The future of Australian property prices

[tech/a]

how is it you guys have it all over them for forecasting ability?

Have a few mates in the US who develop and buy and hold.
Neither are in dire straits. Purely because they take care of their maths for catastrophic events.
Those here in the Industry have done the same. If your gearing is below a revalue of your holdings of - 20% and then you'll be positively geared then banks aren't going to be interested in you.
In fact they will be beating your door down for business as the CBA were for a month with myself.

Best advise I can give anyone is ignore the postulation and get the hell on with it!!!

Private persons who "dabble" would be best advised to operate like a pro---in any endeavor.
Property
Trading
Business.

Its not that hard!!

 

[Mr Z]

Have a few mates in the US who develop and buy and hold.
Neither are in dire straits. Purely because they take care of their maths for catastrophic events.
Those here in the Industry have done the same. If your gearing is below a revalue of your holdings of - 20% and then you'll be positively geared then banks aren't going to be interested in you.
In fact they will be beating your door down for business as the CBA were for a month with myself.

Best advise I can give anyone is ignore the postulation and get the hell on with it!!!

Private persons who "dabble" would be best advised to operate like a pro---in any endeavor.
Property
Trading
Business.

Its not that hard!!

Sure.... but you are still coming at it like an developer not a buy and hold investor. The former can do well while the latter stays still or even goes backwards. Most here are thinking like buy and hold investors, they have concerns with property on that front.... as do I. That probably means little to a canny developers income, but it does not make them wrong.

 

[tech/a]

Do you honestly believe that developers aren't in your midst as buy and hold investors?
Its ALL about gearing/Positive/Passive cash flow once you have that negative capital growth can come and go-----positive capital growth can be USED!

Your thinking like a deer in the headlights retail punter!

Come over to the Dark side!

 

[Vicki]

So does anyone want to humour me, with my question, what would be the possible effects of a 10% interest rate on the oz r/e market?

Vicki

 

[CamKawa]

So does anyone want to humour me, with my question, what would be the possible effects of a 10% interest rate on the oz r/e market?

Vicki

Lots of bitching in the media.

 

[Mr Z]

Do you honestly believe that developers aren't in your midst as buy and hold investors?
Its ALL about gearing/Positive/Passive cash flow once you have that negative capital growth can come and go-----positive capital growth can be USED!

Your thinking like a deer in the headlights retail punter!

Come over to the Dark side!

Hmmmm... we are tracking of course here. Thanks for the egg, I will go suck it now. Merry Xmas.

 

[Mr Z]

So does anyone want to humour me, with my question, what would be the possible effects of a 10% interest rate on the oz r/e market?

Vicki

A new government would be the biggest effect!

 

[wayneL]

Do you honestly believe that developers aren't in your midst as buy and hold investors?

Admittedly I don't hang out with a lot of develpoers, but I have known a few big swinging d~~~ed developers over the years. The minority were buy and holders.

But my comment FWIW is that the buy and hold developers have been the ones that survive the crap times; the rest tend to crash and burn eventually.

One of my current clients here owns most of the Wellington waterfront o slight embellishment there ). Has been acquiring, redeveloping and holding since the late 80's (starting at the worst time). He is is unperturbed by the terrible NZ market atm because he's not overgeared.

The other type tend to overgear and refuse to accept imminent changes in conditions.

So agree the buy and hold type developer tends to look at worst case scenarios and gear accordingly. The other type are a more gambler mindset... put all their (highly leveraged) chips on red and pray.

Just my experience.

 

[nukz]

So does anyone want to humour me, with my question, what would be the possible effects of a 10% interest rate on the oz r/e market?

Vicki

Wayne swann would come out and say hes going to get tough on the banks ... again haha

 

[tech/a]

Wayne
No arguement there.
I was un aware we have shared a change room!

Vicki
My answer
Tremendous opportunity
More so if higher.
A dose of inflation would be welcomed by myself and many like me.

 

[Vicki]

My answer
Tremendous opportunity
More so if higher.
A dose of inflation would be welcomed by myself and many like me.

Wise answer, think I read somewhere, that there could be another 'great transfering of wealth' about to occur.
Where over-leveraged households fold under higher rates etc. & thus people who are cashed up & waiting will have a great oppertunity to make money.

My friend's husband is one such person, a builder who's just bought his second mortgagee's auction property in the beach-side suburbs on Victoria's Mornington Peninsula.
I thought It wasn't all go'n to go to plan, but he's very organised...He's subdivided one block [knocked down old home] & has bearly finished building a big-**** luxury pad, & we were there when someone drove up and offered 1.2 mil!!!
Now he's just in the middle of flog'n off the other half of the land for approx. 600k.

Not bad for 18 months work?...700k at auction initially, house & devmnt. costs 400k or 1.1mil total & looking at 1.8mil in sales for an approx. profit of 700k

But he realises that he was only that successful because he was cashed up & bought in an exclusive beach side spot, where he was confident of a certain class of buyer .
[& very organised, with no lenders involved] and so could also hold If need be.

