I heard on this morning’s news a report from a “proporty expert” that property prices will plateau in 05 before a dive in 06. Unfortuneately they did not attribute the quote to anyone (or I missed it).
Did anyone hear this?. If so, what are the creds of the person who made the statement?
markk
Happy Hunting
http://www.kentscollections.comHey Markk,
I heard the same report on the radio and thought I’d better investigate. The forcast come from http://www.bis.com.au
Check it out, its an interesting read.
Broome,
Do you want to be paid when people pay their telephone bills.
http://www.homebizleaders.com/4537i couldnt find the link – if someone finds it can u please cut and paste
rgds
Hi Guys,
this is something, that in MHO, this is not the right time to be buying property for capital appreciation, unless your willing to ride the bumpy ride ahead, personally, im finding the share market, very rewarding at the moment, and it is putting private investors and traders, in very cashed up positions, though im also finding traders/investors, from other markets than property, are buying up property… due to there cash acceleration their recieving right now.
but to put in more solid assets… personally im having a ball in this market.. and still buying properties up, but at market value… some other close people who i network with, are also loving this market too..
Cheers,
sisWhere did u hear it? Was it on the news??? perhaps lets wait for this evenings MX edition
Hi all,[biggrin]
Why wait for 2006
From the following link
http://www.realestateview.com.au
State of the market
10th November 2004
The latest housing market statistics confirm the end of the housing boom with median house and apartment prices and building approvals in Victoria continuing to decline.According to the latest REIV figures for the September quarter median house prices are down 1.3 per cent to $366,000, while apartment prices have fallen just 0.7 per cent to $290,000. The figures represent a reduction in median house and apartment prices of 2.4 per cent and 3.3 per cent respectively over the past 12 months.
The regional centres followed the trend with Ballarat’s median price down 1.6 per cent to $190,000, Bendigo down by 2.9 per cent to $203,000, and Geelong down by 2.5 per cent to $275,000.
REIV chief executive Enzo Raimondo said the figures provided further evidence that the residential market had returned to more sustainable growth patterns and had entered a new property cycle.
“We believe price growth and activity levels have bottomed out and, given the current economic environment, we are likely to see a period of stable or minor growth in the foreseeable future after three consecutive quarters of negative growth,’’ he said.
The REIV figures revealed Melbourne’s three most affordable suburbs were St Albans, Meadow Heights, and Hoppers Crossing and most expensive Toorak, Brighton, and Kew.
On building approvals, September quarter figures from the ABS show that, seasonally adjusted, total dwelling unit approvals fell 3.8 per cent to 12,928 nationally, the lowest figure since June 2001. In Victoria there were 3232 dwelling unit approvals for September, a fall of 10.3 per cent from August.
PS Enzo Raimondo always says figures provide further evidence that the Market is recovering blah blah.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
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 Bis Schrapnel report, while I haven’t read the report, is probably hinting at the start of the Baby Boomers retirement episode. It has been calculated that the oldest BBs reached 55 in 2001. If retirement age is 65 this group will be reaching retirement in the year 2006. As “empty nesters” it is thought this will herald a period of asset dumping or at least selling down to smaller homes. A good guess is that the property market will not be booming and one should not expect capital gains. A wise move might be to consider where a lot of retired people would like to live. When that is worked out, then that maybe a good place to invest.
This is a world wide phenomenon and many people may want to move to Australia from overseas and you may find a lot of city dwellers anxious for a move to the coast. There is a lot to consider.
A serious investor would be foolish to overlook the opportunities that will occur as a result of this event.Regards Marsden
I reckon this baby boomers thing is overstated.
Interest rates is the main driver of real estate.
However there are some effects from baby boomers. These are as follows;
1. They have the retirement money to invest eg super and have bought property. Herd mentality.
2. Some have bought second homes on the coast.
3. Some have downgraded their homes.Those baby boomers who have sold their city home for a beach or rural home are in for a shock. I have heard of many cases where a baby boomer has sold his home and bought near beach only to be away from friends and family and infrastructure only to return to the suburb their family grew up in.
But the main driver of property prices is interest rates. Decrease interest rates property prices rise – increase interest rates prices fall.
marsden – what you say is def backed up in the latest API magazine. Sure some people miss their family and friends and then move back to the city but then again many dont!!! have you been to the beach recently??? it has cafe’s, golf courses community groups etc etc. and family and friends love coming for a visit..
infrastructure in country areas is improving. baby boomers are selling out of middle suburbs and buying lifestyles. city apartments and coastal rural areas are gonna continue to do well, even though as some may say they are not QUALITY property….
ignoring the baby boomer element, or even downgrading its importance is unwise………but thats the risk you take!!
Dear Yack,
Your interest rate theory is soon to get a very big test. The baby boomers have been driving house prices from the 60s and, it is very true, they have been ‘manipulated’ by interest rate changes. However, the BBs are going to try cashing up and prices will drop despite any interest rate movements. The only way prices will not drop and that is if someone arrives to buy their properties. Migrants may but it appears that we may see property fail to some extent.Regards Marsden
I think that the easten states markets will continue to fall and stagnate for a few years, share markets will be the big winner for the next 3-4 years it so cyclical. I still recon there is still value in sa and wa ip’s and they should continue to grow in value. If interest rates go up so dose the competition for rental property, first home buyers become wary of investing due to market hype on interest rates. So if rates go up so do rents (supply+demand). Just my future prediction.
Yack your theory that mummy’s boy returns to his suburb in a big city doent hold true with me. I have moved to Coffs from Sytdbey and would never go there unless it was to catch a flight. We have more visits from our old friends and our new ones too to keep us very busy, and as for missing the family, not in this life.
Happy to be close to the water and in easy drive to brizzy for the odd reno to up the rent. Baby boomers selling down, good. All that means is there will be bargains which may again be cashflow positive too.
Lets see what happens, and no matter what, smile and move on.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
I’ve seen two properties recently where prices have been reduced by about 15% from their listings 12 months ago. One was grossing 10% 12 months ago, so will now gross 11.5%.
I’ve seen one property that I looked at 12 months ago sell at auction for 65% of the asking price then. 24% gross return on auction price. I was in the middle of settling something else so I wasn’t in a position to bid. I know Jenman might not be too popular with some, but I’ve seen a lot of auction agents cost their clients. With this auction they used an agent over 100 km away, short auction advertising period, only open for inspection twice before the auction from memory on weekdays.
Dear CRJ,
This may be prices returning to reasonable levels after being heavily inflated during the boom period. I see prices dropping but some of the starting prices were just not realistic. I guess we will be back to normal when we see the 1% rental theory apply again. When you pay 300k for a property and will expect to get $300/week rent.I’m looking forward to buying good sound properties and being able to rent them out for a good return. Searching the corners of the world for a good yield is not my idea of sensible ,long term property investing.
However, we don’t want prices to drop too far because we have that capital gain in existing IPs to protect.
Regards Marsden
marsden – for me property investing is like any investing and if that means going off shore then so be it!!.
i have shares from around the world so why not property…
being SENSIBLE might lose you money!!!
be careful when using well known chliches like ‘only invest in ones backyard, dont invest int he country side, only buy a place you yourself would live in’…..all off these things are cliches which will stop you seeing a GOOD DEAL when one presents itself.
Dear Rogue,
I try to avoid using a cliche’ unless it is appropriate. I checked my last post and I am unable to see that I had.
I have properties in 4 different countries and I feel I was sensible when I bought these.
I prefer to operate in familiar teritory for obvious reasons. I also try very hard not to lose money. I guess I don’t understand your response and hope you will elaborate.
Regards Marsden
marsden – ‘searching corners of the world looking for a good yield is not my idea of sensible long term property investing’.
maybe i interpreted this incorrectly as having a dig at those who have successfully moved around the globe to buy high yielding property that makes good money..
sorry if i cuased confusion….
Dear Rogue,
Nope, not a dig. I was just saying it would be nice to get back to operating in our own backyard. I was also hinting (or hoping ) that rents would get better and property prices a bit more in line with rentals.
My response to the original query suggested that the concern had to do with the baby boomers retiring and selling to fund their retirement. It appears that this may happen and we will experience some property downturn. This suggests that good solid properties will endure where less sound purchases may not. Don’t be caught out!
Regards Marsden
marsden – no worries…
i would however like someone to define ‘good solid property’ as i too would like one…
anyone care to have a go at what w good solid property is over the next 10-20 years???
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