Yes we looked at Perth as well and found it far too expensive compared to say Queensland which has all the factors of better growth.
Queensland is moving backwards now and we have identified some great deals especially small shopping centre complexes as we are getting bored of investing in houses and puting up with tennants etc
The fact is that all the experts over the last few months trying to pump up the property market have got it wrong. Unless you live on the waterfront the average mum and dad property is going backwards and will get worse IMHO – lets see shall we?
D
Originally posted by wealth4life:Unless you live on the waterfront the average mum and dad property is going backwards
Another good point, W4L! The REAs and their spokesliars are constantly informing us that “demand at the upper end of the market is strong, houses in {insert posh suburb} are selling for higher prices than they were a year, or even two ago”.
Well, pinch my tail! If median prices have fallen, yet sales are strong and prices rising in the luxury price bracket, what does that tell us about the sub-median priced houses?F.[cowboy2]
Oops, edit that. It tells us nothing.[blush2]
Originally posted by wealth4life:Yes we looked at Perth as well and found it far too expensive compared to say Queensland which has all the factors of better growth.
Queensland is moving backwards now and we have identified some great deals especially small shopping centre complexes as we are getting bored of investing in houses and puting up with tennants etc
D
Wow D,
We’ve been studying the “Perth market”, if there is such a beast, for over 12 years now and can only admit to knowing a tiny portion of it well enough to even comment lucidly. How long did you spend running your eye over it before writing it off ??
What did you look at…..there’d have to be at least….guessing now….maybe 400,000 separate properties, some silently listed, most not listed but maybe available, some on the internet, some just have a sign out front, some have nothing, some just in a REA’s window. To cover the lot is a mammoth task indeed. Or was it just a quick high level surf on re.com and then
> straight to conclusion.How can Qld (once again that’s a whole bunch of properties) have better growth “factors” than WA, and therefore overall better, but you say it’s going backwards and WA is roaring ahead…..I don’t follow that logic at all ??
I agree 100% with you however, that over time you get pretty sick and tired of listening to very low paying residential tenants whinging constantly eroding your cashflows. I’d caution the retail side of things though…..we’ve spent quite a few years studying these small shopping complexes and unless you have a solid retail background, can be a big trap for the unwary. But hey, not to discourage you, do your DD and hook in I reckon. nett yields for retail in my neck of the woods have dropped from 8.5% down to about 3.5%, as the flood of residential investors realise that there is perhaps better investments than the typical unit or house. It’s a bugger competing with them, because anything above about 2.5% gross is better than what they are currently getting and therefore think it is Xmas to get 3.5% nett and snap things up.
Good luck with your endeavours.
Thanks Dazz,
Firstly WA is too far away to analayise numbers over the net then fly over to get disapointed.
Most +ve cash flow properties we found were in the sticks and quite frankly from our past experiences of selling properties in country towns it can take years if the market is not right and we like to cash in sooner.
We are currently controlling over 35 properties and are doing well with small office suites in prime locations – however we furnish the suites and rent them fully fitted out getting over 12% return for our trouble and the tennant pays the out goings not like residential.
We are about to exchange on a 51m/2 office now with water views on the top floor, rip out the carpet install vitrified tiles and marble reception desk and other nice stuff. We have a friend who wants to sign a 5+5 lease for $xxxx which will give us a 14% return.
As for QLD Dazz well 1. its closer 2. its on the East Coast 3. thers more happening up there than the West IMHO … cheers
D
As someone who only registered about a month ago, and have since been frantically reading most forums to further improve my knowledge of real estate, I find myself confused over some of things other members have said.
After reading Steve’s first book, and about to begin the second, I was under the impression that property was the way to go with making some money.
I find myself coming to terms with one question.
Is it possible to still make money through property in an ecconomical climate where things are looking grim for property with the likes of oil prices, interest rate rises and water levels dangerously low ?
Is it still possible to find +ve cashflow properties, where these factors have a limited impact ?
Does it matter if i invest in country property, just to get +ve cashflow properties ?
