Forum Replies Created
- devo76 wrote:If the market did crump and gloomers could afford there own home PLUS a investment. I bet most would eat there words and do so happily. And then next boom they will be accused of causing the housing affordability problem. And then they would be pushing the merits of investing having the wisdom and expieriance of seeing things from both sides. Wealth is a strong driver to which i believe many could not argue against.
Financial wealth is a bit of an illusion. It won't keep you healthy or make it safe for you to walk the streets at night. It won't stop some poor and disgruntled tenant from robbing and physically injuring you. Even in Rich Dad Poor Dad the author admits that by beating the rat race you are still a rat.
Don't get me wrong, I know financial wealth can have value and believe that hard work and invention should be rewarded in kind. I am niether socialist nor capitalist – I am slowly becoming a patriot and am worried about the countries' future more than isms.
It seems there is a fine line between wealth and greed. True wealth can mean so much more than financial, including freedom, health, friendship and all that kit. I think it is important not to fixate on material wealth alone. I know this forum is about material wealth but as I often say residential property investment carries a social responsibility with it and if investors can't be socially responsibile either the government or the economy of society itself will sort it out. If we are all suckered in by delusions of being the biggest capital investor on the block, than the block is lost.
devo76 – can't vouch for any-one else but I don't ever want an IP. Saying you know you would is being rather arrogant – you can not know what others value in life. I consider a housing a social right and not an investment right and that the long term stabiliy of society is a better investment for me and my family than the short term fiscal lining of my own pocket. What is the point of being rich if the world is broken? If I had enough money, however, I would have no problems with investing in commercial property.
That said, I agree that neg gearing can't just be scrapped – it would crash the market too hard and hurt too many people. It has to be phased out slowly and softly, over the next 15 years or so. For instance.
2010 – 10 IP limit for gearing
2011 – 9 IP limit and so on…This will bring balance back to market without causing anyone too great a loss. It is logical, which is why governemnts would never do it…
duckster wrote:Just remember that there are not enough rental properties to meet the renter demand now. So if the Labor Government fools around with negative gearing the number of rental properties available to rent will decrease and hence the high rents will get even higher. This is what happened last time the government fooled around with negative gearing and investors left the property market in large numbers during the 80's.The introduced lower tax rates are causing this also to occur as negative gearing is becoming less attractive due to the lower neg gearing income loss tax deduction, property tax and capital gains tax implications.
Duckster, I read some articles explaining that the rental increase when negative gearing was last abolished wasn't as bad as people remember. Here's one of them
http://www.smh.com.au/articles/2003/08/24/1061663676588.html?from=storyrhs
The trouble with increasing rents, like spiralling property values, is that there is an upper limit society can afford. Rents are at or past it – look around and see that highly priced urban fringe properties aren't renting, regardless of any percieved population crisis.
The main reason governemnts are opposed to changing IP property laws is many members have similar invesments.
crashy wrote:In my area there are 2 properties agents are advertising as 'distressed sellers'. A year ago one of these properties was listed at 380k, now listed at 280k. It seems there is just NO buyer interest out there ( I said buyers, not tyre kickers)
limbo limbo………..
I might have a go @ 200k
One thing this forum has made me aware of is that you have absolutely nothing to loose. Put your 200K bid in and post how it turns out for you.
Depends on how tight the area is and the cost of the blocks, I reckon.
Why not just go to all the auctions in the area where you want to find a foreclosed property and put a low bid in? The ones that accept are probably bank sales – they probably have reserves set at valuation levels not vendor and REA speculation.
Ultimately, you are chasing the low price, right? Not the fact that it was actually a foreclosed property.
sunshine168 wrote:Hi EveryoneI am a single parent. How do I protect my asset from the future relationship?
Thanks!
If assets more important, why have future relationship?
CHIS,
Stalin was a socialist or communist (i guess it depended if the motherland was at war or not).
hbbehrendorff claims to be an anarchist but isn't really because if he was he wouldn't be blogging or trying to convince anyone of the NWO, he would rather being trying to crash this site, hack the planet and set whatever he could on fire…
Back to houses – in a much earlier post you suggested that:
Quote:If it costs roughly $200K to build a basic 3-4 bedroom home and anything from $150-$200K for a small suburban block, can houses really fall below the cost of building them? I expect 5-10% is certainly possible but can they really halve in price? I suppose if the cost of the land itself decreases this is possible.There is a bit of over-specualation and markup for salesmen and developers in those prices, which will fall off more and more as things get tighter. Average house costs between 150 & 200K to build – agreed. The going rate for suburban blocks is currently between 150 & 200K – also agreed because of undersupply issues. The land rate, however, will change as state governments release more (as they are currently in the process of doing) and make outer suburban blocks worth more in the vicinity of 100 – 150K. Combined with difficult to get credit and needy sellers, this will eventually bring the bottom end down to a total of 200 – 300k for house and land, 25% under last years peak of 300 – 400K for the same end of the market.
