Pelican, I don’t see that anyone here has made this an ethical question. People are discussing the rights and responsibilities of the wrapper- as per the question. Noone mentioned wrongs or rights- people have been discussing the legalities of it.

kay henry

Well, there is a possibility of proices become CF+, I suppose. I’ve put a post about negative growth in the General Property section. There are some areas that are losing value- not merely maintaining. API mag doesn’t show regional and rural areas, but there’s a possibility that these areas will LOSE value too- not just maintain. Hence, if properties in some areas lose 10%, and rents remain stable (or even increase) then CF+ properties will start to show.

CF+ properties are just as vulnerable to losing value as more expensive properties are. Some people will keep “downscaling” to be able to afford any property, so the cheaper ones will always have a market, but it’s unlikely that the cheaper places will continue to rise in value whilst others lose value- it’s just unlikely at this stage of the market (in Australia).

wonga, you say you haven’t found any CF+ places, but a quick way to look for them (given they don’t usually show rental prices on realestate.com.au, for example (or the place might not currently be being rented), is to find a place with cheap properties, and then to go to the realestate.com.au rental pages, and then to type in that place. It will give you a pretty exact measure of how much you can rent for. I’ve just started using the rent pages myself (hehe- after all this time!) and it’s good to see how much you can really get- as opposed to RE agent’s valuations for rentals- which are often inflated when they’re trying to sell you a property.

kay henry

I think also that apartments are relatively new to the RE landscape in australia- as in, the first suburban units were built in the 60’s or thereabouts (we called ’em flats back in them days- hehe).

New apartments are a bit “new york” now… and young people will grow up thinking they’re deirable, whereas in the past, they WEREN’T desirable- as in the 60’s blocks- well, there were some art deco ones but that’s another story. When i was a child, really the only units around were Department of Housing units, and units in general, were considered the very poor cousin to houses.

Props, you mention the McMansions- I agree- the Kath and Kim suburbs are going to be less desirable, I reckon, when urban Gen Y’s grow up, than living in some of the newer apartment blocks. I just can’t imagine Y-geners doing the washing their car in the drive on the weekend in suburbia, thing. I think they’ll be far less attached to domesticity than baby bomers and late X-gens. And Y Gen are going to be our tenants in the next generation of tenants.

kay henry

kay henry

SS = So sorry?

kay henry

Celivia, you’re in good form Feeling good, huh?

kay henry

investron, depends on the tenants as to if they want a house of unit to live in- it really depends on the demographic you’re targeting. A lot of young people do NOT want to live in a house- they want to live in a unit in the city, with a gym and a pool. If you are targeting the suburban nuclear family with kids, then yes, they do want a house for the kids.

It also depends on the demographic of tenants and their cultural background. There are some people who come to Australia- for example some International students- and in their culture, everyone lives in units.

I know people like John Fitzgerald say suburban houses are the best investment proposition- due to the nuclear family model, but for many people- including me- I prefer apartment living. I can’t be bothered mowing lawns and stuff either. I lived in my last rented house for 12 years, and we always go someone to mow the lawns because it just wasn’t an interest of the tenants (we were workers and students and saw it as something of a drama).

kay henry

Rose,

It won’t be more positively geared if you add a larger deposit, but it will have greater cash on cash return- for what it’s worth. But you’ve still spent the deposit- so you have plus 30k and less return, or minus 30 and more return- much of a muchness.

Go gently with positively geared houses now, rose. If you’re financially strapped now by negative gearing, maybe it’s time to just pay up debt quickly, and then save for a deposit on what you know. A lot of the pozz geared houses on the market now are probably over-valued in prive and undervalued in rent. I mean, all our IP’s might be overvalued, but at least there’s choices- the PG property supply left in australia now- well, I don’t love it.

kay henry

Single person household increases in city areas are well-documented:

“Melbourne’s socio-demographic characteristics have also been changing… dwindling average household size and a significant increase in the proportion of single-person households, a trend towards delaying child bearing, and so on. Changes like these have important implications for infrastructure planning, including the provision of transport.”

http://www.btre.gov.au/docs/atrf_02/papers/28Morris.doc

And check out this paper too- unfortunately, I can’t cut and paste for some reason. But this ANU paper- written in 2004, predicts that 1 person households in australia will increase by 249% to the year 2030.

http://www.ahuri.edu.au/global/docs/doc698.pdf

There are many papers and reports which discuss 1 person households as an increasing market trend.

Per room, 2 or 3 bedroom places don’t necessarily achieve more than city 1-bedders. A colleague of mine just rented a 3-bed house in Summer Hill (a nice village suburb 8km’s out of the sydney CBD). Per room, it gets about 25% of my rent. In fact, the whole house barely gets more rent than my one-bedroom place. And yet, that house would cost probably $1 million dollars (not hard for a house in a decent suburb in sydney), whereas mine was much much cheaper.

simon, a 1-bedroom apartment can be an entry into the market. I wouldn’t go for one of the millions of student apartments in carlton or somewhere… actually, melbourne is a tough market for inner-city apartments generally (ditto for a lot of sydney, and for places like fortitude valley in brisbane), but there is an increasing demographic of single households, and yields can be very worthwhile for some city apartments.

It’s not a trend to be ignored. As prices in cities become more inaffordable, and you have a greater amount of renters in general, increasing amounts of International students who want to be in the cities, people marrying later, childbirth rates falling, and even older people who get sick of sharing houses… well, there’s definitely a market there.

kay henry