yes you are on a winner with Queens Park – Cannington has gone crazy and Queens Park / Kenwick and all around there will be next to really benefit.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
Redwing & Tikki,
Derek has explained the confussion, my bad.
Cheers,
Benson
AusProp: what yield do you consider to be “good” for your Thornlie property ?ie what weekly rent would you expect ? (just curious)
Isn’t it funny how a suburb can change its status.
When I was in Perth, you would never consider buying in a place like Queens Park. You look on the map, and it looks ideally located, close to major arterial roads, and even the city, but you drive aroud the streets and its all run down and scummy.(maybe not anymore, but it certainly was not so long ago !!)with a reputation for high crime rates and breakins…
Does it take someone with a different viewpoint/perspective (maybe buying sight unseen ?) to change the perception/reputation of a suburb ? and then if this is followed up by many others (the herd) does it then become self fulfilling ?
A friend and new convert to “positive gearing” was investigating Geraldton as a likely spot to invest in, and the agent he spoke to told him that he couldn’t understand all these Sydney buyers snapping up all the properties sight unseen in certain areas that he considered to be “scummy’ (both the properties and suburb were scummy)
Maybe the agent and locals are out of touch with the real amrket, or so far within their comfort zones that they could not imagine property prices moving up so much and so quickly…Change of subject: what does anyone think of Alan Koeler’s article in the weekend paper regarding global influence on interest rates by 2006 and flow on effect to Aust. proerty prices ?
Seems to be we are a bit inward looking about local influences determining property prices, whereas according to him, forces beyond our control and the control of the Reserve Bank will determine the outcome, which includes increased interest rates (regardless of whether the reserve bank want to raise them or not) and falling property prices…..KP
Hi KP – fist I should point out I don’t actually have a Thornlie property, but am considering it. Purchase price say $180k, rental say $180/wk. so that is 5.2%, be conservative at 5%, with combined excellent cap growth prospects. There is also a shortage of rentals in these areas. Yes it’s negative, but we’re are talking city properties here with large land content. If you really want to push your cashflow – look at units in these sorts of areas.
Queens Park – it’s no oasis just yet, but on its way. I hear what you are saying about local agents and it’s very very true. SOMETIMES when you are selling you can get better prices using non-local agents as their minds are a little more open. Valuers cause similar problems and as one gent described them, they are ‘glorified historians’ which always amuses me when I see some of the valuations that come in – particularly when it is a new concept or standard for an area.
That article – I read it very quickly and thought that was why I didn’t get the drift of it. I was equally confused as to how rates can go up without the RBA putting rates up. I would re-read it again – is it worth the time? not sure…
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
I think the point he was making was that Ian McF would have no choice but to put rates up in line with rising global interest rates.
The domestic rate has an immediate impact on the AUD.
The RBA spends a small fortune in buying or selling the currency to maintain in within a bandwidth where they feel it should be.
The RBA only has finite resources to do this with.Rising rates are on their way.
How many property investors have experienced rates up around 10% or more?
Many have, but I am sure many also have not.
How many have factored this into their calculations ?
A -ve property gets more -ve as the rates rise, which is fine if you can hold on…but if you’re maxxed out on your cashflow and your LVR and face the prospect of increasing repayments and decreasing property values….
And don’t rely on rental increases to make up the shortfall. They currently supposedly lag the property price (property prices have increased strongly las 12-18 months but rents have not kept up)but all you have to look at is the To Let colums in the weekend paper to understand that there are HEAPS of rentals available, and thus pressure is kept on rents increasing.I don’t think there is anything special about what Alan Kohler has written, only that it is symptomatic of what is to come.
Cheers….KP
Originally posted by The Mortgage Adviser:You mentioned interest rates as high as 10%. I had a loan at 18.5% when I was 18 (early 90s). Labour was in control then.