Quote:I have been to a few property investment seminars. Everybnody assumes property will always double in value every 7-10 years. This is the whole premise for negative gearing. I'm not convinced this will happen in the next decade. I believe the boomers will flood the market and prices will at best stagnate and at worst suffer significant price drops.When the boomers all start selling up to move into retirement homes or become grey nomads it will really effect the prices in the inner suburbs. I agree that after the bottom of the market reaches the 250K mark, that end will stagnate for around 10 years. During the course of the boomers selling, the middle of the market will lower. A 4-5 bedroom place within 10km of a city centre will not see price drops until the Boomers start selling their PPORs.
Quote:This is not of course relevant to highly sort after locations like Sydney Harbour forshore etc. Location location location will always hold some value.True, to a point, though even esteemed locations will have some price drops. They will still be out of reach of the greater population, so does it really matter?
Quote:Houses in the burbs may not appreciate much. Rural houses will decrease as these economies decline and the houses age and fall apart.Houses never appriciate – they are like cars, always depreciating. Only land appreciates and that is not always and not consistant over the short term. Last 8 years in Oz, especially the last 4, there has been so much greedy specualtion from all angles that housing prices have been thrown totally out of wack. Everyone had a get rich quick scheme (and some did). Capital gains, renos, negative gearing on low IRs, increasing ones portflio and a herd mentallity that sucked half the country in… in the end too many of us tried to get too rich too quickly and it is unsustainable economically. Call it a crash or a correction but it has started and I can't see there being another boom like the greedy naughties (our version of the roaring twenties:)) for atleast another 15 years – more likely it wont be till 2070 or so:O
Oh, here is an article on the thread topic
http://www.abc.net.au/news/stories/2008/08/15/2336027.htm
Can't really blame the Boomers though, it's not their fault they are going to live too long with lifestyles that cost too much.
mackar,
There is buyer interest but not purchasing – it was on the news the other night. Most buyers a waiting for at least a whole percentage drop in interest rates (from the banks, not the RBA). Bears are attending auctions and home opens (people like me) – to see how low things are getting, not looking to buy just yet.
As for the stamp duty concessions it depends on the state but yeah, most have zero stamp duty for FHB at the cheaper end of the market.
Personally, I still feel we are going to see more interest rate hikes form the big banks in Oz over the next 2 years – even if the reserve keeps lowerring. Reasons being – ANZ and National are struggling and it will be the best way for them to try and stay afloat. On the flipside, Westpak and Commonwealth will use interest rates to achieve purchasing power in attempts to buy the other 2. Commonwealth has already declared it can't guarantee low IRs in the foreseeable future.
Put it all in writing and send it to the REA or landlord (whoever is managing it).
If you get no response in 2 weeks, contact the Queensland tenants advice service and fill out the appropriate forms to get a tribunal listed – I put the link in another thread around here somewhere.
Why did you pay before signing the lease?
Question aside, once the lease is signed you can never withhold rent. You sign to that effect but they sign to keep it fit for habbitation and all that. Without the lease you'll have to rely on verbals for the tribunal which can be messier. Just make sure you don't loose the proof of your payment to them.
I agree gamay – it's rubbish, geared to calculate wealth based on investments. Play with the numbers a bit and have a look. It's more of a debt calculator than a wealth calculator.
Based on your current lifestyle – what a croc, it doesn't collect enough information to work out what your lifestyle is.
Without super it gives me 0 – saying I will survive till tommorrow but what about LSL, redundancy and rec leave? And what about the fact that I have 0 debt means that even on govt benifits i will still be in front?
I put my super in (which is substantial) and it gives me 800 or so and says i will survive 2 years. But it doesn't ask how old I am so how does it know when I can get that super.
Ok, I apologize, I didn't realize it was a free download (thought it cost $25). I scanned it with AVG and it is not a virus, so I read it and disagree with a couple of points of the articles findings. No. 6 is a very good reason not to invest in real estate at the moment and No. 7 is a very good reason to wait.
There is a lot of stuff in the news about how tight the rental market is at the moment. As I am having problems with a biatch of a landlord, I thought finding a new place was going to be hell. So started looking for somewhere to buy – which I didn't want to commit to because I am sure the best time to buy is yet to come in this cycle.
In the meantime, to cover all my bases, I put in for a couple of cheap rentals. Surprisingly, the prospective tenant turnouts at both was quite small and I ended up with the second house I applied for (lucky, as the first one was a total dive – which I noted an the application form – no doubt explaining why I didn't get it:))
I am in ACT but the employment rate here is quite high, like Perth's, suggesting an even tighter market. I think there is a bit of REIA and media exaggeration going on though, to prop up rental prices and try and keep over leveraged investment properties from foreclosing. I think the rental market is, give or take, as tight as it was in around 2005/2006, no-where near the overstressed levels that Perth was under last year.
That said, Subi is a convient location for a lot of high paid workers around the City and East Perth, so if the place is in good nick it sould go. Perhaps you need a more aggressive agent?
BenEdan – I'm only looking for a PPOR, just don't want to get ripped off! I take a very investor like stance to purchasing though, the Mrs will weigh in from the other angles:)
You have picked the right area but cutbacks in my dept weren't as bad as initially forecast so I didn't think it was a factor. You're probably right though, I don't know what the other depts. are doing with more redundant staff.
harb wrote:Krudd copied Howards policies so except for some names nothing else really changed at the last election. Rent assistance goes up with the CPI but there is talk of larger increases to make up for above inflation rent increases.Krudd copied how Howard refused to say sorry to the aboriginals did he? Krudd copied the luxury car tax models? Krudd copied the Iraq policy? I am not offerring opinion on any of these things, just proving a point. Krudd lied a bit to get in. Pretended he was more liberal/conservative than he really is. He has a much more socialist agenda (Howard couldn't even say socialism without crying:)) and the longer he is there the more it will come out.
Rates are here.
http://www.centrelink.gov.au/internet/internet.nsf/payments/rent_rates.htm
A 10% CPI increase on rent assistance of 100 P FN makes it around $110 P FN. Last 6 months rent has increased far greater than the CPI as landlords struggle with interest rates. hardly equitable.
The only other thing I have heard of in the Labour pipeline is the rental subsidy, where the landlords get some kind of concession for going under market value and I bet to qualify the landlords will have to accept a value set by the government and not by the market.
One man's doom is another man's boom. A much needed correction in market values of residential property is what every gainfully employed FHB is looking for. Jon Chown – downplaying the market may be exacltly what the greater population in this country needs. What you consider a negative comment from D could be positive to a great many others.
I am no investor or anything like that but last weak I offerred 290K for a house advertised @ 350K. I thought the REA was going to laugh at me but he didn't, he took me seriosuly and advised that the vendor had set a reserve limit of 300K. He also said he was sure he could find me something in my price bracket in the coming weeks. This is in an area where everything was listed over 400K last year.
There are more than 500 properties in allhomes for sale in the area where I am looking and only around 50 for rent (some of those are short term as the owner wants to sell). It doesn't take a genius to work out investors are trying to offload. In the month I have been looking only around 5 of those 500 have been listed under offer.
This weekend I will put some 260-270K offers in. Stuff it, what do I have to loose? I can afford a house at that price and someone may actually say yes. Only thing I am afraid of is that whatever I buy depreciates another 20-30K in the coming months…
Doesn't this forum moderate spam?
hbbehrendorff – then what determines the bubble size? The one America currently has is only comparable to 1929. Why has there been no bubble that big in between? If we were controlled by a ruling elite, surely they would suffer the middle class with more frequency?
I mean, the best way to collect middle class wealth would be to do it as often as possible. Generate massive 1929 style bubbles every 20 odd years. Why doesn't the elite do this, if they are so in control?
I agree with your basic understanding of how banking cartels are operating but do not believe they had a plan with the longevity you suggest. The banking cartels, like all of us, react to global forces beyond their control in an opurtunistic way.
For instance;
http://www.news.com.au/business/story/0,27753,24291697-14334,00.html
Beyond any control of the main cartels in Europe, Westpac and Commonwealth are no doubt planning to take advantage of this situation (probably mean higher rates for everyone). Our banks, like the European cartels are prepared to eat each other if the opurtunity presents, negating any unifying conspiracy that any one may think exists.
harb wrote:25% drop ?That sounds like wishful thinking on your part. I'm sure they'll either find a way to afford rent increases, move somewhere cheaper on the outskirts or buy their own properties. The ones on a very low income are getting government rent assistance anyway so its up to the gov. to make sure they can afford rent or provide some for them.Or it's up to the govt to make sure asset value decreases enough so that the available low income assistance is sufficient.
The current fed govt isn't making descisions that give people more money, it is working out how to take it away with truancy clauses and the like. It was the Howard govt that persisted in bailing the overleveraged out, not this one.
Maximum govt rent assistance runs at about $150 FN and it isn't going up to my knowledge.
harb wrote:You are kidding, right ? Until the full exposure to the US market gets revealed and inflation gets under control the only relatively safe place to park money in Australia is quality properties.Large inner city blocks will maintain value, I don't deny that. Nothing else will.
devo76 wrote:If this is true does that mean Sydney and NSW are ripe for investment since they have had little to no growth since 2005 for the majority of property. effectively missing the extended portion of the bubble.I haven't been watching the Sydney market so much but it seems the outer western suburbs are pretty low. Doesn't mean they can't go lower though…
Before SA had it's most recent price increases, everything there was pretty much in line with wages/inflation IMO – now, like most other places in Oz, SA is overvalued – though not as bad as most. In some ways SA is the state that is the camel back breaking straw, having an economy that was unable to support rampant speculation and investment.
Perth has the misfortune of being Australia's L.A. I used to live there, so I feel sorry for the place.
If the average wage is 60K (give or take), then the bottom of the housing market in all states should be between 200K & 240K, with entry level rent around $200 PW. It's not there yet but I am 95% sure it will be within 2 years.
devo76 wrote:Its also a shame that like many say around here interest rates will not drop any time soon.. …….. Hang on a minute
It's for local politics, the RBA is trying to boost confidence and stop a recession. Have you seen whats happened to our dollar since? Quickest falls this year. That mineral export thing that is supposed to keep Australia strong is worth around 2.5% less because of a .25% rate drop that the commonwealth bank still hasn't full commited to.Peter is being robbed 10 times the amount Paul is getting paid…
