be careful on how much you pay. The prices quoted in Aus are inflated by 30% – 50%.

A decent townhouse on or near water and near Manilla or any other major city will return around 10% RR. Capital growth will not be anywhere near the 7 – 10 yr doubling like here in Aus unless you have teh right land.

If you want to buy there, make sure you visit. The legal system works just fine.

D

What a silly thing to say!

It comes down to:

1) What is your strategy
2) What are the numbers

Example, I prefer passive IP's. I have no desire to redevelop sites, etc. I am not that aggressive and I dont have the interest. I buy primarily OTP units / appartments so I dont have to worry about any maintenance (usually), I get full depreciation allowance and they are easily tennanted. Furthermore, I get capital growth over the time of the build for the cost of a deposit bond (virtually nothing)

To further illustrate, my last purchase was an OTP 2 bed 2 bath unit in Cairns. Bought in June 07 for $289k. Settles in 2 weeks from now. 2 other vendors in the 18 unit complex have already flipped at $335k and $340k for the same floorplan. $320/week tennant already confirmed.

Now, if i sell today (which i wont), I have made a 17% return in 6 months approx on a deposit bond, I have a 5.5% RR approx, I have no maintenance issues and I have full depreciation allowance

Why is this a bad strategy?

Should have woken up and developed the land himself….or held onto the block as the developer would have bought a similar block eventually, as others would…gentrificating the area and driving prices up across the area

What suburb?

Suburb report here:

http://www.domain.com.au/public/suburbprofile.aspx?mode=research&suburb=Inala&postcode=4077#mapanchor

F may have a point …

F, how does it work in Europe / UK where more density in population and older money therefore longer times to build wealth? How does the market work there? what are prices versus income? Is Neg Gearing allowed?

Maybe this will allow us to peak into the future?

Foundation,

Good analysis…maybe even brilliant. But I can't commit to an analysis rating as your graphs are way beyond me

However, there is a major issue I have with your thoughts that buy and hold is not preferred. I think you may have used the term "wishful thinking"???

Australia is a big bloody place…..god knows how many towns and cities, further disected into suburbs and streets with different attributes.

This is the beauty of long term property investment.

Maybe most of Melbourne cant keep up 10% CAGR. But I bet i can find at least 50 properties in the whole of Melbourne that can. I also reckon i could find another 50 in Adelaide, Brisbane…hell ….even the Cairns Northern beaches  My favourite new suburb is Footscray. Its a hole of a place, but there are a few little nooks and crannies that offer city views that cant be built out….quality asset.

Its about what you buy and the drivers that push its growth.

To take blanket stats and apply them to all properties is a nice sell….but not a good enough sell 

Now go back to your figures and write a thesis with full bibliography on why I am wrong. I look forward to it Mr Generalisation

Regards

Mr D

Fair point re: Alaistair.

As a newby to these forums, I am loving the depth of knowedge.

If anyone want details to my broker, please ask. He is in Melbourne and a gun.

Mr D

I bought in Parramatta Park (Cairns) off the plan without seeing it also. $279k. 2 bed, 2 bath. Settles in Feb 07 and people are reselling on realestate.com.au for $335k.

I paid $11k commission (part of the $279k).

I have no issues with this as the sales team that showed me the place had done losts of groundwork (2 x independant valuations, 2 x independant rental appraisals, city market driver stats, etc). Also hooked me up with a local property management firm (who i flew up to meet after paying my 10%….would do deposit bond next time now i know of them)

End of that day, my strategy is hold for long term capital gain. Who cares about $10k commission in 15 years when the place is worth $750k plus?