Forum Replies Created
- simple wrote:I some how do not think we "have reached permanently flat plateau"
Not by half.
Thing is, we could have plateued so much softer around 2005 if Howard didn't double the FHBG and give the capital gains tax concessions. Now the landing will be harder and, in some cases, sink lower than needed for equilibrium because a minor bubble was grown into a big one just to make the economy look good and the rich feel richer.
Scott No Mates – I wasn't suggesting the rental market is slowing down. Quite the opposite. Rentals are overpriced and hard to come by because 1) landlords need to cover interest rate increases 2) alot of people are trying to sell. What this has done to the rental market is squeaze the bottom end out almost entirely. 4 beddys cost only slightly more than 3 beddys to rent which in turn are only slightly more than apartments (near me) now. But bottom end tenants on minimum wage or facing redundancy wont be able to afford the rent increases and this will put pressure on some landlords to sell as they wont have the cashflow to keep all of thier investment properties. The only people to sell to, however, wont be able to afford any thing close to the peak of 2007 speculative value. Entry level homes and apartments will have to take a 25% price drop to sell in the next few years.
I recon the only big thing at the moment is investing in bank shares or depositing cash but even that will be shaky for the immediate future as all the biggest banks are eyeing all the others of for takovers.
Do you realize that in 1920 there was a terrorist attack on wall street? Then, in 1925, property went through the roof as everyone was investing in something solid. Everyone knows what happened in 1929 – safe as houses became a furphy. This pattern is strangely familar, is it not?
IMO – .25% isn't going to increase buying at all. Needs a full percent or so to bring a mortgages in line with rental costs on a property of a similar size. Either that or a decrease in the sale price of residential property.
But I wish I was smarter too:)
We all reap what we sow…
Property can only stagnate or downturn from here.
Rent is increasing so much as it is the only way to create investor profit. Trouble is, the bottom end of the rental market has peaked and tenants are going to start missing payments, putting the investors under stress to sell. Trouble with selling is, the only one's looking to buy can't afford what the investors paid and the market is already flooded.See the fine, circular mess this bubble has the country in? Investors are going to have to take a hit of around 25% on thier bottom end residential properties to start sorting this out.
Artaud wrote:Cheap real estate compared to the rest of the country and with the Howard Government pushing nuclear energy there very well may be strong growth there in the next 5-10 years as uranium mining companies look to move operations in.Hey Art, didn't we change governments? Don't we have a greeny musician as an environment minister now? Not sure how nuclear sits with those 2:)
Qlds007 wrote:Not at all. 100% finance is still alive and well.Madness – like Sparta:)
Consider this though, if a vendor offers 5% of the value of a house to secure a sale then the lendor would have to assume that the house is worth 5% less than the agreed price (provided that the valuation isn't less still). The lendor could then ask for a 5% deposit on the new price, correct?
Perhaps some of the lendors (finally) are considerring the buyers and do not want them to over-extend themselves – silly, I know, to think that a financial instituation may actually be considerring the stability of the purchase (which would, of course, determine the long term stability of the loan). If only that had been practiced for the last 10 years some vendors might be in a less of a pickle that they are now.
Chelley, where is the house?
Qlds007 wrote:It is perfectly legal for a Vendor to provide part of the deposit as long as it is clearly disclosed to the financier.But doesn't the financer use the deposit to offset any potential depriciation in the mortgage loan? Isn't that why banks are chasing deposits now – because the value of property is decreasing and the deposit acts as a kind of surety for the bank/lendor?
Chelley – I think what you propose to do is very generous do but I am not sure if it is technically legal.
If the financer found out that you were providing the deposit, wouldn't it would null and void the loan?
So it seems banks may not value property as high as some owners and or vendors do.
A question, is there any way a buyer can get a bank valuation from a prospective lender (not an independant valuation from a 'property expert') before bidding on property?
D – most sad to hear about your Brother in Law.
I may sit on the polar opposite side of the housing market to you, putting up with a very mean landlord who keeps lying and trying to break the law with us but, as you have noted, the twists of life outweigh even the most sound investment plan. It is sad to hear of any news such as yours. 1 of my work coleagues recently lost a son and another his wife. Sad news.
I am in the 28-38 bracket, as is my partner. Our plan is to keep saving what cash we can until the market feels fair – we only want 1 house (at any given time) which is more security for the kids and would preffer to spend more of our lives living than investing. We have done a lot of living already – between us we have seen the globe.
Only spanner in our works is the rental problem but I still feel the market is better to wait in (even if we do have to pay more for rent than what is reasonable). Each week I see 10 more properties listed for sale near me and 1 less for rent. But sooner or later the vendors will have to lower their expectations and (sooner) I will be out there putting offers in. I probably wont get takers yet but I am confident that the near future will bring reason back to this market. I believe a large part of the problem with stubborn vendors is what lifestyle they envisiage for themselves with that extra 50-100K they think their property is worth. Worth is an entirely subjective thing, I guess.
With rentals becoming scarce this type of behaviour will be on the up and up. That said, if you have not recieved rent for a period of time you should have no problems enforcing an eviction and getting an order for the payments that you are owed. REAs are useless most of the time and interpret all laws in the manner of thier own financial profit (ie prolonging the process unless you whish to put the property up for sale). Read up yourself and fill in the approriate claim form, sack your REA if they are no help. Start here.
