Property bust not here yet … worse to come

I'm looking at apartments in Melbourne. Two weeks ago I only found two listed for <220k. This week, I found five pages of them. Many under <$150k, almost half are claiming 'price reduced' etc. Is this a result of fire sales due to possible interest rate rise, or was my search two weeks ago just unusually unfruitful?

My piece relates to my clients, which is a microsm of the population. I gave their age range and back ground, and all but two who bought in the late 90's will come out behind. The best so far was a city apartment bought 98, sold in 2005 for a loss after capitalisng purchase and sale costs – and it had been negative every year. (and that was the peak growth period), lots of these people bought new or near new apartments, they let others sell them property (Often with sellers fees built in at 10%).

I never said, you or any of the other smart operators here who only make huge gains, and I never saidanything about Perth, or the trolls who drop in from time to time with the "next year it's gonna boom" spiel, but my clients. The naive investors who drove up the market and ask any accountnat with a few over 55s and I think they can tell you of some if not a lot of their clients who have done the same.

Also on the stats on property question. One of my clients made the property pages over ten years ago when he sold his Mosman house for 950, 000. The piece saif he bought it for 410, 000 less than ten years before. It forgot to mention that he put over 500,000 in improvements into it. Take into account stamp duty and commission, and yep he lost

But the piece only mentions the buy and sell,….funny about that.

I know quite a few agents were keep open for inspections they had in the morning and rescheduling any after about 12pm. Next one is Melbourne cup…. LOL

D

Wow, are you getting all defensive on me ?   I only asked because I find it unusual to hear that someone who bought a house in 2000 is bleeding , unless he unknowingly  built a mansion on top of a toxic waste site. 
I find it incredible that most of your clients who bought in the last 10 years are all bleeding, no matter what capital city you are in prices have gone up since 2000 unless they have been ripped off and paid 2x-3x market value 10 years ago.  Even 50% overpriced and with seller's fees of 10% built in the price depreciation and NG over all these years should have helped them get ahead.  As their accountant you have advised them about that I hope.    

No you didn't say that, but are you saying  we  "only make huge gains" because we don't have you as our accountant ?
I haven't seen any trolls with the "next year it's gonna boom" spiel in here but I did see a few with the " " xxx-insert your reason here-xxx will pop the bubble soon" and " this is crazy, the  real carnage will begin soon "   type of trolls around, do they count ?
The "naive "investors who ignored "expert" advice and used common sense probably did alright if they bought 10 years ago.  Its the truly naive people who listened to unfounded doom and gloom spread by "experts" in search of their 15 minutes of fame and followed their advice who may not be doing so well.  Btw, do you only add up numbers for your clients or do you also advice/discuss with them financial strategies ? I'm guessing you are not or else you wouldn't tell us your clients are bleeding, next Xmas instead of a card and hamper basket maybe you should send them a ticket to one of Steve's seminars or some investment books.  LOL

No, what is funny is that you gave it as an example when you were trying to make the point that anyone who bought in the past 10 years is bleeding.  How much would that house be worth these days, if he spent 500k on improvements I'm guessing at least  $2M ?  Its a shame that someone as naive as this person didn't get some advice from you or his financial adviser to tell him 
1) not overcapitalize on the property if he intended to sell it    
2) demolish and build a new one for less then $500k
3) since he spent 500k in improvements  keep it for a few years.
4) wait for prices to stop going up before selling

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You are not alone SydneySider2000,  short of some rare unfortunate case of bad luck everyone who bought 10 years should be sitting on some major capital gains and a decent return on their investment.

Well done.

Well done again.

And well done once again.

And another 'well done' going to him.  Was this your example of a bleeder who purchased 10 years ago ?   Short of using the Mastercard at 24% interest p.a  to purchase properties back  in 2000 and holding them until now he should be reasonably happy with the profits he made.  If he ignored his advisers and kept his Mosman property for a few more years he'd have scored  5/5   lol

You can say it and I'm sure there will be some bears who want to believe it even if you didn't say it ,  but do you have any real examples of bleeders who purchased 10 years ago and are still bleeding now  ? Lets not use real homes as examples because with population increases the city expands and actual homes increase more then the increase in median prices. Lets use the median price of a Sydney home 10 years ago and the median price now,

http://www.myrp.com.au/sydney_house_prices.do

Ops, even the medians almost doubled and that despite half a decade of little to no growth. And we all know what happens after a period of no growth …  

So how could someone who bought a house (rather then a median)   10 years ago possibly bleed ?  As the article said, going back 20 years the results are undeniable,

Quote:

http://www.theage.com.au/business/property/rewriting-golden-rules-of-real-estate–a-mansion-at-a-time-20101007-169pw.html

Sydney house prices have tripled over the past two decades, but they have quadrupled in the harbourside suburbs in the east and inner west, figures show.

Hi all,

I have been following up with this tread,  I really want to believe what you said gmh454 .
But all the fact shown that it's almost impossible someone bought a piece of real estate 10 years ago and still bleeding now…..

Can you please kindly explain how did that happend in detail so that all of us can avoid this disaster happen to us.

I have an example.
Buy any house in 2000.
DON’T INSURE IT
then burn it to the ground.
That’s one way to lose money
………..actually…………..
The land value alone would probably put you in front so scratch this example.

HHmmm good points here however,

How long is a piece of string?

I bought an old sh.tter in 2000 knocked it down built a 40 square pool 3 marble baths and am up one million profit HOWEVER

If I had to upgrade in the same suburb (Hunters Hill) i need another 500K

I don’t believe a lot of people make money because you have to replace it … 99% of people don’t like to go backwards.

1971 Nixon took away the gold standard from cash and since then inflation has gone through the roof.

Lot sizes have come down from 900 – 350 m/2 … actually OS people live more in apartments than houses, aussies will have to change their way of living.

Over the last month I left Sydney for a World trip including. London, Italy, China, Taiwan, Paris, Switzerland etc NOT usa because every one else is doing that.

Australia is CHEAP on the bottom end like bedsitters, Motel rooms, and studios and that is where I am going to focus … the PPOR is too hard to pick because even on one side of the street to the others prices change.

Paris is $1,500.00 per month for 15 squares thats about a car space.

Top end is dropping folks get on a plane and do your home work it is better than turning up to a 3 day boot camp believe me.

I think Kiyosaki is right over the next 10 years middle class will be wiped out unless they get financially smarter.

Regards to all and I am in Taipei returning to Sydney Monday after 33 days on the road.

Phil Sigglekow

if they bought 2 years ago and lost money I would believe it. That is “in the last ten years ” also.
Honestly mate you did imply a ten year timeframe