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May 29, 2011 - 5:49 am

ummester wrote:

Why? Why is making billions of dollars the be all and end all. There are greater things to invest in than money.

Of course. For one thing, some would say it's better to invest in religion than invest in anything you have in this world. Money doesn't bring happiness on its own. However in my opinion, with money brings choice. It means I can choose to NOT work if I want to. I can do ANY job I want regardless of how much it pays, without worrying how to put food on the table. It means spending more time with family or doing the hobbies I enjoy do, because I need not be tied to work 44 hours a week.

Choice is power. Choice means happiness.

ummester wrote:

How old are you?
What is your family situation?
What is your work situation?
When are you looking to retire?
What do you value most in life?

I'll answer these as well as the ones I posed:

Q: How old are you?
A: Turning 29 this year.

Q: What is your family situation?
A: Single, and enjoying the simplicity of it.

Q:  What is your work situation?
A: Veterinarian, working 44 hours a week (4 full weekdays and 9-1pm on every Sat). Wish I could work less and have leisurely breakfasts instead of the regular 6-10 minute deal. Also, I'd rather be spending time with people whose company I enjoy, not clients, who likewise probably don't enjoy seeing me, and are strictly at my clinic on a business-basis only. The job is fairly stable, but it took 5 years of Uni studying and 4 years of slogging in the workforce to get me to a salary that is only 'national average'. It ain't going to make me financially free. I need to do something more.

Q: When are you looking to retire?
A: The sooner the better, hopefully before I hit 50. Retiring before 40 would be awesome, but not at the rate I'm going, and I'm not counting on a massive inheritance from my parents to 'set me up for life', because honestly, they've done a magnificent job of bringing me up. It is up to me now to make my own success. However, retiring doesn't mean to not work at all. It could be working 2-3 days a week, in a job I enjoy more than my current one. That said, there's no point retiring when I'm say, 70 years old and about to get an aneurysm the year after.

Q: What do you value most in life?
A: Tough to answer. It might be Happiness or Freedom, or it might be Time. Either one would be very empowering. I'd like to live near the sea and to do photography of weddings, landscape, animals…Both photography and the smell and sights of the sea make me feel very much alive. Having Time also means spending more time with people I love, particularly family, and when I'm happier, I can make a better son, a better brother, nephew and friend.

Q: Are you a bear, bull or a 50-50?
A: Depends on the prevailing conditions. Won't consider myself an expert analyst, but I understand the fundamentals when they are there and similarly the effect that sentiment can have regardless of the fundamentals. Sentiment is hence one of the things in investing that has a self-fulfilling effect. People seem to react more to bad news than they do to good news. I've joked about this before, but in the news, the things that sell the best are stories about a disaster of some sort. Personally I think there is money to be made and lost with any venture you make. I was investing in the stock market for nearly 12 years before pooling the funds as a deposit for my first home. I don't see one investment as being better than the other, but the choice simply reflects my personal priorities. I absolutely WANT to have MY own place to live. But to answer the question directly, on Australian property, I'm 60% bull, 40% bear. I love how cheap Australian property is, compared to that in Singapore where I was born and spent most of my life. How lucky is this: I get to control a house on thousands of square feet of land and at a price my buddies in Singapore wouldn't even be able to dream of. The vast majority of my Singaporean friends and relatives (of my age) do not control property at all, and some have no hope of doing it in the near future. Having said that, the AU$ is way high at the moment and consumer sentiment is not good at all. I believe there is plenty of scope for property price growth in Australia in the future, however current conditions are a dampener and hence causing price drops in some areas, or at least constraining price growth. I am waiting for the baby boomer shift, which should create a stir in the property and share market.

Q: How many properties do you control?
A: Two properties. One is a Melbourne outer suburban house with a lovely rustic huge backyard that I plan to move into eventually with the woman of my dreams (if I find one). If not, then I'd be getting a couple of mates to board with me. The other is a beachside period home in North Geelong/ Rippleside. You could call this a 'regional' property. Considering the access of transport to Melbourne CBD and the commute time however, I'd consider it 'outer-suburban'. Eventually, this would be my 'retirement' home. Incidentally, I believe this is a possible area that the retiring baby boomers may move into in the future. Truly magnificent value in this area IMO. I love both my houses and consider them as much a place to live as an investment (if not more). For me, the importance is having a place to live that defines who I am, a place that is part of my identity. Making money from it is a secondary consideration.

