Forum Replies Created
- Pat007 wrote:Still.. being a foreign bank to Australia , they may be more inclined to loan on overseas investments.
worth keeping an eye on i think !Depends on risk. The Japs got smashed in their PI market and have never recovered. I’d expect them to be risk averse and look for the cream in our market. Still if they do come it’ll be through someone else’s back door I’m betting.
The Freckle
tiger_ra wrote:yes but its in hopes of making $2 extra in the future!So we’ll definitely do our dough today and hope to make it up later.
You been reading Homer Simpson’s ‘How to Grow Rich by Loosing Money”…. go on you can tell us
The Freckle
Mark Bouris stirring the pot again.
http://www.theadviser.com.au/breaking-news/6559-foreign-banks-would-fail-to-compete-resi
I wouldn’t get too excited about the Japs coming. If it was as easy as some make out and the profits there for the taking they’d have been here years ago.
The Freckle
tiger_ra wrote:One of my main drivers in investing in property is to take advantage of tax savings from negative gearingThe ol’ spend a dollar to save 25 cents trick eh. Sounds like a plan.
The Freckle
xdrew wrote:I think the funniest thing with this little thread is it started in 2008.Since then the properties in my area have added another 28% to their market value.
Which is on average 5%pa. That’s just enough for a PI to hold it’s buying power and cover maintenance costs. Neutral or negatively geared and you’re out the back door.
Not what I’d call a profitable investment area.
The Freckle
(Bold type = Quotes from Crusty above)
I dont know hoe you construe a report saying Irymple can onlly support one new supper market instead of 2 because there are a whloe bunch of new shops and woolworth shopping complex being built 2 k down the road in Mildura as bad??
I’m not saying it’s bad. Herron Todd White, the writers of the report infer it is;
There are a higher than normal number of vacant shops in Mildura’s
main shopping mall and generally low confidence levels
among retailersThe eventual construction of these large retail
premises will presumably be to the detriment of some of
the smaller, existing retail businesses.Large chain store type operations rarely provide any real benefit in small towns and do have some negative impacts. For example one large store usually means the closure of several small local stores. Over all unemployment options are reduced as large stores rationalise employment. Large stores remove large amounts of money from local economies in payments to outside suppliers and investors. Locals tend to spend most of their income locally.
one of the problems holding back the region is a lack of competent and williing workers
Your word not mine but I agree.
lots of people in mildura from oveerseas many sponsored by their employers because they cant get locals to work or they havent botherd to get the necessary training or skills
The demographics don’t support your assumption of lots of foreign workers. The exception might be seasonal pickers under various govt programs who actually spend very little in town. Foreign workers are a two edged sword. On one hand they enable businesses to continue to survive and subsequently contribute to the local economy. On the other hand foreign workers send the vast majority of their small incomes out of the country and actually take from the locally economy. Their contribution to the property market is almost nil. They don’t buy property as a rule and they rent the cheapest snake pits around.
The report you linked mentioned nothing about the record grain production for the last 2 years or that the area was one of the only area to consistently produce grain over the 10 year drought.
Climate change policy is seeing the regions water rights diminish year by year. The region faces incredible challenges over the next decade or so as they struggle to adapt. Farming generally produces more down years than good and even good years may not be as economically successful as one might think. Bumper crops can actually reduce prices and quality has a significant impact on payouts. All agriculture sectors across Australia are facing unprecedented challenges as global currency wars force the $A ever higher and significant climatic events have increased 10 fold in the last decade. Agricultural insurances are a significant and rising cost to farmers.
The problem with agricultural and how it impacts Mildura are many here’s a few;
Ag employment is becoming more specialised and mechanised to reduce costs and resolve labour shortages
low skilled farm labour (pickers) are the lowest paid jobs.
trend towards farm amalgamation and corporate ownership
conversion to lifestyle blocks as farmers opt out.
http://adl.brs.gov.au/data/warehouse/pe_abarebrs99001275/pc13466.pdf
Many farms in the Mildura–Wentworth region are small, with around 61 per cent of farms having a total value of
agricultural output of less than $150 000 (?gure C) in 2000-01. In total, farms with a value of agricultural output
of less than $150 000 produced less than 20 per cent of Mildura–Wentworth’s value of agricultural output.
