I do agree with your views. I would want to live in the Northern Beaches too if I could afford it. However as an investor, are you happy with the yields you are getting say if prices remain flat?
Thank you flyingfox for bringing the thread back on course. My opinion on your question is that nothing will seriously change over the next 3 to 7 years. Some areas where there is not much demand will probably see prices go down. Some areas in high demand where there are more people than units available will probably increase, how much is another question.
I invest on the Northern Beaches in Sydney. My property is walking distance to the beach, shops, transport and clubs. I never have a problem renting it out and it is a popular area that people want to live and they will pay higher rents to live there.
Right now I am looking at buying a 2 bedroom unit there. I know the area very well, street by street. I have lived there most of my life. I can tell you without any doubt that in the last 3 years (when I moved out of that area) that a good 2 bedroom unit with all the facilities I want as described above have gone up in price. It is very hard to find what I want. These units have gone up and I must pay more now than what I would have 3 years ago. I can't really see prices coming down in that area, however I can not speak for any other areas of Australia. Just my opinion.
I do agree with your views. I would want to live in the Northern Beaches too if I could afford it. However as an investor, are you happy with the yields you are getting say if prices remain flat?
Since the cricket finished early I went to an OFI on Saturday. I only went because it was the front unit of a pair, the back one of which was auctioned about six months ago and I am curious to see if it goes for more, less or the same as the other one. Engaging in the usual chit chat with the agent she said now was a good time to buy, I muttered something about not being so sure and she fairly pounced on me and was most insistent that prices were going to rise and I had to get into the market NOW!!! She was almost hysterical
Since the cricket finished early I went to an OFI on Saturday. I only went because it was the front unit of a pair, the back one of which was auctioned about six months ago and I am curious to see if it goes for more, less or the same as the other one. Engaging in the usual chit chat with the agent she said now was a good time to buy, I muttered something about not being so sure and she fairly pounced on me and was most insistent that prices were going to rise and I had to get into the market NOW!!! She was almost hysterical
Latest figures from RP data, houses prices fall again. Melbourne worst hit it would seem (may account for the hysterics from the agent I spoke to).
The article also says rents are rising. Being a tennant I keep a close eye on rentals in my area and can't see any evidence of them going up so I don't agree with that assertion (although other places may be different of course).
http://finance.ninemsn.com.au/newsbusiness/aap/8587769/home-prices-fall-again
Investment in Australia really has only three options: real estate, the stock market or cash. Cash has been king, but with falling interest rates, money is going to start flowing out of bank deposits to real estate, or stocks and funds. Which would you invest in? Falling interest rates are also good for the property market, so property might kick on again, but how high can prices go? Property is a great-long term investment, so 10 years-plus and you should do OK, but I think the share market will do more over the next few years. The stock market is still historically low, with plenty of potential for growth, much more than the property market. A lot of investors are still wary of stocks, but the bandwagon is building up steam again and your money isn't locked up for a decade. I'm certainly moving my money out of cash and back into stocks.
There will always be people wanting to buy a house, and I don't see any big collapse, but prices might stagnate in real terms for a decade, like the 1990s. If real estate prices tumble, along with mortgage rates, real estate is the place to be, but I don't see either happening.
Investment in Australia really has only three options: real estate, the stock market or cash. Cash has been king, but with falling interest rates, money is going to start flowing out of bank deposits to real estate, or stocks and funds. Which would you invest in? Falling interest rates are also good for the property market, so property might kick on again, but how high can prices go? Property is a great-long term investment, so 10 years-plus and you should do OK, but I think the share market will do more over the next few years. The stock market is still historically low, with plenty of potential for growth, much more than the property market. A lot of investors are still wary of stocks, but the bandwagon is building up steam again and your money isn't locked up for a decade. I'm certainly moving my money out of cash and back into stocks.
There will always be people wanting to buy a house, and I don't see any big collapse, but prices might stagnate in real terms for a decade, like the 1990s. If real estate prices tumble, along with mortgage rates, real estate is the place to be, but I don't see either happening.
Investment in Australia really has only three options: real estate, the stock market or cash. Cash has been king, but with falling interest rates, money is going to start flowing out of bank deposits to real estate, or stocks and funds. Which would you invest in? Falling interest rates are also good for the property market, so property might kick on again, but how high can prices go? Property is a great-long term investment, so 10 years-plus and you should do OK, but I think the share market will do more over the next few years. The stock market is still historically low, with plenty of potential for growth, much more than the property market. A lot of investors are still wary of stocks, but the bandwagon is building up steam again and your money isn't locked up for a decade. I'm certainly moving my money out of cash and back into stocks.
There will always be people wanting to buy a house, and I don't see any big collapse, but prices might stagnate in real terms for a decade, like the 1990s. If real estate prices tumble, along with mortgage rates, real estate is the place to be, but I don't see either happening.
Interesting, some comments on the Bloomy this morning also reflected a move into stocks in the US because of the lack of yield anywhere else...
CanOz
Real returns are still below term deposit rates and with house prices falling not increasing, there are no capital gains to be had in the near future. Of course if you look hard enough there are and will be decent returns but nothing great.
You keep going around in cirlces. I thought we addressed this further back. How do you explain that now I must pay more on the Northern Beaches for a decent 2 br unit than what I did 3 years ago? What makes you think there are no further gains? Again, I emphasise, research and pick your area carefully.
To answer your question regarding "real returns being below term deposits". try getting a term deposit over 4.8% now, you will be hard pushed to find one. It you did get one then good luck to you but where will you get capital growth? There will NEVER be any, is that a good investment? I will take 4.8% income from rents with a possibility of capital growth anytime over just leaving it in the bank.
This has clearly been happening here since cash deposit rates began to fall significantly.Interesting, some comments on the Bloomy this morning also reflected a move into stocks in the US because of the lack of yield anywhere else...
CanOz
To answer your question regarding "real returns being below term deposits". try getting a term deposit over 4.8% now, you will be hard pushed to find one. It you did get one then good luck to you but where will you get capital growth? There will NEVER be any, is that a good investment? I will take 4.8% income from rents with a possibility of capital growth anytime over just leaving it in the bank.
No capital growth with term deposits but no loss either. While there is a possibility of capital growth on your real estate there is also the possibility of capital loss.
You keep going around in cirlces. I thought we addressed this further back. How do you explain that now I must pay more on the Northern Beaches for a decent 2 br unit than what I did 3 years ago? What makes you think there are no further gains? Again, I emphasise, research and pick your area carefully.
To answer your question regarding "real returns being below term deposits". try getting a term deposit over 4.8% now, you will be hard pushed to find one. It you did get one then good luck to you but where will you get capital growth? There will NEVER be any, is that a good investment? I will take 4.8% income from rents with a possibility of capital growth anytime over just leaving it in the bank.
Don't be ridiculous Miss Hale, hasn't anyone told you property always goes up(over a 10 year period)*?
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