Buy In Brsibane?

thats a pretty all encompassing statement… what part of Brissy are you considering, and was it Ian McFarlane who gave you the interest rate tip??

cheers

brahms
Purveyor of Fine Finances
aka Mortgage Broker Brisbane

YES!

Wow Rob – that’s pretty strong stuff…

The question was a pretty general crystal ball gazing / pondering exercise.

I wonder about the two following aspects to your reply ;

1. Why do you believe your crystal ball is any more accurate than anyone else’s ??
2. What do you base such strong opinions upon, how many decades have you been investing for, and how many $ MM’s of dollars do you have at risk in the property market ??

To speak with such conviction on so many varied and intricate subjects, you must of been in the game 50 years and have 60 or 70 MM exposure. surely. I’m astonished really…

[rolleyesanim]

Hey Jewel where were you looking at purchasing specifically?

Maybe put some more details onto your post for a more varied response from people on the Forum, there are Brisbane Investors on this site also.

Interest Rates will rise..someday, but the sun will rise everyday

REDWING

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

Brisbane house prices aren’t on average or the whole currently increasing. Short of a miracle there is no reason for them to do so in the foreseeable future – in fact the experience in the areas that boomed first and recent REIQ figures would indicate that Brisbane house prices are falling[1] and will continue heading back down to more rational levels without any further external pressure. Add a rate hike or two, and prices will fall faster and further.

Let’s have a look at how this might hypothetically play out for a first time buyer:
If home loan interest rates were to hit 9% in 2006, a drop in house prices of 20% (in real terms) would be absolutely on the cards.

For our example, imagine 2 individuals, both with a maximum weekly accommodation budget of $320 are buying
PPORs.

The first borrows:
$205k at 7.07% today. (For simplicity lets assume they can lock in 7.07% over 30 years)
$317 p/w repayment for 30 years
$289,000 total interest payments

The second waits 18 months, setting aside the savings they make by renting (let’s say $120 p/w). S/he can now buy an equivalent PPOR for $160k. With the accumulated savings, the loan required is:
$150k at 9% (once again lets assume constant rates for the loan period)
$317 p/w repayment for 19 years
$163,000 total interest payments

After 19 years the first has finished paying off their PPOR and start saving or investing their $317p/w.
After 30 years, the second person has paid off their house, spending a total of $494k.
Meanwhile the first person has paid off their house (9.5 years earlier) for $243k and also invested a further $157k (or at 7% compounding such as bank interest – $211k, at 10% compounding eg shares – $261k).

So which is of most benefit to the buyer – lower interest rates or lower house prices?

Jewel, who would you rather be?
At any rate (pun unintended), you have nothing to lose by waiting a year or two and investing the savings you make by renting. Remember that when investing, a low risk situation with a higher potential return is almost always a better option than a high risk situation with very little potential upside.
Cheers, F.[cowboy2]

*All advice should be taken as general examples and do not take into account the personal circumstances of any individual. Besides, I just make stuff up…
Ok, for the pedants among us, here’s a link:

In real estate agent land maybe. In clever investor land:
A buyer’s market is when you can buy an asset for the lowest price with the highest yield, most capital gain potential and least chance of capital loss.
A seller’s market is when you can sell an asset for above its rational value – ie when the yield on current sale price makes it unattractive, yet there is buyer demand (google “greater fool theory” for more details).

These ‘market times’ will often be at odds with those you describe Colin, and REAs love those terms, which they misuse to confuse.
Cheers, F.[cowboy2]

Sorry, I didn’t read all of the replies, but it was suggested in one reply that property prices may decrease in Brisbane?? What!? That was a crazy statement, apologies to those who disagree, but really! Have a look at recent town planning, change in categories to create higher density housing, migration levels to Queensland, namely around Brisbane, the distance Brisbane is still behind Melbourne and Sydney, continual infrastructure increases, and possibly magnify this 3 fold.

The key is to be positioned and informed, if you have both of these, then there will always be opportunities to jump on- especially in Brisbane, and they are out there now!

Hope this helps,

J.

J.

jparsons – people use this jargon a lot, it’s a bit of a nonsense really (promoted heavilly by realtors of course) when you consider –

– comparitive populations of Syd, Mel and Bris
– comparitive economies of each

Brissy is a great place no doubt, but now that our medium house price is neck and neck with Melbourne, and our population isn’t half of Melbourne, B = 1.7m M = 3.6m, i feel there is a bit of a discrepancy, Maybe Melbourne is cheap.

Qld net immigration is great, so long as they aren’t all disenfranchised brain dead unskilled welfare dependant loosers moving here to get a better tan due to our ‘positive sunflow’ status.

Or worse, thrifty old retirees who glut up our roads doing 47.5k’s, turning left from the right lane with miserly useage of turning indicators!!

I have seen research indicating Qld is suffering a brain drain to the southern states….simply put, the good money in Australia ain’t north of the border.

Infrastructure….mmm, i’d say its poor at best(we simply have a smaller population spread over a larger geograhical area – Brissy is the largest city ‘geographically’ in Aust. – in terms of infrastructure this isn’t a good thing).

We have a skeletal rail network, no trams (a very sad day in 1968 when our learned forefathers dispensed with what is now sorely missed), and a heavy reliance on road transport which has not been supported by any significant roadworks, icb being the only real ‘net’ improvement in 15 years.

granted, there are some great planning initiatives in place….now

Having said all that, i’m not going to sell any of my real estate up here either, long term prospects are really positive – i just think a balanced view is needed sometimes. And i haven’t had a coffee yet, so i may come back and change everything….

cheers

brahms
Purveyor of Fine Finances
aka Mortgage Broker Brisbane