I heard that Melbourne median property values rose over 5% in the December quarter. Am I going mad? I thought I heard this on a radio news bulletin very early this morning, I may have been dreaming. Can anyone shed any light on this? I’m not complaining, it would be a welcome boost to my equity, but this seems a bit rich in a flat market.
Marco[blush2]
Just read the paper and Melb has supposedly had a 5.6% increase in the median price of property for the December quarter. Suburbs where I have my IPs have supposedly outperformed this with around 7% increases. I was rather sceptical of the figures, but when I consider that the owner of the 2 new townhouses built next door to my townhouse in Brunswick (which I paid $420,000 in early 2003) wants $500,000 each for his which are very similar, then maybe the figures do stack up. I know he won’t get $500,000, but if he can achieve even $470,000 I’ll be very happy for both of us.
What
run that past me again
you paid 420k in 2003 and you’d be happy with 470k now
crazy….assuming for last 2 years you be getting 400/wk rent you’ve lost $16,000 no rent minus $30k LOST without adding CPI
if you bought shares in just 1 year you’d be up $162K
forgive them lord…they know not what they do
they hang onto any word that breathes a positive sign…..p.s. CPI was close to 3%
that makes real returns 2%….
but wait… its looking good in 2018/2010..hang in
p.p.s. just a hint guys
if real wages have gone up 14% in the last 10 years (according to the PM whos now trying to restrain your wages with IR) and property prices have gone up 100% over same period…do you think property prices are going to keep growth?????
read the budget…boring i know….but it tells you where the country’s going…not just your street in brunswick
then you might question some of the decision made on the spending, using your taxesthis government carn’t afford for property to go…..
unless we have REAL growth in industry, this country’s stuff
wake up…properties in for the long haulhb..I believe in diversification of assets. I am fully aware of the performance of the stock market since 2003, I already have a share portfolio, although I wish it had been bigger. However, this is a PROPERTY forum. When I want to chat shares, I go to the Comsec chat room.
Anyway, let me explain why I said what I said. I have 3 IPs, 2 I own outright which have both had great capital growth and rental income. The Brunswick one was my latest purchase. My reason for saying I would be happy with a valuation around $470,000 is because clearly the market has been flat since late 2003, so I would be glad to have ANY capital appreciation on this particular property. The rental income has been great on this property too. Of course, in HINDSIGHT, had I invested the $420,000 entirely in the stock market I would have done much better. However, I didn’t have a crystal ball at the time, maybe you did.
Your comment:
“forgive them lord…they know not what they do they hang onto any word that breathes a positive sign…..”
was insulting and could not be further from the truth.Finally, what the hell are you on about when you say:
crazy….assuming for last 2 years you be getting 400/wk rent you’ve lost $16,000 no rent minus $30k LOST without adding CPI
by the way, stock market’s gained about 20% in last year, 20% of $420,000 is $84,000, so your comment:
“if you bought shares in just 1 year you’d be up $162K” is also unfounded.3056
your right, soory, its a property forum…..
lets talk propertyyou buy 420k 10% deposit ..
taking into account Stamp duty on transfer of land:(victoria),Stamp duty on mortgage,Registration of transfer of land,  Title search,Registration of mortgage discharge,Loan application fee / package fee,Mortgage insurance,House insurance,Solicitor/Conveyancing fees,
then you have 2 years rent at $400/wk
less interest of 7% 2 years,
then you sell $470K, costs Real estate commission 3%(incl. 10% GST),Real estate agent’s advertising costs,Discharge of mortgage registration,Preparation of discharge of mortgage,Attending discharge of settlement,Solicitor/Conveyancing fees:
and lets not forget 2 years of land Rates and water rates
TOTAL LOSS -$60,000add back your depreciation and neg gear costs
thats pretty simple
spreedsheet available…..
