can you show the sums for that?
The future of Australian property prices
- Thread starter Joe Blow
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can you show the sums for that?
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My basis for that is that in some suburbs in Australia (particularly in Sydney), it is cheaper to own that rent.
Quick Google
http://www.theage.com.au/business/property/where-its-cheaper-to-buy-than-to-rent-20121220-2bopa.html
That list only factors in mortgage repayments and not other costs associated with owning a home. Plus if it's cheaper to buy than rent that's a real red flag as far as expectations of future capital growth go.
6 in Melbourne and 48 in Sydney out of how many suburbs in total??? Also banco beat me to it. There are many more costs associated with owning a home than just mortgage repayments.
Don't always believe what the media tells you ...
+1.
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Yes, it is. But who is to say after 30 years you own nothing? What's stopping you from owning significant shares or 100% ownership of a company? What's stopping you owning commodities, cash flow positive assets, trucks, boats, services, a product. Something that gives something back to the people?
If you look at anyone who has been very successful, most of them rent. They don't buy to make money, they buy after achieving substantial success in business, and because they want to live there. Property is an investment for the middle class only because it forces them to save where they otherwise wouldn't. I think it's a stupid place to park $400,000 for such a pissy return, you can start a lot of other things up with much lower overheads and generate a much higher return. I guess it's all about risk/reward.
ftw129
Sell crap and manage risk
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Nothing is stopping you (you can own shares/property and a company) & instead of paying extra on mortgage repayments (for redraw), purchase shares instead.
As an example, I have paid extra into my mortgages (about ~60k), and now have the chance to invest elsewhere, with a 100k profit on the property price too.
Where are the stats for this?
Gates?
Buffett?
Trump?
Abramovich?
Mittal?
If you purchase the right shares. It goes the same way for property. There are 'goods ones + bad ones' in both investment vehicles.
Instead of 'hypotheticals', I would rather take the advice of people who dabble in property/shares in the real world on a daily basis.
I don't know the answers, but I know that both property and shares go up and down....timing is the key...
I have my fingers in both pies (shares and property)
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I was a lucky pre boom purchaser in inner sydney back in 97.
had to sell out of around 20K worth of shares at the time to help pay the purchase costs. Those shares are all up somewhere between 5 and 10 times in value, not factoring in the dividends over a 15 year period.
Now the house is fully paid off, so I get to live relatively cheaply, but looking at how much interest I paid over the years AND maintenance costs, i can't help but think I would have been much better off renting and just topping up my shares every 6 months.
Anyone buying an investment property for a 4.5% gross yield is crazy in my POV, especially when there's still plenty of good quality companies paying 8-9% dividend yields once franking credits are taken into account. I'd much rather be able to build my investments from cash flow than
The only thing I am happy about with buying is I've been able to stay put since March 97. Before that I'd moved around 5 times in 3 years which ain't fun.
had to sell out of around 20K worth of shares at the time to help pay the purchase costs. Those shares are all up somewhere between 5 and 10 times in value, not factoring in the dividends over a 15 year period.
Now the house is fully paid off, so I get to live relatively cheaply, but looking at how much interest I paid over the years AND maintenance costs, i can't help but think I would have been much better off renting and just topping up my shares every 6 months.
Anyone buying an investment property for a 4.5% gross yield is crazy in my POV, especially when there's still plenty of good quality companies paying 8-9% dividend yields once franking credits are taken into account. I'd much rather be able to build my investments from cash flow than
The only thing I am happy about with buying is I've been able to stay put since March 97. Before that I'd moved around 5 times in 3 years which ain't fun.
Exactly. If you bought 20,15 10 years ago, good on you. Perhaps even 5 yrs ago. Would you buy today as an investment?
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Yep. Up & Downs...it happens...
I am not master investor. I am trying to make a buck like everyone else.
I appreciate this thread and all input on ASF.
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I don't think you could call it an investment?
There is still opportunities out there though. If anyone is investing in hope of capital appreciation over the next decade I think they may be in for a shock.
prawn_86
Mod: Call me Dendrobranchiata
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7 different cities/towns in 8 years for me
The flexibility of owning shares over a PPOR or having 100% of assets in an IP has allowed us to move around, which may have otherwise been difficultI don't think you could call it an investment?
I don't think many of the so called investors are investing in the hopes of anything else....it is not like you are getting decent returns in general.
True...doesn't happen often enough and people tend to forget...
Neither am I.....just learning...
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I work with a guy who has 4 places. He said it's not worth his time buying anything that yields less than 10%, and I would agree. You have to go inter-state or to areas likely well out of your comfort zone to find these places though.
Yes this is true. There were some regional properties and some in mining areas that did and are doing quite well. If you timed it, you did really well. Just need to be careful in some cases as the demand will fall once construction/expansion operations at mines stop.
Julia
In Memoriam
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Really? What is the evidence for this claim. No successful person I've known over some decades has not owned their own home. Usually they have some IP as well, plus shares.
Owning your own home isn't just about the financial aspect. It's also about the simple pleasure of creating an environment with which you can do what you want and which provides a sense of security being at the whim of a landlord fails to give.
Agree, And that's without the consideration of potentially ghastly tenants.
Pivotal point. Timing is everything. There have been wonderful times to buy property for substantial capital gain. Nothing like those times now.
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Well that's an extreme example but kind of true, he's 73 years old, wants a fortune for his house, and nobody wants to buy it. He'll be dead in 10. Someones gonna get lucky, wont be him
As a new home buyer, and a much least experienced investor - and even with all the talk about how property prices are likely going to drop - it's so tempting to buy a house just for that reason. I mean it's nice to know you own it and create something you can be comfortable in.
Is Australia expecting rentals to increase? Cause currently people in my area (WA) are paying 300-350 rent, and if they had a mortgage for the same property (around 250-300k) you would look at 380-400 weekly payments instead. Obviously you would be forking out 250k for the interest over say 25 years.
If I rented for 25 years, I would be paying:
52 x 25 x $350 = $455000 - at the end of this I own nothing - assuming rent stays constant
If I took the mortgage I pay out:
52 x 25 x $390 = $494000 - at the end of this I have a house I decked out. Sure, I would probably spend like $$$$ on it but that aside, can someone explain to me why they feel renting and putting it in shares is better.
With sincerity - I honestly feel this is my lack of investment knowledge, and probably the property will drop in price in the long term? but I can't predict the price in 25 years.
Are you mortgage calculation on the total price of the property or just the mortgage amount? If just the mortgage amount, you need to include interest calculations on your deposit. You also need to add for expenditure that you have to have in a house such as insurance and rates that you don't pay in a rental.
You should also include some depreciation for fixtures and fittings.
If you are interested in why many think that Australian property is over priced, have a look at this article
http://www.propertyobserver.com.au/...cord-and-will-crash-philip-soos/2013011658802
It has some great stats over a long time frame.
