House prices to stagnate for 'years'

[Freeballinginawetsuit]

Read this link...

http://www.smh.com.au/news/national...-in-debt-crisis/2006/08/20/1156012414995.html


HOUSE PRICES CAN GO DOWN!!

Smart young people in Sydney rent, it is as simple as that.

I am smart, young and rent.

you are none of the above..

You are a very simplistic young man by the sounds of it, certainly big on judgements for people you don't even know.

Maybe smart young people in Sydney rent?, dont own property and are quite happy living in a rental and getting kicked out at the landlords whim.

Personally I would rather own my own home, enjoy spending money on it.
Its quite nice to contol your own destiny, and owning the roof over your head affords this security.

Whoever without punters like you I would have no one to rent my investment properties to!, and once a month I am glad that theirs still a few punters like you around.

Relax a bit Realist not everyones of the same opinion as you and just because they are not, dosen't make them wrong.

 

[Realist]

You are a very simplistic young man by the sounds of it, certainly big on judgements for people you don't even know.

Maybe smart young people in Sydney rent?, dont own property and are quite happy living in a rental and getting kicked out at the landlords whim.

Personally I would rather own my own home, enjoy spending money on it.
Its quite nice to contol your own destiny, and owning the roof over your head affords this security.

Whoever without punters like you I would have no one to rent my investment properties to!, and once a month I am glad that theirs still a few punters like you around.

Relax a bit Realist not everyones of the same opinion as you and just because they are not, dosen't make them wrong.

Haha, read that article again mate. And again, and again until you figure out buying a house in Sydney the past 3 years was a real dud investment.

Now think about Perth, the population, the economy, the reality. Compare it to Sydney.

Getting it yet?

Virtually no-one ever makes much money on residential property despite all the hype. The sharemarket is a far better investment. Sure there's a few punters who live and work as property developers. If you break it down and look at reality they are working as builders and maintenance people and would normally be better off just getting a day job, or buying shares.

You keep doing what you're doing and I'll keep doing what I'm doing.

I will buy a home of course, when the time is right.

Meanwhile I'll let my landlord pay the high interest rates while my savings and shares soar cause of my cheap rent!

The best thing I ever did financially was not buy property!!

 

[Freeballinginawetsuit]

Haha, read that article again mate. And again, and again until you figure out buying a house in Sydney the past 3 years was a real dud investment.

No think about Perth, the population, the economy, the reality. Compare it to Sydney.

Getting it yet?

Virtually no-one ever makes much money on residential property. The sharemarket is a far better investment. Sure there's a few punters who live and work as property developers. If you break it down and look at reality they are working as builders and maintenance people and would normally be better off just getting a day job, or buying shares.

You keep doing what you're doing and I'll keep doing what I'm doing.

I will buy a place of course, when the time is right.

Meanwhile I'll let my landlord pay the high interest rates while my savings and shares soar!

the best thing I ever did financially was not buy property!!

At least you have a Plan, onya!

Hope it works out good, dont be a renter though when you settle down with a missus and kids.

All the best with your future goals.

Mark

 

[Realist]

At least you have a Plan, onya!

Hope it works out good, dont be a renter though when you settle down with a missus and kids.

All the best with your future goals.

Mark

Thanks.

 

[Jay-684]

I too am interested in both your asset portfolio value and your performances of late Realist. For two reasons,

1. I am 22 and would like to see where I'm at myself

and

2. You sometimes post about your BHP/RIO stocks etc going up/down $4 in a day... doesnt exactly get my blood pumping

looking forward to a reply

In relation to the topic of the thread, I hope to purchase a residential property in Sydney in the next 12 months, somewhere near the Norwest Business Park before construction is completed.

 

[Bronte]

How much in assets would a 30 year old who is doing ok have?

We hope you are going to tell us Realist

 

[juddy]

How much in assets would a 30 year old who is doing ok have?

a lovely partner and a number of healthy happy kids. That's all you need really. The rest is just icing.

:

 

[Freeballinginawetsuit]

We hope you are going to tell us Realist

Any smart young guy should own a property.I must admit I'm of a different opinion to Realist and certainly don't jump to his assumptions.

Actually Realist, I'm 26 years old, have my own Business, www.contractaquaticservices.com.au, employ 12 people, own 3 properties and trade large parcels of short term shares.
I am a single dad who cares for his son, week about with my ex. Having my own home, business allows me to do this and afford my young bloke the security of a home and quality parenting with me.
I sincerely hope you aren't a worker bee,that dosent ever own his own home,answers to the boss and trades all his spare cash on RIN shares (500 shares at a time).

