All Topics / General Property / Property to do well in 2005

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  • Profile photo of enduserenduser
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    Seems to me then that it is getting close to “BUY” time.

    Profile photo of wealth4life.comwealth4life.com
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    Yep things are really bad – I just bought a DA approved site in Redcliffe for four houses at $440k + 4 x 4 bed houses turn key at $135k each that will resell each for $325 – $350k each.

    Thats about a $100k profit each or $400k for the four if I decide to sell them all or keep two brand new ones that will be +ve geared.

    Come on guys – look out side the box because one day you are going to spend the rest of your life in one.

    I love bad times because the inexperienced panic, this is where you get the opportunities, resiwealth is about to be launched.

    How’s life Mike ??? regards to all … Phil[weird]

    Profile photo of woodsmanwoodsman
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    All I can say is that BIS Shrapnel have just revised their 2005 estimate of new housing starts in Australia from 160,000 down to 145,000. They were trailing HIH which had already factored a slump in 2005 followed by a minor recovery in 2006. Now the two are more closely aligned…
    Seems to me then that it is getting close to “BUY” time.

    A reduction in housing starts, depending on its cause, maybe indeed be beneficial. Counter-intuitively, a reduction in supply, all other things being equal, depending on the demand profile, results in a price increase.

    Profile photo of wealth4life.comwealth4life.com
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    Many people here talk about demand, or seem to rely too much on it IMHO.

    What about being able to produce a product under the market value in any area, brand new with all the bells and whistles.

    Investors get returns but developers get rich, well most of them…..

    Profile photo of woodsmanwoodsman
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    Resiwealth,

    Demand and supply considerations are still very much relevant in developments….You just can’t create profit by simply building.

    There must be a market for your property (either sale or rental)

    Profile photo of carlincarlin
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    Re-“Bargains Galore as House Prices Slump” article.

    Does the Sun Herald do well out of real estate advertising?

    Were these properties obscenely overpriced in the first place?

    Are they really bargains – what kind of yield would you get? How long would you be waiting for capital gain?

    Though I haven’t crunched the numbers and I don’t know the Sydney market, this article smells like real estate advertising to me. The Adelaide Advertiser does the same thing – big articles with pointers to the real estate pages.

    Neither paper (with their massive incomes from real estate advertising) is a messenger I would trust when it comes to assessing the real estate market.

    The likes of Henry Thornton is a better bet for me.

    cheers,
    Carlin

    Profile photo of DDDD
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    Guys as houses in SEQ have gone to a slow crawl over the past 12 months, the number and consistency of sales in the unit/townhouse market has not slowed. There was a stall only until the interest rates have gone up. Now that happend recently the uncertainty for a lot of investors has deminished and this had added urgency to their step.

    What I am seeing is that with the 1200 new warm bodies arriving in SEQ per week, the slow down of new houseing and the prices being $100k plus higher for houses over the last three years, the uunits and townhouses seem to be the first to kick ahead. I have seen a hovering about the $100k mark for a good 3 months without much happening. This in the last 6 weeks has changed with increased volumes of sales and prices firming to now average $120k entry into this constantly under pressure market.

    Ok we all have differing opinions in here and thats great. But if someone cries out “the sky is falling” just one more time I’ll scream. In some markets, as always be cautious, but dont sit on your hands and suffer from analysis paralysis again. You guys nearly missed the last upward trend so be open to what the market is actually doing NOW.

    Next issue of API has a reno special to add value and rent to your IP’s. The reno kings feature as do 4 examples of yours truly.

    Sorry but im excited to be in print. Thanks guys.

    DD

    PS146 Certified Financial Planner and Buyers Agent
    Don’t sweat the small stuff,and it’s all small stuff!!

    Profile photo of christobellchristobell
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    A lot of people say that about the Goldcoast “how many new people are arriving weekly” but how many new people are arriving weekly into Sydney and the prices there are still dropping there. Spoke to a R/E agent at Ray White Main Beach (Goldcoast) yesterday and he said there are twice as many sellers as buyers at the moment..Hmmm..what does that tell us.

    Profile photo of aussierogueaussierogue
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    DD
    congratulations for being in print – you are obviously successful at what you do!

    but unfort your last post sounded like an advertisment.

