[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

July 1, 2014 - 10:03 am

Free bump. It’s been few months. Anyone made any observations of the market lately?
I can only add that renting out houses becoming more difficult. Took us 3 months to find tenant for waterfront house, had to drop rent from $1,200 to $850/week.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

March 13, 2014 - 12:50 am

Guys, I think we have fundamentally two completely separate topics here.

First one raise by Freckle, that AU economy and RE are more than likely to be visited the recession of some severity.

Second is what 'sciencesurf" is talking about, that money to be made on RE.

In regards to recession, I would agree with Freckle, we will see it, we actually already see it in Australia. In jobs market (go and try scoring $200K/year job that was easy to get in 2006). RE, I just purchased 1M+ house with 30% discount compared to 2006 pricing. So high end is folding. Jobs: last time we employed was in 2006-2008. Been shedding people since then. Last payrise thru the factories was some years back, workers are still on the same money as in 2008. Talk to business owners, very few are positive about company's profitability next 12 months, most are happy to maintain the current levels and not to contract further.

Times are very though for wast majority.

About money been made, sure there are pockets and opportunities. You can make some handy profit in falling or raising market. You can make money while it stagnates as well. It's no been said that you should NOT play in RE market. It's just that you have to be BLOODY good as market is very patchy and you are more likely to loose than to make.There is no capital 'growth guaranty' that was there to help you in 2004 when you buy RE.

I know people that made several millions developing and selling in Brisbane in 2009-2011. Started from fairly conservative $900K. But they are exclusion, and to one of them there are 100s who are in the red now days.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

March 11, 2014 - 10:41 am

I would call this scenario you have painted 50/50 chance. If you think that will come true, buy gold/silver and make a killing.

Otherwise, housing in AU seem to be now well and truly in stagnation phase. May spend another lot of 5-6 years there as I can see it.  Fascinating variable is interest rates.

Thanks for the link, missed it!

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

March 6, 2014 - 12:45 am

Source: http://blog.residex.com.au/2011/10/19/regional-australia-7/

2007- 2011 prices are flat for greater Brisbane. 2011 – 2014, slight improvement evident over last 12 months:

Source: http://www.allenrealestate.com.au

So a summary would be we are in the flat market from 2007 till 2014. That is 6 years of no growth. Considering 3% CPI, than is worth of 18% loss of value due to inflation. So after all we did have 20% correction ?

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

January 25, 2014 - 12:59 am

If I would be looking to spend $450K, I would travel down for few weekends few times to get the feel, visit open homes and talk to agents. Hire push bike and ride lots in the area of interest, get the feel of the suburb.

Then you leave and decide if you are comfortable to make a purchase yourself or need an agent. Remember, it's your money. None really cares about you making the loss or gain but to profit them self in transaction. 

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

January 22, 2014 - 8:09 am

Interesting to observe such a separation between action in prices in mid/low end of the market versus high end and luxury properties. They act almost totally independent to the eyes of the observer. 

Agree about the crash. What makes it a muddy waters is that some commentators pick pockets of the market and state 'strong activity', or observe transactions qty only. I was told by REMAX agent that last 8 weeks was 'flat-out'. Same agent sold me property with some large discount during the meeting. Does it mean that property market picking up?

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

January 22, 2014 - 1:45 am

Time for short update.

Been observing number of specific properties around Brisbane for the last 4 years. Areas of interest Ascot, Hamilton, Wynnum, Bulimba, Hawthorn.

In Ascot, house on the hill, valued at $3.5M sold for $1.9M after 12 months on the market (bank sale). Second house valued at about $3.5M (at best times) still on the market. Had offers just over $2M. Number of houses in Bulimba, came on the market, waited 6-12 and withdraw without sale. Had offers well below listed price (I made one).

There are more examples but the point is, high end is in pain. My take is that salaries are deflating, it's hard to find a job now paying over $200K that you need to support loan of this size. People lost jobs and/or big bonuses and have to let go to PPORand investments that are negatively geared.

Those who can hold-on, withdraw without the sale due market offering less than they ready to accept.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

January 22, 2014 - 1:29 am

Good advice by Freckle.

It's a mixed bag at the moment. We have property that is within 10km from CBD purchased for about $650K in 2009 still worth $650K according to sale next door in December. On the other hand, we got property under the contract few weeks back for $1.4M that was 1.95M In 2009.

So, in mine view high end is folding but is hot as far as number of transactions is high. Mid range is steady up/down 10% depending on the pocket in Brisbane and time of the year.

You can say that market confidence is good and people buy/sell houses, but values of the houses is another question altogether.

