Forum Replies Created
While in the face of the information given it would be fair to say that there could be some sympathy for your situation and while Patriotsoldier is correct in the rental side of the equation, the important part of the equation is missing. How much is the property worth on the market? (A quick search reveals that 4 x 2's in the area are mostly selling in the $600 to $700K price range (yes, there are some in the $500K range as well). $500 a week rent is a lousy rate of return even in the present market.
The other side to the story, but not taking sides as all information is not supplied.
Not sure about other States, however in Queensland the answer to this question is found here – much to the dislike of Buyers who continually want us to break the law.
‘574D Real estate agent not to indicate reserve price to
potential buyer
‘(1) This section applies if a person wanting to buy residential
property (potential buyer) asks a real estate agent for
information about the price at which residential property that
is to be, or may be, offered for sale, whether or not by auction,
(offered property) is likely to be sold or is, or is likely to be,
offered for sale.
‘(2) If the offered property is to be offered for sale by auction, the
real estate agent must not disclose to the potential buyer—
(a) whether the seller has set a reserve price for the offered
property; or
(b) the reserve price set for the offered property; or
(c) an amount the real estate agent considers is a price
likely to result in a successful or acceptable bid for the
offered property.
Maximum penalty—540 penalty units.
‘(3) If the property is not to be offered for sale by auction and the
seller has instructed the real estate agent not to disclose the
price at which the seller is willing to sell the offered property,
the real estate agent must not disclose to the potential buyer
the price at which the seller is willing to sell the offered
property.
Maximum penalty—540 penalty units.
‘(4) However, the real estate agent does not commit an offence
against subsection (2) or (3) if, on the seller’s written
instructions, the real estate agent gives the potential buyer a
copy of whichever of the following was given to the seller—
(a) the comparative market analysis for the offered
property;
(b) the written explanation showing how the real estate
agent decided the market value of the property.
For those who wish to learn a little more about the Act you can read the full story here. http://www.legislation.qld.gov.au/LEGISLTN/ACTS/2006/06AC010.pdf
Hi Chris,
West End is the area that I specialise in, although almost entirely in the Unit/Townhouse side of investment and I agree almost entirely with the comments and observations given by Event Horizon. Although there are still some good buys in this area, I feel that we have perhaps toped out at present and, as mentioned above, areas like Woolloongabba are set to offer better short term growth as they are starting from a lower price point and there is very little supply to date.Would be happy to discuss further if you wish. No obligation.
Jon
I was interested in this report. What do the other analyists on this site have to say about this. Is he real?
Fosty1. Sorry I have no experience with flats or multiple occupancy. My comments were a throw away line.
In the 1980's I was selling property when interest rates were over 18% and while oil wasn't $200 a barrel, most families only had one car. Perhaps we will learn to adapt and change our lifestyle to suit our circumstance. I don't see house prices dropping significantly just because some people want them to. We forget very quickly that house prices dropped by around 30% in the 80's around 12% in the mid 90's and again in 2003 abd yet we still have record prices. Even if they drop by 20% this time the real question should be how quick will they return to the past highs? The smart money is on aquisition if it is affordable.
Yes, I wouldn't mind having a mint xu1 in the garage. I'm sure it would have proven to be an excellent investment.
It's funny how moments in time change and our beliefs change with them. A friend sent me an email the other day with extracts from the Courier Mail 1957. Two stood out as interesting to me. A Victor lawn mower cost 49 pound (approx $98) and the Unions were going to battle for a pay rise for Storeman and Packers current wage 13 pound 18 shillings (roughly $28). Today you can by a Victor for less than half a weeks wage while it cost almost three weeks wages in 1957.
Wezwaz. Heven forbid that they do, but if they do, It will be time to invest in tent manufacturing. There is always an opportunity.
You could always buy a house with lots of bedrooms and rent out by the room. As you say the property may not rise in value by much, but think of the return on investment you could get. Peopel still ned a roof over their heads and the Govt only has a few roofs.
Hi ‘D’, While I appreciate the sentiment that you described in your post (not wanting anyone to go broke or loose money), to say that you are not negative is just a total crock – there is little in your comments that could be construed as positive (apart from your friends decision to purchase what sounds like an exceptional deal).
While it is true the Property market is in a state of flux at present, it is any ones guess as to what new developments will occur that will affect the state of play. I believe that a positive mental attitude is better than one of doom and gloom. It is fair to say that some people will loose their shirts (due in most parts to poor money management and bad or no planning). Bankruptcies may well be rising but is this due to housing or poor business decisions? You don’t have to be a home owner to go broke.