In contrast, the largest 2 per cent of farms produced 21 per cent of Mildura–Wentworth’s value of agricultural
output. Many small farms and, particularly the estimated 26 per cent of farms with a total value of agricultural
output of less than $50 000, would be mainly reliant on off-farm income to support their operators.IF it wasnt for that region being a reliable producer of grain Australia would have been relying on imports to feed itself
I have no idea where you get this idea from. Mildura is the smallest of the grain belt regions.See below.Mildura–Wentworth is one of Australia’s largest and most diverse agricultural regions with both irrigation
based horticultural industries and dryland broadacre industries. The region produces around 21 per cent
of Australia’s wine grapes and citrus, together with 10 per cent of barley, 7 per cent of wheat, 5 per cent of
vegetables and almost all of Australia’s dried vine fruit production, plus a wide variety of other agricultural
productsWhile its farm diversity has some economical buffering affects its 2 primary sectors, grapes (38%) and grain (24%) remain vulnerable to global macro economic factors. Grape production faces some serious challenges due a production glut and falling prices. What does help Mildura though is that it processes most of the grape industries production.
The revolution in farming over the last 10 years with no till farming has meant increased (X3) production and more reliabiity cropping every year instead of every 3 and higher yeilds as well new varities such as hindmarsh barley that yeild 30% more not to mention more marginal country can be farmed too. What about the new varities of canola that can be grown and high prices paid for it
Please post sources to substantiate this because I’ve seen nothing that could support these claims. All things considered these claimed improvements would mean only tiny adjustments to the Mildura macro economy. Improved farm efficiency is always occurring yet farm debt is rising faster than farm gross receipts. On Mildura farms 03/04 debt to income was approx 68%. By 05/06 it was 87%.
Nationally the debt to gross T/O is increasing (see slide 17)
http://maps.neilclark.com.au/web/news/Megatrends%20and%20Agriculture%20March%202011.pdf
there have been fruit fly outbreaks over the last couple of years the industry didnt collapse,
I stand corrected.
why post an old outdated report
Irymple Town Centre | Economic
Justin Malkiewicz | Statement of evidence
28 November 2011Herron Todd White report – 2011 June
Realestate.com.au
Mildura Property Data & Trends
Data current to 2011there have been 7 more up to date ones released since maybe the one that said Irymple house price went up 40% does fit you bias
In 2002 Irymple saw a 42% jump (units) and 2008 a 29.7% jump (units) according to Realestate.com.au. Does this not make you suspicious?
The corresponding data for houses was 2002 6.3% and 2008 -10.8% I smell a rat somewhere. I suspect the sample size is too small to give accurate figures. Mildura figures are likely to give a more accurate profile of the region.
Any way keep looking through your foggy rearveiw mirror, I will be looking through a clear windscreen
Don’t tell me tell this guy. I think he’s on your side anyway. Maybe a Casino or two will help…
A Mildura property valuer believes that economically Mildura desperately needs Victoria’s second Casino Licence
TUESDAY, 23 NOVEMBER 2010
The valuer Chris Cleary says many district homeowners have lost between 10% and 15% of the value of their properties and presumably a greater percentage of their equity, since the peak of the market around mid 2007. He said this has been disastrous for the region and even at the conservative rate of a 10% loss, this equates to around a $500million loss in householders equity.
“Whilst the drought is now over and we have water back in the river there has been no noticeable improvement in house prices our property market is stagnating,” Mr Cleary said.
“There is a proven direct correlation between population growth and property value growth. Whilst Cairns and Townsville have the advantage of being Coastal locations with larger populations, which you would expect to see strong capital growth, the smaller inland locations of Launceston and Alice Springs have seen a more than doubling of property values in the previous 7 years of (107% and 169% respectively) as against Mildura’s 32%.
