All Topics / General Property / Property bust not here yet … worse to come

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  • Profile photo of wealth4life.comwealth4life.com
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    Hi Simple and FW,

    Yes how the time flies and how interesting it is to look back …

    Our commercial portfolio has suffered but we bought some cheap one bedders out west and up north in Sydney plus we bought 3 old houses in quality suburbs for knock down rebuilds … each house has risen in value bu over $250k …

    2010 we have rising interest rates … the FHOG has come and gone … Chinese buyers are flooding the markets and going home … USA commercial market about to reseed … land sizes in new estates have shrunk to 350 m/2 – 450 m/2 gone is the old quarter acre block … billions of dollars to be spent in medical which is going to increase taxes …

    If the GST hits 15% many businesses will go broke … what else folks ???

    Profile photo of traolcoladistraolcoladis
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    Isn’t a referendum needed for the gst to be increased?

    Profile photo of fWordfWord
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    wealth4life.com wrote:
    land sizes in new estates have shrunk to 350 m/2 – 450 m/2 gone is the old quarter acre block … billions of dollars to be spent in medical which is going to increase taxes …

    If the GST hits 15% many businesses will go broke … what else folks ???

    I wonder what the implications of smaller land sizes in new estates would be. Naturally I'd guess that our classic suburban house on a big block will turn into an 'old favourite'. Newcomers to the market might like brand new home and land packages, but perhaps when they tire of that, they'll trickle into old suburbs, buy up these big blocks and start to build their McMansions.

    This is a good thing of course, for those of us who own average 3 bedroom houses on family-sized blocks. Either that, or it'd just become the norm to have 350sqm of land. Having said that, I can't help but drool over property listings featuring big plots of land. I mean, there's nothing quite like sitting on your deck and gazing out into a backyard that doesn't appear to end, or to walk out the front door and admire a beautifully planted large frontyard that's big enough for a picnic with friends and two cars still parked in the driveway.

    If GST hits 15%, we'd all have whinge and whine about it for 3 weeks. And then we'll all get on with it. As it is I thought 10% was quite a blast, but we've pretty much all accepted it by now.

    Profile photo of realestateedu.com.aurealestateedu.com.au
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    Yes FW I think that buying in old established areas is very intelligent for many reasons, firstly land size, then transport and schools and then either a knock down rebuild or renovation.

    Older established areas are also better located close to the CBD

    We are currently doing a program running numbers on buying old properties out west in Sydney and adding granny flats down the back to increase ROI

    Philip Sigglekow author LREA

    Profile photo of fWordfWord
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    realestateedu.com.au wrote:
    Yes FW I think that buying in old established areas is very intelligent for many reasons, firstly land size, then transport and schools and then either a knock down rebuild or renovation.

    Additionally, if I had to bet, transport and amenities in already-established outer suburbs can only get better in the future. As people buy into suburbs even further out, amenities have to follow and there might be a ripple effect into the suburbs that are next to it. The trick is betting or guessing on which suburb is likely to become more 'central' in the future and become a mini-CBD or hub. If anyone catches onto these they'd be in for a fair bit of money long-term (ie. at least 10 year plan).

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    http://www.news.com.au/money/property/house-price-growth-slowing-at-last-data/story-e6frfmd0-1225859802095
    Extract:
    AFTER a year of surging prices, the pace of growth is finally easing, with the country's median house price rising 3 per cent in the March quarter — down from nearly 5 per cent growth in the previous three months.

     

    Profile photo of DWolfeDWolfe
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    ok Simple. It's good but there is like a huge BUT……………..what about Melbourne? Yeah ok a median of the whole country shows one thing but the article basically banged on about Melbourne being crazy. So the median is down (a little) spread over the country. But individual markets are still rising including the rainy and crazy Melbourne market.

    So now what for Melbourne? Anyone got a crystal ball so I know whether to buy in Melbourne or Perth? I need an 18 mth time frame so If the magic 8 ball says "you must seek another path" or "ask again later" can someone let me know so I can plan my whole life around it!

    Speculation is getting us nowhere and really quickly. Strategize and run with it, as long as there is enough profit in the deal, the market can drop and the return will still be worth it. If the market drops by a huge amount we are all stuffed and you better board up your windows.

    Just my 2 cents (again)

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of god_of_moneygod_of_money
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    AFTER a year of surging prices, the pace of growth is finally easing, with the country's median house price rising 3 per cent in the March quarter — down from nearly 5 per cent growth in the previous three months.

    I still don't get this statement. The property price is still growing at 3% albeit small amount… and they call this as 'SLOWING'
    Another Murdoch's media propaganda

    Profile photo of DWolfeDWolfe
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    Hehe GOM I completely missed that. I was too busy reading about how property prices were UP and how Brissy was the only one  to record a fall! Whatever…

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of god_of_moneygod_of_money
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    I STILL don't get it how they measure the property price based on the average annual income of 4x.
    It is damn cheap median price if ONLY 4-5x of average annual income.

    Let's compare the median property price in SINGAPORE/ HONGKONG/ KUALA LUMPUR/CHINA etc… their median price is 10x more than average annual income. The property with land in Singapore will cost at  >3-4 millions (with average income ~35-40k/annum).

    Profile photo of DWolfeDWolfe
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    Hang on, hang on,

    Brisbane was the only capital to record a fall, with house prices slipping 0.1 per cent in the March quarter, but up 9.1 per cent for the year to a median of $451,388.

    LOL!

    So it isn't really a fall if prices are up for the year?!

