- simple wrote:Hey Guys, this thread started by D on June 5, 2006.
Anyone want to summarize?
1. Early indication of problems in RE in June, 2006
2. First major signs of instability in December??? 2007
3. Today indications of RE loosing value (only small %), September 2008Seem like as time passes it just becomes worse. Given trend we have and based on past experience it seem like next 12 months situation to cause further reduction of RE value. I some how do not think we "have reached permanently flat plateau"
Not sure of the exact numbers but if you bought in SEQ or SA during 2006. You would be able to see a fair price drop before you even get close to your original purchase price.If you bought at the peak and have to sell then you may be in trouble. But this is a small % of ther population.
Its also a shame that like many say around here interest rates will not drop any time soon.. …….. Hang on a minute
devo76 wrote:If this is true does that mean Sydney and NSW are ripe for investment since they have had little to no growth since 2005 for the majority of property. effectively missing the extended portion of the bubble.I haven't been watching the Sydney market so much but it seems the outer western suburbs are pretty low. Doesn't mean they can't go lower though…
Before SA had it's most recent price increases, everything there was pretty much in line with wages/inflation IMO – now, like most other places in Oz, SA is overvalued – though not as bad as most. In some ways SA is the state that is the camel back breaking straw, having an economy that was unable to support rampant speculation and investment.
Perth has the misfortune of being Australia's L.A. I used to live there, so I feel sorry for the place.
If the average wage is 60K (give or take), then the bottom of the housing market in all states should be between 200K & 240K, with entry level rent around $200 PW. It's not there yet but I am 95% sure it will be within 2 years.
devo76 wrote:Its also a shame that like many say around here interest rates will not drop any time soon.. …….. Hang on a minuteIt's for local politics, the RBA is trying to boost confidence and stop a recession. Have you seen whats happened to our dollar since? Quickest falls this year. That mineral export thing that is supposed to keep Australia strong is worth around 2.5% less because of a .25% rate drop that the commonwealth bank still hasn't full commited to.Peter is being robbed 10 times the amount Paul is getting paid…
devo76 wrote:Not sure of the exact numbers but if you bought in SEQ or SA during 2006. You would be able to see a fair price drop before you even get close to your original purchase price.If you bought at the peak and have to sell then you may be in trouble. But this is a small % of ther population.
Same for SA where you would have easily made 50% if you bought in 2006.
POPULATION SIZE AND GROWTH
Australia's estimated resident population (ERP) at 30 June 2007 of 21.0 million people is projected to increase to between 30.9 and 42.5 million people by 2056, and to between 33.7 and 62.2 million people by 2101. Series A projects the highest growth, while Series C projects the lowest growth.
Queensland is projected to experience the largest percentage increase in population between 30 June 2007 and 2056, more than doubling the 2007 population of 4.2 million to 8.7 million people by 2056. As a result Queensland is projected to replace Victoria as Australia's second most populous state in 2050.
Hi Bardon,
And another stat I read was that the CBD of Brisbane up to 2.6km from the city is the No. 1 area to invest for long term profits … I am now only investing into high quality investments and holding for the long term … all our SMS is going into quality property, sorry all you financial planners I would rather own a 1 bedroom investment property in Brisbane CBD than invest in shares IMHO
D
wealth4life.com wrote:10% rates this year and rising …well, since you bumped this old thread…. how are them rates going ?
I hope you didn't lock in at 8.5% to invest into them high quality investments of yours.
Thanks Harb … actually worse and I'm embarrassed to admit it …
I locked in with Citibank on a fantastic rate of 9.14% for 2 years wow what a deal … I just received a letter today that they put the rate up to 9.26% and I'm fuming !!! … I'm on the line now waiting so will definitely refinance with another lender as long as I can get my 3million loc
D
You never know – rates may still rise. We may even see a decoupling of banks from each other, in some ways we already have. Why is Combanks fixed term more than a whole percent greater than Westpaks? Imagine if, within the next couple of years, banks start charging interest based on thier security ratings…
"Roll up, rolll up. We can't promise we won't go bankrupt and sell your mortgage but as long as we're afloat it's 2%!"
vs
"Your mortgage is safe here but you'll have to pay 15% for it."
wealth4life.com wrote:I locked in with Citibank on a fantastic rate of 9.14% for 2 years wow what a deal … I just received a letter today that they put the rate up to 9.26% and I'm fuming !!! …How can they do that, and what was their excuse ? I suppose the exit fees would be something ridiculous like $50K or more to stop you refinancing ?
ummester wrote:You never know – rates may still rise. We may even see a decoupling of banks from each other, in some ways we already have. Why is Combanks fixed term more than a whole percent greater than Westpaks? Imagine if, within the next couple of years, banks start charging interest based on thier security ratings…Yeah sure, they may rise and the banks decoupling from each other just like they decoupled from RBA .
I can just see in a few months when cash is flooding the streets, rates falling at 5% or lower and and no takers the bank manager pimping on the sidewalk trying to drag passers-by in his bank to sign them up for a new loan.
How many takers for the fixed product do you think Commbank has these days ? My guess is not many at all. They'll pass it on soon enough and before the RBA drops it again , that way they may still get some poor sucker hooked on the higher rate yet don't look like greedy bastards when the next cuts arrive.Yes interest rates are a dilemna for me now. This time last year I was convinced they would continue to rise and stay up there to at least combat inflation. So I fixed my investment loans at 8.25% now I will see how much it costs me to break them.
harb wrote:How many takers for the fixed product do you think Commbank has these days ? My guess is not many at all. They'll pass it on soon enough and before the RBA drops it again , that way they may still get some poor sucker hooked on the higher rate yet don't look like greedy bastards when the next cuts arrive.Obviously it depends on the price difference but I would be happy to pay a small amount more for a secure mortgage – especially with the way banks have become an endangered species.
So how is everyone enjoying the roller coaster ride???
It's not going exactly how I thought it would – but I guess that keeps it interesting
I thought that governments and banks (worldwide) would play a lot safer than they have been.I remember a few people telling me I was crazy for fixing my loans at 6.5% 2 years ago, when rates started to climb.
Will be interesting to see what things are like just before xmas as that is the traditional spending time when people max out their credit cards etc.It's interesting reading back on our comments,
China may now go into recession.
Petrol under 90c go figure that one.
Interest rates under 5% go figure … but
Australia will hit 100 billion in credit debt … this is not good.
Bank credit will tighten further.
D … merry xmas
why don't the govt let people save money and earn interest. the reason might be y people don't want to save is because they get taxed on the interest they earn.
Is that a possiblity?
Some people are saving, they may save it in property or shares as opposed to saving it in a bank but at the end of the day its still saving. I don't know about other people but right now I look at the low bank returns and the inflation rate and don't see any reasons to keep the money in a bank. Tax or no tax the returns suck, the chance of any capital gains is 0 and I can't claim any tax deductions for traveling to the bank to see how my savings are doing or any depreciation expenses on my passbook .
No problem with keeping money in the bank especially when it is in an off set account on an IP loan.
wealth4life.com wrote:Yes the world is a changing place … in times of uncertainty it always pays to go back to the basics …I attended a seminar in Cronulla Sydney for a new network group that is setting up Network Clubs around Australia and involving the local communities to attend. One point was made that we lose of sight of the big picture and need to focus on happiueness first when investing … very interesting …
We need to build smarter housing and not huge 6 bedroom with big pools and huge mortgages …
Just a thought … D
I've been wanting to network with others who are interested in investing for a long time. Are these informal network clubs where you just get to know people or do you have to pay to network with other people?
I thought that governments and banks (worldwide) would play a lot safer than they have been.
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