Forums / Property Investing / Help Needed! / Best advice : Don’t invest into property : The australian market is CRASHING.

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  • Profile photo of Mick FMick F
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    @mick-f
    Join Date: 2008
    Post Count: 4

    "The fact you had to come here to get help means you are not prepared enough, or not smart enough, probably both"

    I am only new to property investing but the above line tells me that you lack the ability to think before you act/speak, which makes me wonder how you could possibly be a succesful investor.

    When you started investing, how did you learn? Do you seriously think that there will never be a time that you have an idea or a question and would like some feedback from a third party? I would have thought a forum like this is beneficial to everyone, even the most experienced "investors" like yourself.

    Now your points about a crash may or may not have some truth to them. I personally dont look at an Australian market as a whole. I think the Australian market can easily be broken up into seperate markets. For example the resources boom in WA (which is still just as crazy as ever) should make property investment in WA to be as good an option as ever. Im not sure how correct this is… after all, Im only new to investing and the reason I have joined a forum such as this is to try and learn some negative points as well as some positive.

    But after all that, I think this thread has provided me with some really good infomation (good and bad). Doesnt hurt to hear a different point of view.

    Profile photo of azmiahmadazmiahmad
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    @azmiahmad
    Join Date: 2005
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    Hi Everyone,

    I think as an investor , you make money when the market is down and up. If you do not invest during the down turn, I think you will miss out the best opportunity. I know of a friend who does not invest thinking that the market is bad at the moment.  My take is if you cannot invest in both good and bad times , I think you would not invest any time any way .

    Just my 2 cents worth

    Profile photo of carlincarlin
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    @carlin
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    The most effective gauge for the property market here in SA is The Advertiser, the local rag that derives a huge chunk of its revenue from real estate advertising. When it starts publishing "get rich, buy property now" articles you can be sure the market's either flattened or dropping.

    Last Monday's article in the money section really takes the cake. A panel of real estate agents, real estate insurers, real estate developers and real estate lecturers. Guess what?!!! They all think now is a great time to buy. Incredibly, the developer also thought it was a good time to buy land and build. Well, knock me down with a feather!!!

    Profile photo of Opportunity In EverythingOpportunity In Everything
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    @opportunity-in-everything
    Join Date: 2006
    Post Count: 122

    Wow, having just spent 7 weeks in Europe yeah Australia watch out our market is going to crash.   Cause all of our residential investment comes from overseas.  Mate Dubai needs your help head there!

    Yeah sell me all of your properties now for a 60% discount before they go  60.1% lower. 

    Whatever, boom, bust, upward, lower, cycle, cycle on. 

    Mate i'm looking at the cycle for my little suburb of 7,000 houses in Australia graphed on my wall for the last 14 years,  I hope you don't mind if on that basis that I'm ready to buy and buy and hold.

    Are you any good at picking the next boom, can you tell me which suburbs are going to double in value in 2 years like they did in Perth.  I might move on then.

    Profile photo of blogsblogs
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    Opportunity In Everything wrote:
    Mate i'm looking at the cycle for my little suburb of 7,000 houses in Australia graphed on my wall for the last 14 years,  I hope you don't mind if on that basis that I'm ready to buy and buy and hold.

    Are you any good at picking the next boom, can you tell me which suburbs are going to double in value in 2 years like they did in Perth.  I might move on then.

    lol hello>>reality is calling, can anyone say 'commodity boom'?? WIthout it you would be scr$wed. Also basing your whole belief on 14 years is hardley indicative research-thats like saying because BHP has gone up 1000% in the last 14 years it will go up another 1000% in the next 14 years. Try looking at the real situation-MASSIVE debt and now way out. Its coming, oh yes itscoming…ignore at your own peril.

    Profile photo of AlextAlext
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    Four years ago: http://www.abc.net.au/worldtoday/content/2004/s1058123.htm

    Every year there is someone that predicts a crash, in one form or another. Surely someone will get it right one time…

    Profile photo of AlextAlext
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    BTW are you the same 'Scamp' , who is a 'Real Estate Developer' that posted on this thread on the 'Global House Price Crash Forum': http://forum.globalhousepricecrash.com/index.php?s=91120db0a24f872a3fc2b839ba702341&showtopic=31925   ??

    Profile photo of elkamelkam
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    May I ask what sort of investment property you have/had in Holland Scamp.

    Cheers
    Elka

    Profile photo of ScampScamp
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    elkam wrote:
    May I ask what sort of investment property you have/had in Holland Scamp.

    I have a Type A PI in holland ( a safe, mostly paid off mortgage ) which I rent out to students.
    I have evicted the students and am selling now, as the bubble is about to deflate here in about a year or so. We're seeing a final rush in the property prices going up ( quite usual in the end of a bubble ) before the bubble completely dissipates. I want to have my money in gold before it turns to dust.

