Hi all,
Just need to touch base to see if anyone else is starting to get an uneasy feeling about buying in this market now, reason being RBA has being warning people about over borrowing for the last 18 mths, the government has put us in a corner where if interest rates were to rise by just 1% it could put Australia into a recession or worse the same feeling as when the interest rates where 18% and the morgagee in posession could be in abundance. I have also heard that houses are over priced by 5 -10% and there could be a bigger reduction in certain areas, peter costello was very careful with his words on 60 minutes about the housing market, speaking to Real Estate of course they say the booms staying for a while, of course they like the super income that’s been coming there way for awhile. spoke to my bank yesterday, who in not so many words, was telling me to hold off for a while I have heard that the banks are getting worried about all the money that has been given out so freely, there toughening up. Has anyone else heard this or am I just being paranoid, a property investor on 60 minutes also stated that the RBA has worned people but they just keep on borrowing, it’s like they go through the first red light and make it so they keep going throught the next red light and so on, and the sad thing is they don’t wake up until its too late and it smacks them in the head. I just don’t want to be caught out and all the hard work gone. What does everyne else think
The market is HOT HOT HOT but if its capital gains your after you need to find an area thats in the early stages of growth. I suspect not Melbourne or Sydney. It may be better to wait if your a believer in the hypothetical Crash ” we have to have”
MJK
You may think its hot hot hot, but a boom has to end sometime that was costello’s words, I just hope that the boom stays for awhile for the sake of people being indebt with the 7 to 8 figure sum, its just so conflicting, people who have made great profits with this boom say oh its going to be here for a long time, nothings going to change and there’s people who have been very cautious and have been doing this all there life 50 years plus saying its going to bust, and they don’t want to get caught out its being going for two years. Well I just talked myself into it I’m going to hold back buying for at least 6 months pay off as much of my existing properties as possible, so if anything does or does not occur, I won’t be in a huge hole trying to get out!!!!!
Real life case study.
A good friend of mine is a Real Estate Agent. They sold 3 units to an investor 12 months ago for $80K each. Rental $165 per week each. A good deal for the investor.
The investor is now putting the units back on the market at $190K each and is expected to get close to that. A good deal for the new purchaser – I don’t think so!
Cheers[
]interesting point
fyg just say i were to find a +ve geared property
returning 10.4 pct. good deal eh! meets the 11 second rule – ive done my due diligence no bikies next door etc etc.is it a good deal however what if that same property returned 30 pct only 12 mos b4.
either the market ‘was’ underpriced. or the market is ‘now’ overpriced.
i might be wrong but it hink returns in the country areas have historically been alot more than 10 or 11 pct?? and these high returns would merely represent the premium for the risk of investing in the country areas.
from what i can tell the risk hasnt really changed but the price and the rent has
can anyone clarify what historically has been a good rural/country town return???
or is this a case of how long is a piece of string..
I’ve heard country towns of Bendigo, Shepparton, Ballarat is good, also Murray Bridge in SA I know of a farmer who sold his pig farm and now owns 11 houses in the main street of Heathcote VIC.with a population of about 3500 where his wife every thursday goes around in the mercedes and collects the rent for the 11 properties.
with low interest rates low unemployment and people still uneasy about the sharemarket, i cant see a “bust” so to speak occurring. prices will flatten in the apartment market and mild losses will occur, however people still want to invest look at all the shows on tv “renovation rescue” “the block” diy this diy that. People believe theres money in property. I think people are getting more savy now, buying houses in areas with low development, future potential, close to the city, transport infrastructure all that jazz. If a mythical bust did occur then hey that would be great for investors anyway. Bargain property!
That’s if you can afford the bargain properties, if interest rates go up a percentage, they stated that the borrowers would feel a pinch worse than when the rate was at 18%, you must have your properties freehold, or very good tenants, do you think of what would happen if you couldn’t rent out you property for months, interest rates have gone up too do you have the capital to survive. Thats what I’m question people who are borrowing at a fast rate, but are they looking at the what if’s!Please don’t tell me your living in a fairyland where the house prices will keep going up and interest rates will come down. I’m not having a go I’m just trying to warn people, to be careful it would be awful to hear how people lost everything because they got to cocky,c a know it all and it all backfired. Listen to reports there’s more and more coming out that its going to end. As for the RENO & diy shows, come in spinner, people are making more of a mess then if they didn’t renovate and left it as it is. Money wasted. Unless your renovating for profit!!!!
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