House prices to keep rising for years

[MrBurns]

Very Interesting.
Thank you Mr Burns

One of the oldest tricks in the book was to give a tennant free rent up front for a higher figure on the lease, that hiked up the price of the proprty nicely.

Then on review the rent would probably go down or if the tenant went broke the new owner couldn't get that rent level again.

 

[Bronte]

That is not very nice though.
I do see your point.

 

[MrBurns]

That is not very nice though.
I do see your point.

Owners also lease back their own property at inflated rents to get a high price from inexperienced buyers, goes on all the time.
It's a jungle out there.

 

[Bronte]

These townhouses were new off the plan and of course unleased.
We had to take a risk that they would be rented at a certain price to be positively geared.
We managed to rent them for $250 per week from day one.
As posted previously this IP was rented to the same people for nine years.
Today they are rented out for $450 per week.

 

[MrBurns]

These townhouses were new off the plan and of course unleased.
We had to take a risk that they would be rented at a certain price to be positively geared.
We managed to rent them for $250 per week from day one.
As posted previously this IP was rented to the same people for nine years.
Today they are rented out for $450 per week.

As long as you bought on the VACANT value and not on any value based on an inflated rental you would be ok.

 

[wayneL]

Owners also lease back their own property at inflated rents to get a high price from inexperienced buyers, goes on all the time.
It's a jungle out there.

I recall it was very common in your neck of the woods Burnsie. I can't recall this ever being done in Perth.

Perth *was* good value in those days.

 

[MrBurns]

I recall it was very common in your neck of the woods Burnsie. I can't recall this ever being done in Perth.

Perth *was* good value in those days.

Well I expect Allan Bond would have kept it all on the straight and narrow

 

[wayneL]

Well I expect Allan Bond would have kept it all on the straight and narrow

***Bursts out laughing!!

Indeed!

 

[Beej]

This is a good marker of value.

This was possible 10 years ago when there was value.

This is nowhere even remotely possible today.

If it is, show me. I'll buy some.

That's true. In Sydney, last last year in many area's this became possible - no coincidence I think that it turns out that time now marks the bottom of the market here. Perth has little/no value by this measure today from what people here say - so clearly it is expensive. The thing is this does not guarantee by any means a return to "value" any time soon.

Value does not tend to hang around for too long. What keeps it there is a higher level of perceived risk (think of the XAO at 3100 - didn't last long did it? Was real value there as it turned out, but fear/perceived risk created the opportunity). Perth used to have value, because people were unsure what the long term future of the city was in terms of growth (economically, population etc) potential, compared to say Sydney/Melbourne. Now, the outlook for growth in Perth continues to be high, so without that risk, the value goes away..... But that's a market for you!

Cheers,

Beej

 

[wayneL]

That's true. In Sydney, last last year in many area's this became possible - no coincidence I think that it turns out that time now marks the bottom of the market here. Perth has little/no value by this measure today from what people here say - so clearly it is expensive. The thing is this does not guarantee by any means a return to "value" any time soon.

Value does not tend to hang around for too long. What keeps it there is a higher level of perceived risk (think of the XAO at 3100 - didn't last long did it? Was real value there as it turned out, but fear/perceived risk created the opportunity). Perth used to have value, because people were unsure what the long term future of the city was in terms of growth (economically, population etc) potential, compared to say Sydney/Melbourne. Now, the outlook for growth in Perth continues to be high, so without that risk, the value goes away..... But that's a market for you!

Cheers,

Beej

I think it's a bit more complicated than that; but the simple bit is that the economy is reliant on high RE values. As such, governments will create policies to support prices.

I think it is... and has been, a grave mistake, but agree value might not return soon. (I'm 70-30 atm)

Eventually it is inevitable by one mechanism or another and unfortunately will negatively alter the social fabric of Oz (as outlined ad nauseum). But Oz is not alone in this.

RE is a "HOLD" for me atm.

 

[kincella]

well maybe some should consider we are heading towards a European style of living....??? larger % of renters than owner occupiers.....and Switzerland had only 37% owners......due to constraints in available land etc.....the high cost of avaliable housing.....higher % would like to own a home...but could not afford it.....
and today more modest rises in house prices.....
http://money.ninemsn.com.au/article.aspx?id=869574

 

[satanoperca]

from the above link

However, Mr Joye said he did not expect the recovery to run at the same pace in the coming months

Gee I wonder why, FHBG reduced today and further reduction in the next few months and the ever growing reality of rising interest rates given retail figures out today showed an increase, giving the RBA a reason to raise them.

The lollipop is almost dissolved, hope there is some more in the cookie jar.

 

[gfresh]

How sustainable are these rises? Wonder if the government will take the hint from the RBA..

Satan: unfortunately there is plenty.. Rises just encourage further investors into the market which will only push up prices further.

 

[satanoperca]

Gfresh, you are right, but those lollipops may become less if this is any guide of future interest rates. Certainly will effect the FHB that the government want so eagerly to get into the market.

http://www.asx.com.au/sfe/targetratetracker.htm

And then click on the link for implied interest rates for the next 18months. Cannot get it to link directly.

The only way is up, it would seem for interest rates.

 

[MrBurns]

Don't forget Rudd changed the rules allowing unprecedented Asian investment in residential property thats why it's all Asians at Auctions lately, so wonder when the effect of that will abate.
Labor always think up new and inovative ways to **** this country up

 

[robots]

hello,

gee the RBA is spot on, rich get richer and the vulnerable get NOTHING

superb, how it should be just like years before, those who put in get rewarded

the improvements to our country as result are very impressive

hang on, just get the violin out for a tune

lock it in eddie, yeah man once the property sold no aussie can ever buy it back

thankyou
professor robots

 

[robots]

hello,

good evening, another glorious day across the country

OH YEAH:

http://www.heraldsun.com.au/busines...st-survery-finds/story-e6frfh4f-1225781196624

oh yeah, more $ rollin' in for the title holders, I am a HOLD

thankyou
professor robots

 

[satanoperca]

Go ask the Japanese how they feel about that after their endeavors into Australian real estate a decade or more ago.

http://www.theage.com.au/business/strong-retail-sales-means-rate-rise-looms-20090930-gbtf.html

 

[mythos]

well maybe some should consider we are heading towards a European style of living....??? larger % of renters than owner occupiers.....and Switzerland had only 37% owners......due to constraints in available land etc.....the high cost of avaliable housing.....higher % would like to own a home...but could not afford it.....
and today more modest rises in house prices.....
http://money.ninemsn.com.au/article.aspx?id=869574

Having lived in germany. It is better to rent in Europe, as you have a much more secure tenancy. You can paint, put in new kitchen, etc in Germany. And the leases are essentially perpetual.

Unlike a lot of RE Agents in Brisbane who won't give you more than a 6 month lease, so you have no certainty over how long before you might have to look for a new place.

Much better to own in Australia, however in Europe there is little reason to own, as renters have most of the benefits that owners have here.

 

[robots]

hello,

Sunshine & Lollipops

going to be a blast tonite, flick the 30yr old TV onto Ch9, Hey Hey

thankyou
Professor Robots