Yes I've bought OFT and I sell them too. I can give you a positive story. I bought one at Parramatta around March this year and paid $380k for a 2bed with settlement end of next year. At first prices seemed abit high for everyone but looking at it now, it feels like I got a bargain price. The amount of money being spent on Parramatta is phenominal and it's really pushing up the property values higher. So if you select the right area then you got alot to gain and little to lose.

I just had a look at byron bay at homepriceguide. Units have gone up by 3% over the last 6months and 10% over the last 10years. Houses have dropped by -15% over last 6months but over last 10years have gone up by 15.1%.

Also, my memory's not as sharp as it used to be.

HAHAHAHAHAH!!! Wata Ripper!

I havent red Steve's email but judging from Nigel's post and the opinion of quite a few people here that almost everyone is looking at one side of the coin.

THEHEATH said that by increasing rates there will be an over supply of properties as people cant afford to hold on to their properties. Now that's assuming that owner occupiers are the only ones who buy and sell properties. No one is really taking investors into acount.

Over the past few decades the property market has been controlled by the owner occupiers. But now as more and more people are becoming educated about property and becoming more investment concious; the wheel has been turning of sorts. This is based on my personal opinion but if we keep going at this pace then one day the whole property market could be controlled by investors.

The rate rises wont really hurt investors as much as rental demand will go up since not many people will be able to afford to buy a home and giving the investors the upper hand which leads to higher rents. So really the higher rents are offseting the high interest rates.

Another thing that could offset the over supply of properties are investors looking for bargains and population growth. So the over supply, if there is one, might not last for too long. Add in all those factors Bardon talked about and things are not looking that bad from an investor point of you.

If we stop relying too much on the "interest rates affecting property values" and "land appreciates, house depreciates" type of theories and look more at the broader picture by analysing all the major economic factors affecting property values rather than one or two smaller factors then we can go along way with our investments rather than buying a peice of land here and there.  

I said in one my posts in another forum; given there is demand, even a rathole can increase in value. While you can claim depreciation on the structure of a building such as a unit or a house, it doesnt necesarily mean it will depreciate in price too.

You can buy 10 acres of land in Whitehead NSW for maybe $20,000. That is alot of land….heaps! Yet it stil costs a fraction of a price of maybe a 1 bedroom Sydney apartment. Why? Because there is no demand for land in that area. To give you an example, according to Australian Property Monitors, Avalon which is on Sydney's northern beaches; the median price for units went up by 90+% in just 6 months. Everyone wants a peice of it. That's why prices have skyrocketed.

Don't get sucked in to this whole "Land appreciates, house depreciates" theory. It's an ancient theory that has long lost its credibility. If you understand the Law of Supply & Demand then you will go much further than those who solely rely on this old belief.

But you are right on target regarding Sydney's studio units

I wouldnt bet on property prices stalling between now and 2010. Even though with all these recent rate rises we had, property market has been performing very well (Refer to chart below). You should buy when your financialy ready. Usualy it's not the TIMING of the market that matters but TIME IN the market that's most important. The longer you are in the market the more money you can potentialy make.

So if you're ready then go for it now.

I think property is the ideal choice given your current situation and future goals. If your decision is to only invest then you should look more in to eastern states as I dont think Perth has much to offer for investors now….maybe except some individual areas which could be hard to find. So you might be faced with a dilema of either invest or buy a property and use it as PPOR to get the FHBG and free stamp duty then rent it out after a short time. The problem with the second strategy is that if you guys buy in the wrong area, at the wrong time then it could take quite a while before you see some capital growth which could slow down your wealth creation process.

Sometimes you have to let go off the smaller fish to catch the BIG ONE.

How much have you had in capital growth over the past 6 years? The rates wont be rising forever but the property prices will be. Especialy in Mosman. Whatever weekly repayments you've had over the past 6 six years, total them up and compare them against the capital growth you've had over these years. That way you will know how much profit you've made so far.

I would say it would be a good idea to hold on to your property as capital growth always outstrips the repayments for well located properties.

Besides, the more rate rises, the higher the rentals as most people wont be able to afford to a buy a house. So demand for rental properties will definitly go up.

If you're going to rent it as short term rental such as holiday rentals then you will need to furnish it without doubt. Also for holidays rentals I dont think you can get Landlord's insurance.

When you're first starting out then Capital Growth is the way to go. You wanna build up equity in a hurry to build up your portfolio quicker. When you're more settled in the future then you can look at +cashflow properties to balance things out abit.