Is it a good time to invest? I don't know, depending on how good of investor you are!

P.S. Stop reading forums and internet looking for quality info. Most what you read is one-sided and opinioned. Get out, talk to agents, visit houses. Come back and do it all over again every weekend. In 6 months, you will be advising me on how good/bad particular areas are

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

November 12, 2013 - 5:38 am

Same property now was listed for $950K

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

August 5, 2013 - 11:32 pm

G'day,

Nice to see that you been so active in investment so early, you will do well.

I like your strategy, about having paid out PPOR. Maybe because we are the same, it provides a fall back plan if something goes wrong.

One advice is to watch your cash flow!  Your returns are in the range of 6.5% meaning that you are running at the loss on your investments. Do not factor tax return in to the calculations, employment status can rapidly change and affect it, I worked it out the hard way over the years. What worked for us is to create a buffer in off-set account of the value of over 20% of all outstanding debt. This allow you to quickly come up with cash when there is opportunity on the market as well as critical buffer when starting a family.

Remember to check your financial state with stress test. I calculate my ability to meet the repayments at interest rate of 10-12%. If you can live with it for some 2-3 years, you are in the safe range.

As a side note, I have figured out that investing in myself pays better than investments in property. Meaning if you are young engineer for example, spend money on study first, work hard on experience and connections – second. Then spend even more money on creating your own business – third. This will later on buy you any qty of properties, cars or anything else you wish to spend the money on.

Property then becomes just an type of inflation adjusted savings account.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

July 29, 2013 - 1:26 am

SOURCE link

NEWS: Gold Coast home cost $21.44m, sells for $5.3m

ONE of the biggest homes on the Gold Coast has sold for less than a quarter of what it cost to buy the land and build.

The huge unfinished house on the elite Sovereign Islands was put on the market by mortgagee, ANZ Bank after court action in Australia and Singapore to evict owner Clare Marks and husband Scott Tyne.

The six-bedroom, seven-bathroom mansion had an initial construction cost of $12 million and sprawls over four blocks that cost $9.44 million in 2005.

But the whopping $21.44 million outlay came nowhere near to being recouped at auction on the weekend, with a civil engineer picking up the property for $5.3 million.

Riccardo Rizzi, who works in Perth, plans on making the property at 26-32 Knightsbridge Pde East his new home.

Mr Rizzi bested a Melbourne buyer who dropped out when the bidding reached $5 million.

The deal, which set a selling record for all the wrong reasons, was watched by a crowd of more than 200.

While Mr Rizzi has snapped up the Gold Coast property bargain of the year, he will face the expense of completing the 3004sq m house, which is believed to be only 80 per cent finished.

Ms Marks and her family were living in a completed wing of the house when they were evicted.

ANZ gained an order in the Supreme Court, Brisbane, in October to take possession of the house, an order which Ms Marks unsuccessfully appealed against.

She later said she had declined a bank offer to lease her the house at $3000 a week because she could not afford the rent and, in her words, was left `homeless'.

Ms Marks is an accountant operating a practice at Paradise Point.

Previously she ran a similar business in the UK for five years.

Former Mallesons lawyer Mr Tyne has been locked in a $2 billion-plus legal suit against Axa Asia Pacific (now part of AMP) over cancelled life insurance policies called Prosperity Bonds.

ANZ's move to take possession of the house came after interest payments were not made on a multi-currency credit facility for up to $15 million.

The facility was secured by a first mortgage over the house and by personal guarantees from Ms Marks and Mr Tyne.

New owner thrilled

Mr Rizzi said the opportunity to buy the home was just too good to pass up.

"It was a unique opportunity to buy something extremely special with the ability to bring the personal touch to complete it at an exceptionally good price,'' he said. Mr Rizzi.

Mr Rizzi, who entered the bidding at $4.5 million, thanked Professionals Paradise Point sales agent Murray Schmidt for his advice.

"The bidding went well, we kept our powder dry,'' he said.

"Murray advised me how to deal with it and he did it well and we eventually got there.''

He said he planned on moving into the house but had no idea how much it would cost to finish.

Professionals Paradise Point principal David Vertullo marketed the property with sales agent Chris Moyer and said he was pleased with the result.

"I think in the current climate it represents a good result, especially since the house is unfinished,'' he said.

"It's a magnificent home and upon completion it will be one of Queensland's best homes.''

More than 20 people registered to bid at the auction.

Among those who have been active in the market is billionaire Clive Palmer who, with family members, owns at least nine Sovereign Islands properties.

The record for a house on the islands is $11 million, paid in 2006 for Baltimore, a seven-bedroom Royal Albert Crescent home.

