Guys,
I’ve been buying in the very bottom of the housing market here in perth. The crapiest houses in the cheapest suburbs. I think when the heat eventually comes off the market its the bottom of the market that will be the safest.
My question is: when sydney cooled off, what did the very bottom of the market do? Did it experience as strong a drop in house values at the middle tier suburbs?
Just by the way, i believe perth’s market still has another good 6-8 months left in it as strong levels of appreciation… but thats just my thoughts.
Cabo Wabo
Unfortunately its the opposite. The bottom end was filled with investors and these are the guys who can’t afford to hold. That unit purchased in Cabramatta for $235k in 03 and picked up by agent for $90k @ m’gee sale recently is prime example. No offence to SW Sydsiders but I sure wouldn’t want to live out there if I had the choice. We lived in Cabramatta for 9mths and every night all we could hear was police sirens going off constantly and there were gun shots every 2nd night. Admittedly this was nearly 15 years ago but memories are still very vivid.
There are numerous stories of homes bought in Blacktown and Mt Druitt areas for the mid $300k mark back in the height now struggling to sell for mmid to high $200s. These older fibro places wouldn’t rent for more than low $200 mark. A cabbie told me how he had to sell for a fairly large loss as he couldn’t afford the mortgage repayments and similar stories with his mates. He said he doesn’t understand why its so cheap. Simple – no one wants to live out there and so only investors bid frenzily over each other in utter madness during our boom.
I wonder if areas such as Orelia, Kwinana, Rocko, Leda will experience similar “hurt” when the market cools over in WA.
Absolutley agree, its the bottom end supported by investors that goes first.
Other example is the famous St.Clair property bought for $450k, that the bank had to give the new buyer $250,000 and two round the world plane tickets (business class), before he would take it. I was holding out for first class, maybe I should have accepeted when the auction went to economy.
Hmmmmmm … if a 230k property bought in Sydneys west went for less than 100k, ……what about the lean-to with natural ventialtion and in built wildlife, that I bought for in Woop woop for $$$$$$
back in 2004 ???????Nahhhhhhhhhhh
Hmm, thanks guys… gives me something to think about.
What ur saying is be very carefull of the suburbs where prices have been driven primarily by investors.
You believe those suburbs to be careful of are the lower end of the scale as opposed to the middle tier suburbs. U are saying that in sydney there was a larger proportion or investors in the bottom end than in the middle tier.
I’m gonna do some homework on this and find out what the investor spread is across the property range here in perth.
Good feedback… thanks
Cabo Wabo
Cabo in Sydney before the cashflow positive buy a knockdown buzz got going, most investors advoided the west, it gave lously returns had poorer tennant (in all meanings) and the bad CG was self fulfilling.
I know a lot of people bought their investment property there because they could not afford elsewhere, but also remember a few who bought ten or more.
OK i’m back – i have been up north doing some research on waterfront resort projects for a large Asian syndicate, sorry cannot tell you any more at this stage.
GMH you honestly make me laugh with some of your one liners, please keep it up i love good humour.
My idea of the bottom of the market purchasing for saftey is picking an area like Elisabeth Bay or Darling Point in Sydney and finding the cheapest property in a well healed suburb.
Every city has its best top 10 suburbs and IMHO these have proven prudent over time, how about a Point Piper one bedder or bed sit??
Buy in gloom sell in boom “Rinee Rivkins” favourite quote.
D
location, location, location.
Agree wealth, and glad to know someone has been paying attention.
Hey GMH454,
Could you please restate your previous post as you lost me a bit. “Knock down buzz?” and … where was it that people were buying 10 or more proerties because they could only offord it there?
Walk me through it mate?PS, what does ur Alias GMH454 mean? Have u got a big block Torana or something?[exhappy]
Cabo Wabo
Cabo welcome to the “A/Mod drag racing forum”
Yep it is Jim Rowleys 1974 Statesman that he ran A/mod in. Ran 11.68 and 132mph (on diff runs).
