The future of Australian property prices

[nunthewiser]

What I fail to see in the argument is why property should go up. Not the: "i bought in 1990 and it went up THIS much, look how smart I am, do the same now and itll repeat", .

Personally i would view all these internet zillionaires that brag and boast in this thread with a grain of salt.
with the exception of Trainspotter ( who i have personally met and seen most of the toys/assets he has mentioned) i would take all these claims of riches and success as merely heresay and internet bravado.
to me most of the claims and boasts here are nothing but blah blah blah trying to impress the internet world for some strange reason.

I own real estate, happy to but i do also recognise the cyclical nature of ALL forms of investment and PERSONALLY believe we still got a long way to go before this downward cycle is finished.

Only my thoughts from someone that thinks the internet is a bloody hilarious place at times

 

[trainspotter]

Why do you need to buy one or the other? Given your current circumstances I see no reason for you to buy a PPOR ?? What are the advantages? If you were married and wanted to raise some kids and the PPOR was near a school yadda yadda yadda then maybe you have a justifiable reason to own one. Never under estimate the power of the "hairy cheque book". They make you do CRAZY things. Remember there is no CGT on PPOR and funnily enough prices still (in some areas) continue to climb. No no no you wont get 20% per annum like we have just witnessed but a solid 5 to 6 percent return over a long period of time is nothing to be sneezed at. Remember this is AMORTISED as well. You know the compound interest thingymebob? Look ....... I would love nothing better to pay cash for everything including houses but it just aint gonna happen. As fast as you can save the market moves further away. (I reiterate ...... in some areas)

Why not ask your parents if you can buy 1/3rd of their going concern on one (or several) of their IP's? Why do you feel the need to buy an IP? Why did your parents buy several IP's of which you are advising them. You already know the pitfalls and seem to have all the answers?

Negative Gearing is for people with high income thresholds that require tax deductions. IMO I fail to see the sense in making a loss on an income producing investment and then get SLUGGED by CGT when you sell it?? What's the point? Unless it is for tax purposes of course.

I prefer to buy off the plan with a large deposit and onsell to a third party when I am "flipping" ...... works great in a rising market. Not so great when the market is flat. Pick your mark and hold onto your balls in some cases. I REPEAT ...... now is not the time to be buying with the intention of selling in a short term to make a profit. THINK looooooooooong term. Not for everyone I know but that is the facts of life.

Whether it is perceived or not there seems to be a "shortage" of homes and the RBA aknowledges this as well. MAYBE not on the Gold Coast etc but this is a classic example when developers get ahead of themselves. Pie in the sky stuff !!

"By contrast Australia's [huge] housing shortage is creating two classes of city dwellers; those with property who fear further residential development will compromise their lifestyles and tenants who know that home ownership is getting beyond their reach." Percy Allan (Chair of Market Timing Pty Ltd)

A country the size of Australia should not have a residential land shortage, but it does.

Allan says: "Until the concentration of population in a few state capitals is reversed, the housing crisis will grow worse since urban consolidation is meeting growing resistance in the absence of mass transit systems to alleviate metropolitan congestion."

Thusly a "perceived" shortage.

Rents will inevitably be driven up as interest rates go up and owners look for a higher yield. So renting now is great. Probably not so good in the future. IMO

Would NOT be looking at property in the USA at the moment. Still a lot more pus to be squeezed out of this market.

 

[Mr Z]

not all areas experience booms and bust, those areas with little local/state govt intervention in their markets never had the 'tulip mania' that places like Florida and Vegas had, despite how strong economically they are/were

ie Texas.

The US isnt one market, but yes im well aware itll be hard as **** either way, long term

Yes... I'm well aware that the US is not one market, but in talking to people that live in states that didn't boom suggests to me that selling pressure is still strong in most areas. TX looks to be rolling over but as you say it didn't get that far and has been solid to date ---> must be all that oil money! However does that not suggest that the true bargains are to be found elsewhere at some point in the future?

 

[FxTrader]

Anyone interested in just how corrupted the financing side of the U.S. housing debacle is should view this vid...

