House prices to keep rising for years

[wayneL]

FYI - UK,s most loathed landlords selling up.

The cynics here are wondering whether it is their decision or the bank's. Their valuation is always above market value and could possibly be in deep doo-doo.

That's speculation though. But if it were me (and genuinely had £70mil in equity), I'd keep 50 or 100 houses and live the life of Reilly on the unencumbered rent.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6819301.ece

Fergus and Judith Wilson, 793rd on The Sunday Times Rich List this year with a combined value of £70 million, have decided to call it a day after almost 20 years of property investing.

At their peak they owned about 900 houses but their portfolio has been badly hit by the downturn, falling from an estimated value of £180 million early last year.

They have now decided to put the whole lot on the market to take advantage of a recent rise in house prices in Ashford, Kent. Mr Wilson said that they had already received a number of approaches from investors wanting to buy the whole portfolio, including a consortium of professional footballers and funds from Russia and the Far East.

Values in Ashford, where many of their properties are, have risen as a result of the opening of the high-speed rail service to London. The Wilsons, who live in Maidstone, also own properties in their home town and in Shepway and Hawkinge near by.

Mr Wilson, 61, estimates that the summer bounce in prices in the area has added about £1 million to the value of their portfolio. He said that while property in the areas took three to four months to sell in the summer last year, it could now take as little as three to four days as property is in such short supply relative to demand.

He said: “The time is right for us to go. It is much easier to offload them now than I think it will be in 18 months.

 

[Knobby22]

He said: “The time is right for us to go. It is much easier to offload them now than I think it will be in 18 months.

Very,very interesting quote from a professional investor.

 

[gfresh]

20 years takes them back to the late 80's.. one recession and one of the best periods of credit and housing growth in the last century, hardly "experienced".. All it took was an actual serious recession and it was enough to finish them. Kincella on here would have more experience than that here I would say.

Mr Wilson said that they had already received a number of approaches from investors wanting to buy the whole portfolio, including a consortium of professional footballers and funds from Russia and the Far East.

Why are these guys buying then?

 

[wayneL]

Why are these guys buying then?

It's BS.

They were allegedly approached at the height of the bubble. Those offers are no longer current however.

These people are well known for embellishing the truth.

 

[kincella]

and across Australia...in fact 1225 suburbs with houses below 500k's....... and of course its written by property industry people....not goat breeders ........this has been part of my theme...there is affordable property out there for everyone.....seek and ye shall find......

extract only ...read the full article...
Emerald City the country's most affordable
IT has been dubbed the country's most expensive place to live but Sydney is in fact Australia's most affordable city.

A report on property in the country's capital cities names Sydney as the place with the most suburbs where the average property price falls under half a million dollars.

Of 1225 suburbs across Australia where the median house price is below $500,000, Sydney has 298, almost half of the city's total suburbs, according to the report commissioned by the National Australia Bank.

"This result is a little surprising, given that Sydney is the nation's most expensive housing market," said the report's author, Cameron Kusher of research firm RP Data.

"It does show that many suburbs still exist where affordable property is available."

General sales manager at McGrath Real Estate Matt Lahood said many of Sydney's first-home buyers trying to get their foot on the property ladder had unrealistic expectations.

"A lot of the buyers coming into the market want to kick off into the parkside and beachside areas," Mr Lahood said. "The perception of their dream area ends up not being the end reality."

Raine & Horne chief executive Angus Raine said the city was made up of a "series of tribes", some of which carried greater "snob value" than others.

http://www.theaustralian.news.com.au/business/story/0,28124,26028999-25658,00.html

 

[Buckeroo]

Raine & Horne chief executive Angus Raine
General sales manager at McGrath Real Estate Matt Lahood

And from extremely reliable sources as well

Cheers

 

[gav]

Call for reforms of tax lurks as negative gearing frenzy hits

http://www.news.com.au/business/money/story/0,28323,26029676-5017313,00.html

LANDLORDS are claiming $11 billion in tax deductions a year as a negative gearing frenzy grips the property market.

The tax grab from property "losses" - the richest potential deduction for individuals - is about four times the amount claimed 10 years ago.

