The future of Australian property prices

[young-gun]

can I play?

put me down for Long XJO , Short all the property indexes except Perth. $1m per side

hypothetically.

XJO long that's dangerous even hypothetically

 

[numbercruncher]

Interesting read listing rental returns across different US cities - helps demonstrate the extent of our bubble ...

3. Daytona Beach, Fla.3 of 10

Median home price in 2012: $114,000
Projected home price in 2015: $123,282
Projected annual rent in 2015: $11,048

In a market like Daytona Beach, where the median home price is down to $91,000, most homes are very affordable. But many locals still aren't buying.

"By and large, single-family homes are not priced beyond the reach of renters," said Winzer. But bad credit histories, often due to past mortgage payment problems brought on by Florida's severe housing bust, have made it difficult for many local residents to get mortgages, forcing many to rent.

For real estate investors, that means there's plenty of demand.

And the risks associated with renting in the area, which was hit hard by the housing bust and recession, have also started to subside. Unemployment dropped by 1.9 percentage points to 8.7% over the past 12 months.

Even with the lingering economic issues in the area, there's a lot of potential reward, according to Winzer. The estimated return for landlords in Daytona is about four percentage points higher than the national; average, according to HomeVestors.

NEXT: Orlando, Fla.

http://money.cnn.com/galleries/2012/real_estate/1206/gallery.best-rental-investing-markets.moneymag/3.html

 

[apgb8]

http://www.wabusinessnews.com.au/ar...A&utm_medium=email&utm_campaign=article_click

opinions?

 

[young-gun]

http://www.wabusinessnews.com.au/ar...A&utm_medium=email&utm_campaign=article_click

opinions?

It won't happen

 

[againsthegrain]

No chance

 

[im sparticus]

A buddy of mine had baught into a new development in in his home in manila waterfront he calls it a condominium (highrise 30 floors) he baught off the plan and is yet to settle with the dmeveloper 26m2 for $125000, Given that labour is cheap there im suprised to find per m2 ( usually in oz luxury highrise the bigger the unit and better positioning the greater the $$$ per m2) our average new 2bedroom is usually 5 x 6 times the size and very compareable $$$ Per m2 and a completely renovated oldy alot cheaper with the only diff being some ammenities. some people just cant see the value though.

 

[Glen48]

Kirk, Manila is another bubble being pumped up every shopping center is pushing leaflet's etc..

 

[Glen48]

http://finance.ninemsn.com.au/pfpro...-aussie-trophy-homes-that-cant-sell.slideshow
sell your face book shares and move up

 

[damien275x]

I went to three auctions in Melbourne over the weekend. None of them sold, and there was a dismal turnout. I found out one of them ended up negotiating with a bidder for slightly more, but they still got about $35-40k less than they wanted. The sellers were wanting to leave Australia though so they had to sell. Some people will hold onto them and wait longer, but if prices keep sliding it doesn't look like they will recoup any losses they incur from this point forward.


Also at the moment it looks as though even the most optimistic forecasts involve price stagnation. If prices stay the same, you're going backwards @ 3% p/a on average (inflation) so after 5 years, that's 15%. a $52,000 loss. Then you've got to factor in the transaction costs of selling the place, so you'd be bleeding upwards of 20%.

I am looking at buying in 2017/18 at this point, I think after about 5-6 years of steady falls or stagnation I will be able to buy one comfortably, especially if I am able to invest money in another area and have it compound, although with all the doom and gloom I am not banking on very high returns in shares. Possibly a slight appreciation in the price of my Gold and Silver collection but thats about it.

 

[Miss Hale]

I went to three auctions in Melbourne over the weekend. None of them sold, and there was a dismal turnout. I found out one of them ended up negotiating with a bidder for slightly more, but they still got about $35-40k less than they wanted. The sellers were wanting to leave Australia though so they had to sell. Some people will hold onto them and wait longer, but if prices keep sliding it doesn't look like they will recoup any losses they incur from this point forward.

That's interesting. I had a look through the Auction results for last weekend and noticed quite a few places around my area passed in for well below the reserve. Even saw a few where the later offers were lower than the vendor bid!

Also at the moment it looks as though even the most optimistic forecasts involve price stagnation. If prices stay the same, you're going backwards @ 3% p/a on average (inflation) so after 5 years, that's 15%. a $52,000 loss. Then you've got to factor in the transaction costs of selling the place, so you'd be bleeding upwards of 20%.

I am looking at buying in 2017/18 at this point, I think after about 5-6 years of steady falls or stagnation I will be able to buy one comfortably, especially if I am able to invest money in another area and have it compound, although with all the doom and gloom I am not banking on very high returns in shares. Possibly a slight appreciation in the price of my Gold and Silver collection but thats about it.

We originally thought we would buy in one or two years (from a year ago) but are now thinking of a longer time frame too, maybe five years.

Another thing I am noticing is rentals being offered for 6 month leases. As a renter this doesn't appeal to me as the last thing I want to be doing is moving every 6 months. I am also seeing rentals being offered for sale after not being let, and houses for sale being listed for rent after not selling.

 

[trillionaire#1]

That's interesting. I had a look through the Auction results for last weekend and noticed quite a few places around my area passed in for well below the reserve. Even saw a few where the later offers were lower than the vendor bid!




We originally thought we would buy in one or two years (from a year ago) but are now thinking of a longer time frame too, maybe five years.

Another thing I am noticing is rentals being offered for 6 month leases. As a renter this doesn't appeal to me as the last thing I want to be doing is moving every 6 months. I am also seeing rentals being offered for sale after not being let, and houses for sale being listed for rent after not selling.

