Forum Replies Created
Is there anything the government wouldn't control in your utopia world ?
That is socialist/communism propagana talk at its worst
Anybody who wants to dabble in the mathematics side of house prices then this is the video to watch
No obviously we dont have a property bubble ha, property is different in australia, because in the lucky country prices always go up, and we have fantastic quality houses, people who say there is a bubble are uneducated because land and houses are in a shortage, thus demand and supply is making them more expensive.
Even if we did have a bubble it wouldn’t make a difference because we sell petrified wood to China
Unemplment is low and pies taste better with tomato sauce which makes property appreciate during the mid term
People say there has been falling prices this year, I say there will be a soft landing
Once confidence in the property market returns probably in the later end of this year, expect clearance rates to soar
We are at the beginning of another great property boom ppl, expect to see massive returns during the next 2-3 years
The fundamentals are just ripe in this present buyers market !
I would personally consider one common theme which happens with many Mar and Pa "Investors" I know, Negative gearing is over leveraging imo
I virtually don't really know anyone personally that "invests" to directly make a profit, they so call "Invest/loose money every week" because they ultimatley believe the next person down the road will take on there "investment" for a much higher premium then they originally paid
I would love to see foreclosures sky rocket and property loose a decent 20% while interest rates fall a few percentage points.
There could also be some great commercial deals around the corner with retail falling on its feet.
Just as the mainstream media is telling everyone how property is a bad investment and people are scared is exactly when ill be loading the boat with as much property as I can get my hands on.
Wow, dollar bellow parity now, Just goes to show what investors really think of Australia in times of uncertainty
I believe that the swiss franc is the nest of safety investors will run to, Not the aussie
Check out these charts
adimis wrote:"…and he huffed and puffed and blew his house in…"People will still need to live somewhere,
People will still need to eat something &
People will still need to keep themselves warm & clothed.As long as you've built with bricks (Excuse the pun, its not meant literally), then there is little to worry about.
In fact – "knock knock" – is that opportunity at our front door?
enjoy…
You could build 25 million kings palaces in Australia, Though it doesn't mean people are going to buy them
I have heard this excuse from the property spruikers so many times it makes me laugh. It really isn't a valid reason for anything.
Lets change your statement to something more REALISTIC so that you can invest based on true principles instead of using statements with no fixture to there variable price limits
People will still need affordable housing
People will still need to eat something (Yes thats true, Though it dosent mean there is a shortage of caviar)
People will still need to keep themselves warm & clothed (True, Though it doesn't mean everyone will buy the latest dada attire)While there has been a housing crisis shortage for the past 50 years, What the spruikers have not told you is that the number of people per household has dramatically fallen in this same time period (this strickly goes AGAINST the so called laws of supply and demand for housing which has caused price rises)
So the truth is that while prices have skyrocketed, supply has also done the same, Which is the opposite of supply and demand
There is only a certain price people will pay for accommodation (be it rent or mortgage) there will be a cap which I think we have already hit where people realize its unaffordable and stop buying. People will board with others and you will see the number of people per dwelling increase, As is already being seen according to this article today
There is over 65 million unoccupied dwellings in China, massive new city's await people to live in them while the population live just outside them in not much more then a garden shed because there income cannot afford the prices the government sets.
while you are correct in saying that people require accommodation, It will not relate in people paying more then they can ultimately afford.
While the stock market is getting hammered im still making massive gains on my silver.
The world economy should have had a massive crash back during the good old "GFC" Remember ? when Kevin handed out cheques to everyone for a G to buy a new plasma ?
Instead of letting capitalism sort out the bad from the good, Our socialist ministers intervened, (stacking the domino's even higher with more debt) which they call stimulating, See our government says one thing and does the opposite, Stimulating would be lowering taxes, Though they call stimulating making the debt ball chained to our feet even heavier.
I like this parable
"To presume that productivity would multiply thanks to government largess is the equivalent of assuming that a thief could aid a convenience store by first stealing $20 from the store, then returning later in the day to spend it. Logic tells us that no stimulation results from money simply changing hands."
You can't have it both ways, Everybody wants the massive 20% speculative gain on gains every year, They want to use capitalism to leverage themselves and prosper like we do under the free market, But we don't want to get disciplined through losses.
The losses are far wide and will eventually hit home, Its just a matter of time until it happens, These debt borrowing's, stimulus packages and quantitative easing debacles DO NOT HELP US, they only prolong the inevitable and make the ultimate downturn harder and longer then it has to be. Why do you think the great depression lasted so long and was so painful ? it wasn't just by chance. It was caused by the same interference we have today just in different ways, Back then they tried to regulate food prices and it caused people to starve to death.
The majority of people including people in top positions of power like Ben Bernanke believe WW2 ended the depression in america though its not true, It was the deregulation caused by the government being "busy at war". If interferience in the markets worked then our economy would be fixed by now, Though obviously what has failed to fix the problem in the past is not going to suddenly work now when things are many times worse.
When people like me say that "the stock market" or the "property" market is in general overpriced we are called "DOOMS DAYERS" or "DOOM and GLOOM" pessimists, Though I believe people should be looking at the correction as a very positive thing, A way of fixing our economy.
The sooner the market can be left alone without government interference the sooner prices can change, jobs that we don't need can be lost and new investment can be made for the future which will improve conditions for everyone.
one example is property, If you work in the building industry like I do then you will obviously know how bleak things are, many builders I know who are old men now have told me that they have "NEVER" in there life seen construction this quite
7x wage earning accommodation is not affordable which is having a negative effect now on the trades which are linked to this sector, If property crashed it wouldn't be long until our industry could recover.
We need capitalism to be allowed to take its course, expunge the bad investment, purge the unnecessary jobs and start over fresh much stronger.