Launceston during the 1980’s was considered a region with limited growth prospects.
The Launceston Country Club was one of the first major investments into the region in the 1980’s and since then there has been extensive other investment that has now seen the region as a premium tourist destination with solid population growth.
Mr Cleary says there is a perception that provincial cities with Casino/Entertainment/hotel complexes are progressive regions with an increasing tourist and economic outlook.
“The establishment of such a complex here is likely to lead to other beneficial development,” he says.
“A huge injection in investment in Mildura will see new jobs created, a more progressive outlook, population increase and a resultant increase in homeowners equity and we have to encourage this investment.”
Mr Cleary said that as a region we need to encourage development to see our region grow and prosper rather than listen to the negativity of the fear mongerers who are active in opposing the Jewel entertainment complex.The Freckle
Nigel Kibel wrote:With 2012 well under way it will be interesting to see what happens to the Property Markets across Australia this year.
Most of the indicators would suggest that in 2011 the property markets had bottomed and we should see steady growth throughout most of Australia for the remainder of the year.Hmmmm………
That stuff you get from Crusty the Clown is highly unreliable.
I prefer these guys http://www.macrobusiness.com.au/2012/01/mortgage-data-indicates-ongoing-melt/
The Freckle
crusty wrote:freckle, another thing you and that economist who sits up there in his distant Ivory tower and work out average incomes is that there is so much work there a lot of people can demand to be paid in cash. No cash no workers. There are people on social security benefits working for cash, counted as unemployed , thats is what makes a great place to own rental property, they also get rent assistance, if they atr short of money to pay the rent they can just go and get a day or a couple of weeks work pickingfruit or something. Of course the unemployed will move there, cheap housing. Also the average incopme figures are nonsense too as some people work 2 jobs sometimes one is under a false name the tax man only knows about one . Than the idiot buearocrats wonder why there is so much unclaimed supper annuation. I know lots of examples where newly arrived migrants who arrived own nothing but a debt for there travelling expense after 2 years own a house and a new car, a couple may have 5 jobs between them and they may work 18 hours a day. You know what they say about lies and statistics. Also some of the worker have small fruit blocks and offset there taxable income further skewing statistics.What a lot of twaddle!!
Mildura demographic breakdown below;
Mildura (3500) is a suburb of Northern Victoria, North Western, Victoria. It is about 476 kms from VIC’s capital city of Melbourne. The population of Mildura is 28,744 and is comprised of 47.7% males and 52.3% females.
The median/average age of the Mildura population is 36 years of age, 1 year below the Australian average.
The country of birth of people living in Mildura is 82.4% Australia, 1.6% Italy, 1.5% England, 1.5% Turkey, 1.1% New Zealand, 0.5% Greece.
85.7% of people speak English as their first language, 2.3% speak Italian, 2.2% speak Turkish, 1% speak Greek, 0.8% speak Tongan, 0.4% speak Samoan.
The religious make up of Mildura is 25.4% Catholic, 20.9% No Religion, 16.4% Anglican, 8.8% Uniting Church, 2.9% Presbyterian and Reformed.
47.4% of people are married, 32.5% have never married and 12.5% are separated or divorced. There are 1691 widowed people living in Mildura.
59.5% of the people living in Mildura are employed full time, while 27.8% are employed on a part time basis. Mildura has an above average unemployment rate of 6.7% and 8408 people are not part of the labour force.
The average individual income is $395.00 per week and the average household income is $761.00 per week.
The average rent in Mildura is $155 per week and the average mortgage repayment is $1083 per month. 30.1% are fully owned, and 29.9% are in the process of being purchased by home loan mortgage. 33.3% of homes are rented.Now I don’t expect those stats to be 100% accurate but it does give you a fairly accurate profile of Mildura’s makeup.
With regard to under the table cash workers, the black economy, the shadow economy etc they’re active in every town and city within Aus. Bureaucrats know and understand all this as does your ivory tower economist. The amount of ppl your talking about represents a tiny fraction of the population and is almost (but not totally) insignificant.
