Scott No Mates wrote:

There's hope for Frankston  & Umina yet fword.

Haha, that's right! Frankston has potential. A workmate used to stay in Bentleigh East. He then bought a place in Frankston, uprooted his whole family there and sold the Bentleigh property. He believes Frankston has plenty of room to move upwards. The guy must either be very sure of his research or completely deluded to actually uproot from an old home near Melbourne CBD and move further away.

I'm not familiar with Umina, but would you be referring to Umina Beach? Some weeks ago my uncle made a broad comment about the almost certain ginormous gains of buying stuff that's near the water. That's an extremely sweeping statement. A newspaper article I remember reading some time ago however, suggested looking for the three Cs when buying property. These might have been 'coast', 'coffee' and 'cake'. That is, buy a place near water and near trendy cafes. But the hidden C is 'cost'. Such property would be pricey indeed.

Well, it may not be as simple as that. The suburb may be inhabited by the 'undesirable' sort today and nobody has a crystal ball. But what if the place polishes up?

Essentially, if you can see that houses in the area are undergoing significant development, with demolition or renovation occurring and very nice, newer-style luxury houses springing up, or quaint period homes in excellent state of repair, then you may be on to something.

On the other hand if all you see are one overgrown lawn after another and with an old bomb or wannabe sports car parked on the said lawns, houses are messy in general etc then it might be a better idea to keep an eye on the area first rather than buy into it immediately.

Not adding to either side of the argument, but for what it's worth, I personally know of a house that sold at auction just this Saturday past. It was reported as having sold for $517K in the Sunday Age results, despite a number of us KNOWING that it really sold for $537K. Anyway, take this info for what it's worth.

Now I'm not an expert in this field, but in my opinion, past sales information is just a guide, if at that. The price of a house that sold even two weeks ago and in the same street as another house that sold today may not necessarily be similar. My Dad always tells me this, and I've heard it elsewhere many times before: Valuation is not a science. It's an art.

The sale price of a house depends on many factors, tangible or otherwise. The neighbour may make a difference to the sale price, for example. Or sometimes it just boils down to simple supply and demand. In an area that a myriad of well-healed folk are trying to buy into, there will always be a one-up-manship at auctions and houses might presumably sell for 'more than its worth'. But is this really the case?

At the end of the day, things usually sell for what they're worth. The reason for this being that there will always be someone out there who is willing to pay a particular price to secure a property, even if it means overpaying in the short term. People should buy property based on what it's worth to them, not on the sale price of a house in the same area and of similar size that may have sold weeks or months ago. Just my opinion anyway.

Oh, woe is me. All of the time I think that without my parents, I would never be able to survive. On the occasions that I do ponder what would have happened if I were living alone and paying rent, I shudder in fear knowing that the little that I currently have shouldn't even exist.

I wouldn't be surprised if this is the same for many of the Gen Y/ Gen Z folk. Frequently we get told to get off our arses and work. Well, we do. We have modern conveniences, but we also have modern problems.

A couple of 'general' things that might have been covered already:

1. Before buying anything, weigh it up by considering if it's a 'need' or a 'want'. If it's a 'need', then stop fretting over it, save your time, shop around for the best price and buy it. If it's a 'want', let it go. The only caveat here is when you 'want' something that would secure your health, wealth and happiness in the future, because in that case it really is more of a 'need' rather than a 'want'. I mean, don't you actually 'need' health, wealth and happiness when you're older? Nobody 'needs' to be miserable when they're in their golden years!

2. Consider your long-term goals, and then do anything possible (so long as morally correct) to reach that goal. Likewise, if anything is holding you back from reaching those goals, ditch it and look for something more productive. It's easy to get comfortable with things in life. For example, it's easier to stick to the same job that you've had for years but pays pittance rather than moving to a job that pays more but has a great unknown hidden in it. But if that pay rise is going to get you closer to your goal, then do it! There's hardly ever a win-win situation in life, but decisions always revolve around weighing up your options and deciding which has a greater overall advantage for your happiness.

These two general things might suggest a person be cold and harsh and to sell their soul, not to follow religion (if you have one) and not to help the poor. On the contrary, I'm suggesting that a person who is in better control of their life is much better poised to help and inspire others to do greater things, because they will look to you as a person who has done the hard yards and succeeded, and now you're helping others to do the same. It simply means doing your best to get what you want, and to get it quicker. Look at it this way, none of us are getting any younger.

Oh, and something else:

If you don't have enough cash stacked up to take a big loan for a house, or just not quite ready yet, read more into the stock market, study individual financial reports from the companies you're interested and buy wisely. Money made in the share market is a nice springboard into real estate. My Dad personally still prefers shares, but I'm going to play a bit of a game with him and go real estate instead!