Am I wasting my time with property ?[confused2]
As someone who only registered about a month ago, and have since been frantically reading most forums to further improve my knowledge of real estate, I find myself confused over some of things other members have said.
After reading Steve’s first book, and about to begin the second, I was under the impression that property was the way to go with making some money.
I find myself coming to terms with one question.
Is it possible to still make money through property in an ecconomical climate where things are looking grim for property with the likes of oil prices, interest rate rises and water levels dangerously low ?
Is it still possible to find +ve cashflow properties, where these factors have a limited impact ?
Does it matter if i invest in country property, just to get +ve cashflow properties ?
Am I wasting my time with property ?[confused2]
Hi Cuey no don’t give up the deals are there you just don’t see them with your eyes!!
D
Well, this would be the most interesting forum thread yet! Great stuff. hey Cuey, I know where you are coming from. Unfortunately nearly all the books you get are a few years old now, and things have changed, dispite what all the ‘gurus’ say. The 40 50, and 80 thousand dollar houses most bought and sold/held/or renevated are no longer that price, and people that bought heaps of them, are now using the profits to continue on buying other stuff now, or put into managed funds/shares etc as others have been saying. It is quite hard to ‘enter’ the property investment market now, especially if you have or have had family to keep, and work full time. However that said, it was reading Steves book on ‘million dollars of property in one year (his second one, which I found really motorvational) that got me and the wife started. (along with a few other books). We bought two investment properties in Tassie, and have enough for a deposit left to get something else (probably Vic or SA, and we live in NSW) at the expense of renting ourselves, and it seems to be going well. It will take time though, and some of the books, and even other investors can make you feel a real insecure tool unless you own at least 10 house, do rennovations, and have ‘made a killing’. it’s hard to be balanced, but as you may have noticed there is an excellent ‘collective’ pool of wisdom on this site,, and I think you will still find, that (this is opinion only) as long as you avoid capital cities a tthe moment, (unless you have lots of time and or money to ‘find’ the deals, or pay someone else to) and buy a tad below the median price, and ensure you are not negatively geared, you will be on a sure thing with property……slow and steady. Then later on we can try some of the more adventurous stuff? All the best .[thumbsupanim]
Just like to add my 2 cents worth regarding cycles.
Many talk of cycles as if they are a cert.
However, rarely does one find analysis of cycles extending back into the 19th century. And continuity of cycles depends much on many economic and political variables remaining constant.There are many variables not remaining constant these days- i.e. we are seeing a serious shift of wealth from the USA and Europe to China and Saudi. The USA has been long THE MARKET for all consumables. It’s capacity to continue consumption at current rates is seriously questionable as there is little scope for further debt serviceability. The USA is exporting more working and middle class employment off shore.
If you are not preparing for further contraction in the Australian economy within the next 5 years, then good luck to you.
“If you are not preparing for further contraction in the Australian economy within the next 5 years, then good luck to you.”
whoah – where did that come from? When did the contraction start? (I sound like a doctor!!!)
Welcome WinstonWolfe. I agree. Except I believe further cycles are inevitable. I just think there is a very long way to the bottom from where we are today.
Ausprop, it is quite easy to show that our GDP net of household borrowing and adjusted for monetary inflation has actually been negative for some years now. Then add in the fact that much of the GDP growth over the last 5 years has been an unsustainable illusion resulting from excess consumer and housing spending on the back of the ‘wealth effect’ and predicated on the infinite expansion of debt and historically low interest rates, and, yes, our economy is in bad, and worsening health!
F.[cowboy2]
Originally posted by WinstonWolfe:Many talk of cycles as if they are a cert.
However, rarely does one find analysis of cycles extending back into the 19th century. And continuity of cycles depends much on many economic and political variables remaining constant.Foundation may be able to help me here but there was a significant Russian economist in the early 1920s who came up with cycles within cycles and charted them not back to the 19th Cent but the early 18th Cent.
Can you say Tulip !!!!!!!!
The big cycle depends on every one who experienced it last time disappearing before it happens again and then the mini cycles about a generation long each, take hold.