3056
cba 2 years ago $30.59 today $43.88 420K invested today $966k
bhp 2 years ago $11.10 today $25.53 420k invested today $600Kseddon 5 years ago 233K today 365K
west melb 5 years ago 381k today 400kignore last one..(thats was 5 yrs)
cba 2 years ago $30.59 today $43.88 420K invested today $530k
bhp 2 years ago $11.10 today $25.53 420k invested today $851Kseddon 5 years ago 233K today 365K
west melb 5 years ago 381k today 400ksorry guys
i couldn’t believe 420k invested 2 yrs ago would make so much.
had to check again
and again….and yes here the FINAL figures
cba 2 years ago $30.59 today $43.88 420K invested today $602k
bhp 2 years ago $11.10 today $25.53 420k invested today $966Kseddon 5 years ago 233K today 365K
west melb 5 years ago 381k today 400kps if you have read the story’s in fin review on the world shortage on zinc…what would you think?
one of our zinc company is booming
take that 420K today..$2million (2 years)but sorry this is a property forum
flemington 5 years ago 253k today 395kyes..yes… i’m thinking long term….
hb…
Please don’t give me a lesson on shares.
I know all about BHP, CBA and hundreds of other stocks. I’ve followed them for years. But you are right, they have by far outperformed property in the last 3 years. But before that, property did much better than stocks. Thats why you need to be diversified. So next time, read my posts correctly. I told you I already have a share portfolio. Yes, I would have done better had I put the lot into shares in that time frame, but i didn’t. Stocks and property both have downturns, but they are both great investments over the long term. What I said was that I was glad to finally see some capital growth in a property which was probably bought near the top of the market, i never said it had been a great investment so far.[biggrin]Why don’t you use TLS in your calculation? Or why don’t you use CBA when it was around $35 before it dropped to $24? It is easy to handpick stocks that have done well after they’ve gone up.
3056
correct
TLS after 2 years lose -$104K on original $420k
Exactly my point. Can we leave it at that, i’m tired of this. If i had have known i would be attacked for my post i would not have bothered. Everyone else on these forums seem to encourage each other and only offer positive feedback.
Hi Steve,
I did not hear the buletin or read the article you refer to but I caught this article on the web that may go part way to reaffirming (at least in part) what you heard. From todays Herald Sun
Property is still fizzing
By TONY RINDFLEISCH
05feb06PROPERTY prices in most Melbourne suburbs have risen since the peak of the last real estate boom, Real Estate Institute of Victoria figures show.
Analysis of 220 suburbs with more than 30 sales in comparable December quarters has found prices have declined in only 16 suburbs since the peak of the five-year boom in late 2003.
This is good news for most home owners and disproves the widely held belief prices have been falling since the peak.
The REIV figures show that in a flat market, blue-ribbon, inner-city suburbs perform best.
Toorak, with a $1.98 million median house price — 75 per cent more than December 2003 — shows the greatest price growth.
Toorak, Brighton, Hawthorn East, South Yarra and Canterbury are the top five performers.
Property adviser Monique Wakelin said the statistics proved that even when the market was subdued, premier locations did well.
“These suburbs are within 12km of the city,” Ms Wakelin said.
“We have consistently said if you buy the right property in the right location it will not only hold its value during a plateau or moderate downturn, but the really good areas will continue to grow in value through a plateau.”
REIV chief executive Enzo Raimondo said the figures reflected Melbourne’s “soft landing” of property prices.
Low inflation and unemployment had supported the market.
Suburbs showing price falls included Footscray West, Newport and Donvale, as well as Surrey Hills and Williamstown.
Ms Wakelin suggested Surrey Hills’ comparative lack of diversity, and resales of new developments in Williamstown could explain the data.
++++++++++++++++++++++++++++++++++++++++++++++++++++Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Thanks Derek. By the way i’m Marco, not Steve.
Ooops[biggrin]
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by hb:sorry guys
i couldn’t believe 420k invested 2 yrs ago would make so much.
had to check again
and again….and yes here the FINAL figures
cba 2 years ago $30.59 today $43.88 420K invested today $602k
bhp 2 years ago $11.10 today $25.53 420k invested today $966KIt’s always easy to talk about share market successes, but what about Enron, HIH, Ansett, OneTel, WorldCom, Harris Scarfe, Burns Philp, Arthur Andersen, Esso at Longford, etc, etc.
I am not against investing in shares. In fact I hold some very good share investments. Shares are good as long as you have the money to invest. But the thing to appreciate is that property allows leverage.
It is worth remembering that investing is about long-term returns, not short-term gains. If I wanted short-term gains I would trade, not invest.
