House prices to stagnate for 'years'

[tech/a]

As for house prices its pretty well as expected Melbourne and Sydney coming off and the rest either tappering or continuing.
This will flatten and or fall dramatically once interest rates rise.
There could also be one last splurge before or as interest rates make a move as some lock in fixed rates as pricing dips a little.
Adelaide Brisbane and Perth best.
Opportunity in all states I believe in low density housing for the rent scarcity to come.Also there is a market I believe for the 200-300K semi detached new dwelling of young families who dont want to rent.

Community title will become the low density way of the future in my view.

 

[ghotib]

Good ole hindsight meter

FWIW we're in the process of getting some real estate agent opinions (I refuse to call them valuations) on a 2 bedroom semi in Sydney. Only one so far, but his comment is that first-home buyers are in the market for around $550-595K.

That seems high to me for this property - I'd put it around $530K. Even so, that's held up pretty well since the other side of the semi (in better condition) sold for about $560K in 2003.

Now can someone explain how or if that fits to the indexes and what that RHS/LHS investment/affordability graph is trying to say, because I don't get it.

Oh, and Tech - what's community title? Is it what NSW calls Strata?

Thanks,

Ghoti

 

[BentRod]

Fleeta---a perfect example.

Kris.

Do you smoke---no not a trick question.
I'll show you what you can do with the price of a pack of Fags over a few years.
For those who think making big $$$s is for the fat cats!

Sorry to drag this up from page 2 but I'm interested ...even though Kris wasn't

Cheers

 

[wayneL]

.....but his comment is that first-home buyers are in the market for around $550-595K.

At around the same price in my area...

http://www.realestate.com.au/cgi-bi...0&p=10&t=res&ty=&snf=rbs&ag=&cu=&fmt=&header=

 

[tech/a]

Ghotib.
The left side axis isnt clear as to wether thats 1000s.
But if it is then that would be a mean average over the metro area I would say.Inner suburbia would be greatly different.But without knowing the axis its hard to say.

Bent.
I'm trying to remember what it was I was going to show Kris.
When I remember I'll post it up.

 

[BentRod]

Thx Tech.....will look forward to it mate.

Bent.

 

[RichKid]

Bent.
I'm trying to remember what it was I was going to show Kris.
When I remember I'll post it up.

From memory I think you went on to discuss the amount of money a regular/heavy smoker could save by giving up smoking and then put then invest the money or something like that I think....see those posts again from about that date...

 

[tech/a]

Rich I remember it is the power of capitalizing and compounding.
Stay tuned.

 

[tech/a]

Lets take the cost of a pack of smokes at $10 for simplicity.
A pack a day smoker invests $3650 a year into destruction of their body (I did).

At age 20 they decide to invest the same $3650 a year (Hopefully from the funds of not smoking) every year and they find a way to return 10% a year on those funds---each year adding another $3650.

Mind you this is a lot better than Super!!

So year 1
$3650 * 1.1 = $4015 + 3650 = 7665
$7665 * 1.1 = $8431 + 3650 = 12081

ETC

In 35 yrs the figure is $1,088,162
Had you placed $3650 each year under your matteress.--35 * $3650 = $127,750.

Now for the exciting stuff.
At year 42 its $2,158,612 only 7 Years later

Just imagine in 35 yrs time what $10 a day will seem like--10c
So increasing as we can afford it --RELIGIOUSLY--will be even more benificial.

Many here want that 100-300% a year in their persuit of financial freedom.

Lets take a look at a more realistic approach.--Slow but steady wins the race.

If 100-300% a year is achievable then 30% must be a piece of cake.
Well I have recorded evidence over the last 4 yrs that 100% + is achievable so 30% is very real.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=74;t=000001

So lets take a go getter 35 yr old who starts with $100k and each year places $10k as a compulsary saving plan and he finds his constant way to return 30% in the market.

$100,000 * 1.3 = $130,000 + $10000 = $140,000
$140,000 * 1.3 = $182,000 + $10000 = $192,000

In 8 yrs he has $1,044,307.-----$ thats 43 yrs old.
3 yrs later he's made $2mill and 2 yrs later $3Mill.