[video]http://www.youtube.com/user/fiercefreeleancer#p/a/u/0/ssl5yb7FewA[/video]

 

[robots]

hello,

oh gidday everyone, professor real deal in the house

great discussion, i dont know if you can claim the top Nun, my town (ballarat) is still going strong, i dont know mate

and how's this, today i got the train from Southern Cross to Ballarat in 1hr and 4mins, EXPRESS straight up to Victoria's No.1 regional town. amazing brothers

oh well, what page all you traders up to in the text book?

thankyou
professor robots

 

[trainspotter]

hello,

oh gidday everyone, professor real deal in the house

great discussion, i dont know if you can claim the top Nun, my town (ballarat) is still going strong, i dont know mate

and how's this, today i got the train from Southern Cross to Ballarat in 1hr and 4mins, EXPRESS straight up to Victoria's No.1 regional town. amazing brothers

oh well, what page all you traders up to in the text book?

thankyou
professor robots

Heeeeeeyyyyyyyyyyy Prof robots ..... good to see the EXPRESS is running on time. Only one hour from CBD to afforadability. Amazing stuff, pays to look around from the Citycentric areas. The Premium Station on Spencer Street is lovely short stroll to Etihad Stadium as well as the Docklands.

Not sure what page the traders are up to botman but I can assure you things are slim pickings on the RE front at the moment. Oh well ...... set and forget stage for me.

 

[Ardyne]

Hey Robots, For a useless fact the new suburb in Ballarat is named after my great grandmothers company E . Lucas & Co.

 

[Agentm]

i cant think of anything worse

the mail must be chaotic



to..

The Manager
1 smith Street
E . Lucas & Co.
VIC 3660

imho the return to sender will be pretty high

 

[againsthegrain]

I drove to work as usual, 20 mins in traffic from Mordialloc to Toorak, what a beatiful drive, not much traffic on the freeway from Warrigal rd entry great scenery, no pushing through on a overcrowded trains or running to the station when you are about to miss the express.

Sleeping in at 8:15 every morning is great, get to stay up every night and have more free time, life just seems a breeze like this and all at a fraction cost of a mortgage. Forget stress and 5am early starts to catch the early express - life is good!

 

[prawn_86]

1 hour each way on the train is 10 hours a week for those who work. At a very conservative time value of $20ph this means you should be 'saving' at least $200pw to live out there.

 

[Tysonboss1]

1 hour each way on the train is 10 hours a week for those who work. At a very conservative time value of $20ph this means you should be 'saving' at least $200pw to live out there.

Not to mention the cost of the commuting itself,

This could also be offset though because the benefits are not always financel,

 

[prawn_86]

Not to mention the cost of the commuting itself,

This could also be offset though because the benefits are not always financel,

I agree you can offset with lifestyle etc, but i think you still need to put a $ value on your time, this at least allows you to quantify the lifestyle decisions.

EG is it worth $200pw in this case to live away from the main city?

When in Adel we found it was only $40 a week more to live 15min closer to the city, so this meant 5 hours a week between 2 of us. Even valuing that time at only $10ph it worked out $10 cheaper to live closer.

 

[zzaaxxss3401]

... Ballarat ... Victoria's No.1 regional town.

What makes Ballarat so good? It's freezing in winter - it actually snows there sometimes. Up until recently it had an eye-sore of a dry lake. Sure it's got a Bunnings (1), but the freeway now bypasses it so there's no reason to stop and clearly you still have to travel to Melbourne for work.

What about Geelong or Bendigo or Shepparton or Mildura or Warrnambool?

 

[againsthegrain]

I value my time after hours at around $50 ph, being able to stay up until 1am on average compared to 10:30pm for early start is a big difference. I have decided a long time ago that I do not want to spend a big % of my life commuting, sleeping, doing over time. Life is too short, work smart not hard. Yes I run a very small part time IT business on the side part hobby part pocket money when not doing my full time job 9 - 5 so the $50 ph figure after hours is very conservative.