    They have to have something to measure it against. Doesn't make it right. A lot of scientific theory is….theory. A lot of these figures are…..figures. Doesn't make them mean anything! Put a lot of figures together and then use some journalism, hey presto you have an article……

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    I thought that the median in Melbourne slipped around 10K for the month of March. But really, does this equate to a genuine price drop of property, or does it actually indicate that the FHB type of houses are starting to appear on the market again? If the latter is true, then is it because people who overcommitted are now forced to sell because the bloody RBA decided to raise rates 'gradually' (ie. like 6 times out of the 7 times they meet, assuming a climb to 4.5% at next meeting)?

    It is doubtful if the issue of inflation will be fixable just by raising interest rates. Also, it is additional pain to have 'suffered' a 1.9% pay rise in an environment that has inflation rate of 2.9%. In essence, I'm actually earning less this year than I was last year!

    Profile photo of DWolfeDWolfe
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    Definitely just a very botched band aid job designed to slow people down, who lets face facts don't really need slowing down.

    Cmon KRUDD I'm spending less, biz is down, retail is down…..whaddya want? Most people are piling money into their mortgages than into retail spending.

    So while the country is watching this hand (the RBA) and bitching about rate rises what is KRUDD doing with his other hand? Tightening some internet censorship? "Fixing" some anti terror laws? Wheeling and Dealing? Good on him for trying out some propaganda and trying to put out fires… that he started.

    BTW was talking today to a friend who immigrated here some years ago who had a good rant about foreign ownership and how they thought the whole situation was going south pretty fast. I don't you have many friends left KRUDD.

    Out you go MR Prime Minister and don't let the door hit you in the butt.

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of wealth4life.comwealth4life.com
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    And now we are seeing the effects of their strategy … all the stuff ups = more taxes.

    On the weekend I watched Robert Kiyosakis webinar … he is correct when he says the the middle class will be wiped out over the next 10 years if they don't embrace a clear understanding of the money system … middle class will be wiped out with increased taxes, cost of debt, and savings.

    This credit crisis started after 1971 … yes it has taken 40 years and the noose is tightening … look at Greece who will pay for their government mismanagement of money "taxpayers"  

    Profile photo of simplesimple
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    So, we just had ficially one month of negative RE value growth? Glitch or cooling down?

    Profile photo of DWolfeDWolfe
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    Which state was this in? Which council area or suburb or area?

     I have recently made a very nice purchase via private sale (OHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH THE AUCTION RATES ARE FALLING THE MARKET IS CRASHING)

    Sorry very tired of THAT old chessnut. The are we have gone for is experiencing steady growth (wow steady even in Melbourne the crazy capital of the world) it is outer ring suburbs and a fab development site. Seems like a like a lot is in the pipeline and I will happily run with this property as I don't think you can go down much from low.  I'll let everyone know where when the deal is more concrete.

    I'm pretty sick and tired of hearing people bang on about slowing and negative growth when there is a factual shortage of residential property and more to the point shortage of decent residential property. How many shacks do you see around that people are just not willing to live in.

    I think if there is a slow/drop it will be short and pretty negligible apart from when ACA and TT do their beat up and run around with cameras interviewing people in the only suburb they can find with an actual drop.

    I think I will start a new thread soon, How much money do you think you will make in 2010/2011 FY? And if the answer is none the poster is DOING IT WRONG!!!

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    It would hardly be surprising to see a slowdown or even a slight drop in prices in the near future (ie. the next 6 months). Traditionally (as far as I've read), property makes spurts of growth with lull periods in between where prices can remain flat or even slightly fall over a period of years. The trick it appears, is timing the property market and buying during these lull periods where property is considered better value.

    The additional tricky bit is that this graph apparently differs from suburb to suburb, so some suburbs might already be posting plateau in pricing or even falls but other suburbs may still be on their upswing. Based at least on this graph I'm happy to say that, at least for my suburb, I bought at the right time just as it was getting into the upswing (although this was purely by chance, not because I'm a technical chartist), and before that prices were pretty darn flat. If I get the chance I could photograph that and post it here as an example.

    I've seen it written over and over again that property is a long-term investment. Sure, if you buy at the absolute right time you'll make a killing, but for the most part you're letting time do your bidding, and letting time give you a chance to reno a place and improve it before revaluation.

    Good news for those holding rental properties is that, the relatively higher interest rates compared to that 6 months ago and higher prices will keep vacancies low as people struggle to find a PPOR and have to continue renting, and those who even thought of upgrading will hang on to their current houses for dear life, so you stand to gain as a landlord. But I pity those who have yet to own a house. I worry for my brother who has yet to set foot in the market but does need a house to stay ultimately.

    Profile photo of wealth4life.comwealth4life.com
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    Hello FW good comments,

    I believe the Government should link your PPOR to your SMSF with a max lend of no more than 50% on independent valuations … why

    Because people are spending their equity to survive and 95% of people at age 65 can't afford to stop working …

    Your PPOR should NEVER be used for wealth gearing purposes … only marketing and sales companies will tell you other wise

    D

    Profile photo of DWolfeDWolfe
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    Good points.

    At least it would give people a reason to contribute to their super voluntarily rather than see it as something that will never bring them any income.

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    DWolfe wrote:
    Good points.

    At least it would give people a reason to contribute to their super voluntarily rather than see it as something that will never bring them any income.

    D

    And in my case the income from super is actually negative. In all the three years working here and getting super contributions from my employer, the fund has only ever lost me money. Of course to be fair, this spans the terrible period of the GFC.

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