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ummester
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October 17, 2008 - 2:06 pm
Apparently, this time around, the 21K can be used on any new home even if it is already completed and sitting on the market.
ummester
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October 17, 2008 - 2:01 pm
VDan,
The point isn't to convince buyers like yourself – who were already prepared to buy.
It is about getting those who aren't quite ready to commit into the market.
A little more research and it seems like housing credit is actually on the edge of a cliff – the percentage of people buying is incredibly low at the moment and, like a typical public servant, Rudd has given a knee jerk response.
ummester
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October 14, 2008 - 11:55 am
It's not going exactly how I thought it would – but I guess that keeps it interesting I thought that governments and banks (worldwide) would play a lot safer than they have been.
ummester
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October 14, 2008 - 10:36 am
Wonder if you can use the 21K grant with this http://www.revenue.act.gov.au/home_buyer_assistance_mp/5
make the loan pretty cheap – of course the govt. would own the land initially but the end result would be a lot less than renting for your own home…
ummester
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October 14, 2008 - 8:17 am
mattjones wrote:
Whoa that changes things We have two properties to go on the market this weekend – maybe best to hold off in case this news brings a mini boom…….
CHeers,
Matt
Which is exactly what worries me with it.
It's a get in quick deal. Does everyone realise that the 21K expires at the end of this FY and the 14K too? From July 1 next year its back to 7K all around. Sell, sell, sell and put 7K on top. Build, build, build and put 14K on top. You've got 9 months to get a loan or make some cash.
I realise that construction needs a boost and fully support doubling the grant for new home buyers – even tripling (though that is pushing it) but the established home buyers grant should have been left alone.
I fear this will create a mini boom from now until June 2009 and that the resultant drops and possible foreclosure rate to follow it may be devestating. We weren't quite as bad as America with it's subprime (even though our prices are more over-valued) but after this…
ummester
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October 14, 2008 - 3:48 am
It's triple for new homes and double for established. I think it is madness, even being eligible.
ummester
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October 13, 2008 - 11:53 am
If I had a million to spend on investment property, yes, I would buy a single floor of a building in a place like Woden and get a government tenant in it. Most secure tenant you can have.
Of course, if it could be on any property and didn't have to be an invesment, I would buy a nice rural place with a solid water supply and give up being part of the rat race for good:)
ummester
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October 13, 2008 - 11:34 am
I agree with the anarchist on this. The top 2 floors of a building I know were just for sale and they went for around 1 mil each. They were guaranteed 7.5% return – not quite 20 but nothing to laugh at.
You would be surprised how much rent you can get out of govt. departments…
ummester
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October 13, 2008 - 11:23 am
There is a lot of construction around Belconnen at the moment. This is also close to where the Stanhope rent land/mortgage house scheme is being trialed and loans are currently going through for this – was actually talking to someone about it today. His house, and others on the same scheme, should be ready in around 6 months. With 20K saved, the fellow I was talking to was going to have a weekly cost of $350 on a house mortgage and land rented from the ACT govt. which is less than rental prices in a new home around here. These propertys are bound to effect the prices and rental demmand Northside ACT. On top of this, the scheme will be open to investors as of January.
Canberra wide rental demmand is strong because there is a glut of propertys for sale with vendors who won't move on price. Everyone in Canberra is trying to make maximum profit, if you live there you should know that:) I think the market here is in a mexican standoff. As soon as places get advertised at a reasonable price they are snapped up but very few of them do… yet – every vendor is fighting for their last 50-100k to supliment their dwindling super.
In short, wait. At least 6 months, 12 is better.
ummester
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October 13, 2008 - 10:43 am
The thing about this property is that the rent equals to the rule of thumb for the current value. Each 100K of value should, give or take, cost $100 PW. If that rent is sustainable (which depends on unemployment levels, CPI and all that) then 375K may be the true value of the property. For the thread starter, this is something positve, atleast, meaning that, as bardon stated, the property mentioned may have lost all that it is going to.
The other interesting thing is that it was purchased in 2003. Imagine how much similar places went for in 2005, 2006 or 2007!? No matter what they went for, they are probably all worth around 375K. A return to 2002 prices was what I expected from the correction and using this property as a yardstick, it may work out more or less correct. True it is one property, in one area, but historically Sydney leads the curve in Australian property prices.
ummester
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October 13, 2008 - 10:25 am
harb wrote:
How many takers for the fixed product do you think Commbank has these days ? My guess is not many at all. They'll pass it on soon enough and before the RBA drops it again , that way they may still get some poor sucker hooked on the higher rate yet don't look like greedy bastards when the next cuts arrive.
Obviously it depends on the price difference but I would be happy to pay a small amount more for a secure mortgage – especially with the way banks have become an endangered species.
ummester
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October 13, 2008 - 6:46 am
You never know – rates may still rise. We may even see a decoupling of banks from each other, in some ways we already have. Why is Combanks fixed term more than a whole percent greater than Westpaks? Imagine if, within the next couple of years, banks start charging interest based on thier security ratings…
"Roll up, rolll up. We can't promise we won't go bankrupt and sell your mortgage but as long as we're afloat it's 2%!"
vs
"Your mortgage is safe here but you'll have to pay 15% for it."
ummester
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October 12, 2008 - 12:32 pm
CHIS wrote:
you have tenants get rid of them. Some tenants that don't want you to sell it will leave it looking like a tip when people come to see it.
