- Nigel Kibel wrote:I think that in a down market also creates opportunities. I can see that a city like Brisbane is currently under valued.
I do not like boom markets its a little like being on the set of the walking dead. People over pay because they are worried about missing out. In a market like this if the deal works then in the medium term you will make money
Well said, we purchased few IP's lately, it's defiantly improving from investor point of view.
Shopping around now is a pleasure, 10% discounts are a norm. We make offers with 20% discounts, some are been considered by owners.
My take on prices in Brisbane (CBD + 30 min radius) to trend down some more. Say 10-15% is very realistic figure, since you already can get this level of discounting.
Been to few inspection this weekend, agents look lonely at some of the places.
Totally agreed.
I like the down/depressed market.
I can really get the value of a property, not over inflated price like in the hot market.
How long do you guys think the flat/down market will go for ??
Recently I monitor the auction result in Sydney,NSW it looks like the clearing rate is picking up a little…
Also the share market has been coming back up a little for the last couple of weeks…
what's you guys read in property market for the coming year,2013 ?
Oh boy, a holy grain question.
From this point in time RE prices can:
– rise
– stagnate
– drop
Also, they can rise/drop by different amount as well as for different length of time.
Imagine number of possible outcomes? Now, multiply them by number of possible government interventions and major moves in world economy.
So, in real world any prediction are worth no more than amount you paid for them
My expectation, next 12 months – slow meltdown. Next 5 years, stagnation overall.
But my actions are more based on what I see now, now what I expect. I see the gain – I go for it.
Only my strategy is based on my expectations, meaning I buy for cashflow not CG (mid therm).
Capital city home values fall over consecutive years, down -3.8%in 2011 and -0.4% in 2012.
RP Data just released their end-of-year housing data for 2012 and it confirms what many already knew. 125bps over the last 12 months still hasn’t been enough to get traction under the market and as we roll into the “fiscally responsible” new year 2013 isn’t looking all that great either. The latest uptick in commodity prices should provide some support for national incomes, so that is a positive as long as it can last, but given what we’ve seen in the trend in credit since the GFC that may just result in further down payment of debt rather than increasing asset prices.
With governments across the country all hoping that housing construction will provide some economic support it’s going to be an interesting year for the housing market, but with immigration again on the rise and the RBA predicted to cut deeper they may still be some upside in 2013. For the bulls Sydney and Darwin are still looking good, for the bears there is everywhere else.
Interesting thread, if there is a down turn than I would be looking at buying up as much as I could afford.
I was in the U.S. during the massive and worse property collapse in the nations history. It was really bad. And the average buyers got scared off and many were not able to get mortgages. However, the luxury market just increased during this property collapse – as odd as it may sound. And it's still booming. More buyers from abroad than previously, but certainly booming.
The areas that are mainly affected by a sluggish property market are those where it is already cheap and easy to buy properties in a booming market. Cities generally keep maintaining their value and even experience increased prices.
Interesting comment about US market.
I was watching Los Angeles area, lower part of it some 2 hours from city.
Over the last few years higher end properties have sank down a bit, but still fairly expensive. I was concentrating on 700K – 1.5Mil. I did not see any price crash in good areas near the water, same confirmed my a friend who live there.
As Tinim mention above, it's poor and low end suburbs that actually got hit bad.
In Australian on the other hand, particullary in Brisbane, waterfront houses sank down from 2Mil to 1.5Mil and still falling. Properties on the Brisbane River are not much better, some go with 20-25% discount from 2007-2009 prices.
Cheaper houses are little bit better, 10-15% discounts from market high are more common.
I'm into making money at both ends of the property investment life cycle. If I decide to sell early on, I make money because I nabbed a bargain. And by holding onto well-positioned bargain buys as I like to do, I'm looking forward to decent growth over the long term.
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.
To be fair though, I don't think auctions have ever been popular for buyers in Qld.
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.
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.
Simple, rather than your own observation, can you provide with more evidence based statistics from reliable source
Sydney house prices reach all time high
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.
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
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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!
You could see a few more of these over the next few years. Corporate AU is up to its eyeballs in hock.
Same property now was listed for $950K
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.
I hear ya!
God's sake don't tell Nigel. He's still still pumping Brissy central… undervalued was his opinion if I remember correctly.
The bust has been here for a while but most don't realise it. A bust is part of a process that takes time. When a car hits the wall when was the crash? At impact or was is somewhere back in the past that the process originated?
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