Though I don't think our governments will allow what needs to be done to happen, instead taking us down the very long and dark hole and letting our whole economy sink with the entire ship.
If I where in your circumstances I would be using that 200k as a deposit for 1 big high return commercial property instead of half a dozen over priced houses that loose hundreds of dollars a week.
For the little return in houses, there are such massive costs in holding them, Where commercial property leases usually add on the costs (outgoings) to the tenant, Most agreements are CPI linked and leases can be locked in for many years at a time.
In my experience there are less things to "break" or "go wrong" in commercial while "stuff" in houses needs repairing/replacing all the time.
You can get better deals on property management too, a friend of mine recently bought a $2 500,000 property that netts about $5,000 a week with a 7% property management fee
emptyvessel wrote:Out of interest, what do you regard as "highly leveraged"?Is it an absolute measurement or a relative one?
Scenario 1:
Income: $2000 week
Debt service per week on a $110,000 loan at 110% LVR @ 10% Interest : $230.50
Percentage of income to service debt = 11.52%
Scenario 2:
Income: $800 week
Debt service per week on a $400,000 loan at 80% LVR @ 5% Interest: $539.19
Percentage of income to service debt = 67.39%
Which one would you consider to be over leveraged ?
I own property in Hervey bay, Not much happening in the Fraser coast is there ? That's why I recently left the area and moved to emerald.
I would not expect to see much growth in property prices around Maryborough for a fair while.
Yes, Our dollar is stronger then other currency's but I think a lot of that strength is stigma from "Australia has a never ending mining boom"
If you want to see what China is doing with our resources check here: http://www.youtube.com/watch?v=SIzbMT2NVDA .. though that is a topic of its own.
Interest rates are still at historic lows and everybody is feeling the pain.. The retail sector is coming apart because people are already maxed with debt and spending a historically high percentage of there earnings on servicing this debt
How would people fair paying off there $600k Mc Mansion if rates where closer to normal levels, like say 10% ?
Yet at the same time, Interest rates can't stay where they are, with inflation increasing investors will turn else where and bonds will require higher yields.
Though if interest rates rise much more, well.. that's when you will probably see the cookie start to seriously crumble
I think we need to feel the pain and purge some of the bad investment in our economy so we can get over this downturn and continue on, Though I don't think the government will allow negative GDP to happen and will step in with "stimulus" to "save the day"
You have seen the government try to keep the property market propped up for years now, FHBG went from $7000 up to $21000 for new homes
The Qld state government has now introduced a $10,000 building "boost"
And the Federal government is pumping millions in to the NRAS scheme to apparently make housing "affordable"
I would like to hear Steves personal opinion on whether interest rates will rise or fall over the coming year and what effect this will have on property prices ?
Yes there are good deals around everywhere to be had, and the majority of those are in Commercial real estate – But most people don't have the funds necessary to get these deals (im talking 5-10 million property that yields 10-12% +)
Maybe its less to do with the media and more to do with the fact that getting $350 bucks a week rent on a house that costs $650 a week to hold onto isn’t such a good investment after all. I think ppl are slowly waking up to the fact that property in general is far overvalued
Some property's have a box around them and they can show up randomly anywhere, Im guessing that there is an option to pay extra to advertise them so that this happens.. This is purely speculation though..
Our debt levels in real terms are double what they where just before the great depression.
You may have already seen some high end property sometimes sell for half price eg: 4 mill property sell for 2 mill
I think its entirely possible that you could, in some cases see the same type of deals done on average houses.
Our debt binge we have been on since the 1980's is so insane it has to unwind, and many people will loose everything in the years to come, That is the true reason you have seen doubling property every so many years… The loans have got bigger and bigger and bigger and now we are at the point where you see the retail sector totally collapsing because house holds are spending a historically high percentage of there wages on servicing debt on there Mc Mansion.
I truly believe that in the mid term future, there will be awesome deals to be had, as the dog eat dog investors snap up real assets at a fraction of there historic high's
The people with large amouts of cash will reap the rewards while those who don't go bankrupt and loose everything won't be able to purchase any cheap property because they are so highly leveraged
Yes, I agree with much of what you said… though one thing that really bugs me is when your sorting through hundreds of different property's and they all say lines such as…
"WOW, Great Investment Oportunity !" or "GREAT RETURNS" or "INVESTORS ONLY!" though most of the time they don't say how much they rent out for
And likewise a lot of property that lists there income says "POA"
So your saying that property will continue to compound by 7.5% every year doubling wage growth forever, Is that what your trying to say ?
7 years = 1 mil
14 years = 2 mil
21 years = 4 mil
28 years = 8 mil
35 years = 16 mil
42 years = 32 milWell just think about it for a second, Do you think a real estate agent showing you through a particular property is going to tell you what a bad buy it is ?
Do you think a finance broker is going to try and convince someone not to get a loan ?
Can you provide reasons as to why an Investor would want to take particular "Investing" advice from either a broker or real estate agent ?
Now don't confuse tailored advice concerning your profession with advice on investing before you answer my question
Dont take advise from ppl who gain from you making a purchase, such as brojers, real estate agents, magazines extra.
These ppl make money from selling you things, not from investing.Dont listen to baby boomers, neighbours, ppl at bbq or the person working behind the counter at your fav local shop.
Don’t by anything emotionally
Don’t by negative geared property
Don’t by positive geared 200 year old property in the middle of no where
By bargin good valued high yeilding property in smart areas with the cheapest finance possible at the highest lvg
Wait your turn and don’t get greedy when you see others appear to make money on spectulative buying
I belive there will be some great deals on the market in the mid term future when this current property bubble pops
Ohhh and I almost forgot lol, don’t by property on the expectation of capital gains