    And yes, the Scamp on GPHC is me. Read some of my posts there to get a good impression of what is going on exactly. It's never a bad idea to get views and opinions from both the Bulls and the Bears.
    I'm a bearish investor , I know when to pull out, although this time is the first time that I am actually a bit anxious about being able to sell the house. Which is why I sell it this summer instead of december ( when I am expected to come to Australia to buy a nice property for a deflated bubble price ).

    It's a good idea for the readers on this forum to go and have a look on the 'other side' like we from GPHC do on here and somersoft forums :

    http://www.globalhousepricecrash.com

    Read the posts there, and please feel free to reply to our posts, we love to hear the bullish side of things, we hardly ever see a bull anymore.

    Profile photo of meakinmaster60meakinmaster60
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    In my lifestyle ( job)
    I travel around the worl d a hell of a lot, spendin often montsh at a time

    the past few years i have spent a lot of time in the US, most recentlly 3 mths.

    I can tell you now,

    Australia is heading exactly the same way!! its not only "politics" that we like to be right behind the US….. its our entire economy. also

    Sad but true I tink, whats happened to our " lucky country"

    The US is a real mess, I pray that our great land doesn't go the same way.

    too many people, have jumped on the band wagon, with ( like the above poster said) someone with a sales pitch or service to promote, gives their view to generate business.

    A good point, cause its not the "littel aussie batteler"  who got the "great deal"on a too good to be true mortgage" who is going to be better off.

    oh- Invest OverS eas( but not the US) and you can find great C+ deals.

    Sorry if it was direct, but Australia is in for a big slump.
    i am saving my $$$$ and will pick up the bargains later on.

    J

    Profile photo of Opportunity In EverythingOpportunity In Everything
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    @opportunity-in-everything
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    The great thing about this site is that we will all be able to come back in 12 months time to these posts and have a good laugh at the absolute nature of some of these comments. 

    December 2008 the Australian property market in every state, in every suburb and every home would have crashed.  Cause we're all in the same boat cause we're in Australia.  Yep every capital city in Australia is going to slump. 

    How's Sydney doing now?  What about FNQ? 

    I think we'd all agree that we're pretty much experts in our own backyards take it beyond that to another suburb or state and we're relying on something else other than everyday market watch.

    People aren't going to be migrating to Australia (Shhh don't tell the ALP and Rudd who are going to flood the country with workers to address the skills shortage). 

    The South East corner of Queensland won’t be experiencing population growth at the rate of 1000 a week anymore now will it?

    The region’s growth will generate demand for 575,000 new dwellings and 425,000 new jobs, as well as supporting infrastructure and services. It will impose significant social, economic and environmental pressures on the region.

    So will there or won’t there be a solution to the urgent need for more housing through greater release of residential land for development.I guess you have to ask yourself does demand have an impact on the sustainability of house prices in Brisbane, Queensland, Australia  which might be some practical basis for understanding the localize nature of the market.

    What I’m saying about the last 14 years in my patch is this clear.  In 2003 you could buy a three bedroom house for $90K today the same property is $300,000+.  Property doubles every 7 years does, I mean does it really?
     

    Right so my PPOR that I recently purchased/built for $725,000 is going to be worth $290k in December. 

    Cause it didn’t cost me $350k for the build and $375 for the block.  Yeah so which is going to drop in value greater the house construction or the land, I don’t see any more blocks for sale and it took me almost 1 year to find a builder and build. 


    Demand for new housing what will that do?  Is anyone planning on investing in cardboard boxes that can be coverted into 4 bedroom houses? 

    What about the IP I settled on almost 3 months ago now.  I picked it up at Auction for $375,000 it’s a 4 bedroom ensuite brick and tiled built 2004 sits on 635m2 and it’s tenanted for 12 months at $425 per week.  How much will that decrease in value?

    On wages is anyone really prepared to say that wages with the ALP in power at a state and federal level and the unions waiting to take control of the workplace wont be on the rise and strikes along with them.Yeah the economy is a mess is going to be a mess and will impact on the market but maybe recycled paper to make boxes four housing isn't the boom move either.

    Profile photo of wellonthewaywellontheway
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    Has anyone seen the ABS link posted by Scamp?  I haven't seen any replies to that post, but I'm trying to make sense of the 2006 stats.  I see the total private dwellings in Australia being 8,426,599 and the total occupied total dwellings being 7,596,183.

    My interpretation is that there's 830,416 of unoccupied private dwellings (total – total occupied)……..which isn't quite logical and doesn't match with the messages from the government/real estate bodies/increasing rental price + queue on rental waiitng
    list……

    Profile photo of vicgirlvicgirl
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    @vicgirl
    Join Date: 2004
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    The official cash rate in the US is 2% and it could stay flat for the rest of the year.
    In Australia it's 7.25% and still no signs of easing.

