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A few people have referred to levies in relation to apartments, what are these exactly? Are they the same as body corporate fees?
The future of Australian property prices
- Thread starter Joe Blow
- Start date
Yeah around sydney near darling harbour it will cost you around 11k -15k to hold a year depending which building your apartment is in and in what area...
I looked at some of the apartment there every so often and I will pound when the time comes -
when cash is king and debt is the dirty 4 letter words...There are 2 beddies apartment there you can get 850 a week rent for around 650k
Bill M
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And to put that into perspective I have a 12 year old house. In the 2 years and 3 Months that I have lived there my outgoings have been only around $400 in repairs and maintenance. I have full control of that. Paying higher levies does not equate to a better building or service and could well mean the Body Corporate Manager is wasting money in some areas. Nearly every unit block I have owned a unit in the Managers have blown up cash one way or the other, that is why I am very sceptical on the fees that must be paid.
Seems you are indicating that the body corporates are calculating their fees based on location. Is that the case in Sydney?
I can see that buildings maintenance depends on features (like pool, gym, elevator,...), but would consider it a rip off when these body corporates charge on location. This would be trying to tap into the investment while taking none of the risk that an investor/owner has.
Wysiwyg
Everyone wants money
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I would be interesting to see body corporate reports to examine where the unit holder's privilege of ownership (fees
) go for the year.
Bill M
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No it's not, it happens everywhere. Just look at any high rise apartment block anywhere and ask them how much their body corporate fees are for a 2 bedroom unit for a year. Anywhere in OZ it would be high, except in brand new buildings. I had one of those (new buildings) and then it sky-rocketed a few years later. In the beginning the developers said they weren't sure what they should be, later the fees crept up and UP.
Nah, doesn't work like that. They can not tap into your capital investment. In all honesty they just don't manage well, that's all.
Examples, fail to upgrade fire certification as required by council, $6,000 fine. Call electrician to fix a light, he told me it only need a fluro but changed the lot and at 3 times the price. I know, I made out I was a renter and he told me.
I would be interesting to see body corporate reports to examine where the unit holder's privilege of ownership (fees
I like that question. This is how the yearly reports come back. (note, no detail)
Plumber: Repair damage level 3 $1,296
Electrician: Repairs 9 lights $1,642
Security gates: $3,219
etc.....
It is not detailed. Once I was in a meeting and we brought up why certain jobs were costing so much. Believe or not the d!ckhead said he can't find the paperwork. That is how slack they are. If it was a courtroom we could sue them for a motza but geeezz we are only plebs and pay body corp fees. No ones going to pay to sue the body corporate manager.
Not all are incompetent, I'm just saying be very, very wary of body corp fees and their managers, that's all.
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http://www.theage.com.au/business/property/record-slump-in-house-prices-in-2011-20120201-1qsid.html
Record slump in house prices has a correlation of 1 with the record slump in posts by Robots.
It is inversely proportional to the amount of extra shifts he has had to take on as well.
Could be more of the same for 2012, interest rate reductions or not.
Happy days of sunshine and lollipops
Keep up the good work brothers and true believers,
MW
ASF investor 2011
Record slump in house prices has a correlation of 1 with the record slump in posts by Robots.
It is inversely proportional to the amount of extra shifts he has had to take on as well.
Could be more of the same for 2012, interest rate reductions or not.
Happy days of sunshine and lollipops
Keep up the good work brothers and true believers,
MW
ASF investor 2011
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The body corp is a fund of that owners pay into, It's not a for profit thing that some one gets to keep all the funds that don't get spent at the expense of the owners.
It's basically an account that owner pay into shared costs come from.
The Body corp is responsible for charging enough that they accrue enough funds to cover big future costs without having to hit owners for large lump sums,
Glen48
Money can't buy Poverty
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The real record will be know in about another 6-8 years time once the market has bottomed and the next record will be how long the market stays flat for.
I did hear Robots was flipping burgers in some soup kitchen it was do it your self type place.
I did hear Robots was flipping burgers in some soup kitchen it was do it your self type place.