    ‘warm bodies’ ‘analysis paralysis’ – the only one you mised out on was ‘rent money is dead money’.

    i think what everyone one needs is balance – not an obvious sign of prejudice one way or another.

    with reagards to building something under current market value – thats fine if the market is legit!! if the market is in a bubble or inflated you would need to build 50 cpt under the market value for the thing to be worthwhile.

    I personally believe people will maek money money from realestae in any market but i also believe the deals are harder to find and the risks are super high. So which one is it ‘analysis paralysis’ ‘or the turtle always wins??’

    Profile photo of ian_from_brisbaneian_from_brisbane
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    Originally posted by christobell:

    …he said there are twice as many sellers as buyers at the moment..Hmmm..what does that tell us.

    It tells me that now is a great time to buy.

    Profile photo of enduserenduser
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    christobel, the one piece of advise I would give to anybody in property is “Never believe an Estate Agent when they talk about the market”. Remember, they have one aim, turnover, and it doesn’t matter a hoot if the market is rising or falling to them.

    Why not develop yor own methods for working out which way the market is really heading. No-one will tell you, but there are ways:

    1 Get on an email advisory service and specify a narrow band of property. Then watch the emails come in and see the trends yourself. It’s only asking prices, but if you stay consistent it’s a good guide.

    2.Sample your area of interest to see what percent of “For Sale” boards have a “Sold” sticker on them. Where I operate, above 60 % is a positive market and around 20% is a slow market.

    These are called “primary data”, where you collect it yourself and no-one elses bias is introduced. There’s lots of other ways of keeping informed but I’m not giving them away here.

    Profile photo of Michael WhyteMichael Whyte
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    Originally posted by resiwealth:

    How’s life Mike ??? regards to all … Phil[weird]

    Phil,

    Couldn’t be better! Trust you’re well too!! Just got back from 5 weeks in Africa living the high life. And of course, Kay is now 21 weeks pregnant, which is just insane!!!

    We just about own our PPOR outright and are equity rich in a falling market. Will get the LOC in place over the next month or two then keep an eye out for the odd quality property to buy at discounted prices.

    As you know, I’m a buy and holder, but IMO the bottoms not too far off so its gonna be my day soon (probably 2006 rock bottom).

    I’m still holding those 40 acres in Bundaberg which aren’t doing much but I’ll talk to you about development options when the market takes off again in the next cycle.

    Cheers,
    Michael.

    Profile photo of gmh454gmh454
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    Originally posted by ian_from_brisbane:

    Originally posted by christobell:

    …he said there are twice as many sellers as buyers at the moment..Hmmm..what does that tell us.

    It tells me that now is a great time to buy.

    WHY ?????

    Profile photo of foundationfoundation
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    Twice as many overpriced properties to choose from I guess![biggrin]

    Profile photo of Michael WhyteMichael Whyte
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    Yep, and some motivated sellers! But, if this is just the tip of the iceberg then those sellers are only going to get more motivated if you let the game play out as its headed.

    Ciao,
    MW

    Profile photo of foundationfoundation
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    …and with another rate rise this month almost a certainty, those ‘motivated sellers’ will soon notice the only houses selling are the ones that have significantly lower prices…

    Profile photo of DerekDerek
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    Hi all,

    One isse that doesn’t seem to have been raised yet is that the Australian property market is not a single entity.

    There are different states, different cities, different towns/shires and finally individual properties can and do perform differently to the broader market. They are not all at the same place at the same time as different state and local factors can come into play.

    The key to working out where ‘your property cycle’ is to know it well. Clear criteria, thorough research, careful selection and prudent buying are invaluable factors that come into play.

    Derek
    [email protected]
    0409 882 958
    Property investment advice and researched property in quality locations available.

    Profile photo of gmh454gmh454
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    Originally posted by Derek:

    Hi all,

    One isse that doesn’t seem to have been raised yet is that the Australian property market is not a single entity.

    There are different states, different cities, different towns/shires and finally individual properties can and do perform differently to the broader market. They are not all at the same place at the same time as different state and local factors can come into play.

    Agreed and it been interesting in the last year or so on this board as people in WA & SE Qld were still chasing Cap Gains while ppl in Sydney could see it had topped and the next cycle was starting. (not next boom….next cycle ). It’s often been arguments over the merits of apples vs oranges.