Owner Susan Lillioja has since marketed it at $19.5 million

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

If we could get the sub $700K price range to fall the same percentage – 75%!

Imagine what that would look like on a $500,000 or $400,000 home.

Affordability would be the word!

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

July 28, 2013 - 6:11 am

god_of_money,

I can, have few charts saved. But I do not consider them reliable as per se. Knowing how it is calculated and how the data sourced, I do not like to use them.

Instead I pick properties in areas I like and watch them over time. With few dozen properties on the my 'watch list' I get reasonable feel of how the area or segment is performing in Brisbane. 

So I have here my thoughts to see if others observe the same. I have no interest in discussing publicly available statistical data.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

July 26, 2013 - 3:05 am

Interesting flip side to above post:

Few houses in the range of $500k are getting sold fast. If it is a clean house and investors material, they go under contract n the matter of few weeks.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

July 23, 2013 - 12:49 am

Another 6 months passed, recent observation:

A house (good area, 20 min from CBD) purchased in 2007 for 1.1Mil, valued at 2011 at 1.5Mill but did not sold in 2011. On the market again, trying to sell for 1.3Mil. No offers at this point in time. People are looking but noone willing to offer over 1Mil.

So from 2007 till 2013 no price increase.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

May 24, 2013 - 6:57 am

Karley12 – Welcome to the propertyinvesting! Some fresh blood is always welcome.

First post and right on the hot topic of Perth market, supporting biggaz13 view? If I had so much luck today, I would go out and buy Gold Lotto ticket

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

May 24, 2013 - 3:50 am

Back to the Brisbane, I find that rents are becoming increasingly difficult to increase over last 12 months. Boarding houses are now been flat on rent for 24 months, top end property ($1000pw) are stagnant. Only middle priced housing still can go up some 2-3% this year (assuming that it was priced correctly in 2012).

There seem to be inflow of amateur investors on the market, of late. Came across few people making offers on properties at listed price. One couple made offer over listed (owner occupiers). In both cases they overpaid. ROI at the moment is not making sense, you better off with money in the bank. Or renting instead of purchasing PPoR.

On the other hand some properties spend over 6 months on the market with little action. Interestingly, many contracts fail on finance. I do not know if financial institutions become more difficult or buyers use it as the 'way out' option.

I would support Freckle view on Brisbane. Cannot see any major upwards pressure drivers. It's all a mixed bag at the best. In my view, short term we are flat and mid term we will go down some.

Let's sort.

Positives:

Pollution Growth

Inflation (mild)

Infrastructure projects completions

Negatives:

Unemployment on the rise (go and talk to employment agencies – not gov statistics)

Wages increases are miniscule (in manufacturing sector anyway)

Closing off immigration channels is on the cards

People's debt levels are at elevated levels

Cooling down of Australian Economy if a fact now that is gaining traction (see AUD/USD)

Heaps of cheap NRAS style apartments coming on the market (everywhere in CBD)

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

March 2, 2013 - 1:06 pm

Do the calculations, see what works for you. Different people have different goals.

For me, aim of the game is income, so I would reduce the debt so it start to be positive and sink income back in to it accelerating repayment.  

Some 'try to stay' as negative geared to reduce TAX on income. It's a choice they make, so strategy is different.

Others have 'better' places to invest cash, so they let property to sit there and invest hard cash in more profitable ventures or other IP's.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

March 2, 2013 - 12:59 pm

Mine are: Hope for the best, plan for the worst!

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

February 9, 2013 - 8:50 am

Been to the Auctions today. 

600K Property, 5Km from the CBD Brisbane. Mortgagee sale. Started at $600K,got to $635 with 3 people out of 30 active. One out of three was employee of the real estate agency (by my observation) who ended up with highest bet. No sale I guess.

1.5Mil property (reserve), about 6-8 buyers. No offers at 1Mil Passed in. 

Top of the hill, 7km from the Brisbane CBD

Seem like there are two types of PPL come to the actions, mom/dad with low budget hinting a discount and investors who ready to offer 20-30% below market value. None of them want to pay advertised or reserved price.

[simpleParticipant@simpleJoin Date: 2006Post Count: 237]

January 28, 2013 - 4:45 am

@ xdrew

I will add to the above that with some creativity and bargaining you can get positive cashflow in areas of reasonable/good CG. Even more so lately, many vendors are discounting and some are under pressure.

I am also big supporter of the idea of leaving some 'buffer' as XDREW mentioned. Our calculations of risk include loss of main income for periods of up to 2 years. If you can make 2 years without going broke, it's a good start. 

This is where cashflow positive properties really count!