Im also seeing more of the 6 month lease offers here in SA,a growing number will even let you bring your pets!

 

[im sparticus]

Short leases usually spell high demand expect rental increases at expiry also. when thing soften 1+ year leases become common. everything is playing out nicely weve had the boom and the price contraction now increasing yeilds no just in relation to price but in real terms lower holding costs via record low interest rates, just a matter of time before it becomes a no brainer only problem will be once it starts showing in the figures most will have already missed exactly what they were holding out to catch.

 

[young-gun]

Short leases usually spell high demand expect rental increases at expiry also. when thing soften 1+ year leases become common. everything is playing out nicely weve had the boom and the price contraction now increasing yeilds no just in relation to price but in real terms lower holding costs via record low interest rates, just a matter of time before it becomes a no brainer only problem will be once it starts showing in the figures most will have already missed exactly what they were holding out to catch.

Yet another easy to understand, well structured post. I hope I haven't missed the boat to lose my money! Can I still buy at record high prices? I can?! Phew.

 

[satanoperca]

Short leases usually spell high demand expect rental increases at expiry also. when thing soften 1+ year leases become common. everything is playing out nicely weve had the boom and the price contraction now increasing yeilds no just in relation to price but in real terms lower holding costs via record low interest rates, just a matter of time before it becomes a no brainer only problem will be once it starts showing in the figures most will have already missed exactly what they were holding out to catch.

Rental demand high, high prices, long leases > benefits landlord
Short leases, low prices > low demand - landlords are trying to just get someone in. There is no benefit to the landlord having a high turnover in tenants and if demand was high tenants would be forced into the above.

Glad to see Sparticus that you are persistant but unfortunately overgeared to matter.

 

[im sparticus]

Rental demand high, high prices, long leases > benefits landlord
Short leases, low prices > low demand - landlords are trying to just get someone in. There is no benefit to the landlord having a high turnover in tenants and if demand was high tenants would be forced into the above.

Glad to see Sparticus that you are persistant but unfortunately overgeared to matter.

Short lease does not equal high turnover especially during times of high demand just greater opportunity to increase rents

you missed the point read back landlords are not even offering long leases even to tennants that want them reason high demand ll would rather have the opportunity to increase rents regularly they are not worried about loosing tennants as demand is high .in times of low demand ll want to lock you in for longer periods at higher current rents as demand and prices fall or are expected to fall this is just fact and makes perfect economic sense. you will also find that you have a greater ability to increase rent by small amounts regularly than large amounts less frequently less chance of upsetting your tennant and lower turnover. something that cannot be done with long leases.

Overall Long leases being offered = low demand. short leases offered = high demand. cant even get a long lease no matter how much you beg unless you offer more money = very high demand.

Dont kid yourself demand is high.
.

 

[Miss Hale]

Landlords are finding it hard to get tennants around my area, properties are typically spending some time empty before getting tennants (the place we are in now was advertised for over two months, was vacant before we moved in and we were the only applicant). Many properties having to drop the rental price before getting tennants.

I was wondering if some of these properties offering only 6 month leases were really houses that the owners want to sell but can't so they think they will let them for 6 months until - hopefully - the market picks up then they'll put them back on the market. Another theory I had was that landlords are being told by by agents to offer the property at a lower rent (because demand is low) to get someone in and then increase the rent when - hopefully - the rental market picks up in 6 months.

 

[young-gun]

Landlords are finding it hard to get tennants around my area, properties are typically spending some time empty before getting tennants (the place we are in now was advertised for over two months, was vacant before we moved in and we were the only applicant). Many properties having to drop the rental price before getting tennants.

I was wondering if some of these properties offering only 6 month leases were really houses that the owners want to sell but can't so they think they will let them for 6 months until - hopefully - the market picks up then they'll put them back on the market. Another theory I had was that landlords are being told by by agents to offer the property at a lower rent (because demand is low) to get someone in and then increase the rent when - hopefully - the rental market picks up in 6 months.

We're paying 330 a week for a two story 3 bed 20 mins from the city. The landlord actually wanted us in for 24 months at that price. I guess the rental market is different throughout suburbs, I can't say that I think renting is expensive at the moment.

 

[im sparticus]

Getting $460 1brd 12km direct line from city turned over tennants mid dec2011 and still had somone in 3 days latter 6 month lease . As always in life you get what you pay for i guess.

So youngung are you in the long lease = high demand camp ala satan ¿ 24 month should spell some pretty high demand according to him

 

[Miss Hale]

Getting $460 1brd 12km direct line from city turned over tennants mid dec2011 and still had somone in 3 days latter 6 month lease . As always in life you get what you pay for i guess.

So youngung are you in the long lease = high demand camp ala satan ¿ 24 month should spell some pretty high demand according to him

What city are you refering to im sparticus? My experience in Melbourne is very different.

 

[im sparticus]

What city are you refering to im sparticus? My experience in Melbourne is very different.

Anywhere but melbourne, that particular example is from sydney eastern suburbs whilst i am yet to rent my brisbane appartment ( north east 4km from city direct line)(still renovating) talking with the landlord in the unit below mine paints a similar picture just delayed a couple of years expecting it to be neutral to positive from day one (actually going of the performance of the unit below it would have been neautral without the renovation but ive gotta live in her for 12 months anyhow so mayaswell learn to renovate in my spare time whilst your time is worth something your spare time is worth nothing always best to do something productive she was in very original condition when i moved it so it didnt feel like i was demolishing anything of value.

vacancy rates very low in both areas somewhere between 1-2%