House prices to keep rising for years

[gav]

Landlords get greedy, exploiting the fact that only 1 in 100 rental properties are vacent, so rent prices go through the roof. I know quite a few ppl sleeping on relatives couches for months at a time because for every rental property there are so many applications.

Then those same landlords complain when these low income earners renting their properties dont keep up with payments - some because of increased cost of living (food, fuel, etc) and yes, some do bring it upon themselves with interest free purchases and the like.

I rented in what I would call a '****-hole' for 14 months, because I could not afford anything better within 45mins of where I work. After paying a rediculous amount for rent for the 12 month contract, the landlord put it up another 20% per week. Finally my brother (uni student) and I found somewhere nicer, newer, closer to my work, and we moved in with our other brother who had been sleeping on our couch for the past 2 and a half months. We got lucky, it must have been our 20th application. And the applications are so personal these days, demanding all our past bank statements for over a year (wtf?), pay slips, conducting interviews with past & present employers and referees that went for over 10mins, etc. I swear, it was easier to get into the Army! (i did that for 4yrs too)

Then the real estate agency get all ****ty that we are moving out, saying "well you obviously dont have a financial problem, you've payed every week on time". Then they give less than 24hrs notice (which is against what is stated in our contract) for countless number of inspections. Yes I could refuse them entry because they arent giving 24hrs notice, but I have done everything right so far, and I want my $1300 bond money back after the inspection next week.

I know there are cases where its the other way around. 8yrs ago my parents bought a home that they wish to live in when they retire, and have been renting it out. They retired last month, and told the real estate agency to give the tenant 4 months notice a while back. The house was vandalised, he had horses on the property which damaged the back yard, yet he was given his bond back. The real estate agency told my parents if they believed the tennant was responsible for the damage they would have to report it to the police and it wasnt their problem. My parents also later found out this same tenant was evicted from his last property, and was in prison for 12yrs prior to that (not sure what for).

My point being, for those of you who own investment properties with GOOD tennants who keep the place clean and pay on time, dont get greedy and jack up the rent. Being greedy will come back to bite you... Eventually

 

[Tysonboss1]

I know quite a few ppl sleeping on relatives couches for months at a time because for every rental property there are so many applications.

Then those same landlords complain when these low income earners renting their properties dont keep up with payments - some because of increased cost of living (food, fuel, etc) and yes, some do bring it upon themselves with interest free purchases and the like.

I

Supply and demand factor in perfect operation in your first paragraph, if there is that much demand then rents must go up,... this should then ensure more developments occur to soak up the excess demand.

secondly in response to your second paragraph, if they can't afford to pay rent then they should be downsizing or moving into a cheaper area, or perhaps budget better or work more hours.

 

[Tysonboss1]

My point being, for those of you who own investment properties with GOOD tennants who keep the place clean and pay on time, dont get greedy and jack up the rent. Being greedy will come back to bite you... Eventually

Annual rent increases is not being greedy.

Do you really expect to rent a property indefiantatly with out a rental increase?

If the rent doesn't rise each year then it is actually going down each year.

It's simple if the rent is to high then rent somewhere cheaper, land lords hate vacant property so if the asking price is to high it will be vacant till they put it down, however if there is no other better property for you to rent for the same $ amount and the applications are steadily coming in then the price is probally just right.

Don't be afraid to offer the land lord a lesor amount if you truly believe the property is over priced, a land lord will accept a lower offer rather than have a vacant property, however if there are other aplications coming in accepting the advertised rent then it is propbally not over priced.

 

[robots]

hello,

the big issue is if the likes of trigieboff, central equity and others get in and build the "run of the mill" accommodation that is required to help people like gav,

at the moment development is aimed right at the owner/occupier with a smaller % of units for investment,

for instance on st kilda rd you have a few developments that are for OO's, serviced apartments, the ones that are "run of the mill" have got into issues as investors have walked away

people have forgotten back around 01-04 you couldnt get a $5/wk increase in your rent,

the "private investor" needs more incentives to dive into "new" investment property if the gov is not going to build and maintain it, with maintenance being the costlier of the 2

when I grew up in frankston we had a housing commiss home 4-doors down, new people came about every 2-yrs, it got trashed every time,

put you're hand out and trash it as parting gift, wonderful

so the maintainence was enormous every 2-yrs, on every property they owned

thankyou
robots

 

[theasxgorilla]

My point being, for those of you who own investment properties with GOOD tennants who keep the place clean and pay on time, dont get greedy and jack up the rent. Being greedy will come back to bite you... Eventually

People should keep the place clean, pay on time, and expect to pay market rates for rent. That goes without saying IMO.

