The future of Australian property prices

[trainspotter]

Same but different basilio -

GIO agreed to Kaye's request, provided he sign a waiver releasing GIO's obligations to pay Kaye the equivalent of a deposit for each purchaser who defaulted at settlement.

But under the deal, the developer faced the possibility of an uninsured Kaye being unable to pay it for the apartments it built.

I think the banks and insurers have changed lending practices since then. It was 2003 afterall and the mood has swung against this kind of operation.

 

[Mr Z]

Depends on interest rates. If the banks jack the margin on the wholesale funds due to costing overruns and short supply my money will be on a boing. OR are they just profiteering again? Supposedly the biggest GFC in history and the big 4 are coming out with pregnant profits like never before.

The profits are explainable and not sustainable, witness the market reaction to CBA's profit. GFC worked out better than expected and going defensive yielded short term gains. At least that was my quick read of it... but I am not following the banks closely.

The scuttlebutt is that anything written at todays rates is actually underwater and while it may make sense in a strategic fashion over the whole book (??? yeah I dunno but experts tell me it can) the loan will not be in the black until rates rise. This is a part of the reason for the focus on quality not quantity ATM, they are looking down the road.

I prefer my bank profiting considering the alternate! Just so long as I am not over a barrel with a grimace on my face.

 

[satanoperca]

Hi,

Didn't see this post before even though a week old but it seems Robots mentor Dr Steven Keen has a brother.

LOCAL property investors have become "Ponzi borrowers" in a market 40 per cent overvalued, according to a Morgan Stanley strategist.
In a bearish note to clients this morning, Morgan Stanley strategist chief strategist Gerard Minack warned Australia's housing "bubble" could be pricked should banks tighten credit or "loss-making" middle-class landlords start to sell.

http://www.theaustralian.com.au/business/property/morgan-stanley-analyst-bearish-on-housing-market/story-e6frg9gx-1225906316683

Cheers

 

[MR.]

You go for it MR. ! Most Likely You Go Your Way And I'll Go Mine - Bob Dylan.

I forgot this thread is only for the naysayers who are more committed to greed and the stockmarket gains. Let's not try and make money out of building something now shall we! Better off with bits of paper in our hands rather than a roof over our heads.

It may be just me but you don't seem to build anything there TS. Didn't you explain how you make a quick buck out of getting a building company to build a house on your land, you mark it up and bingo, easy money! I think Mr Z would be correct is saying that if you didn't do it perhaps the home owner would and the price would be a little cheaper. Even with your screw down the builder's discount.

I don't know where all this is coming from but you assume I don't build anything! As I had already claimed, machinery had been purchased over property. Unlike many other people I know including the machinery salesman have all bought property recently.(repeating because sometimes you don't listen)

Now you can't compare what you do in building to me. I'm building something in the true meaning of the word. (Don't need a dictionary to look that one up) You appear to be just the middle man, similar to importers, do very little and collect the coupons at the expense of good old Oz. Who cares how anyone gets the coupons, hey? Wrong......

ps: I'm not a fan of juggling bits of paper either!

 

[trainspotter]

One more time just for comedy purposes.

I have an involvement in the building company. A "quick" buck indeed !! LOLOL .... try a bit of risk why dontcha. Every venture must have a profit on it ear marked for "profit and risk" or you will fail. You think I am doing this for love?

So I take MY money and go and BUILD something which employs people which I then sell at a market driven price to the purchaser.

So therefore I am increasing the velocity of the money in the community by paying subcontractors to work on the projects who in turn spend it in the retail outlets and pay taxes etc.. So how is this at the expense of "good ol OZ" ?

I go and BUILD a house and you go and BUY a piece of machinery. How is it that I am not BUILDING something here MR. So when you BOUGHT your bit of machinery did it do the same? The salesman got a commission, the mechanics get to service it, the dealership gets a kickback from the manufacturer. What's the difference?

You said this "I'm building something in the true meaning of the word." what does this mean exactly unless the machinery you are using is BUILDING roads or dams or infrastructure?

You mentioned your plough had lights on it? This means to me general farming or tilling soil?

It seems that I am not the only one who fails to read the written word.

