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My research tells me if you could buy for $40K (and that's a big if, don't know anywhere where you can even buy land for $40K) and spent $20k on renos, there is no way you would sell for $168K. If this was the case the peoperty spruikers would by telling us all about itCan you at least name the state?
bite the bullet or wait and see for another 6 - 12 months
Last month's home price rise across Australia's eight capital cities was the largest in two-and-a-half years and comes on the back of 125 basis points of rate cuts over the past year.
AUSTRALIANS should brace for a "white-collar recession" by early next year with the unemployment rate tipped to rise to up to 6 per cent.
The rise in unemployment is fuelled by redundancies in the financial and IT sectors handed out over the past 18 months, which experts say have so far been hidden from official unemployment figures.
A recent report by Macquarie Bank also found middle-class white-collar suburbs in major capital cities were showing increasing unemployment strain.
The Invisible Unemployment II report showed both Northern Sydney and Inner Melbourne had noticeable rises in their unemployment rates (see graph below).
The eastern suburbs of Sydney, which has the highest proportion of people employed in the finance and professional services sectors (80 per cent), is also charting a decline in employment.
“Redundancy payouts… only last for so long. Thus we suspect this pressure is likely to emerge in the second half of 2012,” the report said.
Just back from spending 4 Months overseas. During that time I received an email from my agent managing my property suggesting I raise the rent and offer a new lease to my tenant. I agreed and we raised the rent another $10 per week. My current tenant signed a new 12 Month lease, all good for us. In the 3 years of renting my property in Sydney it has been rented 99% of the time and the rent has been going up each year. There is no shortage of tenants.
I thought I'd get the Agents to do a formal appraisal of our apartment as well, the value has not dropped and in fact it is up slightly.
Interest rates have also dropped and so will home loan rates. I think the future of Australian property prices is that they will just keep going up. Strong rental demand (as my unit demonstrates), low interest rates, higher salaries can only mean prices are going to keep going up. (My opinion only and from my own experience)
At this stage of the game I am very happy with my investment, it is so simple, hands off and the rent just keeps coming in Month after Month. It may not give super stellar returns but I'm very happy with what I'm being paid for investing. Good luck all and happy investing.
Just wondering about how it works - does your agent get a cut from getting the higher rent?
Just back from spending 4 Months overseas. During that time I received an email from my agent managing my property suggesting I raise the rent and offer a new lease to my tenant. I agreed and we raised the rent another $10 per week. My current tenant signed a new 12 Month lease, all good for us. In the 3 years of renting my property in Sydney it has been rented 99% of the time and the rent has been going up each year. There is no shortage of tenants.
I thought I'd get the Agents to do a formal appraisal of our apartment as well, the value has not dropped and in fact it is up slightly.
Interest rates have also dropped and so will home loan rates. I think the future of Australian property prices is that they will just keep going up. Strong rental demand (as my unit demonstrates), low interest rates, higher salaries can only mean prices are going to keep going up. (My opinion only and from my own experience)
At this stage of the game I am very happy with my investment, it is so simple, hands off and the rent just keeps coming in Month after Month. It may not give super stellar returns but I'm very happy with what I'm being paid for investing. Good luck all and happy investing.
I'm happy for you Bill. But it's probably not valid to take your one personal anecdote and deduce that all property, as a rental investment, is necessarily profitable. You seem to have chosen a good position where rental demand exists.Just back from spending 4 Months overseas. During that time I received an email from my agent managing my property suggesting I raise the rent and offer a new lease to my tenant. I agreed and we raised the rent another $10 per week. My current tenant signed a new 12 Month lease, all good for us. In the 3 years of renting my property in Sydney it has been rented 99% of the time and the rent has been going up each year. There is no shortage of tenants.
I thought I'd get the Agents to do a formal appraisal of our apartment as well, the value has not dropped and in fact it is up slightly.
Interest rates have also dropped and so will home loan rates. I think the future of Australian property prices is that they will just keep going up. Strong rental demand (as my unit demonstrates), low interest rates, higher salaries can only mean prices are going to keep going up. (My opinion only and from my own experience)
At this stage of the game I am very happy with my investment, it is so simple, hands off and the rent just keeps coming in Month after Month. It may not give super stellar returns but I'm very happy with what I'm being paid for investing. Good luck all and happy investing.