    I think we will all be on the same page soon.

    Was a interesting piece in the Fin Review last weekend on Qld development market. Found it hard to absorb how the building costs had blown out.
    Also the big drop in renos seems to indicate that part of the market is slowing.

    Saw in a RE window last week a weathboard in Parramatta for around 580K. Polished floorboards new kitchen, bathroom, light fittings, curtains, shrubs in the yard BUT with a house that is still way small for Sydney, single garage (shed) with a large yard. It reminded me of the old saying can’t polish a [email protected]#$d. As I looked at the freshly painted bowed weatherboard panels I thought they had spent time and money but this is still worth barely more than land value. Made me wonder why ????

    Profile photo of foundationfoundation
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    As I looked at the freshly painted bowed weatherboard panels I thought they had spent time and money but this is still worth barely more than land value. Made me wonder why ????

    Odds are they’ve left real jobs to pursue ‘property developing'[blink] full-time having had phenomenal success with a couple of minor renovations over the preceeding years. Incredibly they thought it was their $5000 facelift that caused the capital gain at the peak of the biggest speculative boom in history.
    The scary thing is that some people still operating on the assumption that $5k and a bit of elbow grease bringing twenty times that in gains is normal.

    the Australian property market is not a single entity.

    True, but you’d be hard pressed to find an area with >1000 residents within 6 hours drive of a capital city that has not seen HPI of 70%+ in the last 7 years.
    Cheers, F.[cowboy2]

    Profile photo of JunkersJunkers
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    Originally posted by gmh454:

    Originally posted by Derek:

    Was a interesting piece in the Fin Review last weekend on Qld development market. Found it hard to absorb how the building costs had blown out.
    Also the big drop in renos seems to indicate that part of the market is slowing.

    It may (the drop in renos) have something to do with the fact that people who originally jumped on the renovating bandwagon have either sold or rented out their properties after spending every weekend and nights after work renovating for 6 months on a showstring budget with absolutely no idea of what they were doing threw up their hands in disgust and tiredness and gave up, never to touch another renovation project again.
    Or it could be we don’t have the plethora of renovation shows like Location, Location, Hot Property, Auction Squad or The Block that were showing people making gazillions out of renovating. The buying public aren’t stupid, and in the last series last year of Auction Squad, the amount of houses that didn’t sell was embarrassing – the main reason why is because people knew it had been done over by the renovators, knowing that the vendors then had totally unrealistic ideas of what their properties were worth. More often than not most of the people in the crowd were nosy neighbours and other gawkers. It’s the same as basing what you think your house is worth compared to what your neighbour says they got – 9 times out of ten they’ll probably tell you they got more for it than they did to save face. The only real way to gauge what the market value of a home is, is to look at the numbers in reports such as Residex etc. And with The Block (the first series anyway) what a lot of people don’t realise is, the units may have gotten record prices, but the majority weren’t bought by individuals, they were bought by corporations….one was bought by the Daily Telegraph and leased out for a year rent free as a promotion (so how much money do you think they made out of that one, and do you think they were able to write it off??!!), and the one that won, Crazy John bought it and he couldn’t have paid enough in advertising for the publicity he got out of that sale! He’d write it off as a marketing expense and still have an asset to boot.

    I still believe that renovations are a way of making money in this market, but only if you buy really really well and bring the house into line with what other houses in the neighbourhood are presenting and fetching in sales price. The home gmh454 is describing sounds like someone who has jumped on the renovating bandwagon without thinking about who the end buyer will be and what they would want, it may have been better for them to have knocked the whole thing over and built new on the block.

    The last boom was triggered by a number of things, one predominantly being the introduction of the first home buyers incentive, so that naturally brought an amount of people into the market that you won’t see for a very long time to come, if ever again. People forget that, and base their decisions on boom times, rather than ‘normal’ times of stagnant growth. It didn’t help that it seemed every man and his dog was getting on TV and saying it was easy to make a fortune out of property!! The property boom was just the modern day version of the old gold rush times in my opinion………..will happen again if enough people get on telly or the papers spruiking how to make your fortune in property……. [blink]……it’s all in the marketing IMHO

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