Car ran pro stock by invitation was driven too and from the track with monster tyres and tunnel ram. Had a Hone O Dive, 4.56 on the track and 3.19 on the street. Wheels up launches with licence plate and no cage. Also castlereagh in those days was a slippery track. Read beat Garlits there as he could not come to terms with lack of traction.
Street top speed 172 MPH (and we are not talking theoretical) AND it was not me …..please don’t ask me where
Now mechanically restored back to its undriveable condition.
Sorry what was the question again….
Oh yeah, it was part of the positive cash flow thing, back way before it was a buzz word, Have a colleague whose client bought 10 for around 1.2M in early mid 90s. They had a great rate of return. Buying in that number you became your owner manager of risk from tennant, and could get some leaverage with management as you had a nice parcel.
All west of Blacktown
Thanks GMH454.
I can definately see where ur passion is. As for me, for the past 9 years i’ve driven 308 HZ Prem. She’s a beaut. A real sharp runner. Very clean, very straight. i’ll never sell her.
i’ll get back to you guys in the near future regarding my thoughts on the effect of the investor spread in bottom of Perth’s market.
I’ve currently got a few email discussions going back and forth with a few agents i’m friends with, so i’ll let you know in due course…
Cabo Wabo
Sounds like a nice ride.
Partial to them myself
catch you laterSo who thinks the interest rates will go up before the end of the year and if so whats in store for the various states around Australia.
D
If you believe the press then the chances are slowing – but then – it all becomes self fulfilling anyway really? If “we” believe they are going up then the panic merchants sell, so the press reports selling increases so more sheep follow and so on and so on and over time we have more supply than demand and so prices stall.
My ride, Brock ADP wagon, 1 of 6 made – very sad about his passing. Met him several times and a man of great talent. And on weekends its my imported Chev CanAm, size of an escort with ’69 Camaro 302 factory fitted and street registered – awesome fun
The upside to interest rates rising and the market slowing is hopefully our investment property will get started! We signed up being guaranteed 6 month turnaround which fitted nicely with our o/s trip next year. They haven’t even got council approval of the plans at this stage and its been 4 months – only found out three weeks ago they hadn’t even submitted them, grrrrrr, lies deceipt – then hopefully they’ll be able to get hold of labourers to do the work. Lucky its a locked in price or I’d be seriously (fill in own words) instead of just moderatley – LOL. The upside, yes, there’s always an upside to everything, its worth about 30% more going on recent sales – well it would be if there was a building in place – ahhh, you’ve got to laugh at life.
Cheers
Seth
My gut filling is we will have another 20 points added before New Year. Maybe the RBA will be nice to people and postpone rise just pass the NY mark but definitely move interest up in next 3-4 months.
I would suspect 20-30 more points by the end of 2007. If this is the case (this is what I hope for) – we will go hunting for our first IP as prises already falling in Wynnum/Manly Brisbane on both houses and Townhouses. Higher interest will make more bargains to be available.
[biggrin]I would suspect 20-30 more points by the end of 2007. If this is the case (this is what I hope for) – we will go hunting for our first IP as prises already falling in Wynnum/Manly Brisbane on both houses and Townhouses. Higher interest will make more bargains to be available.don’t mean to offend simple – i hear alot of this type of stuff where people say they are waiting for a huge macro event and then they will cash in and become rich.
i would suggest that most people don’t do it because by then “everyone” is not investing in property and you will be inundated with information about how bad an idea it is and how much money you will loose.
I posted a thread a while ago to see how many people had actually profited from the last sydney slump (the one we are in now???) and there were not to many responses from people who had picked up fanstic deal from distressed vendors.
On a positive note I hope you do follow your plan and get those bargains when they come up and start building a good portfolio of property.
But – it is a good thing isn’t it.
We all can’t get rich at once so only a very small percentage of people will “see” opportunities and then only a very very small percentage of those that “see” will take action and do something.