These cycles are based on human nature, which afterall is what governs supply and demand. Greed, innovation, fear, conservatism.His work is quite good, can’t remember his name let alone pronounce it.
Having said that, I am currently sitting here listening to the slow hiss of steam coming out of the East Coast market, and marvelling at how developers are still throwing up Towns houses in areas where stock remains unsold from a year ago.
Go figure.I’m an accountant and am sure the big talk this year will be should I still hold.
Hi gmh454, My accountant tells me to cash up realise my profits then reinvest, his theory is a profit is a profit – works for him he has plenty.
Now cycles within cycles that has nothing to do with washing machines, please tell me more about this i am very interested!!
Will we have another depression or a subsidised recession??
The Perth market is booming – higher prices than QLD – it’s amazing to me how people follow the flock – i hope they don’t regret it.
Hey great work Winston you are in the game and have a good wife to support you along the way, good luck old chap.
The reason why builders are building NEW properties while other stuff near by hasn’t sold is IMHO people want to buy brand new instead of doing a deal on a one round the corner that hasn’t sold – go figure.
D
Wealth, this Russian economist came to the conclusion that the major cycles are around 40-70 yrs and require the people who saw these mistakes to be out of the workforce decision making before the next arrives.
After these biggies the next cycles run something like
1/ Conservatism 1890s /1950s
2/ Social relevance / 1960 or the suffurgette movement
3/onservative snap back 1970s /1910-1920
4/ Monumental Piss up 1980s / 1920s
Then the cycles repeat.
Each cycle is a reaction to the one before.
Economic Cycles are part of the human condition
Don’t know what they will say about this “ME” period.
Loving your posts gmh!
I’m not sure which particular long-term data series you refer to, but would guess its the data uncovered by R. Shiller for his updated book (remember this is the man who called the peak of the dotcom stupidity with impeccable timing!). He tracked the sales over a 350 year time period for a single street of houses in Amsterdam. Adjusted for inflation, the housed appreciated by less than 0.5% per annum over the long term, if memory serves! The articles about this seem to have faded into the annals of google somewhat…
Ah, here’s one:
http://en.wikipedia.org/wiki/US_property_bubbleBut yes, there were cycles, and cycles within cycles…
So to clarify your above point, are we headed towards an upturn in social-conscience and consciousness? Or will something else have to break first?
Cheers, F.[cowboy2]
Speaking of cycles, there is also those little world events that have periodically happened that have a smidge of influence.
I think they were in ;
1914-1918
1939-1945
1965-1973 ??
1990-1991Obviously no-one in their right mind would want to see it ever eventuate, but if your cycle theory is right I reckon it’s just about time for another big one, not one of these piddly 174 nations vs one recalcitrant….but a whopper.
I’m convinced……. the end is nigh
Thanks Foundation
Originally posted by foundation:So to clarify your above point, are we headed towards an upturn in social-conscience and consciousness? Or will something else have to break first?
Like all economics it is never concrete, but you are right greed should be followed by some sort of social freedom. Think it is seen in the Gen Ys not being as material as the Gen Xs.
Changes that have shrunk the world have a impact, unfortunatley usually seen after not before (a working crystal ball would be so nice )
And Dazz wars don’t change these cycles they just pause them ie the conservatism following the roaring 20s lasted a very long time, as the war put a big pause in it. Does’nt change it though. Thanks for your thoughts.
After these biggies the next cycles run something like
1/ Conservatism 1890s /1950s
2/ Social relevance / 1960 or the suffurgette movement
3/onservative snap back 1970s /1910-1920
4/ Monumental Piss up 1980s / 1920s
Then the cycles repeat.
Each cycle is a reaction to the one before.
Posted by gmh454
Dear gmh how do you caculate a monumental piss up (4) ha ha … very funny.
I still feel the big problems are coming after 2010 onwards when the baby boomers start retireing = 25% of Australias population.
D
You must be logged in to reply to this topic. If you don't have an account, you can register here.