As the Henry Review examines how to reform our tax system, the Herald Sun also revealed more than half of Australian companies pay less than 5 per cent tax.

Treasury figures reveal only a quarter of companies, or about 92,000 businesses, pay more than 15 per cent tax on their total earnings.

Property investors whose interest bills exceed the rent on their investment can use the losses to reduce their tax.

Deductions by individual property investors hit $11.7 billion in 2007-08, up from $3.1 billion in 1999-2000.

That's more than double the $5.2 billion in taxable capital gains reported by the same group.

The Brotherhood of St Laurence said the system inflated housing prices while rewarding higher income earners.

The new tax figures, provided to a Senate committee, paint a staggering picture of top-end tax lurks used by individuals and companies.

The corporate tax rate is 30 per cent, yet 182,000 companies pay less than five cents in the dollar on their total earnings. And thousands pay no tax at all.

Taxwatch spokesman Julian Disney said the figures, published for the first time, showed the opportunities available for corporate Australia to minimise tax liability.

"It shows the importance of closing off unjustifiable tax concessions and loopholes, which enable companies to avoid paying their fair share of tax," Prof Disney said.

Greens leader Bob Brown said there was a clear case for change.

"Everyday taxpayers I know would be delighted to pay less than 5 per cent tax on their gross income," Senator Brown said.

"The Government must publish a full and open exposition of the tax deductions available to the business sector to explain these figures."

Treasury Secretary Ken Henry is conducting a "root-and-branch" review of the tax system on the orders of the Rudd Government.

In its submission to the review, the Business Council of Australia argued for the business tax rate to be slashed.

A spokesman for Treasurer Wayne Swan said the Government was awaiting the results of the Henry Review before considering changes to the system.

The tax take in 2007-08 was about $286 billion.

Individuals paid $129 billion and companies paid about $78 billion, with GST and sales taxes making up the difference.
---------------------------------------------------

So individual property investors are claiming $11.7 billion, yet only make $5.2 billion in taxable capital gains. How long can this keep going? And more than half of Australian businesses are paying less than 5% tax? WTF?!

 

[Tysonboss1]

Now is not that best time to be considering entering the property market,

Why rush in to buy now, when you will probally be able to buy at the same prices in 5 years,

Property makes up about 1/2 of my investment assets, While I am not selling any (due to them being positive cashflow and part of my longterm stratergy), I am certainly not adding to my portfolio unless it was a private residence of a business premises.

Most of my property is based in brisbane, and I am certain brisbane is entering a period of stagnation, It's been a good run over the past few years but as with anything I believe it is over, it's time for things to settle for a few years.

 

[satanoperca]

and across Australia...in fact 1225 suburbs with houses below 500k's.......

Ah, what 450-500K is affordable for the average nuclear family? One income, 2 kids and a full time care giver on an average income of 60K, this still equates to X7 the average income. But wait, affordability means sending the kids of to day care 5 days a week, might as well have them born in a test tube and reared in a pen or laboratory then which could have affordability at X10 or more.

Or another way, borrow 400K, 28K in interest plus insurance, up keep and rates make it 33K. Average income clears 47K a year. Seems reasonable if all you want to live on is rice and be the bitch to the overlord banks for the next 25 years.

How about the government grows some balls and puts in place legislation to encourage people to invest their money in businesses that employee people instead of the masses being in debt servitude to the banks for 25 years.

Having affordability at x7 the average income provides no long term benefit to the community and the inhabitants of this great country. It seems that the indigenous people of Australia had the right approach to land usage, they had survived over 60K years, white man will be lucky to leave this land inhabitable in 1K years.

 

[robots]

Raine & Horne chief executive Angus Raine
General sales manager at McGrath Real Estate Matt Lahood

And from extremely reliable sources as well

Cheers

hello,

a bit like all the rubbish from this site:

http://www.debtdeflation.com/blogs/

least the RE's get it right, got the numbers on the board

thankyou
professor robots

 

[robots]

hello,

good morning, another top performance on the auction scene yesterday

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

84% clearance, this is just amazing

sorry sorry, i know i know, i have to wait a few more months apparently

paradise, anyone heard from Numbercruncher?

oh well

thankyou
professor robots

 

[cutz]

So individual property investors are claiming $11.7 billion, yet only make $5.2 billion in taxable capital gains. How long can this keep going? And more than half of Australian businesses are paying less than 5% tax? WTF?!

