Please! This would be great!

D

That is really sad.

And there are a lot of questions that come out of this to do with risk……do you add 'getting shot' to the list?

D

Hi Michael (and all)

Having recently sold our last unit in Melbourne in just 3 weeks and for the price we wanted, I think Melbourne is a mixed bag.

I can only speak for suburbs that I am watching currently – Box Hill south, Burwood, Camberwell, Surrey Hills, Wantirna, Wantirna South, Bayswater, Boronia, Mooroolbark, Lilydale, Woori Yallock, Croydon South, Colac – Those areas and some surrounds.

And it is a mixed bag. Some of the prestige areas are down. There have been sales for around the $1mil for Camberwell which a couple of months ago would have been unheard of. You could buy land for $1,250,000 at that time.

It also depends what you are selling, properties that finished and staged and ready to move into are selling quickly. We staged our unit and redid the courtyard to make sure it was perfect.

I'm finding anything that needs work is hanging around. Vendors want top dollar, people don't want to do the work so it sits there.

We have been trying to sell our regional Vic house (need to put the money elsewhere), but it has sat there for about 6 mths. It needs too much work so buyers are put off. I'll be renovating that soon so we can sell it.

Prices seem to be rising in the $500k and under bracket but the house has to be right……New stuff seems to sell quite quickly also.

So there's my take, complete and utter mixed bag. Buyers are fussy, much fussier now than 6 or 12 mths ago and they want the best they can get for their dollar.

Here's my crystal ball going forward for the rest of the year (Just for Vic) not gospel truth! Regional does ok with steady but low growth. Inner ring suburbs with really well done houses will do ok as will 2 bedroom reno'd units. Houses that are not finished and not development sites will stagnate. Outer ring suburbs will do ok depending on location, will be more driven by what is in the area as the Gen Y start crawling out of their bedrooms when mum and dad start saying "you earn enough, just marry her and move out".

I would not be getting in for growth in Melbourne and would only be looking at manufacturing profit, but that is my strategy.

I'd love a few other opinions on this topic and if anyone is watching any other areas

D

I hear you on the moving around, I'm 30 and have lived in 20 or so houses, in 3 different states. I figure I'm on tour.

I am no longer surprised at what people don't see even if it is in plain sight. Some people are really funny about areas. Years ago when a friend was looking to buy I suggested suburb x, next to the more expensive suburb she was looking in. She paid top dollar for a house that backs onto a train line in the more expensive suburb and the other suburb I suggested – she could have sat on a nice house in a quiet street and capital gained $200k in 2 years.

You can't tell em.

D

Hi usual gang

nice to see no one has changed sides

I don't know about interest rates coming down, but it would not surprise me if there were no further rates rises this year.

People are leaving their money under their mattress' and being in retail ….it ain't roses.

From a retail perspective, turnover is down, profit is down. Staff numbers have been cut, with no new staff being employed.

Retail in states like Vic and NSW provides quite a lot of employment. Mining in WA and QLD and SA will prop up those states.

We have seen a number of retailers starting to go into liquidation. Starting with Clive Petes,  Borders/Angus and Robertson, and a number of other clothing retailers all starting to bite the big one of a lack of consumer spending.

Particularly in Melbourne where a lot of people spent a crazy 9 mths buying houses I think retail has been hit hard due to people paying mortgages rather than buying cheap junk.

I don't think retailers are blaming online shopping as much as they are blaming the rate rise that happened right before Christmas and the ongoing fear that is being perpetrated in the media.

I don't think there is a day that goes by where I don't read an article talking about a property crash, interest rate hikes, a new tax, a disaster, etc.

There are a lot of reasons for Joe Blow to be afraid and that is what is motivating people at the moment. Look at the price of gold, fear is driving that. This is going to be an interesting year to be an investor as it seems that the bargains are already starting to hit the market. Fear is driving the market and will continue to do so until people, like a herd of sheep, wake up and think hang on……..everything is fine and has been for awhile now.

The prices are dropping, but do you ever think that it may be unreasonable to ask $1.2 million for a house that is not even able to be used for firewood? Prices are NOT falling in suburbs that are around the $400-$500k mark which shows that people are still ok with that price.

Personally I think while everyone is running scared and Bubblephobia is the hot topic, I'll be going shopping. There'll be plenty of car spaces at the local shopping centre and everything will be on sale. Then I'll hit the real estate agencies, they are already falling all over themselves calling me, emailing me……now I can pick up some property at prices not far off what I paid 4 years ago. Then in a few or more years the cycle will come around again and people will be borrowing and buying and going bonkers because the sun will always shine… right? Well according to the herd mentality at least.

It is all about sentiment and perception. Even the RBA is about market perception and sentiment.

Now….where's my cheque book?

D

One of the easiest ways to get started is in your own suburb.

When you first start looking at property it's hard to pick an area where you can make money and it is often easier to pick a suburb then keep working your way out from that suburb until you get to one that works.

For instance you can start in your suburb and look at renovated and unrenovated properties. How much do renovated properties sell for, how much for unreno'd ones. Are there parts of town you wouldn't buy into why? Is there a premium for properties close to infrastructure is there reasons they are more expensive? Start talking to agents, ask them questions. Do not be afraid of looking like an idiot, it doesn't matter.

So you look at properties in your own suburb fixer uppers sell for $150k and renovated ones sell for $160k. It's pretty obvious you can't make any money by the time you spend money on materials. If the properties sell for $150 unreno'd and then for $220k done up then there may be an opportunity.

Due diligence is just about asking questions and trying to have as much information as you can. Then it is about either using that information to buy a property or about using that information to move on from an area that won't make money.

Don't be afraid to start from scratch around your area, even if the numbers NEVER work near you, you can still practice and learn how to talk to people or what information is important and what is waffle.

Hope this sorta helped, it really is a matter of starting somewhere. I've started in one place and then ended up in a completely different suburb where the numbers did work.

(Above numbers for illustration purposes only)

Good luck

D

Well done Jamie (and Troy).

This is the second time for you isn't it Jamie, congrtats!

D

LMAO!

Love it!!!!

D

http://www.realestate.com.au/property-unit-vic-lilydale-107216289 Singles palace

http://www.realestate.com.au/property-house-vic-woori+yallock-107054044 Bit further out, still commuting distance to CBD (bout an hr)

http://www.realestate.com.au/property-house-vic-boronia-107132147 Short trot to Eastlink (Love Boronia!)

Plenty out there just have to look.

D