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Gold market maybe
Glen48
Money can't buy Poverty
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Yep another record going in the opposite direction to housing.
Glen48
Money can't buy Poverty
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Look into the future of OZ housing:
The latest Case-Shiller numbers released yesterday showed that the US residential housing market is still very weak. After three straight months of declines, home prices are now at 2003 levels. Duh.
To some, it was a shocking revelation. The pundits I saw discussing it yesterday practically had a seizure they were in such disbelief. CNBC even ran an article on their website in response, extolling the strong fundamentals of US housing.
Let's look at those fundamentals:
1) Most people cannot afford to write a check for $200,000 or more (roughly the median home price), which means they'll require bank financing. Consequently, speculators and investors aside, home prices must be a function of income-- do buyers make enough money to be able to afford the monthly mortgage payment?
2) Mortgage affordability is tied directly to income levels, and where there's no job, there's no income. When you aggregate that notion across an entire economy with high unemployment, it restrains housing affordability.
3) Millions of people have been taken out of the housing market as potential end-user owners. These are the 'former' homeowners who have lost their jobs and/or been foreclosed on. They can no longer qualify for a mortgage, particularly at the ultra-low rates we're seeing now.
4) There's a lot of talk about how low interest rates are making homes affordable. Maybe so, at least to the people who qualify for a mortgage. And while it's possible that interest rates could go lower, there's a lot of potential for rates to rise. And when rates rise, homes become more UNaffordable.
Example: if you can afford $1,500 per month to spend on a home, you would be able to afford a $300,000 home at today's low rates. If rates go up to 6%, $1,500 per month only buys you a $250,000 home. If that's what the average guy can afford, that's where home prices will converge.
5) Many local governments are completely bankrupt; we've read about looming municipal defaults and laying off cops and fire fighters. Property taxes will likely rise as a result, adding an additional cost in buyers' monthly payments.
Again, if a buyer can only afford $1,500/month, and his property tax rises by $600/year, that takes about $10,000 off the price of the home s/he would be able to afford.
6) Ditto for homeowners' insurance rates, which are rising rapidly.
7) There are currently 15 million vacant homes in the US according to the latest census figures, and every day, more people are being foreclosed and getting kicked out of their homes. Housing prices can't have any meaningful rise as long as there's such excess supply in the market.
8) In bad economies, people double up in homes. Roomates. Live-in relatives. The number of households is contracting, and this is a demographic issue-- too many homes, not enough families to fill them.
9) Even if every unemployed American were simply given a home to live in, it would still leave millions of vacant homes on the market.
10) Given how US Homeland Security treats everyone like a criminal terrorist, foreigners aren't exactly lining up to tighten the slack.
Ultimately, while there are bright spots in any market, the fundamentals for US housing remain poor.
It can be tempting to jump into the market as an investor with prices so low. But gobbling up a low-grade track house simply because it's cheap is not a sound investment strategy. There are a lot of things in this world that are cheap. That doesn't mean the price will go up. It just means that they're cheap.
A great investment is one that is both cheap, -and- has a catalyst for growth. Median housing in the US has few, if any, catalysts to growth. If you want to invest, stick to the highest quality assets you can find-- premium homes in the best locations. They'll be the first to recover.
Until tomorrow,
Simon Black
Senior Editor, SovereignMan.com
The latest Case-Shiller numbers released yesterday showed that the US residential housing market is still very weak. After three straight months of declines, home prices are now at 2003 levels. Duh.
To some, it was a shocking revelation. The pundits I saw discussing it yesterday practically had a seizure they were in such disbelief. CNBC even ran an article on their website in response, extolling the strong fundamentals of US housing.
Let's look at those fundamentals:
1) Most people cannot afford to write a check for $200,000 or more (roughly the median home price), which means they'll require bank financing. Consequently, speculators and investors aside, home prices must be a function of income-- do buyers make enough money to be able to afford the monthly mortgage payment?
2) Mortgage affordability is tied directly to income levels, and where there's no job, there's no income. When you aggregate that notion across an entire economy with high unemployment, it restrains housing affordability.