Yeah Gav,

What a great system, load up on debt, get on the ponzi bandwagon and hope for the best, in the meantime average wage earners buying their first homes cop it up the

Personally i can't see the point of negative gearing but i'm no guru, maybe the government just don't have the balls to fix the system cos every man and his dog is a property tycoon.

 

[knocker]

:::::::::::::::: :::

hello,

good morning, another top performance on the auction scene yesterday

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

84% clearance, this is just amazing

sorry sorry, i know i know, i have to wait a few more months apparently

paradise, anyone heard from Numbercruncher?

oh well

thankyou
professor robots

Um no because he has been shafted by you and your cronnies..


your time is fast approaching

 

[robots]

hello,

and a couple of the Western Australia crew havent been around for a while either:

chops a must or kimosabi

anyone heard from them?

thankyou
professor robots

 

[Beej]

hello,

good morning, another top performance on the auction scene yesterday

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

84% clearance, this is just amazing

sorry sorry, i know i know, i have to wait a few more months apparently

professor robots

Yep! Sydney weekend clearance 71%, 150/211 sold - volume is on the up as we hit the first weekend in spring, but with a median auction sale price of ~$650k+ for yesterday and for the last few months it seems the up-graders and out in force!

Now is not that best time to be considering entering the property market,

Why rush in to buy now, when you will probally be able to buy at the same prices in 5 years,

Property makes up about 1/2 of my investment assets, While I am not selling any (due to them being positive cashflow and part of my longterm stratergy), I am certainly not adding to my portfolio unless it was a private residence of a business premises.

Most of my property is based in brisbane, and I am certain brisbane is entering a period of stagnation, It's been a good run over the past few years but as with anything I believe it is over, it's time for things to settle for a few years.

Tysonboss - your outlook for Brisvegas may well be right - there was a pretty good run up in prices there between 04 and 08 when some other cities/regions (especially Sydney) saw little growth in prices. I think the story in Sydney/Melbourne is currently a little different though.

Personally i can't see the point of negative gearing but i'm no guru, maybe the government just don't have the balls to fix the system cos every man and his dog is a property tycoon.

Well if it was removed and you found that your rent doubled, or you were forced to pay for (through higher taxes) more public housing, or maybe even had to live in public housing, then you would probably "suddenly" get the point of negative gearing......

Cheers,

Beej

 

[satanoperca]

Robots,

The next few weeks will give a better picture of the demand supply situation with a dramatic increase in volume of properties offered at auction.

The next few months will be interesting with the FHBG being reduced and a more than likely increase in IR rates. Just a small increase will get people thinking.

I personally are looking forward to heavily loading up on debt in the new year for property purchases, just waiting for interest rates to go up.

Cheers

For those that we up early in Melbourne this morning, it was one of the most stunning sun rises I have seen in a long time.

 

[Uncle Festivus]

Well if it was removed and you found that your rent doubled, or you were forced to pay for (through higher taxes) more public housing, or maybe even had to live in public housing, then you would probably "suddenly" get the point of negative gearing......

Cheers,

Beej

Deductions by individual property investors hit $11.7 billion in 2007-08, up from $3.1 billion in 1999-2000.

I had to have a laugh out loud at that lot or at least explain yourself a bit better.

The point of NG is pure & simple a tax payer funded rort!

So the 'point' of negative gearing is so that we don't have high rents, increased taxes and don't have to all live in public housing? We should be so grateful then! A pity we still have the some of the highest rents & housing unaffordabilty in the world!

The fact is that NG for existing housing is simply a tax payer subsidy for the investor to hide the true costs of owning a dwelling, & does not promote the creation of new housing, & does not keep cost's & prices down, in fact, it actively promotes even more unaffordable property prices.