Starting to think cheap like how much u save by traveling 1 hour on the train is a bit like looking for trolies in coles that still have a 1 or 2 dollar coin in them or collecting fuel dockets that you find on the floor, or changing light globes at 50c per globe LOL and I see it sometimes at the local shops.

btw, 1:04 hr is just the train ride, unless you live right across the station and your work is right across the station at the destination this is not the total travel time. On average you will be looking to add another 30 mins to travel time if doing so by public transport. Bump that 10 hrs to 15 per week, looking more and more sour, you might as well work a full 8 hour shift on Sunday at double time to offset that.

 

[ROE]

1 hour each way on the train is 10 hours a week for those who work. At a very conservative time value of $20ph this means you should be 'saving' at least $200pw to live out there.

Only if you can earn $20 an hour or make use of those spare hours generating money... this argument I think is flaw..

I got so much free time that I deliberately catch bus or walk to work when I start out take me 15 minutes to drive but I don't want to drive...

and those time on the bus I read on investment and go through dozen of books that will eventually generate far more wealth for me down the track.

The knowledge I accumulate while catching the bus is just price less

I now deliberately live far out of the city so I can drive to work longer and listen to audio book and learn more

This wont stop any time soon, I do this as long as I am able to read/listen and accumulate knowledge.

I love reading and I religiously read on most investment subjects
and the best time to do it is on the way to work...

no kids screaming, no one disturb you, it is a time where you
can take in some serious knowledge for those who are able and willing.

 

[prawn_86]

Only if you can earn $20 an hour or make use of those spare hours generating money... this argument I think is flaw..

Personally i hate commuting (both driving myself or via public transport) so i value my time at $20 an hour (which is significantly less than i earn at work) in order to give myself a time value to work with.

Sure when im at home im not actually making that money, but to me, the things i do at home (including reading/researching etc) are worth at least $20 ph and commuting eats into that time which i could be at home

 

[againsthegrain]

Only if you can earn $20 an hour or make use of those spare hours generating money... this argument I think is flaw..

I got so much free time that I deliberately catch bus or walk to work when I start out take me 15 minutes to drive but I don't want to drive...

and those time on the bus I read on investment and go through dozen of books that will eventually generate far more wealth for me down the track.

The knowledge I accumulate while catching the bus is just price less

I now deliberately live far out of the city so I can drive to work longer and listen to audio book and learn more

This wont stop any time soon, I do this as long as I am able to read/listen and accumulate knowledge.

I love reading and I religiously read on most investment subjects
and the best time to do it is on the way to work...

no kids screaming, no one disturb you, it is a time where you
can take in some serious knowledge for those who are able and willing.

There are things that I can't put $ value on like spending time with my family, pursuing many of my hobbies or simply sitting down and meditating - there is never enough time for all of that anyway. Maybye I am too ambitious with my time and my interests

Personally I prefer to read in bed late at night, rather then go out of my way to sit on a bus and read, each to their own.

 

[trainspotter]

What ROE said. We all cannot live in the city. This is part of the blame as to WHY property prices are so high and you guys are screaming as to the cost of property and how the amount of wages to cost ratios blah blah blah. YOU are the cause of the problem. Doesn't anyone own a laptop or a smart phone?

BTW .... be thankful you have a job to go to. For people without a vocation I really don't believe that travelling a pithy couple of hours would stop them from riding the public transport service to work.

 

[Agentm]

yeah

i like to make lollipops when the sun shines

and when the day ends i sleep, i usually brush my teeth.. i sometime snore but i noticed in the last months i have done so less

and when i wake up i ride, then i shower then i go to work. ohh yeah, i forgot to mention i get dressed after the shower and have breakfast.. lol nearly forgot that one..

which is why the future of the Australian property prices is a topic that cant be discussed, as its now all about daily routines

anyone cut their toe nails today?

 

[prawn_86]

What ROE said. We all cannot live in the city.

No, and some people dont like to. Its a personal preference but i still think people should put a value on their time.

I would love to live in a smaller city (like Cairns) but unfortunately the work is just not there, or not at this stage in my career yet. And i would rather live close to work and travel for leisure than vice versa, but everyone is different.