Q: If you control properties (whether your own home or an investment property), how many do you own 'outright' (ie. unencumbered)?
A: None. The bank owns most of my house. I am prepared to pay almost ANY price to have a place I can call my own (so long as I keep up the repayments). The certainty of having a specific place to reside is crucial for me.

Q: Amongst the properties that you control, what are the approximate dates of purchase?
A: The outer suburban house was purchased in Aug 2009, and the North Geelong house in Dec 2010.

Q: If you do not control any property now, did you plan on buying/ would have bought at some stage but now cannot, because of current conditions?
A: Not applicable to my situation. When shopping for my first home, I did have difficulty finding something within my budget in the middle suburbs. So I looked to the outer, less trendy suburbs. Voila! Home ownership suddenly became easier.

Very revealing, isn't it?

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May 29, 2011 - 4:03 am

fWord wrote:

– Last question: do you NOT control any property now and wish you did?

Actually I should refine/ redefine that question:

– if you do not control any property now, did you plan on buying/ would have bought at some stage but now cannot, because of current conditions?

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May 29, 2011 - 12:58 am

And so the debate rages on. You know, there was an irritating voice that started to play in my head. It sang annoyingly,

'Would you like to take a survey??!!'

A survey that reveals the following:

– Are you a bear, bull or a 50-50?
– How many properties do you control?
– If you control properties (whether your own home or an investment property), how many do you own 'outright' (ie. unencumbered)?
– Amongst the properties that you control, what are the approximate dates of purchase?
– Last question: do you NOT control any property now and wish you did?

Not an exhaustive list of questions, but a good start. If we ever started something like this, it would be very revealing. The opinions of people on threads such as this are usually very much divided. That's because these opinions stem from a thought process based on their current situation. I suspect that, in the end, the property market will do whatever it wants, despite what any individual might say. 'Getting it right' is nothing to brag about, whichever way things turn out to be. That's because if a person 'gets it right', he/ she does so by chance.

People who are reliably able to pick a trend shouldn't be wasting their time here, or on television talk shows. They'd be out there spending all their time making billions of dollars.

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May 25, 2011 - 10:51 am

emptyvessel wrote:

Folks compare the GFC to the Great Depression. Are you kidding me? Us GFC kiddies have no idea what difficult is!

Seconded. No offense to those who suffered the effects of the GFC, as I'm sure many have, however the GFC had far less of an effect that I expected. I expected to lose my job, and for my parents to lose my inheritance through failing investments (just kidding, but you get the picture). At the beginning of 2009 I remember talking with a bunch of family friends about where the property and share market was headed. All of us had expected interest rates to drop further and property and share prices to fall through the floor. Guess what? We were all wrong.

Those of us who wanted to buy a family home eventually did get one, but a number of months of opportunity passed by our very eyes, and we were so hopelessly uneducated as to not even have seen it. For that, I am particularly regretful. The sharemarket too, seemingly rebounded (without good reason) overnight and suddenly the whole storm had apparently blown over. That made me feel stupid as well, to have missed the boat. My guess is, the 'GFC' was blown completely out of proportion and people made a mountain out of a mole hill (and the media made a killing out of a story while people were fearfully making water in their pants, sitting in their little hidey-holes and preparing for the apocalypse), or the real GFC has yet to hit. The past 'GFC' turned out looking more like a 'blip' then a full-on collapse. Believe me, I was hoping for the latter so that I could go in and mop up the bargains.

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May 15, 2011 - 11:13 am

I understand your concerns with owning a house as opposed to a strata-titled property. If you prefer a more hands-off approach it is fine to let the body corporate manage these issues instead of doing it yourself. This however assumes the following:

1. The body corporate is actually capable at managing all matters pertaining with the property. They keep everybody's interests at heart by ensuring the property is in the best condition at any time and hold sufficient amount of money in the sinking fund.

2. The others who are living in your block are happy to contribute as necessary.

Now, if you land up with a body corporate that is incapable, there are expensive repairs coming up and there are insufficient funds in the sinking fund (necessitating unexpected contributions from yourself shortly after purchase), and/ or inconsiderate, uncooperative neighbours who aren't willing to contribute, those are all major issues. Just be careful to check everything before you buy. This means getting the necessary inspections done, going through the meeting minutes, checking the sinking fund etc. Better to get a qualified solicitor to do this.

I might have read somewhere of an unfortunate instance where one person living in a small block of apartments had a leaking roof but could not get it repaired because nobody else in the block wanted to contribute to the costs. The body corporate was probably useless as well. Turns out that one landlord owned the rest of the apartments in the block…probably hoping this last owner would sell out and allow the landlord to own the entire block of apartments (perhaps for the sake of redevelopment).

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May 15, 2011 - 7:45 am

Well, it depends…and location is important. Assuming an unlimited budget, it'd be easy to say that a house in a leafy inner-city bayside suburb is bullet-proof, but everybody knows that. Cost-wise, the price of an inner-city apartment could probably buy you a 3/4 bedroom house on a quarter-acre block in the outer suburbs. But the big difference is location: one is nearer to where 'all the action' is, whereas the amenity and activity levels in an outer suburb can be very much less.

I'm also a big fan of owning actual land. There's nothing like stepping into your backyard on a summer evening after work or during your weekends and feeling like you're in your very own castle. As was mentioned above, there is a lot more that you can do to your own house than you would for an apartment or unit. What you choose to do is up to you. It is not necessary to speak to others in your block and discuss whether the driveway should be repaved or whether gardening needs to be arranged. However it also means that when bees invade your roof or a tree drops a mega-big branch in your backyard, the buck stops with you and you need to get everything arranged yourself.

Without a doubt, owning a house with a big backyard is still very important for some but from what I've read, we also need to consider demographic changes when buying an investment property. Something that appeals to you may not be so fine for a tenant. For example, tenants would prefer not doing any gardening and would prefer something with more security, the ability to 'lock and leave', as it were. And this would be very similar for aged tenants who are downsizing and renting something smaller, taking the time to travel the world and enjoy themselves.

The argument of house vs unit/ apartment is hence not quite so simplistic. Perhaps a good balance would be to buy a decent house with OSP (preferably with double garage) with its own separate title and driveway (that would appeal to the demographics of the tenants in that particular area) on a low-maintenance block of land (eg. subdivided from a bigger block). This way you get some land, there is no need to worry about a body corporate or associated fees, your tenants get a backyard that they can enjoy but not so large that they'd spend weekends maintaining it (or leaving it in disarray for you to fix up at the end of tenancy).

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May 15, 2011 - 6:15 am

rachael dorothy wrote:

They are being encouraged to buy an investment property through negative gearing, and use the tax benefits to pay off our family home faster. And after 7-10 years, when the value of the investment property increased, they would then use that equity to purchase a third property.

I'm not an expert on this, but based on my understanding of things, here is a thought on this: a negatively-geared property loses money on a day-to-day basis, regardless of the tax benefits. For example, if your parents were in the 30% marginal rate tax bracket and own a property whose expenses outweigh its income to create an overall loss, they will get a tax benefit (refund) of 31.5% (including the 1.5% Medicare levy) of that loss. What this means is that your parents would still need to pay for 69.5% of that loss from their own pockets.

If the company is proposing using 'tax benefits' to pay for the family home in this manner, then it sounds like a self-defeating proposition. Why not buy a positive income or even a positively-geared property so that you're making a net income from the investment property from the get-go, and then use that profit to pay off the family home? The one big reason why I would buy a negatively-geared property is if you forsee that capital growth is likely to far outweigh the loss you're making on a day-to-day basis, and can eventually sell that house for a substantial profit and pay off the family home in one lump sum. The kind of tax benefits available in this case can also vary according to whose name the property is in, particularly if each of your parents are on very different levels of income and hence in different tax brackets.

Someone please correct me if I'm wrong here, but in short, I think the company should be recommending your parents an investment property that actually makes money if you're planning to pay off your family home in the immediate future. Suggesting that you use the equity in an investment property to purchase a third one in 7-10 years time is fair enough on its own, but consider this: in order to 'use' this equity (or the increased value) in the property, you need to take an additional loan out on that property. So you need to be able to have the income to service that additional loan. It is not as straight forward as drawing out say, an increased value of $40K for free and putting that towards a deposit for the third house.

rachael dorothy wrote:

Also, with all this talk about overinflated house prices and theories of the Australian economy following that of the US and other western countries, is now a bad time to get into the property market?

Well, your guess is as good as anybody else's when it comes to this. There are people on both sides of the argument at the moment and with plenty more in between. The best advice I can give to you and your parents is to read up as much as you can, decide how big and real the risks are, how risk adverse you would be, and then make a plan from there. I'm not going to make predictions here because I'd be very guilty if someone made a mistake based on the said predictions. At any rate, nobody in the right mind should trust one or two 'predictions' they read in a book, let alone an internet forum.

Likewise there are plenty of friends around me who are considering to buy their first home and ask me questions about the process of things. I always tell them what I've learnt in my short life but at the same time warn that there are thoughts that the property market is going to crash and burn. I then leave it up to them to decide whether they want to get involved or not.

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May 12, 2011 - 8:04 am

JLtarra wrote:

Will they extend or not??

John

Good day John. As to whether they will extend it or not is anybody's guess. The FHOG was widely seen as being ineffective in helping FHB get on the property ladder, and if the officials are listening, it's likely they will pull the plug on it. Instead, they are putting stamp duty cuts in place. In my opinion this would have a similar effect to the FHOG, except to a smaller degree since the amount subsidised is going to be smaller.

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May 12, 2011 - 5:13 am

SmartGenY wrote:

Check out MattNZ, Unmester and to a lesser extent my on posts for reasons on not to buy. Check out ALF1 and basically the rest of the forum for reasons to buy. Have fun speculating

Well, that pretty much sums it up.

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May 8, 2011 - 10:18 am

ummester wrote:

Well, I've said it many times on this forum and others, a crash is really only going to hurt those that bit of more than they can chew. Either by equity withdrawal for lifestyle spending, of IPs that are too highly leveraged. It won't hurt those that have borrowed or invested sensibly.

Haha, call it the culling of the weak, if you'd like.

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May 8, 2011 - 4:46 am

mattnz wrote:

I was going back through some of my older posts and found this gem… the average mortgage in NSW is $414k, Source: last line of this Jan 2010 article http://www.smh.com.au/business/westpac-rate-rise-pushes-customers-to-switch-banks-20100105-lsbd.html while the latest median household income is I could find was only $1036 in NSW (2006 census), so lets assume it may be $55k per annum now to allow for wage growth. Source: http://www.leaseinfo.com.au/docs/research/2006%20National%20Census.pdf Before people claim that primarily those on high incomes own investment properties, I am also aware that 75% of those that make negative gearing tax claims in Australia have an income under $80k (this came from the ATO, but can't find it at the moment). It is clear from these figures that loans must have been made in line with the Journalist's findings of 7.5 times income mortgage lending.

OK. Let's study these figures. Firstly, we should compare 'median' mortgage with 'median' household income, not 'average' mortgage versus 'median' income. 'Average' and 'median' are not the same things.

Secondly, taking these figures on board, let's examine to see if it's feasible. That is, is it possible for a single person on $55K annual salary to own a negatively-geared property without living on cardboard and grass for the life of the mortgage. Correct me if any of the calculations below are incorrect, after all, I'm not an accountant and hate working with numbers. These calculations also do make some assumptions of course.

An individual on a salary of $55,000 pa would have a marginal tax rate of 30%. He/ she would be taxed $4,650 plus 30c to the $1 over $37,000. This works out to tax of $10,050 pa. That leaves $44,950 after tax.

Let's say this individual takes an unreasonably high loan of $400,000 to buy a property, considering today's calculations at NAB would only allow for a loan of $311,600 at this salary, at a rate of 7.29% (which I know you can get today at Homeside and fix it for 3 years, and this rate being neither very expensive nor very cheap). The sale price of the property is $500,000 (for 80% LVR) and generates $370 a week in rent for a woeful yield of 3.85% (easily achievable, just look around at real estate websites at properties for rent).

Discounting for a moment, rates, rental agent's fees, repairs etc for the sake of simplicity:

Loan repayments on property at 7.29% interest rate pa (interest only): $29,160
Rent generated by property pa: $19,240
Shortfall: $9,920

A heavily negatively-geared property costing the owner just over $190 a week, before tax breaks.

So, subtract the $9,920 shortfall from $44,950 after tax salary and that leaves the owner with $35,030 to survive on. That's roughly $3,000 a month for living expenses for a single person, in this example. And this example assumes no tax breaks from negative gearing. Under today's tax conditions, this owner could expect over $3,100 to fall back into his/ her lap after getting a tax refund on this property. Consider also that if this owner had a 100% offset account associated with the mortgage, he/ she would be making interest repayments smaller than that above, because any money in the offset account serves to effectively reduce the principle amount and hence reduce interest.

Is it feasible then, for such an individual to own a negatively geared property? I think so. A person willing to buy a property and rent it out, and rent themselves can definitely make it work. If however, the said person prefers to pay off a massive mortgage on their own home PLUS own an investment property, things become very tight and only marginally 'do-able'. But that's a personal choice. I'd rather rent and have an investment property, rather than live in my own home and NOT have an investment property, although the bottom-line is the same: you get to control one property.

A person doesn't need to be rich or have six-figure salary to have an investment property. The point that 75% of negative gearing landlords have annual salary of less than $80K is moot. More important is sitting down and working out the figures to see if it CAN be done. And this example shows that a person on $55K can do it.

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May 8, 2011 - 12:44 am

ummester wrote:

fword,

they type of employment (as in wether or not the bank considers the income secure) matters also. One of the reasons ACT house prices grew so much in recent time is that the banks viewed PS wages as a safe place to load up debt.

Just because you are a sensible borrower, doesn't mean that others are or that the banks are sensible lenders. When prices are on the up and up, maxing out your debt maxes out your potential returns, right?

Indeed, stability of employment would be a big factor. Just to state, I'm a veterinarian who had then been working for a major charity organisation for 3 years, where they haven't historically fired anybody. We had plenty of business right through the GFC. Our company's annual report demonstrates rising income and donations every year. If this isn't a 'stable' job, I don't know what is. The figures in that article are just…'way out there'.

Not saying that they didn't happen (because it very well could have), but I would be very careful about what I read in the media. For a bank to leave $900 in a mortgagor's budget for living expenses is ridiculous, regardless of how stable the job. In my case (speaking from experience), they worked in over $14K in annual expenses for me, a single, considering living with parents and not even paying for 'boarding', no debt, a car owned outright, plus a consistent savings record with the same bank to prove I have never spent anywhere near $14K annually. We actually do not know the circumstances that the journalist quoted to the bank which led to a pre-approval for that sum of money, hence it could very well be out of context.

One of the big reasons for my initial post was to urge would-be homebuyers to be very careful when working out their figures. That would be the take-home message. $900 a month for living expenses should bring on alarm bells already. Flirting with the extremes is akin to playing with fire. You'll be burnt, and badly burnt for the life of that mortgage. One of the things I've learnt in my short life thus far is this: check and double check everything again. Sleep on it. Review it again. Repeat process till comfortable and dead sure.

Yes, maxing out on debt maximises potential in a rising market. But it also maximises the risk. Is the mortgagor truly comfortable and aware of that risk? I'd be very happy for this big crash/ correction to come, because it'd separate the boys from the men…the people who did their thinking and those who didn't. It'd bring all the dirty laundry into public and it'd be wonderfully ugly.

I'm looking forward to it.

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May 7, 2011 - 1:59 pm

mattnz wrote:

In Surry Hills where they were enquiring, $500k is a 1 bed apartment.

Tough. Look to the outer suburbs my friends…decent 3 or 4 bedder for that price. On land. Cast your net wider than the 'trendy' inner suburbs where every man, woman and their dog wants to live. Furthermore, nowhere in that article (as far as my bespectacled eyes can see) does it state the journalist was considering to buy a $500K 1 bedder apartment in Surry Hills.

Anyway, there were more crucial points I wanted to outline before. I'm still amazed at how much they were wiling to loan out in that example, because using me as a real life example, that wasn't what I experienced at all. Furthermore, to max out borrowings with a bank without a back up plan is sheer madness.

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May 7, 2011 - 11:37 am

mattnz wrote:

A Sunday Telegraph journalist sought a home loan through major banks last week. Based on an income of $61,000, a deposit of $55,000, and a good savings record, NAB offered a loan of "at least $450,000".

That loan figure seems ludicrous. When I got a loan pre-approval back in the days from middle to late 2009, NAB was only willing to lend me $380K on an income of $63,000. I had an even larger deposit considering substantial savings, the FHOG back then was $16-17K, plus a gift letter from parents. Even so, I was strongly advised by my mortgage broker not to borrow any more than $330K.

Even today, plugging that income into NAB's calculator, and at that previously low rate of 5.29%, we're looking at a loan pre-approval for just over $368K. I honestly don't know how that journalist got a pre-approval for such a large sum of money on that sort of income. There must have been some stuff in the water at Surry Hills that day.

If we're talking about a $500K house (assuming $450K loan and $55K for deposit and closing costs), that's a lot of 'house' for a single to buy…it's like buying a nice 3 bedroom or even an average 4 bedroom house in the suburbs. Does a single actually need a house with FOUR freakin' bedrooms, large rear yeard and a double carport? Please…

It would be more realistic for a family or couple unit with dual income buying into such a property. Alternatively this single person could rent his/ her house out and then rent another house with family or friends. That doesn't seem too difficult to do…rent a 3-bedder in the suburbs at $360 a week with some mates and each person pays roughly $120 a week in rent.

Furthermore, wise home buyers would be well aware of the following:

1. Do not borrow down to the last cent of what the bank is prepared to loan you.
2. Budget for mortgage payments at an interest rate 2% higher than current rates. Or, if you want to be safer, budget for an interest rate at 'historical average' of 7-8%, and then consider what would happen if interest rates went to 9-10%.

Obviously we do know that it is counterproductive for a bank to loan money to someone who couldn't possibly afford to pay it back, unless they were looking to enlarge their property portfolio by means of intended foreclosures!

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April 28, 2011 - 6:07 am

ALF1 wrote:

For the first time Generation Y’s are facing the fear of losing their jobs, dealing with high credit card debit and looking at the prospect of moving back in with their Baby Boomer parents.

Haha, moving back with Baby Boomer parents? I've never actually moved out, except to qualify for the FHOG on a house. People sometimes make fun of me, call me 'mommy's boy' and what not. Ultimately it boils down to personal values. Parents who actually worked hard to bring up their kids are well worth hanging on to, and living close to.

Having a good relationship with parents is an important factor that allows a Gen Y person to get a financial headstart. The vast majority of my contemporaries are so busy trying to move out that they have no solid savings whatsoever.

Of course my parents also deserve much credit for getting me started in investing…I was about 15 years old back then. But from day one they didn't give me everything I wanted but held back and forced me to save up for life's little luxuries. These were simple things…a special pen, a 'collectible' eraser, a compass, a key chain. When I was young I thought my parents were being absolute tight ****** but that lesson is one of the most important I've learned in my entire life: that I had to work for the things I want.

Key point here is: don't be too quick to ditch your parents in favour of 'independence'!

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April 27, 2011 - 3:10 am

From my understanding of it, Site Value indicates the value of the land only. Capital Improved Value indicates the value of the land plus the house or other improvements you've made to that land. Hence, the total value of your property is $311,000, based on council valuation. That said, those figures are put in place for the council to calculate your rates and also for calculation of land tax by the SRO, if it applies to you. They do not constitute a true bank valuation.

Having said that, the figures on the rates notice usually seem conservative versus the final sale price or a bank valuation (which is itself conservative). I have read at least one book that talks about a quick and dirty means of valuation of a property by adding the site value to your estimate of how much the building (and out buildings) would be worth, and how much it would cost to replace.

For example, if the site value on the rates notice is $300,000, and the current house is old, estimated to be worth $195,000, and would cost approximately $260,000 to replace, add those figures up and you'll have a very rough, estimated value of the property at between $495,000 and $560,000.

Now I don't necessarily agree with this methodology and I'm sure it doesn't work 50% of the time, but it was something I read from a book that I thought would be worth sharing here. Nothing beats an independent valuation of course…and even the bank's valuer works for the bank, not for you, hence their valuation may not necessarily be reliable.

In some cases I've seen people consider that they 'got a good deal' because they bought the house for less than the capital improved value on the rates notice. It may be true that they did get a bargain, however I wouldn't assume this to always be the case, especially based on values in a rates notice.

BTW, I've read your other posts with interest. If you're considering the Australian housing market is going to correct in the manner you predict, then you're better off selling your house rather than considering refinancing and taking out a bigger loan on 'equity'.

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April 19, 2011 - 10:20 am

ummester wrote:

Here are (longer) term IRs and prices. Still not as long as I promised fword but I will find them – just for you:

http://static.seekingalpha.com/uploads/2010/9/26/595019-128548078561902-Leith-van-Onselen_origin.jpg

http://static.seekingalpha.com/uploads/2010/9/26/595019-128548185597047-Leith-van-Onselen_origin.jpg

I wont give you the whole article – you wont like it.

Thanks for posting those. The second JPG in particular was very small and I had trouble making out the words in those graphs. Does a larger version exist in the article itself? I think it matters not whether we will like the article or not. All the better if you can post it up here.

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April 17, 2011 - 6:48 am

Oh bother…

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April 17, 2011 - 12:41 am

xdrew wrote:

And as someone said before .. Geelong and surrounds are too cheap for the value they offer. Once that happens and the transport to and from Geelong improves, expect industry and jobs to flow. One thing that will start that off is the downturn in the car industry. The Geelong council will be actively competing for new intake of businesses to the area.

Great post, xdrew.

Now at the risk of making this look like a spruik, I'm packing in one more vote for Geelong.

As JacM stated, Corio and surrounds offers property that is truly bang for the buck. Imagine this: a 3 bedder on a 600+ sqm block for around $200K. Such property can be found in Norlane, which is even closer to the CBD than Corio. People haven't quite caught on to this: if it takes 50-60 minutes to get from Geelong to the Melbourne CBD (and with reasonable rail access also), and it takes a comparable amount of time to get from an outer suburb into Melbourne city, then Geelong has become an outer suburb. It is no longer a 'regional center'.

I consider Geelong to be a real gem. It's starting to look more and more like Melbourne city itself, except better planned, less congestion and no trams. Even some of the street names make you think of the Melbournian counterparts. It is no longer the sleepy hamlet I remember it to be, about 10 years ago. If you live in Geelong, there's still plenty of employment opportunities, or you could commute to Melbourne for work. The atmosphere is far less stressful, almost holiday-like. And to me, a holiday atmosphere within easy commute to work is a real plus point.

There have been a number of articles over the years that talk about areas of the Surf Coast being popular with a wide demographic of people, ranging from the retirees to young professionals. Personally, I've been looking to the north of Geelong, at areas like Drumcondra, Rippleside and St Helens (the beachside area of North Geelong). There's lovely period housing in these areas, walking distance to the water's edge, and in the case of the latter two areas, an easy walk to North Geelong train station, 5 minutes drive into the CBD, house-proud owner-occupiers…and you can still buy houses in Rippleside for less than $450K (at time of writing).

If you're actually worried about climate change and rising sea levels, well, don't. Take a drive down to Rippleside and see for yourself that the houses are actually reasonably elevated above sea level. It'd take a tsunami to bring these houses down.

There was also a recent article in The Age that describes plans for a new industrial center to the north of Corio that would bring jobs into that suburb and Norlane. I presume the intention is to get this kicked off before the reign of car manufacturing in Geelong comes to an end. It could take a number of years, but the gentrification of North Geelong and Norlane is inevitable. As it stands, the old Rippleside shipyard is about to be transformed into low-rise, luxury waterfront apartments with private marina, and I've at least read about plans to turn the North Geelong golf course into a golf-links residential estate. There's a lot going for this area, IMO.

This might sound a bit far-fetched, but I reckon Drumcondra, Rippleside and St Helens are well set to become the trendy inner suburbs of Geelong. They lack the 'hip' and 'gritty' factor of suburbs such as St Kilda because of the really quiet streets and parks and the lack of cool cafes in the immediate area, but that's not to say they can't be popular with the yuppies.

Note: I have a house in St Helens/ Rippleside, so if you want to take the above info as a spruik, that's understandable. But just have a think about it: a 3 bed/ 2 bath/ double carport detached house on land (about 400 sqm) so close to the bay you can smell the sea, and a rental yield of 4.35%. When the tide is right, you can even walk to the nearby jetty, do some fishing and walk back home. Try getting something like this near Melbourne!

Also, a couple more areas that I like: Werribee South, again for proximity to the beach, although by the looks of things, it's miles away from most things.

Mount Eliza: already ritzy, but that doesn't mean the potential doesn't exist. I predict the area to become a playground for well-heeled baby boomers in the future (if it isn't already).

Alternatively, if you believe what people say about housing being overpriced, and the property market set to crash to the tune of 40%, you're better off waiting. Who knows, Geelong's median price could drop to $290K. Sorry, couldn't resist.

[fWordParticipant@fwordJoin Date: 2009Post Count: 471]

April 14, 2011 - 10:59 am

ALF1 wrote:

…semantics!

Haha, just the word I was thinking of. However I delight in the details.

ummester wrote:

if you tell me I suck, I ask what? What do I suck? You suck is incomplete

Once again, not directed at anybody. However if I had that comment directed my way, given an appropriate context, I'd know what it meant. I'd be surprised if you didn't.

ummester wrote:

I would argue there is not a shortage of seats on your bus, just an excess of unreasonable people, But a big problem with people is that they seldom want to blame themselves for anything, so convincing the people on the bus that they are the problem and not the bus is an impossible task.

Precisely the problem we have in Australia. People cannot accept making a humble start with their first home. They cannot accept that $200K houses do exist, and it'd take them roughly the same time to travel from that house to the CBD compared to a house in an outer suburb that costs $400-500K.

I think people haven't quite gotten it into their heads that if it takes the same amount of time to travel from what would be called a 'regional centre' to the CBD, compared to traveling from an 'outer suburb' to the CBD, then the said 'regional centre' is really now an 'outer suburb' of a capital city. They have a truly affordable house with a family backyard well within their grasp.

But of course, I cannot convince people that their thinking can be widened beyond their current boundaries. They simply cannot get over the thought that the government (or worse, all investors) is the cause of all their problems. They want a 'window seat', and would rather stand around complaining than just take the seat that's available.

ALF1 wrote:

Hey, what your guys thoughts on the sweat glands of the hybrid South American Yak?

Oh, don't get me started on that. *pretends to know a lot*

ALF1 wrote:

LOL!!!! Oh come on guys! Now it's going to be that battle of who gets in the last knife, I mean word. It has been great reading but you guys could end up writing another book like Dianetics and then what has the world got? 2 more loopy religions that can't agree on anything. But it has been a hoot!

Fair enough. I shall sign off here. No more posts on this thread from me regarding anything to do with this debate. Speaking of religion, I know enough to say that the last word shall not come from me.

However, on the topic of sweat glands, count me in!