 

[Mr Z]

FWIW... the paper that is shares and the secondary market that is the ASX allows for and sets the price for raising capital for companies that do exactly what you do MR... LOL and what TS does sometimes as well. Underdeveloped or worse still no capital markets mean much less opportunity to build this nation. As pointed out there is a lot of risk in it, most lose, but those that get it right are playing an essential role in directing the allocation of resources in this economy. People disparage it and to man that I have asked they have no idea of its true role. There may come a time MR when you will appreciate people juggling paper if you ever grow to the degree you need capital well beyond your capabilities. The you will be telling us you are the best bet in town no doubt

I can't believe we are getting into investment tribalism with a righteous moral overtone! The fact is we need it all in the correct proportions, the argument is just over how much of what and how much is too much! MR making unwanted widgets as bad as TS making unneeded houses. Loose money distorts all these markets and gives us all bad signals, any of us could be setting our foot down in the wrong place.

So what, I buy stock in enterprises that employ real people in real projects in the real world with real risks... it is not so evil really.

Lets stay off of this territory, it is probably not helpful.

Cheers
Z

 

[trainspotter]

Now I am really confused?

TS = building houses and making profit

MR. = buying machinery and making profit

MrZ = buying shares on the stockmarket and making profit

And the title of this thread is what again?

FWIW I am not trying to come across as a sanctimonious windbag and saying you are all doing it the wrong way for crying out loud. FFS.

I was merely explaining to the proletariat MY STRATEGY in the property market and how I make my coin.

P.S. - Not trying to provoke you there MR. I asked you previously what kind of machinery you have but I did not get a response. Perhaps if you explained to me what you do I might get a better grip on your reasoning.

 

[robots]

Hello,

yes pretty ordinary state of affairs on the thread at the moment Trainspotter,

basically its been hijacked, oh well

some know the effort they put into building Australia

thankyou
professor robot

 

[Mr Z]

Conversations ebb and flow, get over it. Hijacked my butt considering your contributions!

TS, you did go the moral high ground back there, there is no such thing in capitalism. You are either right or wrong, broke or solvent or paying the market to learn... what ever the market.

 

[Agentm]

Now I am really confused?

TS = building houses and making profit

MR. = buying machinery and making profit

MrZ = buying shares on the stockmarket and making profit

And the title of this thread is what again?

FWIW I am not trying to come across as a sanctimonious windbag and saying you are all doing it the wrong way for crying out loud. FFS.

I was merely explaining to the proletariat MY STRATEGY in the property market and how I make my coin.

nice post

TS,, your very much in the development of property, i see in geelong, the coach of the AFL geelong cats has had a hand in starting that journey, i saw an article where he and 3 others put in $400,000 each and today bomber thompson is said to be worth $10 mill for his share.. thats after 4 years of getting approvals for the massive site

with property prices being at an astronomical peak right now, will you expect that trend to remain?

how do you plan for and buy property and develop good profit with your outcomes in a peaked or slightly declining market?

is it a case of finding real cheap land only and working in that domain or are you expecting developers to make it good still in a declining market regardless of the property (land) price?

 

[trainspotter]

Conversations ebb and flow, get over it. Hijacked my butt considering your contributions!

TS, you did go the moral high ground back there, there is no such thing in capitalism. You are either right or wrong, broke or solvent or paying the market to learn... what ever the market.

Sorry to all and sundry if the moral high ground was perceived in my repost. It was not meant to be taken in such a manner. I was merely purveying to the edjumacted peoples how I make money in RE. Not about building national wealth by ulterior means.

 

[robots]

FWIW... the paper that is shares and the secondary market that is the ASX allows for and sets the price for raising capital for companies that do exactly what you do MR... LOL and what TS does sometimes as well. Underdeveloped or worse still no capital markets mean much less opportunity to build this nation. As pointed out there is a lot of risk in it, most lose, but those that get it right are playing an essential role in directing the allocation of resources in this economy. People disparage it and to man that I have asked they have no idea of its true role. There may come a time MR when you will appreciate people juggling paper if you ever grow to the degree you need capital well beyond your capabilities. The you will be telling us you are the best bet in town no doubt

I can't believe we are getting into investment tribalism with a righteous moral overtone! The fact is we need it all in the correct proportions, the argument is just over how much of what and how much is too much! MR making unwanted widgets as bad as TS making unneeded houses. Loose money distorts all these markets and gives us all bad signals, any of us could be setting our foot down in the wrong place.

So what, I buy stock in enterprises that employ real people in real projects in the real world with real risks... it is not so evil really.

Lets stay off of this territory, it is probably not helpful.

