If you like ghost town go and buy a property in one of those mining towns. The smaller the mining company around the riskier the investment is. I am not saying large mining companies will survive, just look at what is happening to OZMinerals, they are the 3rd largest mining company in Australia and are close to administration.
clones – you think a 30% fall is "big time"? lets wait for 50%
lets look back at oil. there was a "huge shortage" proclaimed a year ago. since then its fallen 75%. what happened to the shortage? is it just as mystical as the "housing shortage"?
Crashy,
In fact, I believe the property markey will fall even further and longer. The days of doubling your money in 5/7 years are gone for a long time.
It is a Myth, Australia housing prices have fallen big time. There are areas in the big cities that have fallen upto 30% already and it is becoming almost impossible to sell any property.
Property above 600K are becoming more and more a liability over here, and their prices are crushing down big time. It can only become worse next year with unemployment firing up.
I bought a three bedroom house in Edgewater near Maribyrnong in April last year for $331,000. Did a $2000 reno (patching up cracks on walls, ripping out carpet and polishing the existing floorboards, agents came along and valued it at $550k
Previous to this though, I bought a double storey house with a coin-laundry in the front. Paid $41,000 for a deposit with the purchase price $410,000, the income from the coin laundry covers the mortgage and bills.
A client of mine purchased a vacant shop in Footscray for $390,000 earlier in the year that was vacant for more than 6 months. Somehow found a tenant in there immediately who was willing to pay $4000 per month. $48,000 per year, and tenant pays outgoings values it at close to $1 million.
Something very doggy with all those numbers, I am not sure they say the whole story or that they are even truth. Plus valuations are only that paper numbers, try to sell to see if you can at all.
Coming from a RE related person it will leave me with a bitter taste. Did a company called centralchoice do the valuation?
Is that a block of flats, because with a rent of 1200 a week it must be only two or three flats or are you just bluffing?. Anyways, good luck you may get 600K if you have the remote chance of selling it.
You may consider your position bad luck or unfortune but I would say that if you hold that property for another 18 months the selling price will be 22K plus lower than what you have achieved. So consider yourself a lucky man for selling for that price and for selling at all.
They are so many and many people trying to sell properties everywhere in Australia that the market has clogged and the prices are dropping fast.
I sell my positive cashflow property all the time. It all depends on whether I can make more money by holding onto the property or by using the money to buy something that is going to make me more money.
I bought a property 3 years ago for $540,000. It currently rents for about $1200 per week. I've got it on the market at the moment. Why? Because it is worth $1.2M now and I can use the money from the sale to pay off the loan and a line of credit and leave a cool few hundred thousand in the bank. So I miss out on the theoretical $100grand in capital growth each year (on the presumption that property doubles every 7 – 10 years) plus the $10 – 20,000 pa in income, but I can use the money in my account to develop properties that will bring me a 100% cash on cash return, making me well over $300g per year.
Does that make sense?
It is all mathematical to me. Where will I make the most money? By holding on to the property or by realising some capital gain and putting it into something else that will make me even more money.
Cheers
K
Hahahaha 1.2M, that must be a doggy RE agent doing his/hers rounds. You will be lucky to sell that for 600K.
I may be wrong and dreaming does not cost a cent so good luck.
10% yields are back and 250bn projects and infrastructure planned in mining towns. I know where im buying next!!
Hahahaha, go there alani and buy as much properties as you can, you will be doing some people a favour.
I can smell that you have invested heavily on those death towns and you will find much more pain soon. Copper and coal prices just drop today to 5 year lows and they will keep dropping even further, I am sure more and more mines will close and that will lead to ghost towns being left behind. But you know there are people that like to live in ghosts towns so good luck.
From Foundation
“I like the price/dividend ratio myself, by price/earnings (PE) is commonly accepted. Your point being?”
My point is all of these ‘share experts’ quote wonderful sure fire figures , yet less than 1% could explain how their anlysis is calculated , so what does that mean?
For example the ASX 100 is based on the top 100 performing companies. If a company under performs then it is dropped off the list and the next best company will then appear into the figures. The average is then used to calculate the yield across the top 100 listed companies in Australia.
Imagine if we had the APX 100 the yields would be in the 1000’s of percents. This is why i get annoyed when i see comparisons of property vs shares , and the ‘expert’ still cannot explain the figures.
So this how we draw a comparison :
Property median capital growth (centre point) , this counts every piece of crap on planet Australia inside the metrpolitan arc vs the top 100 companies in Australia. Sounds like a reasonable judgement dont you think crashy?
Thats right boys and girls a loss does not count !!
These figures are a little bit misleading then?
Hi tony wpb,
You are wrong about the ASX100 being the best performance, that is completely incorrect. They are a selection of the 100 most representative companies in the sharemarket and even if they do not perform well they stay in the index, who says they are drop?
Check the example of Telstra, Telstra is like a investment property right now, it keeps going down and the goverment is trying to pull it up (In investment property who tries to pull it up are the real state agents and people with investment on it), anyway, telstra has been in the index since day one and will continue to be there even if it drops another 50% or more (as property could do )
Clones
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The net result is not so much lies, damn lies and statistics but rather vendor dreaming, buyer wishing and agent glossing.
The fact is that property investment is and will continue losing its attractiveness.
There will always some people investing in one activity or another and some of them will generate value and some won’t and this is what is happening with property, those that come before the boom have generated value and that image is still in their minds, those that came at the end of the boom are getting in some big troubles but at the same time people like dazziling will continue to create value , saying that that value created does not mean that is higher or better than any other investment, and in my opinion is lower at the moment compare even against saving accounts and will continue to be even lower with more interest rates increases.
Clones
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The net result is not so much lies, damn lies and statistics but rather vendor dreaming, buyer wishing and agent glossing.
This is really good for those towns in the middle of nowhere, people from the cities buying there and paying IP stamp duties to help revive a bit those towns.
Unfortunaly, commodity booms do not last for ever and investments on those towns will be a trap for the future. I guess you will have to find 2 or 3 ghost that can move in for future rents.
Clones
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The net result is not so much lies, damn lies and statistics but rather vendor dreaming, buyer wishing and agent glossing.
Well, that is why we are talking about a complex that offers solution for kids to play and so on. They do not have big backyards but the have community areas, pool etc
That is the difference.
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The net result is not so much lies, damn lies and statistics but rather vendor dreaming, buyer wishing and agent glossing.
210m2 says it all. Why buy a such a property when you can get another one for the same price with 700m2. Remember, land appreciates, buildings depreciate.
Neighbours will be very close and there will be a tiny backyard. Who is going to demand this sort of property in an outer suburb, especially in 10 years time after the house is not so new anymore?
Well, I believe the opposite, if I am going to rent out a place I would prefer the one without backyard and in a small place where I do not need to spend time maintaining it.
I believe small place are better for rent adn large for sell.
Clones
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The net result is not so much lies, damn lies and statistics but rather vendor dreaming, buyer wishing and agent glossing.