Hi Rob,
Amd I’ll be very surprised if this card doesn’t get played in the campaigning in the lead up to the next election. Given there are, supposedly, a number of investors who are stretched with the two rate rises of 2003 – this could be a big card too.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
I *still* thought Queens Park , Cannington, Carousel areas were a problem ??
Last few times i’ve been around the Westfield Carousel and Train station area didn’t look to hot..I’d have good locks and alarms.[fear]
HOWEVER-
Suburbs in Perth with a median price of less than $200k and an annual Growth rate of 10% over the last 5yrs include:Balga, Clarkson, Coolbellup, Gosnells, Langford, Parmelia, Queens Park, Merriwa, Rockingham, Warnbro
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorMA: Yes I remember rates at 18%. Was also in the market holding property and struggling to keep up with payments.
What I was alluding to is that rates are on the way up and at 10% in approx 2006, investors that got in this time at 6% will struggle at 10%, just the same as I struggled when they bit me in the bum going from 11 to 18% in the early 90’s
If they go to 10% its not an issue as far as I an concerned (we’re not leveraged to the hilt this time)but it will hurt some if not many and there will be a falloutCheers, KP
The mortgage industry is the best ever. The overheads are low (unless you open a shop). When rates go down, more people buy… when rates go up, more people refinance. It is a CAN’T LOSE business!!!
That is until the unemployed REAs join the laid off bank managers and the dotcom refugees and become mortgate brokers.
Then there’ll be more brokers than loans ; )
Peter
What other areas in Perth are good and yielding a good return.
Originally posted by Property9:What other areas in Perth are good and yielding a good return.
Hi Property9,
See this thread –
https://www.propertyinvesting.com/forum/topic/9746
there are a number of different comments made that you may be able to distill into something of use.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thats an oxymoron Property9,
Good area + good yield ?
Its one or the other I believe(for Perth)…and the feedback I have been getting is that yields are pretty average across the board …especially in the Perth metro area..thats why they’re all flocking to regional areas chasing the good yield.
I had a Sydney investor who moved to Perth all cashed up (semi retired) looking to buy property. According to him, he looked from Yanchep to Bunbury and came to the conclusion that the return was not there, and the “to let” columns were too long in the papers.
He was contacting me regarding a property I had for sale in a regional mining town, showing a gross yield of 10%. He wanted to jump on a plane and come up to see it, commenting that he wanted to buy two at that price. Unfortunately for him it sold.
The word out there is that the boom is over, moderate growth for the next few years, and interest rates on the way up. Doesn’t sound like prospects for good growth or good yields…KP
*Start* looking up north also
Broome’s running out of land, lots happening around Karratha, Geraldton etc..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorRedwing – I don’t know a lot about Broome but I did read the prices were effectively being pushed up artificially by the inability of the state govt to deal with the native land claim. My concern would be that when it is resolved there will be plenty of supply of new land? I was interested in Karratha but hear mixed reports about it.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
Hmmmmm…
I am in Karratha and I’ve been to Broome.
Personally can’t see what the attraction is with Broome. Must be something I’ve overlooked coz Qantas and Virgin blue run direct flights from Melb, Sydney etc. to Broome.
Maybe its the “thaw out” factor with Melbourne visitors.
To me its like the Gold Coast, OK to visit but seriously overrated.
But Broome ppl wouldn’t live anywhere else…
Lord McAlpine transformed Broome a few decades ago, with his vision and investing huge capital in the town, but he has since sold out of the place. His opinion was that Broome should have been colonised before Perth and been the capital of WA. He gave various reasons for this…Karratha ??well, rents are very high, costs are very high, properties show a good yield, with low vacancy rates. There are some passive investment properties where the tenant is the Govt. (GEHA) or the Defence Housing which offer long term leases (5 to 10 yrs) and may include the tenant paying for maintenance items and maybe even rates and taxes..but in my opinion, this is built into the asking price ($300 to 400k)
Unless you have a good PM or are familiar with the location, all I see is RISK investing this way…KP
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