A great person to comment on this would be Bill (BillfromOz). But personally, I’d say that prices are over inflated here. I don’t necessarily see them falling but then again I (now) know they have before.
If you want +ve cf then Canberra is not the place to buy. Best I’ve seen wouldn’t break even for several years. But I’m only a rookie, so perhaps I’m missing something.
Sam
Canberra is a good place to purchase a family home and hold…but don’t expect to buy in the last legs of Bull Run and make a quick profit. The time to have invested in Canberra recently was when nobody else was game to…’94/95.
Family home, you buy when you need to provide long term security for yourself and family.
Are the prices inflated in Canberra?… Very much!
Are there areas to avoid in Canberra?… All ACT
Are there areas to pursue? …………Not in ACT
It would not take much research to confirm the above. Canberra is a volatile market and runs to the extremes in Bull and Bear Markets.Even the top suburbs will come off 10%. Others 15% to maybe even 25%… just as it did in 1994/95.
You have little choice but to wait 2-3 years for Canberra to be a good Investment again.
That will include Qbn and any town within an hour or two of ACT, as that is the market that feeds the others.
Be patient…Hold if owned for a year or more, but don’t buy for investment Today!
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
Hi,
This is really aimed at Bill. Do you happen to know what happens if you have a line of credit and prices drop? Can you get a margin call as with shares if the price drops significantly?
Thanks,
Luckyone
I very much doubt it. In 1995 many home owners in areas like Banks etc, owed more than the house was worth. The Banks knew this of course. But could you imagine the panic if they had called in loans or looked for Mortgagors to reduce debt?
They simply sat it out. That is not to say, that if you are heavily exposed with a LOC, that you may not get a friendly call from the bank. But to answer your question…I think you’ll be okay… not like a margin call on Shares.
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
I agree with Bill, if you had bought 12 months ago, heck even 6 months ago, you would be doing alright. But right now, with talk of interest rates going up one must think that any price increase here at the moment (say, land in the new Gungahlin areas going up from $210k to $240k which is ridiculous for 500sq metres) must be temporary.
I’ve been looking around for a house in Woden/Weston, Fadden areas in the last few weeks. I’m really shocked! They are all unbelievably expensive. The prices are inflated especially those in the low end. I have a feeling that investors jumping in to buy properties just in any condition in a hope that they can renovate and sell at a higher price few months later one. I’m not sure about this. They make it hard for 1st home buyers.
I just saw an ad for an apartment identical to the one I sold recently, in the same building, at the same position, 2 floor up. The asking price is $180K more than what I sold for. []
Let’s see it sell before you give it any credibility.
Courtesy of Shaun Walker…I have stats from The Canb.Times. I will analyse in detail but the Sat. rental columns have grown from 36 on June 7th to 45 on Oct 25th 2003…. an increase of 25%.
I think you’ll be pleased you sold Huey.
The other seems like a “Clayton’s Sale” to me.. keep track of it please. You sold..but will they?
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
Akyboy, your question has been answered so I won’t repeat. But it raises other questions.
A good question on the LOC Luckyone, as it’s of interest to me. I had figured on aiming to get a LOC on my PPOR while the values are still high. The purpose of course to have cash in reserve for a future opportunity. I would however need to achieve more than the recent bank valuation after debt consolidation to do so. 80% in my case would require an extra $25K in the valuation.
Bill, I understand all that you have said. However, are you suggesting that a “friendly call from the bank” could occur when dropped values push the LVR above 80%? If so, I only see two options. Either a forced refinance by the bank back to P&I or sell up.
The Bank will not make contact with you provided you are meeting your committments. All I was saying was.. that if you are “heavily geared” to the tune of several 100k… and values did come off in the order of 20-25% over time(as they did in ’95)they “may” keep an eye on you.
Banks can call up a loan for many reasons LOC or P&I…but choose not to do so.They don’t want to spook the masses. They were entitled to call up loans in the suburb of Banks in ’94/95 when debts exceeded values… but of course they didn’t.
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
For bill.
glad to have been of help. the national library is a great place for all that type of info. i will go in once a month and do the numbers for you. I didnt really see much difference when i was doing it as i was probably doing the numbers wrong. to get 25% increase, did you average the numbers for each month then average those numbers against the amount of months (ie the 4 months worth i gave you?)
enjoy.
shaun
Anywhere in Aussie…I will sit it out and buy better around 2005, Canberra included.
Hi Bill,
I’m a bit confused by this reply. Are you saying that good property deals exist anywhere in Australia or are you saying that you wouldn’t buy anything now and would wait till 2005?
I’m saying, that personally, I will not buy Real Estate anywehere in Aussie today.
By 2005 maybe some areas including Canberra could be considered. If you bought a year or more ago Hold. I’m simply saying that it will prove to be profitable ,if you are patient and leave the R/E market alone for now, if you haven’t already bought.
You make your profit when and where you Buy!
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
Taking the past 20 Saturdays, there has been 36 columns on average each Saturday. The lowest was in june with 24 columns…the largest last Saturday at 45 columns….87.5% increase from the low to last week.
Preferably add two Saturdays ie. Sat 1 + Sat 2 = an average of 30 columns. Then add Sat 2 and 3 = an average of 29..1+2 2+3 3+4 4+5 5+6 etc and take the average of those two Saturdays.
In doing so this smoothes it out and you get a low of 29 Columns in June and a top of 43 for an average of the past two Saturdays. Realistically an increase of 14 columns on 29 in June… best part of a 50% increase.
I took a lot of samples and at best/worst the Rentals in the ACT have risen by a staggeriung 25% minimum in the past 4 months.
I’ll put money on it… more than 40columns this coming Saturday…give me your odds.
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies. [email protected]
Given today’s interest rate rise, I reckon you are on the money. Won’t be surprised to see another big hike in rentals avail by the end of this month. Makes RRs sound more attractive than ever.
All you Canberrans that don’t read the Soap Box, we are having a get together at Olims Pub – now taken over by Mercure I think at 2pm on Saturday 22nd November.