You could say that no matter how bad a crash or slump we have there will not be a very significant shift in who holds the wealth. Some small players will go to the wall but that is about it.
Most mum and dad investors only ever buy one or two – if that is all you are going to do then on some level I agree with all the naysayers – don’t bother.
But on another level I feel that for some these same one or two properties could be the difference between living well or scrapping the barrel in our later years.
Sourcing Positive Cashflow Investment Property http://www.cashflowproperties.co.nz/properties-5.html
Originally posted by DLPP:Quote:don’t mean to offend simple – i hear alot of this type of stuff where people say they are waiting for a huge macro event and then they will cash in and become rich.
i would suggest that most people don’t do it because by then “everyone” is not investing in property and you will be inundated with information about how bad an idea it is and how much money you will loose.
I posted a thread a while ago to see how many people had actually profited from the last sydney slump (the one we are in now???) and there were not to many responses from people who had picked up fanstic deal from distressed vendors.
I am so glad you asked. Due to my date of birth etc I seem to need housing up grades at around boom times. Have tried to retard my childrens growth, kept em locked in the dark and made em where diapers until they were six but nothing worked.
In 1982 bought a very nice house for 110K had listed nine months before at 129K. Guy was a pilot and relocated to HK. We were stoked. Reality was it took about three years to reach that 129K. We paid market. Wish we had bought in 1979 for around 80K.
In 1993 bought 5 acres outside Castle Hill for 410K at auction. Looked for many weeks (a pain as it took us over an hour each way and we had two booys between 8-11… see they had grown) When we talked to agents our budget was around 525K. Never seen so many unliveable houses on strange blocks of land in my life. One agent laughed when we asked about anything under $500K , and you should have seen what he was showing us.
Our vendor was committed to buy (next door actually got a great deal on 15 acres) so had to sell.
Again considering what we had paid we thought this time we had a bargain. Got an agent appraisal three years later for $430K.
No you don’t get bargains at the end of the boom or at the bottom, but a couple of years later in the “flat market”
My thoughts on personal experience, and yep the little kiddies are due to move out soon and we will be looking again. Timing is everything. Now I know what people mean by family planning.
Originally posted by CanAm:My ride, Brock ADP wagon, 1 of 6 made – very sad about his passing. Met him several times and a man of great talent. And on weekends its my imported Chev CanAm, size of an escort with ’69 Camaro 302 factory fitted and street registered – awesome fun
Got a ride around the back streets in LA in a 69 302 Norwood car, in 1991. Until then never knew what the fuss was about, I preferred my torque monsters.
Are Can Ams Sth African ??? Know the engine but fuzzy on the car.
Originally posted by gmh454:Originally posted by CanAm:My ride, Brock ADP wagon, 1 of 6 made – very sad about his passing. Met him several times and a man of great talent. And on weekends its my imported Chev CanAm, size of an escort with ’69 Camaro 302 factory fitted and street registered – awesome fun
Got a ride around the back streets in LA in a 69 302 Norwood car, in 1991. Until then never knew what the fuss was about, I preferred my torque monsters.
Are Can Ams Sth African ??? Know the engine but fuzzy on the car.
Had my Jaguar XJS V12 5.3L coupe years back. Absolutely loved the car, smoooooth power. You can be going 180km/h and enjoy silence. It had 100L fuel tank which needed to be refilled twice a week for a city drive. Glad I sold the car, it would send me broke with current fuel prises! [blink]
Gmh454, thank you for sharing your experience.
I only have one IP in Perth and it’s heavily geared, rental is 3% gross. I don’t want to get into an IP with this kind of yield anymore but that’s the trend here in Perth.
From what you said, this is the time to observe and wait rather than buy. Is this correct? I woudln’t mind getting another IP if the yield is pretty good like 6%.
I feel that we will have an extended of flat period hence buying an IP that is heavily geared will be costly.
Please share your opinion. Thank you.
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