But to give you the benefit of the doubt even if the so called black economy was as significant as you say then it may represent only 1 or 2 property sales per year in a town the size of Mildura. In terms of rentals I doubt they’d be your target market. It’s not the market segement that lends itself to generating equity gains.
The Freckle
I’m assuming all you guys have read this
It’s a comprehensive overview of the last decade to 2011.
Worth noting is Mildura’s vulnerability to high unemployment in times of economic and climate stress. Mildura’s dependency on its agricultural economy is also worth consideration. Much of it’s second tier businesses rely on a sound farming sector to survive.
Globally food demand is rising but access to sufficient water rights is hampering Mildura’s ability to thrive especially in drought/low rainfall years. Drought, the GFC and proposed toxic waste dump brought pop growth to a screeching halt around 2007.
Current threats are a high dollar affecting primary producer exports which isn’t likely to ease any time soon and the current global financial situation. There’s a growing consensus that Australia’s 2 speed economy is set to deteriorate over the next year. By how much and when a recovery might occur are up for debate. The current global outlook isn’t good and that doesn’t bode well for any rural economy that is predominantly export orientated.
More bad news I’m afraid…
source: http://www.htw.com.au/Downloads/Files/223-Month-In-Review-June-2011.pdf
Regional Vic
MILDuRA
The establishment of a sand mining industry in the
Mildura region during the past five years has been a
handy fill-up for the local economy, with the traditional
winegrape and dried vine fruit industries languishing for
much of the last 10 years.
Despite the benefits of the sand mining activity, anecdotal
evidence suggests retail spending is subdued. There are
a higher than normal number of vacant shops in Mildura’s
main shopping mall and generally low confidence levels
among retailers. Builders are reporting low enquiry levels
for new homes, and this inevitably flows through to retail
businesses that supply furniture and associated items.
Concerns about higher fuel and electricity prices,
combined with an expectation that interest rates could
rise is also felt to be contributing to consumers being
cautious with regards to discretionary spending.
….there are a higher than normal number
of vacant shops in Mildura’s main shopping
mall and generally low confidence levels
among retailers….
Retail food and alcohol expenditure appears to hold its
own, irrespective of weak economic conditions, and
there is likelihood that an additional supermarket will
be constructed in Mildura in the next year or so. sites
and permits have also been secured to construct a Big
W and an oxygen hardware store in the Fifteenth street
precinct. The eventual construction of these large retail
premises will presumably be to the detriment of some of
the smaller, existing retail businesses.To top it off unit prices haven’t moved up in 5 years (which is going backwards) and house prices have only increased 10% in 5 years. (or a compound rate of 1,92%)
http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=mildura
It took me about 5 min’s of searching to dig this info up. My conclusion is that Mildura is high risk in terms of investment. With sub par equity growth (negative in real terms because it doesn’t even keep pace with inflation) and seasonal and fluctuating nature of employment opportunities indicates the rental market could be competitive. Currently 82 properties for rent.
Being a small rural town it is vulnerable to changes in domestic, state and national economic factors. Global considerations magnify those factors. Couple that with green house weather events, carbon tax, a high dollar and a narrow (and declining) agricultural base (citrus and wine grapes). Mildura is also a fruit fly exclusion zone. If this pest ever penetrates the region then it’s agricultural base would virtually collapse overnight.
All in all I actually don’t see any positives of sufficient note that make an investment worth the risk.
The Freckle
You can get up to 6.01% / 4mths with Ubank on term. Anything other than TD’s are high risk at the moment. Property in the main is trending down so there’s no rush. I don’t see that trend changing any time soon in fact you may see it accelerate as we head into a possible white collar recession.
The imminent collapse of the EU, a slowing China, deficits in Japan (1st in 30yrs), $1T of global debt to roll over this year, and a rising dollar are all coinciding. I’ve said in the past that Aus may just face the perfect financial storm in the near future. I hope like hell that’s not the case but I’m hedging just in case.
