Property Market heading downwards?

Allan,

Good post but I don’t see how anyone could possibly answer such a general question as ;

“What do you think of the Australian property market at the moment.”

It’s such a broad and varied beast you couldn’t possibly give a specific answer.

I’d try and respond by saying the Sydney residential market is probably down or patchy after a massive run, the WA broadacre farming market is up and healthy, the Melbourne commercial market is so-so, the Perth CBD office market is warming up nicely, the Darwin hotel/motel market is bumping along and the Adelaide industrial market is pretty good at present.

I fail to see how any of the above actually relates to your specific concern ?? Indeed, I don’t believe anyone is large enough to actually be in a position to make use of asking how the “Australian property market” is fairing.

You’ve pinpointed smallish res/comm in Brisbane – why not concentrate on that small market and perform thorough DD research on that ??

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”

Allan,

I have been studying the US market for the last 12 months and disagree that regional areas are on the bubble.

Sure the East and West coast major centers such as California, Boston, NYC, LAs Vegas some parts of Florida are over valued and fall within the bubble defintion. But most regional areas have either being growing steadily within the national average of 7% per annum or have been lagging with very very small growth in the last 15 years. So no evidence to suggest a bubble in regional America.

Resi

It really depends on your view point and time frame. One persons ” doom and gloomer” is another persons “Timing the Market ” and both time in the market and timing the market are valid approcahes.

I tired of anyone who posts a link, article or post which in anway puts a negative spin on the market as being a Doom and Gloomer.

Personally I want to hear all of the views I can , and then I’ll make up my own mind on what I’m going to do. The more info I hear the better.

See Change

More specific questions following the original one:

* What’s your opinion on the residential property market in South East Queensland ?

* What’s your opinion on the residential property market on the Gold Coast in particular… esp. Central Gold Coast ?

I want to hear ALL opinions – incl. the ones that refer to themselves as “Realists” (not doom and gloomers, just being realisitic as such) as well as those who think like attracts like…

Wishing everyone radiant health!
Vanessa

Dimichie i love the way u think (not).

2 ways to make money, good luck and good timing, IMHO, and yes i am a bucket load of fun at the dinner party.

If u feel guilty about making profits then that explains a lot to me about the way you post topics, if u want to give it away i will give u my account details and i will double it for u in 12mts.

Unfortunately every generation has a chip on their shoulders about the generation in front of them, how do younger people see u Dimichie, are u an inspiration to them and what will u pass on to your children.

I don’t know what 2morrow will bring, any thing can happen to blow all the experts out of the water, recession, interest rates, wars, death, tidal waves, drought, politicians. I made a career change when i was 25 and since then got anther 3 diplomas, we were hit with 19.33% interest rates on 5mill and believe me that builds character, i hope u don’t go through it.

I am opionated because i believe that i have done the hard yards, not theory the real stuff, and all not good.

The only problem i have is that i don’t have a better choice other than to be positive and keep forging on, my kids are relying on me to give them a better life than i was given a start in. Yes i read all the negatives out there but i also spend a great deal of my time working out ways of how to make profits, i have to enspire my staff and biz collegues.

Dimichie i do value your posts and replys however you only seem to focus on negatives, i may be wrong, so tell me what is your theory to making profits, Have you read the little green book by Wallace deWattles

resiwealth

resiwealth,

My main problem with the way Australia operates (and the kind of thinking that I find at this forum) is that we’ve become convinced as a nation that the one sure way to prosperity is not to work hard and save, but to borrow and invest in property. The obvious flaw in this thinking is that if all Australians did this we would rapidly become bankrupt, and (judging by the current account deficit numbers) this is already happening.

What is little understood about the CAD is that most of it is an income deficit (i.e. interest on debts owed to other countries) not a trade deficit (the difference between imports and exports). And why have our interest payments blown out? Because the banks (on our behalf) have borrowed heavily from overseas to fund a humungous real estate bubble. Unfortunately, when the bubble deflates Australia will learn to its detriment that our debt is real but our house prices are illusory.

At some point Australia has to reform its tax system to encourage people to work hard, save for their retirement, and create productive enterprises that earn export income to pay off our debts. At the moment we have a tax system that punishes you for saving (super, interest etc) and rewards you for borrowing (negative gearing). This is madness! You cannot have an economy where everyone has five investment properties and a mountain of debt. We can’t all be property investors, someone in Australia has to do some actual work!

Ross Gittins explains the relationship between the housing boom, household savings and consumption and our external debt here:
http://smh.com.au/news/Business/Welcome-to-life-after-the-housing-boom/2005/06/05/1117910186727.html

So to get back to the point. I feel a great sense of pride when I see my software sold and used around the world, but I am not particularly proud of having the luck to buy a property in 1993 and see it triple in value in 9 years. Its not clever, its not smart, its just pure luck.

I’m not “thumping” the property industry. There is a place in any economy for property investment and development. I’m simply making the point that the property industry in Australia has grown out of all proportions and sucked in resources from other sectors of the economy.

I read a stat recently that 3 out of 4 jobs in Australia are somehow related to the property industry. That’s horrifying! We desperately need to diversify and rebalance our economy if we are to get out external debt under control.

I’m developing software and selling it to the world and fighting a losing battle to reduce our foreign debt. Someone has to!

As for investing I have no plans to invest in real estate for the next 3-5 years at least, apart from my PPOR. (I’m between houses ATM)

As for other investment opportunities, at some point in the future the AUD will have to fall 20-30% to correct our CAD, and when that happens our beaten-up exporters will benefit.

I may be a drop in the ocean, but Australia must change. Our current debt-fuelled housing binge is clearly unsustainable.

Amused, people like you make me despair of this country. The great economic success stories of the past 60 years (Germany, Japan and now China) were not created by building houses, they were created with exports. You cannot create wealth by buying and selling houses, real wealth is created by selling something to the rest of the world.

I’ll leave you with this letter to the Economist magazine this week: