Forum Replies Created
- Freckle wrote:All things being equal the 2br house you bought 10 years ago will still only buy you a comparable 2 br house today if you sold up and moved. Higher inflation generally means higher interest rates so you loose from that angle too.
Hence the term 'investment property'. People who buy such a house already have their own home (or rent with the intention of continuing to rent while investing) and are not looking to sell it and buy ANOTHER house in 10 years time to replace it. They are simply going to sell the investment property and use the profit for whatever they see fit, while continuing to live in their own home or rent for the forseeable future.
The other side of the argument also is that an investment property, researched well, has the potential to create above-average gains compared to a bunch of other property. Location counts. All areas have not experienced the same degree of growth within the last decade.
Well, in VIC, I'm seeing over $800 pa land tax on a total land value holdings worth $550K, which is a fair whack. Like stamp duty, land tax varies from state to state I suspect, as Luke also commented earlier.
ummester wrote:It will be alive and kicking until the ineviatable return to long term price vs wage ratios are again met:)Don't count on it!
Then again, either you or I could be right. Take your pick, 50-50 chance!
Wonderful. I'm already in for the ride!
Milliet wrote:I am thinking somewhere in Geelong?At that price bracket, look into areas like Norlane and Corio. If you can stretch a little more, look at North Geelong. I'm a big fan of the beachside northern suburbs of Geelong and think there's much potential here. Only time will tell, but Geelong is becoming a 'mini-Melbourne'. There's a fantastic lifestyle there with great infrastructure, and the suburbs within ready access of the CBD are still well priced. There's been upwards price movement in Norlane over the past year or so that I've been following it. No surprise I guess. At $190-200K for a 3 bedder on a 700sqm block, the deals won't last forever. Bear in mind that if Avalon does go international, it'd mean good things for Geelong's northern suburbs.
Of course there was also previously talk of a Disneyland in Avalon, but that's a separate thing altogether and I'd assume that is not likely to occur at this time, at least not till economic conditions improve and Australia starts to really pull in tourists.
Milliet wrote:Also I have been advised to get an interest only mortgage and tip and extra money into my PPOR. Is this a good strategy? Any advice is greatly apprecited? ThanksYes this is a good idea to aid in paying down non deductible debt. Even better is if your PPOR loan has a 100% offset account that also acts as a transaction account with the features of a cheque book and credit card. This way, if your PPOR ever becomes an investment, you can remove your money from the offset account (hence increasing deductible debt on your previous PPOR, which is now an investment property) and put it towards your next PPOR.
simple wrote:Nice summary going back a long time! Would be good to see 'affordability' plotted against wage/price ration….
The way the chart stands, it represents one-sided view, expensive house may still be affordable IF say interest rates are low. So we need to also see how much % of the wage take up repayments, not just wage/price ratio….It'd be interesting to see what the population growth was like in absolute terms (ie. from 2 million to 3 million) rather than relative terms (ie. a percentage figure like is stated in the charts).
For example, a 30% population growth from 200,000 people to 260,000 (an increase of only 60,000) is not as great as a 10% population growth from 2 million people to 2.2 million (an increase of 200,000) within the same number of years.
This might be stating the obvious and if so I apologise. I personally know of friends and even relatives who are generally not very careful with what they read and sign, and going through things with a fine-toothed comb is not everyone's forte. If it is too much for you to read ALL the documents before you sign them, then look for a personal friend or relative who you consider to have an eye for detail and see if they can review the article for you.
One of my dad's friends does this. In his old age he is just not as capable as he used to be, and my dad is more than happy to help. In return his friend calls him out for lunch. That's what friends are for.
In this world, the people who are too trusting nearly always get eaten alive by the crooks. The key thing is to never sign (and never spend money on) anything you do not FULLY understand. And for any such official documents, get a photocopy of the document duly signed by yourself, the landlord and witnesses on both sides for your own records and ensure it is exactly the same as the one you originally read. Also, anything major should be lodged or received in writing, even by registered post if necessary.
I find it very disturbing for the agent's email to confirm a 12 month lease and the actual lease that was signed was actually for 6 months.
casanovawa wrote:Similarly i know a female friend who had bought a 3bed/2bath unit… She now has two other people staying with her which is helping her bottom line considerably…Just advise your friend that there could be tax implications come time to sell. But I suppose if she was weighing it up between being able to live under her own roof versus not at all, then renting out part of the house to others is pretty much a given.
Doesn't have to be fancy, but near the beach and amenity with unobstructed views to the ocean, with the sunset visible from the deck. This one:
http://www.realestate.com.au/property-house-vic-brighton-109638341
'Nuff said!
Paullie wrote:dachopper wrote:That is my point…. It looks as if guys bought too high, the market is still too high, but the sellers won't sell at market price, but they can afford not to sell….. I can't see how that, would give growth. I just payed 330 for a 1 bed unit that gives 450 a week rent in NSW. 450-500 a week for a house in perth, i would guess 500+ cost price, which is a bad ratio in my books If you take a look at a suburb, like Karawara, which is nothing special….. house prices have gone up 340 % within 10 years. Can you tell me anyone who you know who has had wages go up 340% in 10 years?me, 6x actually. Theres plenty of people who have had good wages increases, I know plenty.
This depends a bit on the profession or the industry for which an individual works. Mine has a hair short of doubled (from a low base) after 3.5 years but am struggling to get any form of raise currently, after working at this new place for over a year. And certainly don't see my salary going up 6X after working for 10 years. But the point here I guess is that there are indeed a lot of well-to-do and well-paid individuals out there who will no doubt seek out the most desirable of housing. This naturally exerts an effect on the price of housing in the 'best spots' in each of our capital cities.
Off the top of my head, small issues with a long settlement include:
1. May be necessary to get a legal document written up to gain early access. This comes with a fee of course.
2. If you are fixing your interest rate for the loan and do not pay a rate lock fee, the interest rate MAY increase and you'll be left paying a higher fixed rate at the point of settlement. This has happened once to me. Likewise, fixed rates CAN fall during this same period and you will be better off at settlement. The point is, are you a betting man?bumskins wrote:fWord wrote:simple wrote:Let's see if trend continue: http://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/6416.0Main+Features1Dec%202011?OpenDocument-6.1% for Melbourne from Dec 2010 – Dec 2011. That's not so bad. I lost more money in shares!
Depends really. There is a lot leverage in property. So if you looked at say $100,000 invested in Property Vs Shares. It might look like: Property (80% LVR) $500K – 6% = $470K, $30K loss. Loss on $100K Principal = 30% Since the person investing in shares probably had little to no leverage, their portfolio would have to have lost 30% to have the same effect. Which on average it probably did, so they are sitting about even.
Likewise, people can leverage in shares. What's the 'usual' without incuring the equivalent of lender's mortgage insurance? 40% 'LVR'? 50%? We need to base calculations on these things also.
simple wrote:Let's see if trend continue: http://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/6416.0Main+Features1Dec%202011?OpenDocument-6.1% for Melbourne from Dec 2010 – Dec 2011. That's not so bad. I lost more money in shares!
Freckle wrote:These forums have no balance because many think you have to be the super positive ra ra type to get along here.Well there IS a balance. The moderator has allowed virtually all rational posts to still exist at these forums, whether they say the property market is stuffed and gonna crash or if it's gonna boom.
Freckle wrote:Yin Yang, black white, up down, negative positive, good bad. These things do not work without their opposites.So you DO agree that there is such a thing as bad news and there is good news. It ain't 'just news'. Anyway, it isn't wrong to post good or bad news. But when such news seems ONLY posted to create either hype or panic…that's just incorrect.
Freckle wrote:Property always goes up especially the one's THEY buy.Oh I don't know. Maybe they're smart. Or maybe they're just LUCKY! Look, in life, regardless of what the endeavour is, people are afraid to admit failure but they are more than happy to sensationalise their success. You and I would do the same. It isn't unique to the world of property investing…or gambling. Most people have had this drummed into their little craniums since day one: you shall not fail! There are also punishments for failure and reward for success, which compounds the issue.
Anyway, that's too philosophical. Over to you, my friend.
Freckle wrote:What would be more interesting here though would be things like how to manage a portfolio in a down turn, what strategies are most likely to succeed going forward, what will the PI market look like over the next 10 years and so on.Exactly. THIS I agree with you. Posting something of this nature will surely be more productive.
Instead people focus on JUST posting bad news.
There was an article in The Age yesterday which covered precisely some of these points. Of course, even material in the media has to be interpreted with caution. Media is a reflection of public sentiment, which is itself a product of 95% of the population, not the 5% who think differently and hence get different results.
Freckle wrote:well it just sucks if your in Qld or Vic.LOL I'm soooo afraid!
Go on, post up MORE bad news!
No offense to anybody here. But if you choose to buy one of the squillions of new, off-the-plan apartments within the CBD area, then good luck to you anyway. People might buy these apartments for the 'stamp duty savings' and the 'guaranteed rental return', plus the impression that they should be easy to rent. However they do this without considering the sheer number that are being built, and hence the competition that they are likely to face. Furthermore, in buying these little shoeboxes, they are not considering that young couples looking for more space and privacy, and eventually looking to start a family, will look for a place with some sort of backyard like a house in the 'burbs.
Those who live in inner-city apartments are probably also more transient, leading to a higher turnover of tenants and hence increased costs in terms of advertising and leasing fees. I personally bought in one of Melbourne's outer suburbs, vacancy rate sitting at 1.6% at the moment, scores better than what we're seeing in some parts of Melbourne. Key thing is to buy to meet demand, not hope that demand will meet your purchase.
The Chinese would see Australia (in general) as being high on the livability index compared to their homeland. Furthermore, they may also see the potential here because they have witnessed first-hand, the nature of property prices in their homeland. This attracts them to invest. And the ones that DO invest here have heck of a lot of money. I get this impression that there is a great disparity between the haves and have-nots in China. A lot of them are struggling to feed their family of 10 children, but there's the bunch of mega-rich who are quietly (or sometimes, not-so-quietly) investing in other countries.
I've generally noted that Dr Wilson has the tendency to put a very positive spin on his articles. Reading these, and the other awfully bearish articles, we've found our middle ground. Frankly, I don't see how we can reliably extrapolate 'market trend' based on the reading of any of these articles. The only thing these articles indicate is the market sentiment.
LAWL
'Paid property spruiker'? Look at me, I do it for free.
This is just hilarious! In life, people with a brain and a backbone can and will do the thinking by themselves. People hoping for a get-rich-quick scheme are taking a short cut to getting poor. There's no easy way to make money. It's just plain and simple. If it were *that* easy to become mega rich, there would be more of us around in that category.
At least I'm prepared to admit I ain't smart enough to be an entrepeneur, hence I got to slog hard and make ends meet, and do it the old school way. But at least I don't sit around and whinge about the people who *are* rich. That's none of my business. I've got bigger fish to fry in my life than to worry about who's richer than me, or who's sprouting lies.
Speaking of fish, I'm going fishing. No time to waste here!
A fall in prices of houses by up to 60% and a fall in land prices of 80-90%? Boy, I'd like to see that.