2012 is the year to tread very carefully in Aus property markets. My guess is that a few good ol’ boys here on this forum are going to get their britches burnt this year or next.
The Freckle
They have no history even though the Co name has been registered for some time. These types of so called expert advice companies who’ll somehow find you the best CF+ properties at under market value blah blah are starting to pop up more and more.
Red flags everywhere with these guys.
Any business who purports to have 20+ yrs combined experience and is legit will publish each of the principles resumes and industry expertise without hesitation. These guys don’t. Their website is just a poorly constructed opaque window to their business.
A business with any reasonable history will also publish it’s partners, portfolios, happy customer references etc etc.
I’d avoid them like the plague.
The Freckle
fWord,
the biggest wingers in society are the wealthy. The wealthier and more powerful the bigger the winging and whining. They do their winging through professional lobby groups or industry associations. Just look how the mining industry went on a winging spree when govt imposed the super profit taxes. And who winged the loudest. Yep good old Twiggy Forest who’s in the top 5 wealthiest in Oz. The big miners got the better end of the deal while the smaller miners had to bite the proverbial bullet.
A more subtle way to winge is to subvert politicians through party donations and influence peddling.
The property lobby group through various limbs of the property industry continually winge to govt, the media etc about how hard done by they are and that their industry should be supported, helped, stimulated, subsidised etc etc.
I’m neither pro nor anti the Occupy movement. My interpretation about the OM guys is that they don’t envy the rich. They dislike the fact that more and more wealth (and power) is being concentrated in the hands of a few at the expense of the many. The 1% are using their position to swing the odds in their favor at a substantial cost to the 99% who have little if any real influence to balance the odds.
The analogy is working in a large organisation that demands more hours for less pay while the senior exec’s take long holidays, receive massive bonuses, award themselves excessive pay rises and retire with golden parachutes regardless of their individual effort, skill or accomplishment. The org’s investors meanwhile receive paltry dividends if any and share value growth with unknown growth prospects.
All anyone wants is a fair bite of the pie and anyone here who reckons they don’t winge about something at sometime is a dreamer.
The Freckle
mattsta wrote:i think it helps to be contrarian. A lot of the richest people in the world became that way because they thought differently from the herd.That's why it's good to take responsibility for your decisions and actions, and to test your own assumptions
I'm not sure that being contrarian has any distinct advantages. Generally speaking ppl who aspire to some level of wealth or success are well motivated and are less risk averse than the majority. I think we all have some level of contrariness in us about different things. You can become more contrarian over time as you see the inequality or destructiveness of various systems be they legal, political or financial. The occupy movement is an amalgam of all sorts of movements with no clear message. <moderator: delete personal comment>. I've always been to some extent or other a contrarian but I've noticed as I get older I've become more egalitarian than ever. The Freckle
Andrew_A wrote:There's been some renewed interest in the Brisbane market and more specifically new product leading up to the Jan 31 deadline (now extended till 30 April), however it appears as if the rate cuts were likely the most important factor in the new interest, they really do make a difference!You’re kidding!!! Andrew you need to focus on credible informative comment that is useful not simply adding to the noise.
The Freckle
“The wealthy are like everyone else”
Since when?
“there is a jump to get there”
where?… wealth.
Very very few get to be wealthy in one jump. It’s often an incremental evolution over a long time. The exception are a tiny tiny group of super entrepreneurs (Larry Page -Google) and those that inherit.
“and its just as easy to fall off the rich rung too”
Not if you’re in the 1% club. In fact it’s almost impossible to fall of the rich rung no matter how many dumb mistakes you make.
“its a moving class structure thats continually revised”
The 1% is never revised it’s simply refined
” Surely if it was spontaneous (the OCCUPY movement) it would have attracted a wider section of the general community and gradually filtered DOWN to the specific sectional branches???
I thought it attracted everyone from the unemployed to economists to politicians. How much more widespread should it get to satisfy you xdrew?
The Freckle
