The future of Australian property prices

[MovingAverage]

Sheep go where the rest of the sheep go, eagles go where there is food.

This is no doubt the logic that underpins the "buy on fear sell on greed" approach

 

[dyna]

Of the 106,500 houses sold last month in both Sydney and Melbourne, 61 % cost more than $800,000. 64% of units sold for less . Dodgy developers in this country and news of buildings falling down in the middle of the night, overseas, will probably lead to further falls in both cities apartment values. Rents have not fallen, though.
Sydney unit yields are 3.55% ( 2.9% for houses ) Melbourne unit yields are 3.95% ( 3.09% for houses)

 

[qldfrog]

Of the 106,500 houses sold last month in both Sydney and Melbourne, 61 % cost more than $800,000. 64% of units sold for less . Dodgy developers in this country and news of buildings falling down in the middle of the night, overseas, will probably lead to further falls in both cities apartment values. Rents have not fallen, though.
Sydney unit yields are 3.55% ( 2.9% for houses ) Melbourne unit yields are 3.95% ( 3.09% for houses)

These yield being i assume before costs: BC,rates,insurances maybe even waters and depreciation..these are loss making Investments only making sense with CG and negative gearIng

 

[Warr87]

These yield being i assume before costs: BC,rates,insurances maybe even waters and depreciation..these are loss making Investments only making sense with CG and negative gearIng

i never understood how people could tout how much they made (doubled in 10yrs etc), despite leaving out the obvious wear/tear, repears, rates, etc., that come with owning the home (making the already low CAGR slightly lower). i guess it also comes down to understanding of risk. i see that as a riskier investment as if i needed to sell the house its not always something you can sell immediately, unlike shares.

also, i don't own property (yet) but I'm not sure I could invest in something that only returns me 2.9 -3.95 % yield.

but i'm probably missing something, or my expectations of returns are skewed because of my trading.

 

[MovingAverage]

also, i don't own property (yet) but I'm not sure I could invest in something that only returns me 2.9 -3.95 % yield.

I get the impression that a lot of residential property investors aren't chancing a positive yield on rent. I suspect a lot are happy with negative yield for the immediate tax benefits and longer term they are chasing capital growth.

But for commercial property, historically that has been chased for it's positive yield on rent but the downside is the lack of capital growth.

 

[Warr87]

I get the impression that a lot of residential property investors aren't chancing a positive yield on rent. I suspect a lot are happy with negative yield for the immediate tax benefits and longer term they are chasing capital growth.

But for commercial property, historically that has been chased for it's positive yield on rent but the downside is the lack of capital growth.

i personally have a problem with purposefully putting myself into a debt in order to pay less tax. it just don't make sense to me. obviously works in some cases, but idelogically it doesn't sit well with me. people have, and will continue, to make money off that way so more power to them I guess. i sometimes have to remind myself that I am much more cash positive than most, but that is obviously driven by my stance on risk/debt.

may also be why I am more favourable to commerical property for future investments given your characterisation. (though initial capital needed is also greater).

 

[MovingAverage]

i personally have a problem with purposefully putting myself into a debt in order to pay less tax. it just don't make sense to me. obviously works in some cases, but idelogically it doesn't sit well with me. people have, and will continue, to make money off that way so more power to them I guess. i sometimes have to remind myself that I am much more cash positive than most, but that is obviously driven by my stance on risk/debt.

may also be why I am more favourable to commerical property for future investments given your characterisation. (though initial capital needed is also greater).

A lot of SMSF's hold commercial property for that reason...chasing positive cash flow with better yields. While historically it has had reasonable yield like a lot of assets in recent times I think the yields on commercial properties are under downward pressure.

 

[Warr87]

A lot of SMSF's hold commercial property for that reason...chasing positive cash flow with better yields. While historically it has had reasonable yield like a lot of assets in recent times I think the yields on commercial properties are under downward pressure.

i found a good calculator for property investment and found that i would need approx 40% down to be cash positive. i used scenarios like higher interest than now, and less than ideal occupancy level. though I think better yield's than above. kind of a worst-case scenario. that's a large amount of money around any major city.

holding property's in a SMSF is definitely one of my future investment strategies. i'm not against property investment but i haven't been comfortable with the climate of investment properties for a while.

 

[MovingAverage]

i found a good calculator for property investment and found that i would need approx 40% down to be cash positive. i used scenarios like higher interest than now, and less than ideal occupancy level. though I think better yield's than above. kind of a worst-case scenario. that's a large amount of money around any major city.

holding property's in a SMSF is definitely one of my future investment strategies. i'm not against property investment but i haven't been comfortable with the climate of investment properties for a while.

yup, best to plan for the worst and hope for the best.

 

[qldfrog]

yup, best to plan for the worst and hope for the best.

With the current destruction of "value of money" not always mirrored in inflation figures, i believe RE allow you to access a relatively stable asset with limited supply: land.
So for houses, industrial warehouses, land and agricultural land, you get a relative safety...but you are non mobile and at risk of taxes/ Asset seizure.

 

[MovingAverage]

but you are non mobile and at risk of taxes/ Asset seizure.

and at the risk of the ALP ?

 

[Warr87]

With the current destruction of "value of money" not always mirrored in inflation figures, i believe RE allow you to access a relatively stable asset with limited supply: land.
So for houses, industrial warehouses, land and agricultural land, you get a relative safety...but you are non mobile and at risk of taxes/ Asset seizure.

well the stability of having a piece of land you own is certainly more tangible than owning some shares. completely owning your own property is definitely something that would add stability to your life (whenever you eventually pay it off).

 

[qldfrog]

and at the risk of the ALP ?

Same same?

 

[MovingAverage]

Same same?

I was only being a smart arse by my ref to the ALP—right, left and centre, I think they all want to stick their hand in the cookie jar

 

[qldfrog]

I was only being a smart arse by my ref to the ALP—right, left and centre, I think they all want to stick their hand in the cookie jar

But usually the alp more,as they like punitive taxation. But most of the western parties moderate right and left follow a socialist agenda of bigger and bigger government,reduced rights and annihilation of middle class to benefit the empowered elite.

 

[sptrawler]

Albo selling off one of his investment properties, maybe a sign that things are getting toppy?

Labor leader Anthony Albanese puts Marrickville investment property on the market - realestate.com.au

Federal Labor leader Anthony Albanese is set for an eye-watering payday as he takes advantage of Sydney’s booming housing market by listing one of his investment properties.

www.realestate.com.au

 

[dyna]

That will be the ex wanting out. Probably not on the top marginal tax bracket, like the shadow P.M.... Neg- geared to the max. Super at pollies' rates of 15% . Go Anthony!

 

[over9k]

Shadow P.M?

 

[basilio]

Now this is a house.. Check out the $1.3 m (US) TV that is part of the outside entertainment area.

Stunning new mega-mansion in the Hamptons comes with 2.5m-tall $1.3m TV - realestate.com.au

This newly build mega-mansion has a home theatre, gym and nine bedrooms — but the crown jewel is the giant outdoor TV which will make you the favourite host for any sporting final parties.

www.realestate.com.au

 

[gartley]

Albo selling off one of his investment properties, maybe a sign that things are getting toppy?

Labor leader Anthony Albanese puts Marrickville investment property on the market - realestate.com.au

Federal Labor leader Anthony Albanese is set for an eye-watering payday as he takes advantage of Sydney’s booming housing market by listing one of his investment properties.

www.realestate.com.au

Maybe RBA chief whispering to him about the real future of IR.....