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Thank you for your suggestions.
I have to sell my PPOR to buy another one. A bridging finance is my plan B. I am leaning toward the second option, put an offer subject to a bank loan only. In general will bridging finance has a higher interest rate?
One of the concern is that a .25 % interest rate hike in March next year on already a soft market. What I am trying to achieve is basically to try to sell my house on the same market condition. I really don’t know how the market will swing while I am trying to sell the current PPOR. I quess that will be the risk that I have to take with option 2. I wonder what other options I should consider.Alex,
I think if you buy early then you have made your money and you can afford to ride the downturn because your yield is higher and you have some buffer against interest rate increase should that happen.
Even if the market drops I think it will take sometimes for the rent to pick up. As you know buildings are still going up as we speak so supply will be plentiful for a while.
It’s true if you are holding for long term (investing rather than speculating) it’s probably wouldn’t matter much to you whether the price is going down. Might slow you down in getting the next properties if you don’t have enough equity though.
Rising property market that pushes the prices up does make you wealthier weather you sell your properties or not. The same logic applies when it goes the other direction. That’s how you make the money, from the price increase.
As to whether the next 3 to 5 years will be a prime buying window I wouldn’t want to quess. I don’t know how the economy and interest rate will be.
But since you are only 27 you have plenty of time left. I don’t have IPs but used too so I am talking from my own observation (or prediction)[cap]
Looking at the figure it wasn’t as bad as I thought. That’s about $1400 per person. I know many people use them to pay things like insurances, phone bills, car rego etc and they pay by due date. I know many don’t but this figures I presume is the total amount used on credit cards in the recent months?? It’s fair to say that big portion are paid by due date. I would think the amount not paid by due date is a lot smaller. The concern is if this figure reflects borrowing pattern for other things like nice cars etc, that will be quite alarming.
Thanks for the explanation Phil. I agree with you that at the end of the day only small percentage of the population will retire wealthy (now or in 30 years time). I remember reading about it on Noel Whittaker’s book long time ago. I think only around 2-3% will retire wealthy and large percentage (40-50%?) will rely on pensions.
The irony is that while people and BB’s are buying up IPs and accelerate price increase, the younger generation finding it tough to get into property market. They have to spend large portion of their income on repayments and further discourage them of having children.
Maybe the market will correct itself in the long run?
I quess the government will have to do something with immigration in the near future.These wealthy BBs must be just small percentage of total BBs if you read what the latest news about superannuation yesterday. Some of them will experience 69% drop in their income. Many will not be able to maintain their current lifestyle. I wonder what is the percentage of BBs have IPs and will be independently wealthy enough to maintain their current lifestyle on their retirements.
If that is the case then don’t sell what ever you do. Build or keep the land. Doesn’t matter if you can’t claim the interest rate expenses now provided you can afford the repayment. Doesn’t make sense selling your appreciating asset.
Does it have ocean view? It’s a smaller size block than average Perth blocks.Simond, you mentioned that the sale will go through in December and has added 63K in value. When did you by this land?
Thank you for the information. The thread mentioned enough books to keep me entertain for a couple of months. I am a slow reader. I might start with The Riches Man In Babylon since it covers general wealth creation.
I think I just discovered why I have not made good money in property, I don’t have the feel of the market. I live in Perth and I own my house but has not IP. I could have got into IPs few years back with no problem but I thought it would stop going up much much erlier. Now people say property is on the way down and I don’t see it. I even think about getting an IP, if they are on the way down I rather wait and wouldn’t want to get into an IP now. Maybe I should try other things[blush2]
I’ll keep my eyes open and follow my instinct. At least it’s my decision if I get it right or wrong.
I am not a beach person either but that’s where most people like to live. I prefer to live near the Swan river and the city.
One thing that I don’t like about Joondalup as far as IP concern is the size of the suburb and large number of properties available for sale every week. I feel that will have an impact on the capital growth. Damn I am so confuse where to buy.That explained why the median price has gone up that much. People spent big money on the building cost. Not that an established house has gone up by 40% in one year. It really doesn’t tell you how much they have gone up.
Cases where property prices fall by as much as 60% has hapenned in few places like HongKong and Singapore(30-40%). They were over inflated to start with and had very bad economic condition for many years. I think if the economy remain bouyant and interest rate remain stable we might not even see a further drop than current prices. But I still think the prices will be flat the next couple of years. You need a recession and high interest rate for median prices to drop 30%. Basically as long as people have money ie good economy and low interest rate they won’t be desperate to sell. To drop 30% of your asking price is desperate.
Morley is 9km from the GPO and Craige is 22km. Craige is one suburb away from the beach while Morley is 15 minutes? Which one will you go for? Both suburb has median price 240k. I checked with REIWA, the website mentioned Hillarys went up by 39.8% in the last 12 months. Sounds like a lot off bull???? Maybe they sold 1 haouse of few millions dollars or something.
Did I read less than 3 percent drop in the last 12 months? I don’t know anything about property in Victoria but a drop of that size is not alarming considering how much it has gone up. I really don’t know who to believe, some say 10 – 15% drop some say still holding up. What is going on???
The reason why I am thinking about joining the crowd (Herd) is because I have been wrong the last 3 years and am I going to be wrong again in the next 3 years by waiting? But looks like it’s running out of steam (still I could be wrong). The last 3 years the herd was right and I was wrong. It’s time to admit it.
Hmmm, I am thinking of getting into IP in Perth. Maybe I should wait and see. I have been saying to myself that property prices has gone up way too much in the last 2 – 3 years but finally I thought I should joint the “crowd” and get an IP. Maybe more wait might pay this time. Talking about 15% drop, well I like to see that happen where I live because I like to move to a bigger property in the same suburb but it’s just so expensive now. I would imagine that when it drops the land portion is the one that will drop the most and less on the building component which makes moving into a property with larger land costs less. Am I being logical to think this way?
Also I think the stamp duty is a complete rip off.I am thinking about Craige too. It’s next to Hillary etc and the railway. The prices seem to have moved from 190K-200K to 230-240K in the last 6 – 9 months. I am not sure if the stamp duty exemption has something to do with it. I wonder what I can expect from rental 4×2 or 3×2 around there. Other suburbs that I am thinking is Padbury, a bit late for Rivervale I think since it has gone up so much that I need 270-300k to buy an old rentable place there and the gearing will be very high. Very close to the city though.
What do you guys think about Mandurah in comparison to Perth property. The railway will be completed in 2006 but it’s still a long ride to the city. Will the property growth be as good as Perth? I am trying to understand the change in people lifestyle. I must say I find it difficult to guest what is likely going to happen. Maybe some people that have travelled and lived in other states or countries can have a better view of what is going to happen by comapring what has happened in other places. I know that they are still land around the estuary that is still selling cheap in comparison to Perth.
What is your opinion?Yes, it will be negatively geared. She prefer locations between RoleyStone and Morley, near where the children live. I don’t think she will be looking too far out like Rockingham.
He wants to invest and help his mum so won’t be getting much in rental. But he has a good income and already own a house.