Valid comment.Wow.. The agents appraisal showed an increase. Who would have thought? No vested interests there of course.
Your suggestion that property prices will keep going up is somewhat contrary to observations in some places.
I live in regional Qld, an attractive 55,000 pop coastal centre, and I can tell you that if I were to try to sell at present I would get about 25% less than three years ago.
I'm happy for you Bill. But it's probably not valid to take your one personal anecdote and deduce that all property, as a rental investment, is necessarily profitable. You seem to have chosen a good position where rental demand exists.
Your suggestion that property prices will keep going up is somewhat contrary to observations in some places.
I live in regional Qld, an attractive 55,000 pop coastal centre, and I can tell you that if I were to try to sell at present I would get about 25% less than three years ago.
You say you are not receiving 'stellar returns'. No obligation of course, but would you like to tell us the %pa return on your capital?
Valid comment.
Interest rates vs House prices.
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(would someone turn some of these into jpgs and re-post if you think they are of interest. So you don't need to log in to view)
http://www.abc.net.au/news/2012-10-02/home-prices-surge-in-september/4290780?section=business
This chart also reflects lower interest rates causing price increases.
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Now the interest rates have dropped a further 0.25%.
With the amount of movement we have left in interest rates these property prices may remain high for some time.
You say you are not receiving 'stellar returns'. No obligation of course, but would you like to tell us the %pa return on your capital?
My charts go to Sept 2012 and are in PDF..... You are looking at the chart "over a longer time span" I re-produced because it shows the apparent common occurance, when interest rates drop (as a result indirectly or not) property prices seem to rise.Your chart goes to 2010. .
+1. There is no point in even arguing it anymore IMO. It's a debt fueled bubble, and debt bubbles burst...eventually(not too much longer). Alot seem to believe there needs to be a catalyst, the end of the mining boom may be seen as one.
The regional lender has been struggling with rising bad loans as property prices have plunged as much as 30 per cent in parts of Queensland and the state's economy has slowed.
If property prices are debt fueled, as we all would agree, the interest rate associated is a major factor. It's not un-comprehendible that interest rates and debt or debt fueled are so closely linked, I for one are paying more attention to this........ it should not be dismissed. I paid a factory off when interest rates were 19% and we all realize, "what if interest rates rose back to the 90's". My point is your "not too much longer" maybe a little longer than we might have thought.
Even at a 3.25% cash rate (6.8% mortgage) the RBA has a good way down if it ever needed to go to zero. Sure, any mining reduction with job losses will reduce interest rates further but the lower the interest rate the easier the re-payments will become on property. The US has mortgage rates of 3%. What would our property prices look like at 3% mortgage rates or what about in the 5's.
The last Youtube link MrZ put up (in the first few minutes) talks about "when interest rates can't drop any further" Stop….., we can drop interest rates and will drop rates further if required. It's a double edged sword for anyone wanting property in the near future and for a little less. I think even regional coastal Queensland towns will now experience some property rises again.
If property prices are debt fueled, as we all would agree, the interest rate associated is a major factor. It's not un-comprehendible that interest rates and debt or debt fueled are so closely linked, I for one are paying more attention to this........ it should not be dismissed. I paid a factory off when interest rates were 19% and we all realize, "what if interest rates rose back to the 90's". My point is your "not too much longer" maybe a little longer than we might have thought.
Even at a 3.25% cash rate (6.8% mortgage) the RBA has a good way down if it ever needed to go to zero. Sure, any mining reduction with job losses will reduce interest rates further but the lower the interest rate the easier the re-payments will become on property. The US has mortgage rates of 3%. What would our property prices look like at 3% mortgage rates or what about in the 5's.
The following is interesting regarding the Bank of Qld losses.
http://www.theaustralian.com.au/bus...-loss-since-1992/story-fn91vch7-1226489239560
All in all, I won't be buying soon.
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