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The future of Australian property prices

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tech/a said:
Really.
I have say 3000 square meters at say on the esplanade for 1.6 mill.
I can place 9 X 2 story 260 meter Apartment/Town houses on it.
I build them at $1500/ square meter.
I sell them for average of $950k each.
Click to expand...

$1.91M profit = (9x260x1500 building cost)-$1.6M intial setup

Australia is truly the land of sunshine and lollipops for those with no fear, persistence and persecution.

+ you are helping a social need, more housing abet a little over the median house value but still helping the cause.

Cheers and have a good evening
 

Then are you in investment property for the gearing? As it appreciates just as fast or slow as the property next door. So you have no real net gain whenever you sell as you still need to allocate the capital somewhere to make a return unless you just buy and hold?

Not trying to start an argument I'm just interested.
 
1q2w3e4r said:
Then are you in investment property for the gearing?
Click to expand...

Yes of course


Its a business.

Some buy and hold after freehold or close to it.
The rest for capital gain allocated elsewhere---some better than others.
The end result for me is passive income and wealth accumulation.

I am at the age where I can retire.
I could retire but would be bored out of my pea brain. Next stop coffin---not for me just yet anyway.
I have a passion for business that will see me to my grave.
I have a great love for life and enjoy every second---the good the bad and the ugly---its not all business.
I have seen too many retire only to see their accumulated wealth erode at a massive pace as the cost of living increases faster than their savings can be replenished through dubious investment. My Mother and Father who are still here being one.
Passive income will do a great deal toward keeping in front of this erosion problem.
 
Go Nuke said:
Here look.....I'll show you how stupid graphs are sometimes...
Click to expand...

I don't see your point? What is that graph? Where is it from?

PS: Re RP-Data graphs, ignore their data if you wish, but it is all pretty much correct, and has been proven to be so. I always consider informatino from all sources, whether I agree with what it tells me or not. Of course like any data, you need to understand what it means, and how it might differ from other data you look at. But to just write it off with no analysis is foolish IMO and will only lead you to ignore solid facts and reach wrong conclusions.

PPS They have picked each inflection point in the market accurately over the past 2-3 years, and well before APM, Residex or the ABS..... And, dare I say it, most of the posters on ASF housing market threads!! .
 
Just a quick question about overseas residential property investors:

Is there really no regulation regarding their ability to borrow and invest in a house here? I mean, banks overseas are offering money at ridiculously low rates so the advantage they have over local investors is huge. So can they really just borrow from their own country and buy property here with no additional taxes compared to local buyers?
 
Hi Beej

The graph is from Mycareer.com. A online job agency. (displayed at the bottom of the chart)
My point about how silly graphs can be was directed at this graph showing the "Average Australian Salary" as titled....being around 90K.

I find that to be :bs:

Thats all
 


Your argument means nothing if you just picked those numbers from a lucky dip. Give me a source.

And if you're a builder then you should know that a 4br double story home cost the same weather it's built in Sydney beachfront property or middle of the bush. (same size block of land)
And when it sells the only thing that determines it's price is the land value.
 

Yeah,

Right on bro, i'm sick of paying more than my fair share of taxes, time to get on that negative gearing train.

Err, then again perhaps not.
 

What do you mean give you a scource!
They are actual figures. What do you want the block involved the building contract and the sales contracts.
5 parties involved.

Well seeing your obviously NOT a builder you have no idea (mentioning a 4 bedroomed home) how to make $$s out of property. You wouldnt be building a 4 bedroom home!

All you want to do is poke holes in real property investment,rather than learn--frankly its beyond the scope of most here and not worth the time in replying.

Some of us DO most including yourself DONT.

Cutz
Where is the negative gearing in that scenario!
 
Tech, you spot on.......
"All you want to do is poke holes in real property investment,rather than learn--frankly its beyond the scope of most here and not worth the time in replying."

Robots, good to see you back.

Another reason for the interest in real estate.....extract
only, read the full article for the bigger picture

Super changes 'pushed people into property' Glenda Korporaal From: The Australian April 01, 2010 12:00AM


INVESTMENT and Financial Services Association chief executive John Brogden yesterday blamed the federal government's changes to superannuation last year for prompting people to turn to investment properties for their retirement savings.
In an interview with The Australian, Mr Brogden said there was also a concern that there would be further cuts in the May budget to the caps on allowable contributions to superannuation beyond the compulsory 9 per cent superannuation guarantee levels.

He said concern about the Rudd government's superannuation changes, following the surprise measures in last year's budget and uncertainty about the federal government's plans for superannuation, had encouraged people who had some extra savings to look for other means of investment, including investment properties.


http://www.theaustralian.com.au/bus...le-into-property/story-e6frg8zx-1225848228175
 
blogger on another forum has the view that we should turn back time to the year 2000.....
he seems to be trapped in a time warp
I suspect he is like others, who in 2000 claimed they had bragging rights on property....
they believed that property was in a bubble, sold their homes, turfed the wife and kids out into a rental, were sitting on the cash, and would re-enter the market for half the price.....
Several posters claimed they did that, put their money where their mouth was.
A couple have since claimed they did re-enter the market, in a different suburb and far more expensive...they were priced out of their former suburb. The others are still waiting to get back in, and some have given up.
You will see these bloggers out there, still waiting to get back in at the 2000 prices. No wonder they are trapped in a time warp.

