Hi All
I have only recently joined up after Reading Steves "0 to 260 properties in 7 years", I found this book very good, I didn't like the first book as it is out of date, it was good to see he has changed with the times in his last book.My question is where would the Melbourne market & Brisbane market currently be on the property clock? If I was to hazard a guess I would say 10 & 9 oclock?
Michael
Geelong. Vic.
Looking to network with like minded people in Geelong?Spud
Both Melbourne and Brisbane commenced the upturn phase of this new property cycle in mid 2006 – so there is still some way for them to go yet.
Sure both cities have had tremendous capital growth in the last year, in fact too much for my liking at this early stage in the proeprty cycle, but there is still lots of upside in both cities.
Remember both cities are running a 3 tiered, divided proeprty market . The inner and more affluent suburbs are out performing which substantial capital growth – double digit in most cases and over 20% in some suburbs over the last year.
The middle ring suburbs are now moving forward as part of the ripple effect. And the oute suburbs are not performing well.
If you waat to know my thoughts on where we are in the property cycle and my verison of the property clock check out this article by clicking here
michael, do you think that therefore the outer ring suburbs will start to perform better once the ripple effect continues to move outwards?
Hi Michael
Thank you for your response, & the excellant article, this leads to my next few questions, since by your article Melbourne is still in the upswing, when do you predict the peak will be?I noted your concern with the rapid growth around the CBD & suspect you don't believe this sort of growth is sustainable?
I have read you book, I purchased it at the property expo, & must say I think it is excellant, & in fact have started to read it again to make sure it has all sunk in.
Hypothetical question, If I was to purchase a development block with in 10klm's of the Melbpourne & Brisbane CBD's that then could have 2 townhouses built on them. These were not completed until late 2009, the purchase & constructions costs were the same.
Which set of Town houses would achieve a better valuation & ROI?
Fast forward 10 years to 2019 & again a feel for what the growth would be?Hi,
Thanks for your comments about the book, I'm glad you liked it. And welcome to the forum.
It's always tricky to pinpoint the time, as much of the analysis is subjective.
However, I think we have now come off the massive high in Melbourne's east, and we will now go into a period of general market gains (5% to 10% per annum). I'm not as sure in Brisbane. Personally, I like Sydney best as the next big growth area as it has been repressed for some years now.
Cheers,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
MichaelYardney wrote:SpudBoth Melbourne and Brisbane commenced the upturn phase of this new property cycle in mid 2006 – so there is still some way for them to go yet.
Sure both cities have had tremendous capital growth in the last year, in fact too much for my liking at this early stage in the proeprty cycle, but there is still lots of upside in both cities.
Brisbane and Melbourne's house prices both increased by about 20% to the year ended 30th November, 2007. If they still have lots of upside then we are looking at a median price of over $500,000 in the next few years. This is frightening for those trying to get into the market. It's going to be more and more difficult to get positive cash flow properties in the future, unless you start looking at commercial properties (as suggested by Steve McKnight) which I'm not yet prepared to do.
hleung wrote:MichaelYardney wrote:SpudBoth Melbourne and Brisbane commenced the upturn phase of this new property cycle in mid 2006 – so there is still some way for them to go yet.
Sure both cities have had tremendous capital growth in the last year, in fact too much for my liking at this early stage in the proeprty cycle, but there is still lots of upside in both cities.
Brisbane and Melbourne's house prices both increased by about 20% to the year ended 30th November, 2007. If they still have lots of upside then we are looking at a median price of over $500,000 in the next few years. This is frightening for those trying to get into the market. It's going to be more and more difficult to get positive cash flow properties in the future, unless you start looking at commercial properties (as suggested by Steve McKnight) which I'm not yet prepared to do.
I'm really not sure what the need for positive cash flow is when your property increases in value by 10% per annum or 20% as has happened in Melbourne or Brisbane.
By looking for the wrong thing many investors hve missed out on the opportunities that the beginning of a property cycle can bring.