The flipside of this problem, that is also on the up and up, is where a landlord is trying to force a tenant to vacate unlawfully as a means to either put the property back on the rental market at a higher rate or list it for sale (REAs support this behaviour as it is money for them). I fear the states residential tenancy authorities are going to become quite overrun as this problem worsens, so if you have a problem with either a tenant or a landlord try and get in fast.
Remember, only the police can legally effect an eviction. The warrants are issued by the residentual tribunals in each state.
johk – have you heard about all those people that are using their credit cards to pay increased interest rates? The banks solution is to give them more credit… gotta wonder exactly what the banks agenda is in all that. My point is that I would hate to see another Australian end up in that position.
As someone suggested, why not try and sell the townhouse for as much as you can get and then upsize with the profits?
No gold or silver for me. If they haven't gone down 30% by 2011, I won't buy one – so I won't be disapointed – I'll just be down a beer:)
How philosophical of you Harb – with the sour grapes anology:) No doubt I will find the first home I buy a dissapointment – imagine how dissapointed I'd be with the purchase at current prices.
2011 – you're on. I recon the curve will have reached the bottom by then. If I loose, I'll buy you a beer, if you loose, I'll buy one of your houses:)
L.A. Aussie – there is no bottom of the price range where I work – nothing under 300K… yet.
The circle of people I know from work over 50% of the boomers have more than 1 property and the X's either rent or have 1 house.
If I could get to work from Western Sydney, i'd be more than happy to start looking for something to buy tthere but that is 300km away. I am more than happy with an older 3×1 that requires some work, (so long as it has a reasonable back yard) but, like I said, they are still overpriced in the state where i work.
Just in –
But many older Australians with strong superannuation returns are also borrowing more and expanding their investments, helping to block younger borrowers from entering the property market.
"Surprisingly, despite the marked distribution in wealth to the baby boomers, their collective appetite for leveraged finance remains undiminished, with those in the 45-59 age group holding over a third of the nation's debt.
The largest share of financial assets in the Australian economy is held by those aged 45-59 years, with 41.8 per cent; followed by those aged over 60 years, with 32.5 per cent.
http://www.news.com.au/business/story/0,27753,24184573-31037,00.html
It's no surprise to me. The Boomers just can't admit the affect they are having. But things are crashing down around them in terms of super, the share market and property – I guess there is some natural organising force towards justice.
Bardon (nice avatar BTW, make it yourself?) to play the devil's (or capitalist's:)) advocate (as I usually do) Terry Ryder could be trying to promote interest in the market to help secure the value of his own investments. Then again, the guy has got it in for REAs, so he can't be all bad…
PS – Reading some of his stuff, he seems to give good advice. Especially about future water concerns. Probably is a good investors market in some areas now – I know of one investor working in Queensland that is already buying @ 30% below last years price (and before you ask, I am only a friend to his brother and can't ask him exactly where he is buying).
mpertile – I agree, you can be a socialistic capitalist. You can produce something useful for society and resonably expect to be paid well for it. You are also correct when you state I am attacking greed and not capitalism.
I have no idea what any of the investors on this board are like outside of it, and by the same token, they have no idea what I am like and what kind of information I am privy to.
What I have seen in this country over the past 10 years (especially with property) is social concience give way to greed. It hurts me that the pursuit of material wealth has made Australia so apathetic to the financially impaired – I don't want my boys to grow up in a world full of either hopeless or heartless bastards. I am no bleeding heart, trust me on that. I have no sympathy for those who don't help themselves or those that expect a free ride. I just want to see the 'fair go' return and not in the pretentious way our goverment (both options) bandy it around.
howardcm – you know what my advice would be. Keep looking, obviously, but don't rush in. Watch the interest rates and the advertised values – I don't think anything is going up any time soon. But take into account a lot of advice here (yes, I do read more threads than what I post in) and these investors do know how to sniff out bargains and the legal side of the property market. Trust REAs less:)
mugli – I'm not offended by the question at all and consider it fair and valid.
1. From the replies investors give, I can get a beat on how they are feeling about the market at the moment.
2. I believe this forum is browsed (if not always posted on) by Australian's who aren't investors and/or capatilists and they probably enjoy reading the alternate viewpoints. Point in case, it was Scamp's thread that brought me here – not for the doom and gloom viewpoint but for the way investors were reponding to it.
3. Even minority voices (or posts) can change group ideals.
4. Property Investing (as is this forums namesake) encompasses more than the financial. It is very much a social investment, much more so than banking, shares etc.
5. I enjoy it.
6. I am learning form it.
7. Even investing in a single house for purely socialistic purpose is still investing.
JRr wrote:I don't have a problem withbanks getting bigger, but I do have a problem when they get bigger through monopolizing the market and that's what I think the current business environment allows them to do just that.Like this
http://www.bloomberg.com/apps/news?pid=20601081&sid=aFskJLzyueg4&refer=australia
I will not be surprised if, by the end of the downturn/correction/recession/depression that we are moving into, there are only 2 mortgage lenders left in this country. One for the Queen and one for the West:)
Trouble with capitalism is that unless you get to be the biggest fish in the pond, the bigger you do get the greater the risk you run of being eaten.
