign on it I'm saying search out opportunity and grab it with BOTH hands.

Do the numbers above on 5% then 10%.
Anyone can do it evidently Morons like myself who do this for a living.

Yes that's fine, and you can claim the interest as a deduction but one still has to service the loan, the upkeep and respective rates...etc etc.

Recent trade on OXR, 35% up in one month, if I was to borrow a further 80%, short term loan, and some do it this way, you figure. And OXR is a safe mid tier stock, and the other great thing is that the moment a trade looks a bit dicey I am out at the click of a mouse.

I follow strong uptrends, I have invested nicely in property in the past but figure it is a very poor proposition at the moment.

Each to his own I suppose, but at best I believe property overall is trending sideways.

 

[tech/a]

Recent trade on OXR, 35% up in one month, if I was to borrow a further 80%, short term loan, and some do it this way, you figure. And OXR is a safe mid tier stock, and the other great thing is that the moment a trade looks a bit dicey I am out at the click of a mouse.

Very true but I doubt there would be many here that trade the price of a house on any trade let alone 2,3,5+ trades consecutively.
Regardless of market conditions people understand housing---over the longterm it goes up---it was cheaper for our parents and will be dearer.

So to was and will the stock market.But what vehical will be used most for Joe Average do you think?

 

[numbercruncher]

Anyways .... so besides property skyrocketing like Bank shares for the next few years, how do people feel about the new Gov incentive of getting 6k p/a plus 2k I understand from state govs to rent out new builds 20pc below market ? Surely will reduce the demand for established Investment props yes/no ?


So you new build and intend to rent for 300p/w but let it for 240p/w and get all this Gov juice, thatll help push up established places prices just like rising interest rates do yes ?

 

[explod]

Very true but I doubt there would be many here that trade the price of a house on any trade let alone 2,3,5+ trades consecutively.
Regardless of market conditions people understand housing---over the longterm it goes up---it was cheaper for our parents and will be dearer.

So to was and will the stock market.But what vehical will be used most for Joe Average do you think?

The average Joe does not even think of trading. An investment in an extra property or two, yes. And as you infer the average Joe does not put the price of a house on OXR.

There are big differences between, owning real estate, which is accumulating assets as a form of saving and trading or speculating. I have an Uncle who has brought and sold huge properties on the gold coast over the last 30 years. I regard him as a speculator/trader and because of his eye, and knowledge of that neck of the woods will make money in any market conditions.

The average Joe cannot do this and I think that some of the rampers on this thread who say it is just plain sailing ought to have a look at themselves. And I am continually amazed at the unsubstanciated rubbish that is allowed to be put forward.

 

[xoa]

The Australian housing bubble is 99% debt, 1% shortage.

We are so indebted, we make the Americans look like spendthrifts. Every baby boomer and his dog has bought a highly leveraged "investment" property. These amateur property tycoons accounted for 45% of new home loans last year. :