If your property increases in value by $100,000 over a year or so – does it really matter if you get $50 a week more or less rent?
Sure you have to be able to fund your purchase, but many investors do this out of their increasing equity.
This time last year I went on record to say that 2007 would be the year that you would regret you didn't buy more properties. I also said it would be the year the rich get richer. To be honest, what our research did not predict was how strongly the markets in Brisbane and Melbourne would rise over the year.
Having said that I believe there is still strong upside in Melbourne and Brisbane's inner and middle ring suburbs. I think the outer suburbs which are more ineterst rate sensitive will continue to have difficulties in 2008 – especailly if we will have the 2 anticipated interest rises.
I agree with Steve McKinight that Sydney is the city to watch in 2008. It is a year to 18 months behind Brisbane and Melbourne's cycle and should continue to move forward – it started to do so in mid 2007.
There will obviously be affordability issues. Not everyone will be able to buy the right type of property in Sydney.
If you learn the lessons from our other markets over the last year and the news from our people in the Sydney market confirms this- it is the affluent owner occupiers who are currently driving the Sydney property market,.
So the suburbs to buy in are those being chased by the more affluent owner occupiers – definately not cash flow +ve areas.
Interesting to read all of the above. Would any of the experts like to suggest which areas of Sydney to watch? Are we talking about the eastern suburbs/north shore only or can we include the inner west, places like Ashfield/Summer Hill. What about the Sutherland Shire/St George area? Would appreciate any input on this.
Personally ZJ, I will be looking at areas which have suffered the greatest median price reductions over the past 2-3 years ie western suburbs. These areas will have the greatest rate of recovery (rebalancing/price relativity) compared to the more affluent areas which have been experiencing prices growth over the last few years.
Scott No Mates wrote:Personally ZJ, I will be looking at areas which have suffered the greatest median price reductions over the past 2-3 years ie western suburbs. These areas will have the greatest rate of recovery (rebalancing/price relativity) compared to the more affluent areas which have been experiencing prices growth over the last few years.There is no guarantee that these suburbs will do well in the long term. I much prefer suburbs closer to the CBD. The popularity of these inner suburbs is accelerating, especially with the Generation X's and Ys.
Hi
Great to hear the thoughts of Steve and Michael – love the books too guys.
I live in Pymble Sydney so I know a bit about the Sydney market. Around Pymble, upper North Shore things are pretty hot at the moment (see stats Pymble/Gordon), but its still a bit patchy even when you look at other suburbs in the area – eg Roseville.
In general I think Sydney areas that are not impacted so much by interest rate movements will do pretty well and have already started showing growth. I'd be cautious about buying in the areas of Sydney influenced by interest rate movements unless you know the area well and can gauge out large discounts on fair value when you buy – you may need some buffer here are prices in general could still go backwards in some areas.
TheBish
Zoe Jones wrote:Interesting to read all of the above. Would any of the experts like to suggest which areas of Sydney to watch? Are we talking about the eastern suburbs/north shore only or can we include the inner west, places like Ashfield/Summer Hill. What about the Sutherland Shire/St George area? Would appreciate any input on this.
We have just opened a Sydney office of Metropole Buyers Agency so we've been doing a lot of research into the Sydney market and which areas are performing well..
And it definately will not be the western suburbs where prices have fallen. These are performing poorly and are unlikley to increase in value for a number of years – affordability is a real issue there.
But many of the eastern suburbs and north shore suburbs have performed particularly well over the last year and are likley to continue to do so.
Property Clock where are we at the momment?
what do you think about Hobart how is performing and what is your prediction about the marketmauriciomauricio wrote:mauricioI will be presenting an updated property clock and an updated status of the markets including Hobart in my next e-magazine – it comes out this Friday free to over 30,000 subscribers –
It also included details of a free webcast with 5 property experts form around Australia giving their forecasts of the market ahead.
I know many forum members already get my e-magazine – but if you don't you can subscribe for free by clicking here
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