    Roll on the property market crash!  I would much rather hold property than cash when rates are starting to fall. Yes, a seasoned investor will survive and even make money in down-trending markets. I notice, even Scamp is planning to invest in Australian real estate soon :-)

    As for gold, there are equal numbers of bears and bulls.

    Profile photo of Alistair PerryAlistair Perry
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    Post Count: 891
    wellontheway wrote:

    Has anyone seen the ABS link posted by Scamp?  I haven't seen any replies to that post, but I'm trying to make sense of the 2006 stats.  I see the total private dwellings in Australia being 8,426,599 and the total occupied total dwellings being 7,596,183.

    My interpretation is that there's 830,416 of unoccupied private dwellings (total – total occupied)……..which isn't quite logical and doesn't match with the messages from the government/real estate bodies/increasing rental price + queue on rental waiitng
    list……

    Read further down, there were something like 550,000 non responses.

    Profile photo of Tony BTony B
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    Hi folks
    To buy or not to buy is still the question.  So many opinions, some say house prices will fall big time and for me I really hope so. I feel its ok to read other peoples opinions, cool, but at the end of the day you would be an idiot to act on any advice if thats what it is, you read on any internet forum.  Ive been working hard to find a good home at a bargan price over the last 5 months, even land, and I have not been able to buy one under what the last punter brought it for.  Ive approached banks & finance companies and even vendors under stress. Try telling them that their home is going to be worth 30% less next year so you best sell it to me now.  If houses are falling, and I mean the average family home price not the crazy sydney places with a view of the opera house, can some one give me the address of a place and supply me the pre sale purchase price and what it is now on the market for.  Something is only what you can sell it for, true. But if the bank says it owes us 250,000 then they will not sell it for 200,000 beleive me.  Fear & Gread, Ive never been gready in my live but now Im regreting it.  I now have been thinging I may be forced to buy out of fear because if the bubble does not burst soon Im  #$%&*?  My understanding of real estate is limited & property investing the same, I have an MBA and own a calculator and with all the talk of doom and gloom I just cant see it out there in the market, in the estate agents window or at auctions on the week end. I think I will wait a few more months to see if the RBA lifts rates.  I also think the Aust. economy is more linked to Asia not the USA or UK.  Asia, China, is booming and still buying our mining resourse. Property in Shanghai went up by 30% in 12 months. Also imigration to Aust. is putting demand up and there is still plenty of building going on, just take a drive. I also feel the banks are not stupid they will not lend money for housing, 100% in some cases if they think, as many on this site do, that property prices are about to fall.  Lenders look on low docers not as home owners but renters. Their monthly repayments just cover the intrest and when it all gets too much, the for sale sign goes up. The lender gets the intrest they have paid over the last 3 years and now have a assett to sell to get there money back, next customer please. I do hope that prices fall for the sake of all average people in this great country not so wel all can get rich but so we all can have a place to live.
    Cheers
    Tony ……………

    Profile photo of Tony BTony B
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    Hi folks
    To buy or not to buy is still the question.  So many opinions, some say house prices will fall big time and for me I really hope so. I feel its ok to read other peoples opinions, cool, but at the end of the day you would be an idiot to act on any advice if thats what it is, you read on any internet forum.  Ive been working hard to find a good home at a bargan price over the last 5 months, even land, and I have not been able to buy one under what the last punter brought it for.  Ive approached banks & finance companies and even vendors under stress. Try telling them that their home is going to be worth 30% less next year so you best sell it to me now.  If houses are falling, and I mean the average family home price not the crazy sydney places with a view of the opera house, can some one give me the address of a place and supply me the pre sale purchase price and what it is now on the market for.  Something is only what you can sell it for, true. But if the bank says it owes us 250,000 then they will not sell it for 200,000 beleive me.  Fear & Gread, Ive never been gready in my live but now Im regreting it.  I now have been thinging I may be forced to buy out of fear because if the bubble does not burst soon Im  #$%&*?  My understanding of real estate is limited & property investing the same, I have an MBA and own a calculator and with all the talk of doom and gloom I just cant see it out there in the market, in the estate agents window or at auctions on the week end. I think I will wait a few more months to see if the RBA lifts rates.  I also think the Aust. economy is more linked to Asia not the USA or UK.  Asia, China, is booming and still buying our mining resourse. Property in Shanghai went up by 30% in 12 months. Also imigration to Aust. is putting demand up and there is still plenty of building going on, just take a drive. I also feel the banks are not stupid they will not lend money for housing, 100% in some cases if they think, as many on this site do, that property prices are about to fall.  Lenders look on low docers not as home owners but renters. Their monthly repayments just cover the intrest and when it all gets too much, the for sale sign goes up. The lender gets the intrest they have paid over the last 3 years and now have a assett to sell to get there money back, next customer please. I do hope that prices fall for the sake of all average people in this great country not so wel all can get rich but so we all can have a place to live.
    Cheers
    Tony ……………

    Profile photo of blogsblogs
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    Tony B wrote:
    Hi folks
      But if the bank says it owes us 250,000 then they will not sell it for 200,000 beleive me.  