If the government scrapped the NG rort then from the above figures it would have aprox $12B to spend on public housing or whatever, not that it probably would though?

The Gov should cut out the rorts and only have rebates for new housing, and migrants should only be allowed to migrate if they don't contribute to housing cost pressures ie build their own. Simple stuff, it only needs a leader with some true backbone to clean up the corrupted system, from the top down.

 

[Beej]

I had to have a laugh out loud at that lot or at least explain yourself a bit better.

The point of NG is pure & simple a tax payer funded rort!

So the 'point' of negative gearing is so that we don't have high rents, increased taxes and don't have to all live in public housing? We should be so grateful then! A pity we still have the some of the highest rents & housing unaffordabilty in the world!

The fact is that NG for existing housing is simply a tax payer subsidy for the investor to hide the true costs of owning a dwelling, & does not promote the creation of new housing, & does not keep cost's & prices down, in fact, it actively promotes even more unaffordable property prices.

If the government scrapped the NG rort then from the above figures it would have aprox $12B to spend on public housing or whatever, not that it probably would though?

In the 80s the Hawke/Keating government tried removing negative gearing for a couple of years - it was an un-mitigated disaster and sparked a rental accommodation crisis and spiralling rents. So past facts/history supports my view.

You need to work through the maths a bit better and try to remove your emotion from the situation, and maybe you would not laugh so much at statements like mine, which actually represent pretty mainstream thinking on the issue around treasury and the political arena etc. $12B a year in tax deductions/refunds for property investors - sounds like a lot? But it is really? Especially given that in 07/08 (the tear being used) interest rates increased to their highest levels since the mid-90s?

There are between 2.5M and 3M renting households in Australia. So $12B/year means that on average landlord costs are subsidised by $4k-$5k per year per rental (ie $75-$100/week). That's really not very much at all, and FAR LESS than it would cost the government to attempt to provide that housing itself if negative gearing were scrapped and 90% of private property investors exited the market.

Also, rents in Australia are CHEAP compared to other countries by any measure - especially the US, UK etc. Part of the reason for that is NG - so postulate and pontificate all you like about the removal of NG and pretend all you like that it has nothing to do with the availability of relatively low cost rental housing in Australia, but it is not going to be going away any time soon.

Cheers,

Beej

 

[Tysonboss1]

The department of housing already has waiting lists of over 5years for people that want houses.

Can They really handle increased demand if investment into property slows.

I can't see a smart government lowering benefits to property investors, as it would be far more expensive for them to have to start funding more state owned housing to take up the slack.

 

[Mofra]

Ah, what 450-500K is affordable for the average nuclear family? One income, 2 kids and a full time care giver on an average income of 60K, this still equates to X7 the average income. But wait, affordability means sending the kids of to day care 5 days a week, might as well have them born in a test tube and reared in a pen or laboratory then which could have affordability at X10 or more.

Or another way, borrow 400K, 28K in interest plus insurance, up keep and rates make it 33K. Average income clears 47K a year. Seems reasonable if all you want to live on is rice and be the bitch to the overlord banks for the next 25 years.

How about the government grows some balls and puts in place legislation to encourage people to invest their money in businesses that employee people instead of the masses being in debt servitude to the banks for 25 years.

Having affordability at x7 the average income provides no long term benefit to the community and the inhabitants of this great country. It seems that the indigenous people of Australia had the right approach to land usage, they had survived over 60K years, white man will be lucky to leave this land inhabitable in 1K years.

Just a couple of points to consider:

a. A single income family would be very unlikely to enter in the middle range market

b. Single income families aren't as common as expected - average household income differs to average salary

c. Family Benefits for a 2 child family equate to $186.20 per fn for Part B (unless they're younger, in which it's higher). The lowest rate for Part A on ave salary is $313.88 per fn. That's $26,000 pa extra income not factored into your scenario, which makes quite a difference. If either child is under 5, the amount of Part B increases and if either child is over 13, the amount of Part A increases.

I'm certainly not arguing in favour of middle class welfare (I don't get any myself) but it can make a substantial difference.