Say, I have $200k to invest. I would have 2 options:
1) A financier may give me another $200k so that I could buy total shares worth $400k. At a net 12% annual return I would profit by about $435k after 5 years
2) On the other hand, a financier would be happy to lend me $800k to buy a property worth $1m. At a net 10% annual return i would profit by about $530k after 5 years. About $95k better off than option 1.
You of course need to be mindful of your own perticular financial circumstances from a taxation, cash-flow, etc, etc position.Cheers
PyramidI LOVE PROPERTY
in fact i have in excess of 4mil tied up in property.
and only 20k in shares….so why the big deal on shares…
15 years ago i was too narrowly focused…..
property, property, property..
all bought in recession….cheap.having recently sold a penthouse in noosa,
and then doing the comparison figures between it and shares
(blue chip noosa…blue chip cba)
instead of having 1mil to invest today, i would have had 2so i’ve removed the blinkers…and read all sorts of forums…including property…and look at all sorts of advice..
a lot old, just a little wiser, i can now see the power in diversifyingHB
Fully agree with your last post re: diversifying and taking the blinkers off. But I think one needs to be in a specific financial position to be able to do so.
There may be an opportunity for “forumites” to learn from your experience and case history. [grad]
How did you get into property 15 years ago? Did you have the money or did you borrow it? Would you have been able to do the same for shares (ie achieve assets of $4m worth in shares) if you had limited spare cash for investment 15 years ago?Cheers
Pyramidhi pyramid
i started Buy,Reno, Sell properties 35 years………
my first property was in Yarraville, 15K….interest only…..i was going to make a fortune…had a full time job, so worked every night and weekends on IP…sold 3 years later 20k.
didn’t have excel spreedsheets then, but my gut feel was…i was a loser.
then, just thru luck, a business was closing down and taking everything back toSA, i’ll save you the trouble, i’ll buy the P&E off ya, take over your lease and pay you over 3 years...no worries
starting capital $1,000
26 years old
same hours as my IP property but all of a sudden the returns where dramatic
i renovated , expanded…
within 5 years, we where generating 10k a week profit…a week!!
we travelled OS every year, at the pointie end of the plane, conferences…we’d take the staff to lunch in sydney…wow…those where the days.
except with high profits comes high taxes…remember then 60%
i got a tax bill for 150K (today about $400k)…sh*******t
i spent 2 months with accountant setting up and educating myself into P/L ,Balance Sheets and accountanting
i was thirsty for tax knowledge
we started our own SMSF…
and that’s where the real investment money went…..remember 100% tax deduction to your company, No tax then ,15% now, on contribution and income.
Yes we had all the family trust, unit trusts etc etc….
but the SMSF, in hindsight, was the best thing we started 20 years ago.
every year, we contributed the max.
imagine 15 years ago, having 400k in cash sitting there, for you to invest, but you carn’t have it till you turn 55.
what a great discipline..its your…but not yet.
but you can invest in whatever you like….wow…and only pay 15% tax on income…..
and when your cashed up, but in no hurry..its amazing what happens.
A recession….people losing homes everywhere..you would open the property page..mortgagee auctions everywhere…
why?
businesses wheren’t investing in P&E, instead they where buying properties everywhere…no matter what price….this was NEVER going to end…borrow,borrow,borrow…
well it did..big time
there’s a ton of examples…..the losses i’ve seem in property are amazing…but personally, being at an auction, when the only people there is the auctionner, the Bank and YOU..is errie.
They paid 12 months earlier…1.2m….we paid 360k….today its worth 1.5m…great for us…bad for them 300k in 15 years…by the way…they also lost their home…totally over geared..and if i still had my yarraville IP today …what would it be worth 400K
30 years later….we where making more than that in 1 year…and having fun.
so when i see
“Melbourne median property values rose over 5% in the December quarter. Am I going mad”i say to myself…i’ve been here before…..
but this time it different….half the market’s struggling ..the other half.(brighton,hawthorn, camberwell) are going gangbusters……
certain businesses are doing very well,some people are getting great pay….so what’s going to happen?Your question: Would you have been able to do the same for shares (ie achieve assets of $4m worth in shares)
in hindsight…if i had educated myself in shares 20 years ago…..EASY and made heaps more…
but my european upbringing taught me property.
i’m happy
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