Ever wondered what the adage "Work Smarter not Harder" really means literally???
and another "Money Makes Money".

Etch this into your psyche.

CONSISTANT return will find you riches well beyond expectations.

Sure a 500% windfall is fantastic fun--- but should not form the BASIS of your financial goals
.
Trust me 0 to 50 comes faster than you'll blink!
Aint that the truth (my older friends here!!).

 

[BentRod]

Thx Tech...Much appreciated.

Will take me a while to digest all that info but I'll get there :

Cheers

 

[tech/a]

Try quickeze you'll need it for Xmas anyway.
Cheerz

 

[Smurf1976]

Well it looks like the results are starting to come in on the great house price debate. The housing industry is doing its best by describing falling house prices as "affordability improves". Technically correct in that lower house prices are more affordable, but really, just admit it, house prices are FALLING.

In Sydney they're falling at about the 1% per month house price crash "cruise speed" seen before in the UK and other countries. In the ACT they seem to be falling somewhat faster.

When you add in inflation and annualise the figures, Sydney houses are losing about 15% a year in "real" terms. If you invest with leverage then potentially it's a lot worse than that.

The safe areas? Nowhere except Hobart and regional WA. It's hard to believe they will be permanently immune from what seems to be a national trend.

http://www.smh.com.au/news/Business...-to-remain-weak/2006/01/12/1136956277419.html

http://www.abc.net.au/news/newsitems/200601/s1546677.htm

 

[money tree]

In August last year I paid $220k for a house in Underwood, QLD.

having nearly finished renovating it, I started looking for a new project. I spotted a house for $250k in Springwood (next to Underwood). I emailed the agent and asked if the seller would consider $220k I would do an inspection.

he replied:

"Im sorry, but your insulting offer is flatly rejected by the owner. I suggest if you only have $220k to spend you go a lot further south, perhaps to Woodridge or Kingston. You will never buy a property in this area for anywhere close to $220k."

to which I replied:

"....actually I recently paid $220k for a house in Underwood, so it would appear you are mistaken....."

so what does it all mean?

well I suspect when I bought it was the bottom of the market. After some further searching it appears the agent was right.....$220k wont buy much....even if you do go down to the bad areas. So.....what the hell is my place worth now? I found a similar property in Underwood asking $309k....but mine is far better. So lets call it $320k.....thats +$100k in 5 months.....ok, ok....its been developed......but hey that only cost me $12k....the other $88k is mine, tax free.

this must kill tech/a :

property crash?

say what?!

dont lump Brissy in with Sydney & Melbourne property crap....we are in perpetual growth. All the cockroaches are selling up their $500k dumps and moving to QLD where they can live like kings.

I notice also that units/townhouses around Kingston/Woodridge are acheiving rental yields of around 7%. To me it looks like prices have fallen a bit, and rents have increased a bit. I may even buy a few positively geared ones soon.

 

[wayneL]

The property bears will need to be patient..

"Im sorry, but your insulting offer is flatly rejected by the owner. I suggest if you only have $220k to spend you go a lot further south, perhaps to Woodridge or Kingston. You will never buy a property in this area for anywhere close to $220k."

What a stupid response. I don't imagine this person will survive in the business for long. More diplomacy could have seen an increased offer. But this would almost guarantee that most buyers would not deal with this clown again...EVER.

I wouldn't.

 

[Smurf1976]

Periodically I check several suburbs of Hobart on www.realestate.com.au just to keep an eye on the market - both asking prices and the number of properties for sale.

The key thing I'm noticing is the steady increase in the number of houses for sale. In one suburb that I've been looking at since 2003 (was considering moving there at the time) the increase has been over 400% albeit from a relatively low base. But elsewhere the story is the same - more and more properties for sale since around August 2003. In rough terms it had nearly tripled by this time last year and it's almost doubled again since then. And I know for a fact that several of those houses are empty at the moment. To make things worse, they've just started building more houses in that area.

