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This is my biggest beef with the issue:
the Cornerstone Christian Community Church as one example. It used its tax-free status to run a chain of pizza parlours in direct competition with other fast food businesses.Seventh-Day Adventists own Sanitarium, which turns over $330 million a year but because it’s a religion, they don’t pay tax,” Ms Ferguson said.there is a car park run tax-free by the Catholic Church in the CBD of Melbourne.The government does not know how much money the Church earns from the car park or how much of that money made actually goes to charity because it does not have to tell them.
Smells like smear to me.
F.[cowboy2]As I looked at the freshly painted bowed weatherboard panels I thought they had spent time and money but this is still worth barely more than land value. Made me wonder why ????Odds are they’ve left real jobs to pursue ‘property developing'[blink] full-time having had phenomenal success with a couple of minor renovations over the preceeding years. Incredibly they thought it was their $5000 facelift that caused the capital gain at the peak of the biggest speculative boom in history.
The scary thing is that some people still operating on the assumption that $5k and a bit of elbow grease bringing twenty times that in gains is normal.the Australian property market is not a single entity.True, but you’d be hard pressed to find an area with >1000 residents within 6 hours drive of a capital city that has not seen HPI of 70%+ in the last 7 years.
Cheers, F.[cowboy2]Padmaa:
borrow of your equity to live and one of you can give up your job – NOWDo you honestly believe that to be a good strategy? That ‘equity’ is not money in the bank, it is simply collateral against which money can be borrowed. Is it a good idea to suggest that det & family use DEBT to fund their living expenses at the (likely) halfway point of their lives? Is this not exactly the opposite of a wealth building strategy, given that they would then be making interest payments on unproductive debt?
There is NO right time to invest in propertyErr, how about 1997? Not the right time? 1985? Not the right time? When houses are fairly valued / undervalued according to fundamentals, I would suggest these are the times to buy property.
1990 or 2005 on the other hand – perhaps not so good.NOW is the only time, provided you do your due diligence.No, tomorrow / next month / next year are also options.
Out of curiosity, what do you see as a reasonable interest rate buffer to factor into your DD? What about the probability and magnitude of capital loss?Looks to me fear is holding you back in the name of conservatism.Or could it be foresight? Common sense? Reading Steve’s latest newsletter? That BIS report? Uncertainty over interest rates?
Look Padmaa, I apologise if it seems I’m ‘having a go’, but as you said, det is ‘in quite an enviable position’, and you are suggesting she/he gambles the lot. Not the best advice.
Cheers, F.[cowboy2]BigJobs, that is a high risk investment apparently posing as something else altogether. There is nothing wrong with risk, providing investors are fully informed.
they offer 9% for 12 months fixed.No, that is not what they are offering at all. That is the current return for people who are/have been invested in the 12 month option.
If you were to currently invest in this option there is no guarantee that your return will be 9%, in fact it could quite possibly be a negative return! I wouldn’t touch anything relying 47% on the success of private residential developments at this point in time… and I’d have to question why those developers are prepared to borrow money at 11%![confused2]
Cheers, F.[cowboy2]I would say with your financial situation that now is the time to position yourself in the market. As long as you buy well and below the asking price of the vendorI agree. 35-40% below in most cases![biggrin]
Foundation, we might join you on the sideline for a bit. Sounds a bit more relaxing anyway.Sure it’s relaxing, but not boring! There are plenty of ways to speculatively invest smaller amounts of money – you don’t have to go the whole ($650k[blink]) hog! Precious metals, art, collectables, call options… done well , any of these could have provided good growth since the peak of the property boom with much lower capital requirements than a house.
Cheers, F.[cowboy2]Hi Det,
I’d think you have little to lose by waiting and watching. Speculating on capital gains today is for fools (IMO). If it’s CF+ you’re after, make sure you factor in a couple of extra percentage points for interest rate rises. Whilst some will buy a property yielding 7% (after subtracting a 20% deposit!) and try to pass it off as a safe positively geared investment, I wouldn’t touch anything yielding less than 12% (note – this leaves me sitting on the sidelines for now).
Cheers, F.[cowboy2]the rolling statistic quoted is just a ratio of new listings coming in the door and sales going out the door. The turnover would be almost 100% of the stock as time progressed, with some months sales figures being higher than previous months listing figures etc…eg sales for Jan and Feb might be treble what the listings are for June and July.That’s what I would have thought – the statistic over the long term should be close to 100%, but the ten year average is just 55%! Where did the other 45% of listings go?
The Reiwa website offers no clues.
Redwing, can you explain the stats?
Ps – The Reiwa website says that Perth house prices increased by 8.4% last year, and if you subtract the increased cost of building due to demand, land prices must have increased less than that again – not quite 55%?