 

[WaySolid]

Realist what have been your experiences with your own property investing?

There are people making money from property investing in all economic environments. It might not have been a great situation for anyone just buying n holding/hoping over the last 3 years but boy the previous 3 years are still compensating me and many others for that. Perhaps people think that there will be no future booms? Perhaps the compound figures won't keep doing what they have been doing for 60 years, thats possible.

In the mean time I will enjoy continuing to make money from my property, I have experienced healthy CG over the last 2 years (Bris + GC) which = real dollars in my pocket for further investing.

PS.... Just read that you will buy your own place in the future, so that answers my first question.

Perhaps it's likely that when others who do have real experience tell you something is possible in a field in which you have no experience that they could be closer to the truth. There is always something to be gained from experienced investors if you are open to learning.

 

[clowboy]

Realist,

You make alot of statements without backing them up.

Have you even visited WA and seen the 5000km's of coast?

As for sydney being a dud investment over the last 3 years, yes yes it has, but what an insane investment perth has been over the last three years.

Considering you could have bought a 250,000 prop for zero $ down and turned that into 500,000 I think that is quite good, in fact I even know a few ppl that have had change left over after buying a property. (ie they got 100% finance and the 7k grant and had three k left in the bank for furniture)

What return does it equate to when you start with nothing, buy a house, have three grand left in the bank, then watch it double in three years?

Sure shares have had much better returns over the same time, but you can't leverage them to the same extent.

Anyway, hope your right, I hope this is the begining of the end for perth property prices.

 

[Smurf1976]

Any smart young guy should own a property.

That depends on what you classify as being "smart".

If the objective is financial gain then whether or not you should own property depends on the market conditions prevailing in the years after you buy a property until you sell it.

If you buy and hold for 50 years then it would be hard to lose (though not impossible). But buying at the bottom rather than at a market peak will give you a much greater profit - even if prices went sideways for 5 years (though in Sydney they are clearly falling and I'm seeing more and more evidence of falls in Hobart too - two very different cities apart from both having a big harbour and mountains to the west) you would be better off with cash in the bank (or avoiding interest on a mortgage) until immediately before prices started to rise again. Unless, that is, rental yield exceeded interest but that's generally the reverse at present.

On the other hand, if you define "smart" in terms of something other than making a financial gain then it could well be argued that owning a property makes a lot of sense. Likewise you could argue that a lot of things make sense depending on what your goals are and what assumptions you make.

If you knew that you were certain to be struck dead by lightning at the age of 35 then there's not much point in worrying about the health effects of smoking or heavy drinking if you happen to enjoy those things. You'll die at 35 anyway so you might as well enjoy life while you have it. But given that we don't know such things in advance, it makes sense to assume you'll be around to age 80 or so and act accordingly with regard to health etc.

Smart to own a property? Depends on what you are hoping to achieve by owning it and the market conditions in the years after you buy.

 

[Smurf1976]

It constantly amazes me how any discussion on house prices turns "personal" ("I did such and such, you could too") rather than being a discussion about where the market is heading.

Not complaining, but I do see some market psychology significance in this.

 

[Freeballinginawetsuit]

That depends on what you classify as being "smart".

Very True.

I personally wouldn't buy any more property in the W.A. real estate market in present conditions. I was lucky enough to have accumalated a few years back.

I do however have hope that W.A. does drop a bit in price enabling an oppurtunity for first time investors to get in. I hope these people take advantage of this opportunity if this happens.

I am a believer that the Australian dream of being able to own your own home,comfortably, is rapidly evaporating. We are the first generation to witness it.

Sad really.

 

[robots]

hello,

not critical whether you rent or buy

critical though what you do with the difference when renting, your out of pocket cost must be the same as for buying

if mortgage is $400/wk
rates $20/wk
insurance $15/wk

total $435/wk

or to rent would be $280/wk then you must invest $155/wk

this is so important, and realist I assume is in this position, numbers show not a lot of difference between them

thankyou
robots

 

[NettAssets]

I am a believer that the Australian dream of being able to own your own home,comfortably, is rapidly evaporating. We are the first generation to witness it.

Sad really.

I think you are being a bit tough on previous generations that had a hard time FB.

