Sorry mate, I'll have to disagree. In a falling market, especially one with expectations of further price drops, investors are precisely the class that will step away from the market. There's a saying that one should never attempt to catch a falling knife. Chances are, only the ones who are really desparate to buy, will buy. Most will try to rent to mitigate the risks.

Low interest rates is only one piece of the puzzle. You need to consider why there is falling interest rates. The global growth engine is stalling. Demand from US is faltering which is slowing down growth all through the supply chain. Australia's actually worse off as we're literally at the bottom of the chain. That's why it hasn't hit us yet this year, but next year will be the kicker.

"(3) The drop in OZ dollar has created a very strong interest from foreign investors looking to get in to the OZ property market" <- Can you substantiate this statement, because I have not seen any reports tha points to this?

I've been wanting to network with others who are interested in investing for a long time. Are these informal network clubs where you just get to know people or do you have to pay to network with other people?

I second that!! In that hot climate.. the girls are known to be…. skimpy on clothes perpetually.. rrrrrrrrh~

No offense, but Duckster what you are advising is a very aggressive gearing strategy which is predicated on a rising market. Choosing to get deeper into loans is partially what is making the current housing downturn worse for a lot of first time familiies and the cause of a lot of mortgage distress and foreclosures.

I believe that prudent investing and not over-extend oneself is always a sensible option.

Mine are to short financials, short transport companies, short consumer discretionary stock options and long gold options. Wait for gold to pop, take up a long term put position on gold and maybe mint some coins from its slide from 900+ to mid levels.

That, and buy my first home.

rudyl wrote:

Just curiously.  When looking at multiples of yearly income – anyone know what Singapore is?  I know their property is REALLY expensive.  And they seem to be doing well (certainly loads of buildings)

I can probably answer that. First off – finite land. This is a country with only 700+ km sq, roughly the size of Manhattan, but with 4.6mi population. Same thing with HK or Tokyo or Manhattan, when you cram a lot of people into a very finite piece of land, that land is going to be very, very expensive.

The economy is another contributing factor – Its probably the most successful nation at attracting foreign investments next to Hong Kong. With a maximum of 20% tax rate in Singapore, ZERO capital gains tax on property OR shares, and NO ESTATE DUTIES, it is extremely attractive as a place for wealthy investors who are savvy enough to see the benefits.

Add to this an extremely efficient govt, low corruption, very strong prospects from IR projects in 2009 and very advance private banking facilities and you have all the ingredients to be an extremely successful nation.

Sati,

You might have overextended yourself.

To summarize what the others have said here, the decision to hold on not is really quite simple. Do you think your property will increase in value by more than what you are losing every month and whether you can continue to service the load?

If the answer is yes, by all means hold on to it. If the answer is no, then sell it. This is really all it boils down to in a nutshell.

Not to be blunt mate, but Hoppers is a real s***hole. I would get out of that location if I were you. With its high drugs/hoons/crime rates and extremely outer suburban location, there are more attractive locations.