Cheers
Z

hello,

now thats interesting, its all Tall Poppy Syndrome trainspotter, keep helping the community man

thankyou
professor robotos

 

[trainspotter]

nice post

TS,, your very much in the development of property, i see in geelong, the coach of the AFL geelong cats has had a hand in starting that journey, i saw an article where he and 3 others put in $400,000 each and today bomber thompson is said to be worth $10 mill for his share.. thats after 4 years of getting approvals for the massive site

with property prices being at an astronomical peak right now, will you expect that trend to remain?

how do you plan for and buy property and develop good profit with your outcomes in a peaked or slightly declining market?

is it a case of finding real cheap land only and working in that domain or are you expecting developers to make it good still in a declining market regardless of the property (land) price?

Gooooooo Bomber Thompson. Not only will he win another flag (Collingwood supporters FLAME ON !) but he has managed to hit the ground running on a property development that has turned a staggering 124% compound interest over 4 years. Now before we all get our panties in a bunch this does not take into account development costs or overheads such as administration and or advertising blah blah blah.

I do not expect this kind of trend to stay solvent for at least the next 5 years IMO due to the market in decline. ABS figures don't BS. Anything above 20% is good money in my world.

I ask for expressions of interest first. Let's say I own a 15,000 sqm unit development site (which I do BTW) I spend about 15k on advertising for people to inquire about the development and send them the information to gauge what kind of response and what level they are interested in. If they say they would like a piece of the action BUT they have to sell their house first or they require finance you can gauge the market by looking at what is selling and how many bother to inquire about the said development. Pretty easy really.

Land price is not the only factor. One of the main issues is the rezoning for high density housing or changing the R codes or how far away the utilities are such as power, water, sewerage and what costs are going to be involved to get it serviced. Can the development be staged in increments of building and what are the costs involved with these items. No good buying cheap land only to find out it requires 240k worth of rock breaking to get the services in or that the sewerage stops 300m up the road and the water authority want a cool 500k to extend the pipeline.

Many factors are involved in such dealings. There is a little bit more to it than meets the eye. AND NO they all do not make money, some are better just leaving as vacant land whilst the market readjusts.

OR you can get all the developments approvals and costings in place, add a premium onto the purchase cost and SELL it to a bigger fish who has the firepower to absorb these kinds of overheads.

P.S. I also have a matrix programme that tells me what the property is worth once you include ALL costs associated with it. Place in development costs, overhead and risks, advertising, interest component, holding costs, building costs, the whole 9 yards and BINGO it tells me what the property is worth to buy (this is only for large scale productions and not single green Torrens titles)

 

[todster]

Hello,

yes pretty ordinary state of affairs on the thread at the moment Trainspotter,

basically its been hijacked, oh well

some know the effort they put into building Australia

thankyou
professor robot

Look for the common denominator

 

[robots]

hello,

will do, thanks

thankyou
professor robots

 

[UBIQUITOUS]

hello,

will do, thanks

thankyou
professor robots

hello,

yes

thank you

sunshine

lollipops

goodbye

:sleeping:

 

[Mr Z]

hello,

now thats interesting, its all Tall Poppy Syndrome trainspotter, keep helping the community man

thankyou
professor robotos

Why yeah... must be!

Where is my brush cutter, lets do this right... actually no, hockey mask and chain.....

Meanwhile back at the ranch we have two bets for a short term pop. Anymore for anymore?

 

[trainspotter]

Why yeah... must be!

Where is my brush cutter, lets do this right... actually no, hockey mask and chain.....

Meanwhile back at the ranch we have two bets for a short term pop. Anymore for anymore?

Jason ... is that you? .............

Put down the chainsaw Jason .... JASON !

There was movement at the station, for the word had passed around
That the colt from old Regret had got away,
And had joined the wild bush horses - he was worth a thousand pound,
So all the cracks had gathered to the fray.

Hahahahhahaaaaa ...... too late ..... party is over. Already leveraged my way to Nirvana. Property HUH? Who would have thunk it?

I wonder how C Corp is going? or what about J Corp now I think about it?

 

[trainspotter]

hello,

yes

thank you

sunshine

lollipops

goodbye

:sleeping:

hello,

minack and keen is my hero

i have no input other than a headline

i can't back anything up with an opinion no matter how many times i am asked

thank you

UBI

:burn:

 

[UBIQUITOUS]

hello,

minack and keen is my hero

i have no input other than a headline

i can't back anything up with an opinion no matter how many times i am asked

thank you

UBI

:burn:

No need to back up the obvious fella. Here's another one for you to disagree with. And remember, if you don't believe its true, it can't be.

http://www.prosper.org.au/