    Want to make a bet!!!! You are basing this belief on what exactly???? Try having a look at the states for some real world evidence-PLENTY of properties sold at 30-50% losses mate!!!

    There arnt many selling at a discount here YET because people are still managing to get by. Its once they are forced into a position where they HAVE to sell that you will see property prices tumble!!! Just go to some auctions-much different atmosphere to even a few months ago-people are sitting back-the greed has turned from the seller to the buyer who is hoping to buy as cheap as possible. Give it time…it will come!!!!

    Profile photo of ScampScamp
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    Tony,

    Just take 10 random houses for sale now, and offer 20% off the asking price. I guarantee you that you will get at least 1-2 accepted. And that's only 20%. Wait till the interest breaks loose, people going from 6% to 10%, that's 120 percent more to pay back over 30 years. Believe me, people who don't need to sell won't put their houses up because everyone knows the houseprices are going down. Soon sellers will start panicking.

    There's so many extra properties for sale every week, it's scaring. Don't fear that you will 'miss out' on anything, there's SO MANY choices now, and every week there's 1000's of houses more on the market.

    Do you think that a financially healthy family would put their house on the market right now ? With all these talks about crashing houseprices ? Do you think RE agents will accept to put the houses on the market at the old crazy prices ? Ofcourse not, they need to make money, and the sellers need to sell because they're getting in financial trouble.

    Yes, I plan on buying a house, I even plan on buying two, and I intend to pay less for my 2 houses than I would pay now for 1 house. And believe me : it WILL happen.

    Prices will crash, and people will be in financial trouble. Whoever buys now at asking price is going to be part of the crash instead of watching it happen.

    You say it yourself : You can't get a loan for the current prices. Do you think you're the only one ? Do you think banks perhaps won't lend people 10 times their yearly wages anymore , because you're right, in the near future banks will only allow you to lend up to 4 times your yearly wages.

    There's no more buyers left, the few ones who would be crazy enough to buy at crazy prices are now being held back by the banks who won't lend them the money. No buyers = No sales = Foreclosures at 50%.

    Believe me : Banks will accept 200.000 for a house worth 250.000. Some banks have been writing off BILLIONS due to the subprime crisis. What do you think that means  ? It means they lent too much to people and have been selling houses at fractions of what the lenders bought.

    Same will happen in Australia, only in Australia it will be worse, because wages are lower, houses are more overpriced and mortgages are higher than anywhere else, and interest rates are higher.

    Do you think that is a healthy combination which justifies buying a house today ?…

    Profile photo of FireflyFirefly
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    WOW, i went to Steve's last seminar and not even HE, a proven, respected, self made property mogul, would dare suggest that anything is so absolute and definite!!! Scamp, are you as qualified as him to be giving advice??? Otherwise i'm guessing that yourself and a few others on here have managed to aquire magical crystal balls somewhere and in that case, i'd really like one too!!!

    I think it is great to have an opinion but really, if everything in life were that easy to predict, we would all be filthy rich! I personally, am going to keep myself educated and informed and react accordingly to the market when the market changes, not to the latest blast of opinions or headlines. To me, this is not behaving like an 'idiot' (as some on this thread would like to put it) to me, this is behaving like a professional investor. Each to their own i guess!  

    Oh, and scamp… if there is an oversupply of property can you explain why, (in Sydney at least) we have the lowest vacancy rate ever, rental increases of 20-40% in one hit are not uncommon (yep, i have experience there!), 50-100 prospective tenants are lining up for every rental open home and renters are bidding UP, yes UP, the rental price??? Oversupply…. WHERE?!!

    Profile photo of vicgirlvicgirl
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    Well, I've been keeping an eye on some properties lately and as I was checking my saved list on the weekend, I saw that 5-6 of them were sold in the last two weeks, so it's not like people have stopped buying. I do see more properties coming on the market in my neighbourhood, nothing more than what I regard as normal, and a lot of them are getting snapped up in a week or so. I think I'm going to record perhaps the number of internet listings in my area on a weekly basis and see what that suggests.
    So it's Monday, 19 May and the total number is 124 – very low still compared to let's say what it was 2-3 years ago. I'll have a look next Monday.
    Anyway, we all wish we could predict the market's movements but if we're going to follow in the US' footsteps then we're looking at lower interest rates, which are clearly not in sight at the moment, so perhaps we are as Tony says coupled to the emerging Asian economies and are at a different time of the cycle. Those who maybe haven't noticed, we did have pricedrops and a plateau for example between 2003 November and 2007, here in Victoria anyway.

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