HousesOnly,

If my real name is henry kay, then, on that logic, your real name must be Only Houses, right??

I do like the name kay henry though. It got into my head when I found this forum ages ago but hadn’t yet joined, and when I did want to join, I kept it )

If anyone is interested in buying a little piece of your own oasis in melbourne, lemme know! hehe

kay henry

hehe HousesOnly- why don’t you tell us what you *really* think? []

I agree that prices will decrease for *some* places. But if you go with some of the old rules- location, price, affordability etc, you should be ok.

I also agree with you re greed and fear. But I have to say, RE is a good way to make money (I won’t touch shares for ethical reasons). My process is- pay a fair price, charge reasonable rents- noone gets ripped off- neither vendors, nor tenants; and of course- do your homework on every purchase.

I didn’t mean “doomsayer” in a bad way. All I am suggesting is that, if one invests in RE sensibly, one doesn’t have to lose the shirt off one’s back, no matter what the market conditions.

HousesOnly- from your name, I presume you have some RE investment? Your message is a little ambiguous- kind of like having the nickname “SharesOnly” and then telling people whatever they do, not to buy shares!

kay henry

enduser,

Yes, the innerbelt of melby has had it. Many people bought off the plan apartments using equity in their own home- most of whom were probably first time investors, had inhouse valuations done (probably way overvalued), and thedy’ll find it difficult to get tenants for those generic apartments.

Most financial advisers, however, will recognise that there will be others who will continue their long-term RE investment plan, won;t buy based on hysteria or greed, and will continue to make wise choices in their investment decisions.

Don’t worry about the doomsayers. It’s likely the 20% dip in values was always there from the beginning. It’s very similar to the qld two-teired marketing of the 80’s and 90’s, except the targets of these overvalued apartments are first-time investors as opposed to interstate people. The 350-400k 1 bed-apartments in Docklands and Southbank may become the new slums of melbourne.

kay henry

Cornell said:
But then again if the place above mine sells for 159k does that mean my place will be worth roughly the same amount and then it will be far from positively geared??Cornell said:

Cornell,

Your place will receive the return on the price you paid for it, not on the actual value of it. so it’s $170/wk on 112k, not $170/wk on 159K. The extra 47k is equity- as in, it’s yours! You’ll be able to borrow on that equity.

If you sell under 12 months, you’ll be subject to 100% (of your profit) capital gains tax- so it will be 47k taxed at your current taxation rate. If you wait for 12 months, you’ll only pay CGT on 23.5k.

If your return yield will be so high, why not hold onto the place instead of eating away at your profit by taxes and agent selling costs?

kay henry

weniksa,

Don’t worry about capital growth for the regional centre. If it had a 20% capital growth, that is good for sellers, not necessarily buyers. Sydney has had ubergrowth, but is that good for us as buyers? If you buy post capital-growth, then you are paying the price.

Remember the old adage: “buy in gloom, sell in boom”.

And remember that capital growth is not necessarily reflective of population growth, employment and all the other things one looks for in buying a property.

kay henry

hehe summo- well, if you know the answer, then why did you ask?

kay henry

The other thing I’d say about this interest rate is that it’s like a little “taste test” by the RB that things have to change re spending. A .25% increase won’t affect people much in terms of repayments. But this .25 warning is indicative that the RB intends to kill off the housing boom for those who can’t afford to play in it.

kay henry