So, supply is increasing whilst even the real estate industry acknowledges that sales volumes are sharply down. Supply and demand and I don't see it leading to higher prices even though the asking prices don't seem to be falling.

Looking also at the sold properties on that site it appears that in many Hobart suburbs there is a 12 month supply already listed for sale. In popular Kingston (middle income middle-outer suburb linked to the city centre by a highway and with reasonable shops and public transport but limited local employment) there's about 2 years' worth already listed and plenty more being built (it's a long established area but being in Hobart there's no shortage of land).

As for actual land prices, the cheaper blocks seem to be coming down significantly in some suburbs (middle income areas) but I haven't monitored that closely.

 

[tech/a]

the other $88k is mine, tax free.

this must kill tech/a :

.

Tree
I'm not young enough nor do I have the motivation or time to refurbish my principal place of residence and move around to the next opportunity and make $s as you do.

We build Community Title Apartments ideally groups of 6-12 if We can find the land.
We buy the land,the builders build and the Clients buy,We cashflow and my wife oversees.
We aim at $50-80K an apartment(Gross taxable) and we pay tax--
We are currently looking for suitable land after completing a JV (Joint Venture) on 10 in Morpettvale.

You have your way I mine.

There will always be opportunities.

 

[The Barbarian Investor]

Prices are still on the rise in WA, vacancies are very low, rents are rising, times for building houses are blowing out to 18-24 months, some building Companies are closing thier doors to catch up on backlogs, the HIA is talking about fast tracking some courses....

All is good and not neccessarily regional WA only, Perth is Booming (4.4% CG last 1/4)

My goals for 2006 are coming along fine..

 

[tech/a]

Sunday Mail reports very strong figures for 2005.
Unley became SA's first Million dollar neighbourhood.
Average price in 2004 was $800K now $1.2 mill.
Thats a hefty rise.

Hey many stood back and watched the Share boom.
Yeh I know those who didnt understand risk also lost a motzza.
But thats what opportunities are all about,understanding how to make the most of them.

There are 3 stages.
(1) Recognising an opportunity.
(2) Understanding how to make the most of the opportunity.
(3) TAKING THE OPPORTUNITY

The last being where 90% fail.

Wheres that megga fone and soap box!

 

[excalibur]

Sunday Mail reports very strong figures for 2005.
Unley became SA's first Million dollar neighbourhood.
Average price in 2004 was $800K now $1.2 mill.
Thats a hefty rise.

Hey many stood back and watched the Share boom.
Yeh I know those who didnt understand risk also lost a motzza.
But thats what opportunities are all about,understanding how to make the most of them.

There are 3 stages.
(1) Recognising an opportunity.
(2) Understanding how to make the most of the opportunity.
(3) TAKING THE OPPORTUNITY

The last being where 90% fail.

Wheres that megga fone and soap box!

A M E N !!!!

 

[bullmarket]

Hi everyone

hmmmmmmmmmm

There are 3 stages.
(1) Recognising an opportunity.
(2) Understanding how to make the most of the opportunity.
(3) TAKING THE OPPORTUNITY

Isn't the above straight out of "Creating Wealth 101" ?

Nothing new there and preaching to the converted

Anyway, I'm not expecting the residential property market on average to do much for at least the next 12 months, but high demand and popular locations (eg..near water, especially the coast) should still do ok overall imo. But I don't see a property crash either as some in the media have been predicting. The overall rise in residential property values in the last 5 years or so has been outstanding and the recent general cooling off is just a 'technical correction' given the slowing down of the economy, rising oil prices, possibility of rising interest rates etc etc.

I believe anyone looking for investment opportunities has to be much more selective and dilligent in their homework/research before committing than say 5 years ago.

Remember the old saying that says it's better to buy the worst house in the best street than the best house in the worst street

Also the S&P ASX200 Listed Property Trust Sector (XPJ) is still holding up ok atm and so property overall (office, industrial, retail, hospitality and leisure) are still doing ok.

cheers

bullmarket