Property in Australia is OVERVALUED?! Have you seen the RE prices in Singapore? "Average incomes" are lower over there, BTW, just seeing how my same-age relatives are struggling even to earn as much as I do, even though they've been at it for a few years longer than I have. And for the record, my remuneration is actually BELOW the national "average" in Australia.

Property is expensive. That much I agree. However, so is that Audi RS5 that I'm hoping to own in about 20 years time. If the property crash is coming, I say, 'Bring it on'. It isn't possible to 'read' the stock market, let alone the property market. I agree with Thomson. If anybody predicts correctly, they do so only by chance. Of course, we can expect slowdowns and even downwards price trends. But a 'bursting of a bubble' with price drops of more than even 15% on average doesn't sound likely to me.

Although this won't be the most qualified of opinions, just thought to say a few words: I'm a FHB who has been with Homeside for 8 months or so to date. Can't say I've had any experience with the customer service side of things since I don't even call them. The IO loan with 100% offset account seems to have a competitive rate. They made an error with the FHB grant however.

When the broker lodged my application with them they applied for the FHB way too early and as such this sum of money had to be returned to the govt and it wasn't ready for me at settlement date. Thankfully I had the savings to cover the difference, but when they subsequently reissued me the cheque for the FHB grant they charged me $8 for the cheque. And of course on top of that I lost out on 'interest' on that $16K for 2-3 days. It's a small issue but it shows how stupid a mistake it was.

What if I didn't have the savings to cover the shortfall and couldn't settle?

For me as such, this loan is 'no frills' and a competitive rate. That's about it. So long as I can draw and deposit my money without issues, that's about all I can hope for. However with a second property possibly on the horizon I will have to see how flexible they are. I suspect my mortgage broker will end up doing all of this legwork again and I might not have to worry about much.

At first glance I was tempted to say that the biggest problem with the property is the word 'regional'. If it's a substantial distance from the city and still a ghost town, then you won't see big capital gains till neighbouring suburbs start to pick up, or if there's suddenly new development in the area that creates an influx of people. I'd be thinking that if you bought true beachfront property within the metropolitan boundary, you'd be cruising. Having said that, my bet is that if you're prepared to hold out for 10-15 years, population growth will be a big aid and could push the urban envelope. That will cause your area to pick up. Not to forget also the sea-change phenomenon…people and water attract each other. Same with people and trees…to a certain extent anyway.

If I were you, it wouldn't be a worry about tsunamis and the like. In the event of a major natural disaster, I've always thought about it this way: if it's time for you to go, it's time. No point fearing it. Having said that, I wouldn't tempt fate and buy seafront property in low lying areas or reclaimed swampland, even if I don't really believe in the concept of global warming.

Really, there's a limit to the amount of coast that's available. Virtually all seaside property that has access to lovely beaches with low pollution, beautiful and peaceful outlooks, piers for fishing, beach houses, and also cafes and shops etc, basically anywhere that appears particularly picturesque, would be expected to pick up in due time. But of course the further you are from a 'desirable' area, the lesser the chances of a boom in the next decade.

Maybe it's because retail, and other businesses that would actually use commercial property is the pits at the moment. That medical building at the start of the street where my parents live has been vacant for longer than I remember. And considering my bad memory, that'll still have to be at least a year.

It would hardly be surprising to see a slowdown or even a slight drop in prices in the near future (ie. the next 6 months). Traditionally (as far as I've read), property makes spurts of growth with lull periods in between where prices can remain flat or even slightly fall over a period of years. The trick it appears, is timing the property market and buying during these lull periods where property is considered better value.

The additional tricky bit is that this graph apparently differs from suburb to suburb, so some suburbs might already be posting plateau in pricing or even falls but other suburbs may still be on their upswing. Based at least on this graph I'm happy to say that, at least for my suburb, I bought at the right time just as it was getting into the upswing (although this was purely by chance, not because I'm a technical chartist), and before that prices were pretty darn flat. If I get the chance I could photograph that and post it here as an example.

I've seen it written over and over again that property is a long-term investment. Sure, if you buy at the absolute right time you'll make a killing, but for the most part you're letting time do your bidding, and letting time give you a chance to reno a place and improve it before revaluation.

Good news for those holding rental properties is that, the relatively higher interest rates compared to that 6 months ago and higher prices will keep vacancies low as people struggle to find a PPOR and have to continue renting, and those who even thought of upgrading will hang on to their current houses for dear life, so you stand to gain as a landlord. But I pity those who have yet to own a house. I worry for my brother who has yet to set foot in the market but does need a house to stay ultimately.