You can't just get rid of tenants Chis. Legally, they have to be sold with the property – escpecially if they are inside of a fixed agreement. What is more, inspections have to be orgainsied at the tenants convienience. In a periodic tenancy, they can be given 3 months notice for renos, need of a family member to ocupy (and other similar clauses that have to be provable in a tribunal) or 6 months without a clause. The laws vary slightly from state to state but tenants have more rights than an investors fiscal motives – it's just that most of them don't know it.
As for the property, taking a 50K hit now may be better than a forced 150K hit in 2 years. If you can hold on, however, I am sure it's capital value will regain and increase from the purchase price long term.
ummester
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October 12, 2008 - 2:10 am
The REA looks like a total clown:) Literally even.
Atleast the property has greener lawns than just about anywhere in Oz… would be worth the 100 just as a private play area for the kids… nice ready to go cubby house.
ummester
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October 11, 2008 - 10:14 am
nadellesophia wrote:
thanx guys, I am still researching on different ways to start my property investing, i am saving like mad, i won't give up
nadelle
Keep saving, looking and waiting… you'll get your shot.
ummester
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October 11, 2008 - 9:52 am
hbbehrendorff
As I have said before, I have no doubt that banking cartels have been working hard to control the fates of whole nations with chains of debt – look at the world bank's track record for instance, 45% of its customers have profitted and the other 55% are far worse off and majorly indebted. Work out the net profit.
An orgainsed and plotted conspiracy would mean that these cartels have 2 things that I find very unlikely.
1) A shared vision of global domination.
2) A long, strong history of working together to achieve their goals.
Even Zietgiest 2 backflips on its first part and suggests that it is the nature of human greed that inspires the shadowy figures and not the shadowy figures that dictate the way we all behave. As a race, we place too much value on the wrong institutions. Each one of us is personally responsible for letting the rich elite have any kind of control over our lives. We give into selfish disires and others use our desires. We always have the choice to be different, we just fall for what advertising sells us. It's no ancient conspiracy, it's just our pathetic weaknessess.
If we bothered to mature mentally as a species, consumerism and capitalism would be long forgotten ideals. We are just too stupid to realize that our destiny is in our hands. It is our own desires we have to fight, not some NWO.
The monatary system is collapsing without any kind of revolution from us. It was always unsustainable. It is what we do with the fresh start that will determine where we go from there, it isn't pre-decided for us. If we want KRudd to adopt full socialism, as a nation we will not oppose it's inception (the majority that is). If we don't we will oppose it. Fingers crossed, that after the intensity of this crash bites, the majority of us will forget our greed and look towards more socially empowerring leadership. If we don't want the Asian union, Krudd wont enforce it – he is not a biggoted, capitalistic racist like Howard was.
Make no mistake, though, this time is more than a mere recession;
http://www.news.com.au/business/story/0,27753,24476398-462,00.html
ummester
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October 11, 2008 - 12:19 am
Alani, we have already seen the biggest property boom in Australia's history and that was bigger than future growth can support. Unless wages double in the next 10 years it is very unlikely that we will see another boom bigger than we just have.
If there are such undersupply issues, why is so much stock for sale?
It is true, however, that in 5 years or so prices should start rising agin from whatever place they bottom out at over the next 2.
ummester
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October 10, 2008 - 3:54 am
jen81 wrote:
This is such a hard one. None of us know how the property market is going to look in 5 years time. I think the thing to remember is that property is a long term investment. Gone are the days of buying something and selling it for a huge profit in a year or 2 years time. Now anyone who owns property is going to have to hold onto it to give it time to recover its value. I guess this may mean that decent properties for sale might shrivel up?
I'm currently saving and thinking about buying my first property next year. I think that as long as I save a big enough deposit and buy something I can easily afford then it should be ok. Although, all the "doom and gloomers" are making me a bit nervous!
I'm a doom and gloomer but I am also planning on buying in 12-18 months. Does that make you nervous? I still have faith that entry level houses will be between 200 + 300K across the board by then and that is the right price for me. If they go down more, oh well, I know what I am happy to pay and can comfortably afford on a variety of interest rates.
ummester
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October 9, 2008 - 12:07 pm
superhoops wrote:
Historically there has been a correlation between a recession, lower interest rates and lower inflation. No country with an entrenched inflation problem has significantly reduced inflation without it occurring in the context of a recession. Therefore whilst lower interest rates do not decrease inflation directly, in times of a recession or potential recession we see inflation decrease.
Yes, but we are not in a recession and still have increasing inflation. Therefore, even historically, it is not yet time to lower rates. We may end up with an inflatory recession and I have no idea exactly what that will do…
ummester
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October 9, 2008 - 11:44 am
superhoops wrote:
The RBA did the same thing in the early 1990's when inflation was around the 7% mark – they lowered interest rates by 5% in the space of 12 months and furthermore they dropped the rate by a further 4% over the next twelve months. During this period inflation fell to around 1 -1.5% by early 1992.
Thus historically the RBA has made the right decision to lower interest rates.
How does lowerring rates decrease inflation and why has the RBA been saying that it has been increasing them to do exactly that? I think you are confusing the effects of the recession itself with the effects of RBA rate changes.