Cheers, F.[cowboy2]Perhaps I am misunderstanding the ‘sales to listings’ statistic, but doesn’t
The ten year average sales to new listings ratio in Perth is 55%.imply that 45% of houses listed for sale in the last decade have either been withdrawn from sale or are still listed? Or by ‘average’ do they mean median?
Can anyone explain this to me?(please speak slowly![blush2])
Cheers, F.[cowboy2]glad now that we haven’t sold upWell I think you’ve answered your own question!
Cheers, F.[cowboy2]the bloody thing is still under warranty for another 18 months….so why would we waste money getting it serviced when we can get it fixed for free.So what’s your problem with the condition on the lease then?
Is this allowed???A landlord can add pretty much any condition they want to the contract but you don’t have to put your name to it. If you don’t like it, ask for it to be removed. If your landlord refuses, and you are not happy to go ahead with the lease, don’t. Easy.
Cheers, F.[cowboy2]inflation was way more than now.…and the higher inflation justified rapidly increasing house prices. That is why this boom is different to the others (oh, and the ease of credit, the breadth & depth of the ‘property investment as a path to riches’ mentality, the unprecedented levels of household indebtedness etc). House price inflation outstripped inflation year after year, and by big margins (with the exception of 2004 in some areas). This situation must be corrected, either by falling house prices or by high inflation and corresponding high interest rates. In other words, there must be a considerable fall in house prices in real terms.
I agree that investors who are positioned wisely to withstand the difficult years will most likely end up winners at some point in the future. However a fall in real values is not an ideal outlook for new investors or further investment, nor does the inflation scenario bode well for those relying on rent to pay their IP mortgage(s). Despite the debt-eroding benefits of inflation, the best investments will still be those that increase in real value.
In my (not so?) humble opinion, the best time to invest in houses will still be after their prices fall.
Cheers, F.[cowboy2]Page 21 of this PDF compares inflation during this boom to that of 1989.
Here is the accompanying article.I would now like to take you through a number of charts that compare economic developments in the 23 quarters up to September, 2004, with the corresponding period in the lead-up to the recession of 1990-91. The shaded region in the first two charts covers the period from the first to the last of the several quarters in which Australian production fell. I invite you to notice the similarities between the growth paths of the economy in the two periods. The comparisons suggest that all of the main variables that were worrying the macro-economic policy practitioners in the late 1980s, and which were said at the time to have led to the extreme tightening of monetary policy, reveal similar or larger imbalances at present.I’m not sure we had a plan for the property when it became an IP. It sort of just happened by default because we couldn’t sell it. It is in Melb in a good area.Houses in good areas will always sell. If yours didn’t it was because your asking price was higher than the buyers were prepared to pay.
Everytime we have a valuation on the house it has dropped by about $40k!!Well, you can discount some of that due to the original overvaluation (see above). Yes, houses are selling for less now than they did a couple of years ago across most suburbs of Melbourne.
Did you get a valuation done in 2000? My prediction is that it won’t drop much further in value than that.
Who is doing the ‘valuations’? Is it your property manager / real estate agent doing a free market appraisal or an actual valuer? If the former, have a think about some of the reasons an REA might overquote the value of a house, then ‘condition’ the seller to accept a lower sale price through a series of falling valuations…
Cheers, F.[cowboy2]…and with another rate rise this month almost a certainty, those ‘motivated sellers’ will soon notice the only houses selling are the ones that have significantly lower prices…
If you get serious, ring LJ Hooker and ask to speak to XXX XXX. She’s my PM, and as someone with a reasonably large portfolioYes, a Real Estate Agent with a number of investment properties in the area… That would be the best place to get unbias advice.
I agree with Greg.[blink]
F.[cowboy2]According to todays AFR – there is around 15 billion dollars worth of building ‘in the pipeline’, however, new building applications / approvals have declined rapidly in the last 6 months. Once that 15b is complete, there will be an abundance of builders looking for work and less demand on materials. In other words, building will be significantly cheaper.
On the other hand, I’m nearing completion of a building almost identical to one two doors down which sold 2 weeks ago for exactly twice what it’s cost me to buy land and build.
So in answer to your question – now is an expensive time to build, but it is also an expensive time to buy an existing house. Do your sums, be conservative, base your decision on the facts.
Cheers, F.[cowboy2]Twice as many overpriced properties to choose from I guess![biggrin]
I’d try a real estate agent.[blink]
…which is why I shouldn’t have bothered![wacko]
Folks don’t want to know why something has happened. It has happened before, therefore it shall continue to happen… ad infinitum. Farewell reason.
I suppose that prop bought for $22,000 and sold for nearly $250,000 4 years later is proof houses double in price every twelve months. Oh hooray.
Good luck with your investing Kerwyn.