I on the other hand did the opposite, I thought property was undervalued, I went on a bargain buying trip and purchased several properties.
At the time I figured, a lot of people would have been burnt by the tech wreck, they would seek the safety of bricks and mortar for future investments.
Well they turned up in droves in 2003-2004, so I sold some of those little bargains, for a stunning profit. I kept the rest for the long term.
I am a contrarian.
I believe there are still some great bargains out there, but not in the inner suburbs. Go further out, with easy commuting to the city, pay a third of the price, and spend a couple hours of day travelling, until you wisen up and find a job closer to your new home.
 

GREAT to see you back robots. I hope you enjoyed your sabbatical.

Real Estate = go you good thing ! Got the champagne on ice to celebrate !
 
Glen Stevens is looking goofy again....still repeating his mistakes of a year ago, the raising of interest rates so fast it kills any chance of a recovery......and all the silly ones who follow the media only goofy show....with their mantra of higher interest rates to scare you out of property.....I am beginning to feel like the Joker...I get the last laugh....at the foolish ones....
if you take a close look around, you will see its very subdued out there....even the kids have slowed their spending...

more proof its not roses out there....
there goes the interest rates rises some have been predicting.....
this index is at 50.2...just .2 above the line...at 50 its at the contraction stage and going under, its fallen 3.6 in March alone... I believe it will head down further for a another 8 months or more
rising interest rates are like the green shoots myth, it was just a fairytale

...........extract only........

Manufacturing activity slows The pickup in manufacturing activity slowed in March as weak demand, a strong local currency and higher interest rates dampened demand, a survey says.
.01.04.2010 09:38 AM

The pickup in manufacturing activity slowed in March as weak demand, a strong local currency and higher interest rates dampened demand, a survey says.

The Australian Industry Group-PricewaterhouseCoopers performance of manufacturing index (PMI) fell 3.6 index points in March to 50.2 points.

The index remained above the key level of 50, which separates expansion from contraction, for a third straight month.

The report found the pace of growth in new orders weakened in March, while levels of production activity, hiring and inventories contracted
http://www.thebull.com.au/articles_detail.php?id=10539
 

Recovery?

By rewarding the profligate and screwing savers and fixed income investors?

This will come at a dire cost later. No! Glen Stevens is looking smarter again.
 

Cost of building depends on access to products and services. What happens if you're building in Bourke and have to import a heap of stuff from Sydney or BrizVegas? I'll tell ya what, the cost can double, treble, even more!

Land value determines the price? Maybe on the shores of Noosa Hastings street. One of my properties I sold, the land alone was valued at 60k. I sold it for over 4 times that.

Supply and Demand determines the price. Always has, and forever will
 

I can speak for all of us (builders), we will not work for FREE!!!!!

Cost of materials go up = so do house prices. Builders need to pay the bills, and that they'll do by increasing prices.

To end this argument once and for all, look at the interest rate chart and compare it to median housing prices. Maybe Beej can help us out with the median house prices, but here's the interest rates over that past 50 odd years....




Couldn't find any long term charts for housing prices, but this gives you an idea:

http://www.econ.mq.edu.au/research/2004/Abelson_9_04.pdf
From: http://www.econ.mq.edu.au/research/research_papers/2004_research_papers2

Rising interest rates did not equal lower house prices...

Up, up and away in my beautiful, my beautiful Balloooooon
 

Attachments

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I took these figures from a govt inquiry in 2006, sourced from the ABS and put them onto excel........
I have used the highest interest rates on my loans from 2007-2010
note the rates were not that all year...just the highest rate paid at some point in that year
the rate does not seem to reflect a drop in house prices
20 years history should satisfy most people, it covers all the modern day dramas and crisis that commenced in the 80's


Interest house prices house prices Growth rate @
rates established FHB 8.25%

1986 15.5 80800 67400 80800
1987 15 86200 68400 87466
1988 13.5 101600 87000 94682
1989 17 138600 107400 102493
1990 16.5 139100 112400 110949
1991 13 136400 115200 120102
1992 10.5 139800 117200 130011
1993 9.5 143000 119400 140736
1994 8.75 148100 127900 152347
1995 10.5 153700 134600 164916
1996 9.75 160500 141300 178521
1997 7.2 170600 154300 193249
1998 6.7 191400 175400 209193
1999 6.5 204600 185200 226451
2000 7.8 229900 205700 245133
2001 6.8 245700 194300 265357
2002 6.55 290800 229400 287249
2003 6.55 336300 291300 310947
2004 7.05 389800 330500 336600
2005 7.3 387600 337000 364369
2006 7.55 396400 350000 394430
2007 7 429103
2008 8 464503
2009 9 502826
2010 6 544309
 
hello,

good evening, another great day man

thanks for the support ,has been overwhelming, the sabbatical was out of control, goof balls, g, ruski's, arctic, trains and trams

it was amazing, the whitelight engulfed me again, showed a new path of euphoria

many thanks to the true contrarian Kincella, i have actually found a property to buy in a satellite city (contracts signed), may move out of St Kilda for a while as rents are going strong

do the same as the other joint and get a few bunk beds in each room

paradise

thankyou
robots
 
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