It brings up bad memories hearing your story...I hate property managers (mass generalisation), the way they play God with prospective tenants. It's a good motivating factor in getting out of renting and into owning. But I dare say anyone in this predicament now might need to keep preparing for the transition for a little while longer as I'm not convinced it's the best time to buy just yet.

 

[CamKawa]

I've been keeping an eye on the number of rental properties available in what Domain.com.au defines as the Melbourne region for the last month. Here's what I have found.

Date ------------# of properties for rent in Melbourne
07.06.2008 ----7770
14.06.2008 ----7949
21.06.2008 ----8100
28.06.2008 ----8158

As you can see the number of properties for rent in Melbourne is steadily increasing. I can't see rents soaring in the face of increased supply.

 

[robots]

hello,

we must all thank Gav for posting his/her REAL life experience when dealing with renting a residential property,

keep the real life experiences coming,

thanks camkawa for that info, just shows plenty of choice when it comes to renting a place in the melbourne region, I am sure plenty would be interested in a place in Toolangi or The Gurdies,

so if the landlord bumps it up you can move on, no big deal really

thankyou

robots

 

[CamKawa]

After paying a rediculous amount for rent for the 12 month contract, the landlord put it up another 20% per week. Finally my brother (uni student) and I found somewhere nicer, newer, closer to my work, and we moved in ...

A case in point here, renters are a price sensitive crowd that show no loyalty to landlords. Good on you for giving the landlord the finger and finding a better cheaper place elsewhere.

Then the real estate agency get all ****ty that we are moving out, saying "well you obviously dont have a financial problem, you've payed every week on time".

Not a very intelligent comment but that's the sort of behaviour desperate REA's have lowered themselves to in order to keep tenants.

My point being, for those of you who own investment properties with GOOD tenants who keep the place clean and pay on time, dont get greedy and jack up the rent. Being greedy will come back to bite you... Eventually

Well said.

 

[pepperoni]

One recent interesting view on interest rates attached ... more recent views seem to be pointing to high imported inflation and extreme domestic inflation brought about by crazy happenings in resources eg recent ore prices etc.

If these things ever eventuate may god save the rba cause nothing will save house prices ha ha.

 

[gav]

secondly in response to your second paragraph, if they can't afford to pay rent then they should be downsizing or moving into a cheaper area, or perhaps budget better or work more hours.

mate if it was that simple id just ask my boss if i could work 60hrs per week. and i cannot get a 2nd part time job, as my main job requires me to be flexible with days & hrs. my one day off per week changes week to week. it is not a huge problem for me, i may not earn much but i can budget and put a tiny bit away most weeks. the area i live in is pretty cheap, and there are alot of ppl in my area that are greatly affected by these rent increases, some of them are leaving & moving in with relatives. the state that they leave the houses in is disgusting, but i cant say i blame them, especially when they are asked to pay 30% more

i guess i have gone off topic a little. some of the comments i have read just really annoy me, as do greedy landlords

 

[kitehigh]

the area i live in is pretty cheap, and there are alot of ppl in my area that are greatly affected by these rent increases, some of them are leaving & moving in with relatives. the state that they leave the houses in is disgusting, but i cant say i blame them, especially when they are asked to pay 30% more

Sorry but leaving someones property in a mess isn't justified ever! If someone every done that to my property they would regret it. I had an old school upbringing and believe in the old school way of getting things sorted. You lost all sympathies with that comment.

i guess i have gone off topic a little. some of the comments i have read just really annoy me, as do greedy landlords

Like others have stated before, we live in a supply and demand society. I don't get a say when they put up interest rates, council rates etc. It all comes around in swings and roundabouts and at the moment the Landlords have the upper hand. It wasn't too long ago that the shoe was on the other foot though and like others have mentioned you couldn't get even a small increase, if anything it rent reductions were the order of the day.

You live in a country which has the greatest amount of opportunities available to able and willing workers. You just have to be prepared to go take those opportunities or put up and stop your whinging. I know whinging is an Australian favouriate past time but really it is the lucky country and people should thank there lucky stars they were born here and not say Iraq or Afganistan.

 

[CamKawa]

You live in a country which has the greatest amount of opportunities available to able and willing workers. You just have to be prepared to go take those opportunities or put up and stop your whinging. I know whinging is an Australian favouriate past time but really it is the lucky country and people should thank there lucky stars they were born here and not say Iraq or Afganistan.