Through the first war and depression there were a generation that had not much hope for a home until much later in life. Even up in the 60's there where those that maybe had a home but where still washing clothes by hand and walking a lot.

regardsJohn

 

[Freeballinginawetsuit]

I think you are being a bit tough on previous generations that had a hard time FB.

Through the first war and depression there were a generation that had not much hope for a home until much later in life. Even up in the 60's there where those that maybe had a home but where still washing clothes by hand and walking a lot.

regardsJohn

Yep, sorry!

Old WW2 settlers up Eneabba,Jerramungup etc. I recently saw some pictures of Margaret River way before the Farmers cleared the land, they certainly had to do it hard.Not much machinery back then.

I aggree we have had it easy, my point is that a lot of the younger generation
don't look to the future. Must be a lot of 20 somethings that wasted money on new cars etc, instead of buying property (W.A.). Imagine how much they would spewin that the cars worth bugger all but if they had used that as a deposit on a house it would have doubled.

 

[Julia]

Virtually no-one ever makes much money on residential property despite all the hype.

Realist

You've made some extravangant statements from time to time, but this is one of the silliest.

I've had substantial investments in both property and shares. The property has comprised my own homes plus investment properties. One investment property doubled its value in about 18 months.

It's the profits from property in years past that has bought me my present share portfolio.

If you just look back to the median price of property in any capital city in Australia 20 years ago you will see how inaccurate is your statement.

Julia

 

[nizar]

Virtually no-one ever makes much money on residential property despite all the hype.

It seems to me like you are bitter because YOU HAVE MISSED OUT from profiting from the recent boom in property

Would it be better to have owned shares from 2000-2006 or to have bought property in sydney or melbourne in 2000, sold in 2003, and then put the cash into the stockmarket until 2006?? Its not coincidence that the stockmarket started booming when the real estate bubble started deflating

Property outperformed shares 2000-2003 without question...

 

[Realist]

Okay alot of questions.

First of all, of course it was a great move to buy property in Perth 3 years ago, and 7 years ago in Sydney. I am talking about NOW though. Now is not a good time to buy investment property. If you have a wife and kids then sure buy a home to live in - you have a life to live! But if you are buying purely for potential monetary gain - think again and do your maths.

There is no point in telling me Perth property has soared, I know, and you are merely proving my point that it is not gonna go up much more, and will probably go down.

Secondly, when telling me prices have doubled you need to also mention stamp duty, interest rates, expenses, empty periods, agent fees, repairs, rennovations, insurance, fees, stress, time, and TAX!! AND INFLATION! Property like shares has expenses and all of them need to be accounted for before you say "I doubled my money!".

Residential property like shares is a great investment if you buy it when it is cheap and sell when it is expensive.

There are plenty of people that have made money from property, there are far more people, and far wealthier people that have made much more money from shares though. Shares are a better investment. No question!

How much am I worth?

Well I earn a good salary and live a cheap lifestyle. I could afford to buy a house, I wont though. I could afford to buy a new BMW, I wont though. I have long term goals, and you know what, I hate working, I'd rather live a cheapish lifestyle and save so when I want I can have time off, and I can retire early. My goal is to buy large successfull slowly growing dividend paying shares and hold, and hold and hold.

That policy is surely the most certain to bring me riches eventually. More certain than Residential property investment, more certain than trading and obviously more certain than buying a flash car and nice overvalued house.

When the time comes I will buy property. I fully understand the advantages, but unlike most I can see the disadavantages and I am prepared to wait patiently for the perfect time. Wealth is not a race, the journey is more important than the destination and a slow conservative well thought out plan is almost guaranteed to work. That is what I am doing.

 

[Realist]

hello,

not critical whether you rent or buy

critical though what you do with the difference when renting, your out of pocket cost must be the same as for buying

if mortgage is $400/wk
rates $20/wk
insurance $15/wk

total $435/wk

or to rent would be $280/wk then you must invest $155/wk

this is so important, and realist I assume is in this position, numbers show not a lot of difference between them

thankyou
robots

The average house price where I live is $1.9M. Seriously - Lower North Shore!

I live in an apartment worth $650,000. It has body corporate fees of about $6,000 per year (it has a shared pool, spa, gardens etc.)

I share with a girl, I pay $175 per week in rent.

The apartment has gone down about $80K to $100K in the past 3 years.

Do your maths again. I am right!!!