The other side to the current economic situation may include such issues as:-
Population growth is still upward. (They will have to live somewhere)
Housing construction is down. (Whatever oversupply there is – if there is any –will be taken up and demand will push supply again)
Supply of land to build on drying up. (Local and State authorities will need to do something – but we know how long it takes them to make a decision. They will require study to be done first and then a study of the study) Rental vacancies at an all time low (Demand exceeding supplies forcing rent increases)
Higher yields on properties will encourage those people who have disposable income (There are actual people out there who earn more than they spend) to purchase investment properties. This will push demand on an already depleted supply.
The Mining and Resources boom continues to pay huge wages giving a portion of the work force massive spending power – (the smart ones might put some of it in property)
Local and State authorities spending massive amounts of tax payer funded money on infrastructure and catch up capital works. (Keeping people employed)
Some smart boffin will invent a cost effective alternative to the petrol engine and oil will be relegated to history. ( I remember reading a story in the 70’s about the fact that oil supplies were drying up and we would run out soon. That was before someone invented the fuel injector which altered the equation)
Getting proper advice from a Financial Planner or Accountant is the best advice that you have given. There are still ways to make money out of property – even in a tough market. I for one refuse to believe that it’s the end of the world as we know it.Hotspot Alert: Brisbane has a history of successful urban renewal in locations such as Teneriffe, New Farm and West End. It's pretty clear that postcode 4006 (Bowen Hills and Newstead) will be the next beneficiary. This area is set to shed its daggy image on the back of the redevelopment of the Exhibition Grounds and Queensland Newspapers sites in Bowen Hills and the old gasworks site in Newstead.
I agree completly with this report but would hasten to add that I predict that Woolloongabba on the south side will equal Bowen Hills at the other end of the cross river tunnel. Units in both of these areas are priced at approx $100K under their adjoining suburbs.
Good reply Yarpos……….. Did anyone see the two young men who built a Hodrogen converter and installed it on their old Falcon and saved 20% in running costs. Water into Fuel. I wonder how the Govt can place a tax on water for clean energy – guess this one's destined for the scrap heap like so many others. Imagine how the whole world would change if oil were able to be replaced and made worthless.
This is the relevant section of the Queensland Property Agents and Motor Dealers Act.
The interesting point I would like to share with regard to this section of the Act is that the 'BUYERS" could care less that it is not lawful for us to advise a price for an Auction property but their standard reply is 'You're an Agent, you should know what it's worth or at least a price range!' and in so many cases, they get so upset when you advise that you can't tell them.
I think that the reality is that in most cases, genuine buyers who have been looking at other properties will have a general idea of what price range the property falls in and from there it's up to them to decide the ceiling that they wish to place on the property. If subsequently someone else wishes to place a higher ceiling on the property, there is no sense getting upset with the Agent – it's out of their control.
From experience, I have found that the people who winge the loudest are the ones looking to steal the property (or get a bargain at best). If you think that the price quoted is low then it probably is.
I personaly abhore this process of underquoting almost as much as 'Overquoting' for the listing – unfortunately both are the result of the inbuilt greed of mankind. The Buyer wants to buy low and the Seller wants to sell high. When one of you Agent hater geniuses figure out a fair way to address this situation, please let us all know. Until then we have what we have – learn to deal with it.
‘574D Real estate agent not to indicate reserve price to
potential buyer
‘(1) This section applies if a person wanting to buy residential
property (potential buyer) asks a real estate agent for
information about the price at which residential property that
is to be, or may be, offered for sale, whether or not by auction,
(offered property) is likely to be sold or is, or is likely to be,
offered for sale.
‘(2) If the offered property is to be offered for sale by auction, the
real estate agent must not disclose to the potential buyer—
(a) whether the seller has set a reserve price for the offered
property; or
(b) the reserve price set for the offered property; or
(c) an amount the real estate agent considers is a price
likely to result in a successful or acceptable bid for the
offered property.
Maximum penalty—540 penalty units.
‘(3) If the property is not to be offered for sale by auction and the
seller has instructed the real estate agent not to disclose the
price at which the seller is willing to sell the offered property,
the real estate agent must not disclose to the potential buyer
the price at which the seller is willing to sell the offered
property.
Maximum penalty—540 penalty units.