That's a fairly harsh comment. It looks like some landlords must be really under the pump. Have you thought about selling?

 

[wayneL]

This thread has been closed once already due to folks getting a bit too personal.

Let's stick to the economics of housing here, rather than getting into criticism and condemnation.

Landlords and tenants have a symbiotic relationship, a bit of respect for each other goes a long way (and ensures this thread stays open).

Cheers

 

[robots]

hello,

good morning all looks like another great day,

auction clearance rates for melbourne ROCKETED to 65% yesterday (from 62% last week), fanatastic news,

thankyou

robots

 

[explod]

hello,

good morning all looks like another great day,

auction clearance rates for melbourne ROCKETED to 65% yesterday (from 62% last week), fanatastic news,

thankyou

robots

Yes the vendors are dropping their prices and getting out. Those who are desperate to live closer to the city (to cut fuel costs) are taking advantage of that. Many think that things have bottomed. But out here at Mount Martha the new property sales offices are like ghost towns. I know many in the RE business here and feel sorry for the employees also.

I think we need to change the name of the thread. "Property Clearance Rates Rocketing Downhill" with acknowledgements to Robots of course

 

[wayneL]

Yes the vendors are dropping their prices and getting out. Those who are desperate to live closer to the city (to cut fuel costs) are taking advantage of that. Many think that things have bottomed. But out here at Mount Martha the new property sales offices are like ghost towns. I know many in the RE business here and feel sorry for the employees also.

I think we need to change the name of the thread. "Property Clearance Rates Rocketing Downhill" with acknowledgements to Robots of course

The estate agency industry is hemorrhaging jobs here too, with the knock on effect that retailers of hair gel and cheap shiny suits are also suffering.

True story.

 

[robots]

Yes the vendors are dropping their prices and getting out. Those who are desperate to live closer to the city (to cut fuel costs) are taking advantage of that. Many think that things have bottomed. But out here at Mount Martha the new property sales offices are like ghost towns. I know many in the RE business here and feel sorry for the employees also.

I think we need to change the name of the thread. "Property Clearance Rates Rocketing Downhill" with acknowledgements to Robots of course

hello,

thanks explod, they have just ROCKETED up up and up so i think you may need to re-address the title,

it going to be a great time for prop if construction drops even further,

thankyou

robots

 

[overlap]

hello,

thanks explod, they have just ROCKETED up up and up so i think you may need to re-address the title,

it going to be a great time for prop if construction drops even further,

thankyou

robots

Interesting leaps of logic.

Clearance rates are a measure of turnover - sort of depending how you can swallow self interest spun into figures by the real estate industry. It says next to nothing about who's gaining or losing in the medium to long term on property, any more than turnover in shares does about the stock market. All activity must be viewed in a context.

Real estate agents and stock brokers love turnover more than anything else. Their trick is to convince the joe blows that activity is all goodness for the rest of us.

Your reasoning might turn out to be correct to a point, but time is a great leveller of markets and investment classes. The trick is not to be forced or spooked away from sensible strategy.

 

[Mofra]

The estate agency industry is hemorrhaging jobs here too, with the knock on effect that retailers of hair gel and cheap shiny suits are also suffering.

Cheeky, but probably fair

Your comments do raise an issue pertinent to house prices - the immediate future of the mortgage borking industry. Recently (2 months ago anyway) there were suggetsions the mortgage broking industry is on the cusp of major reform & consolidation - with the numbers of practising mortgage brokers to halve from appox 10,000 to 5,000. Any consolidation tends to lead to a higher degree of self-regulation (despite some efforts and the odd state-based guidelines, there are no national mortgage broking regulatory guidelines yet), so there is the hope that higher professional standards for the industry are imminent. Like financial planners, there is a slow shift to the more ethical, professional mortgage brokers surviving and the cowboys in the industry (and I have dealt with hundreds) having to move on to something they are perhaps more suited to - such as selling used cars.

Given the inevitable reduction in housing activity in many suburbs, you would expect a similar (albeit less comprehensive) consolidation amongst th real eestate industry is immanent as well.

 

[pepperoni]

Yes clearance rates are great for a RE agents comissions ...... but pity the poor building labourer who has been brainwashed by same RE into thinking they will somehow help his hail mary property plunge.

Its all supply and demand ... and demand at higher prices is always going to be limited by what people can afford.