Maybe not as profitable in ordinary suburbia, but There could be some oppertunities coming up in the near future?

Vicki

 

[greebly24]

The Australian, Thursday, December 23 2010:

"The collapse of Ray White Broadbeach, which was placed in receivership on Tuesday with debts of up to $5 million, follows a severe market downturn..."

"The appointment of receivers to the leading agency has rung alarm bells across the property market on the Gold Coast, where beachfront values have plunged by as much as 50 per cent since the peak of the boom in 2008."

Anyone got any property on the Gold Coast? Just wondering if anyone knows more about this?

 

[Dowdy]

There's been some talk about China having nothing to do with this thread but what do you think the mining boom is and who do you think is buy all the minerals?!

Even politicians have admitted that if it wasn't for the mining boom Australia would be in recession.

And when did house prices last have a major fall - during the 1990 recession

 

[sails]

The Australian, Thursday, December 23 2010:

"The collapse of Ray White Broadbeach, which was placed in receivership on Tuesday with debts of up to $5 million, follows a severe market downturn..."

"The appointment of receivers to the leading agency has rung alarm bells across the property market on the Gold Coast, where beachfront values have plunged by as much as 50 per cent since the peak of the boom in 2008."

Anyone got any property on the Gold Coast? Just wondering if anyone knows more about this?

We live on the Gold Coast and haven't heard that prices have plummeted to that degree.... Will ask the real estate agent who lives in our building next time I see him.

I have a recollection that it was Ray White Broadbeach that were involved in selling a Craig Gore development at Hope Island. We looked closely at purchasing one of these very underpriced units but found there were so many other issues that the discounted price may not come anywhere near covering future expenses. So I am wondering if that's where the 50% came from. Perhaps RW Broadbeach bought some of these themselves and then couldn't on-sell them. So it may only be certain buildings that are in trouble.

 

[RaymondJ]

We live on the Gold Coast and haven't heard that prices have plummeted to that degree.... Will ask the real estate agent who lives in our building next time I see him.

I have a recollection that it was Ray White Broadbeach that were involved in selling a Craig Gore development at Hope Island. We looked closely at purchasing one of these very underpriced units but found there were so many other issues that the discounted price may not come anywhere near covering future expenses. So I am wondering if that's where the 50% came from. Perhaps RW Broadbeach bought some of these themselves and then couldn't on-sell them. So it may only be certain buildings that are in trouble.

[/QUOTE All that glitters is on the gold coast] Well thats what a lot of developers must have thought because I think there are a few big hi rise developments that were sold and when it came time for the buyers to cough up a lot of them defaulted. Its not just one building either, apparently there were quite a few! A lot of those hi rise buildings are sold on the gold coast at very inflated prices so they need to come down a way. Its the same in a lot of cities in Australia, My brother lives in Perth and the property prices there are falling and in some places they have fallen by about 30% although this was in some of the resort towns along the coast similar but not as big as the Gold Coast. Anyway thats about all I know bye

 

[RaymondJ]

So does anyone want to humour me, with my question, what would be the possible effects of a 10% interest rate on the oz r/e market?

Vicki[/QUOTE=Redman] Were you around in the 1980's? The interest rate went to about 18%. Many Many families lost their homes and were literally put out on the streets. I personally knew some that were put on the street. So the people use to be able to put up with about 10 to 12% but after that the **** hits the fan and the banks move in. It was a very sad decade for a lot of families. Hope this helps to answer your question. Buying realestate is good but you have to be able to pay the loans easily or buy for an investment and resell!!

 

[robots]

There's been some talk about China having nothing to do with this thread but what do you think the mining boom is and who do you think is buy all the minerals?!

Even politicians have admitted that if it wasn't for the mining boom Australia would be in recession.

And when did house prices last have a major fall - during the 1990 recession

hello,

i wouldnt mind seeing that graph again of property during the 90's, major fall yeah right

what another great day, usual laughable posts

prices still higher than pre GFC, the greatest financial shock since 1929 and nothings happened, infact they went even higher,

you would be irresponsible to not own a piece of real estate or poor i guess

thankyou
professor robots

 

[Dowdy]

look at the average house price for 1990-1991 (they fell)


Who in their right mind would buy a piece of property, NOW! Oh wait, I forget who i'm talking to

 

[explod]

Interesting battle going on in this thread now.

No one will give in till they have all life beaten out of them.

The bulls in propaerty have never and so will never imagine property to fail.

The bears are mostly the mugs that instead of enjoying life they ask questions.

Roll on lollie pops and sunshine along the St Kilda beach.

Interesting times.

Pebble in still waters.

 

[wayneL]

The bears are mostly the mugs that instead of enjoying life they ask questions.

***wonders whether there will be a role reversal at some point.