‘(4) However, the real estate agent does not commit an offence
against subsection (2) or (3) if, on the seller’s written
instructions, the real estate agent gives the potential buyer a
copy of whichever of the following was given to the seller—
(a) the comparative market analysis for the offered
property;
(b) the written explanation showing how the real estate
agent decided the market value of the property.
The full Act can be read here http://www.legislation.qld.gov.au/LEGISLTN/ACTS/2006/06AC010.pdf
No offense taken gmh454. I'm all for healthy debate on relative topics which help people to make informed decisions, but I'm just a little peeved at the negative attitude that so many on this site have towards Agents, Lawyers, Seminar Hosters, Brokers, Advisers, Property Managers,Tradespeople and in fact anyone who may make a cent out of dealing or talking about property while it seems it's their god given right to make profit at someone else's expense.
Myth Buster – Your statement would in the face of things actualy make sense if only the population would remain static. But then we know it doesn't does it. Which ever way it pans out the demand for rentals will increase.
and your statement,
This one needs to be dumped in to the "doubles every seven years" (may happen to some property but among my many investor clients most will be lucky to double in 15)
All I can say to that is, thank god you're not advising me or my clients as most of mine have done way better than that.
I have found the rule of 72 to be quite accurate over the years.It's funny that when ever you guys go to sell anything you are never lost for reasons as to why it's worth as much as you think it is even if it isn't – Wish we could legislate against that!!!!
If everybody was to believe all of the negative statements on this site we would without doubt create a self fulfilling prophecy and sell up everything we own and move to Nigeria. Perhaps someone has to put the other side of the story after all we all understand that there are three sides to any story. Your side – My side and the truth.
Hi Karl and Rita, While most Buyers believe that prices have dropped by 10% or more, I can assure you that Sellers feel that prices have remained the same but they do not believe that they have dropped. An Agent attempting to tell a Seller a low price will invariably walk away empty handed and with nothing to sell.
These comments are as general as your statement as no pricing example are given.
Scamp says.
These are interesting times, especially when you think a lot of property investors have 20 (!!) properties or more, all NEGATIVELY geared of barely above 0According to the ABS of the approx 2million Investment properties in Australia, 90% are owned by people who have only one investment property and less than 1% of investors own in excess of 10 properties.
Well Brogs, I'm not for one minute suggesting that there won't be anyone who is not going to suffer from rate rises, that in itself would be stupid, however to suggest that 80% house price crashes is just ridiculuos. As with any commercial transaction if you over extend yourself you will pay the consequence.
Lets look at some statistics. Of the approx 7 million properties in Australia 2.6 million are owned outright (these people should not be troubled by rate rises) a further 2.4 million are owned with a mortgage (a significant portion of these mortgages have been in existence for over ten years and it is unlikely that they will be deeply troubled, however those who have purchased in the last five years and who pushed to the limit of their purchasing power (as most people do) there will be a high degree of hurt and unfortunately repossessions will occur. When this does happen and the people are forced out into the street they will have to join with the rest of the people looking for one of the 2 million rental properties available in Australia. As has already been reported this Supply/Demand scale is already teetering to the Landlords benefit and if a large number of people are forced to quit their homes then either the Government or the Private Sector has to provide housing. Some form of balance must prevail.
It's time some of the hurt was felt by the Tenants as the home owners and Investors have been carrying the can for most of this recession to date, and if rents rise to the level that I believe they should be, we will see some of the smarter people who are cashed up re-enter the market and provide this housing. Life will go on, we are creatures of survival.
Mick, you are correct, it is safer for Agents to quote a gross rate of return than a net rate of return as the net rate will vary depending upon tax rate and if we started quoting highest marginal rate net returns, I'm sure some nitpicker would pull us up on this issue as well.
Most intelligent Investors will calculate their own rate of return.
and Donald, You can lead a horse to water but you can't make him drink.
Scamp says,
rates will rise by 0.5 percent this year, and keep going up , and up and up. There's 0% chance of them going down. Oil prices add to the pressure, as inflation is up up up, so interest must go up up up to 13% base rates minimum, which means 18% variable rates.
These are interesting times, especially when you think a lot of property investors have 20 (!!) properties or more, all NEGATIVELY geared of barely above 0 at their fixed low rates that will jump to 10% in september.
If those all come on the market, it's carnage like noone has seen before. 80% house price crashes , and houses abandoned because they are too expensive to upkeep.We'll all be rooned," said Hanrahan,!!!!!! Scamp you really are a joke.