3) Millions of people have been taken out of the housing market as potential end-user owners. These are the 'former' homeowners who have lost their jobs and/or been foreclosed on. They can no longer qualify for a mortgage, particularly at the ultra-low rates we're seeing now.
4) There's a lot of talk about how low interest rates are making homes affordable. Maybe so, at least to the people who qualify for a mortgage. And while it's possible that interest rates could go lower, there's a lot of potential for rates to rise. And when rates rise, homes become more UNaffordable.
Example: if you can afford $1,500 per month to spend on a home, you would be able to afford a $300,000 home at today's low rates. If rates go up to 6%, $1,500 per month only buys you a $250,000 home. If that's what the average guy can afford, that's where home prices will converge.
5) Many local governments are completely bankrupt; we've read about looming municipal defaults and laying off cops and fire fighters. Property taxes will likely rise as a result, adding an additional cost in buyers' monthly payments.
Again, if a buyer can only afford $1,500/month, and his property tax rises by $600/year, that takes about $10,000 off the price of the home s/he would be able to afford.
6) Ditto for homeowners' insurance rates, which are rising rapidly.
7) There are currently 15 million vacant homes in the US according to the latest census figures, and every day, more people are being foreclosed and getting kicked out of their homes. Housing prices can't have any meaningful rise as long as there's such excess supply in the market.
8) In bad economies, people double up in homes. Roomates. Live-in relatives. The number of households is contracting, and this is a demographic issue-- too many homes, not enough families to fill them.
9) Even if every unemployed American were simply given a home to live in, it would still leave millions of vacant homes on the market.
10) Given how US Homeland Security treats everyone like a criminal terrorist, foreigners aren't exactly lining up to tighten the slack.
Ultimately, while there are bright spots in any market, the fundamentals for US housing remain poor.
It can be tempting to jump into the market as an investor with prices so low. But gobbling up a low-grade track house simply because it's cheap is not a sound investment strategy. There are a lot of things in this world that are cheap. That doesn't mean the price will go up. It just means that they're cheap.
A great investment is one that is both cheap, -and- has a catalyst for growth. Median housing in the US has few, if any, catalysts to growth. If you want to invest, stick to the highest quality assets you can find-- premium homes in the best locations. They'll be the first to recover.
Until tomorrow,
Simon Black
Senior Editor, SovereignMan.com
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FYI back to ~2000 level in real (ie. the only thing that matters) terms.
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prawn_86
Mod: Call me Dendrobranchiata
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Bintang,
Do you know the correlation % between gold and house prices? It seems to me that if you are basing analysis off this you have 2 asset prices/risks to factor in, as opposed to just looking at the Real Home Price Index or a Price:Income Ratio
Do you know the correlation % between gold and house prices? It seems to me that if you are basing analysis off this you have 2 asset prices/risks to factor in, as opposed to just looking at the Real Home Price Index or a Price:Income Ratio
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As usual your examples are far to overly simplistic,
That guy with $1500 permonth to spend still has to live some where and if he is not buying he must rent, and if he is willing to spend $1500 per month on rent then an investor can spend $360,000 on the house and make an investment out of it, So it is unlikely to drop to $250,000.
Offcourse it is total possible to drop to that level in the midst of a choatic financel mess, But as the dust settles it will not stay there.
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Varies greatly depending on which country and which time period, eg for the last 10 years USA 0.04, UK 0.34, AUS 0.02, NZ 0.57
prawn_86
Mod: Call me Dendrobranchiata
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So what are you trying to display from these charts? With a correlation that low i wouldn't have thought comparing the 2 would prove of any use.
Is there any historical evidence that house prices will reduce (or gold increase) as per your charts?
I'm bearish on houses also, but am just curious as to what your graphs are actually trying to prove if they are using a metric that has no (or a very weak) relationship
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I have provided more explanation in another forum. Am happy to answer more questions after you have taken a look. I'm just saving myself the trouble of reproducing the entire story here. Here is the link:
http://bubblepedia.net.au/tiki-view_forum_thread.php?comments_parentId=25049&topics_sort_mode=lastPost_desc&forumId=7
