Well from what I can see things are heating up again-been looking for a two bedder around Flemington-Kensington area for the last 4 months-had a townhouse listed as $290+ last weekend sell for $395!!! Thats right over $100k more-and it had over 300 people through it and probably around 60 people there on the day. I managed to just settle on a two bedder townhouse in Kensington for $340 which I think (hope) was a good buy. Read the chief financial analyst from the ANZ yesty saying he expects interest rates to come DOWN over the next year. So all in all I think there is still plenty of demand and think things are only going to get better, well in the medium term anyway. Opinions?
Did you buy in the kensington banks which is full of townhouses or did you buy near the station, Please advice what is the capital growth
towards the estate townhouses. I mean is there a regular growth in these areas as there is abundance supply of townhouses compared to demandCheers
AbhishekBought in Kensington banks. Capital growth seems to be fine if you like at the stats, plus considering you need in excess of $400k to get a 2 bed town house now I gues cap gains would be around 10% per annum over the last two years. Doesnt matter if the area is 'full of town houses'-only so many places within 5 k's of the city that you can even buy a town house-no brainer IMHO…..
I was actually at an auction last week in the old/original part of Kensington. A very nice 2 bedroom house got passed in at $360K and sold immediatly after the auction, presumably for $380K-390K. The house was already getting $350 per week rent and could probably be boosted up to $370 or $380 with a new kitchen and some minor cosmetic works around the house. To me, the relatively low sale price of the house indicates that market has definitely stagnated and perhaps even shrunk. The turn out at this particular auction was very small, probably only 25 people. It just depends on the day and the property I suppose. An auction that I went to in Yarraville earlier that day had about 200+ people there. The house in Yarraville was in very very poor condition and needed some major structural work and only had one bedroom, yet it sold for $350K. As an investment the Yarravillle property would have been a terrible buy.
I've been looking at properties (generally under $400K) fairly extensively over the last few months and get the impression that sellers still want top dollar for their properties even in these uncertain economic times. A few sellers have already started to reduce their prices but most are generally holding out for what they could have got a year or a year and half ago. One house I was interested in in West Footscray got passed in at Auction in September last year for $400K . I believe the owners want about $410K for the house, yet similar and sometimes even better properties in the vicinity are selling for around $390K. There is just no way these guys are gonna get what they want for the property. If I was them I would be spewing I didn't sell in September last year. Their stubborness has cost them an extra 6 months on the market and reduced the price of the property another $10K.
Unemployment indicators are also painting a pretty bleak picture. Figures are set to rise above the predicted 7% to around 8.5% by the end of the year. When in the last few months have predictions actually been worse than initialy anticipated? Never! All economic indicators are becoming gradually worse as more reliable data filters through.
I am predicting that house prices will continue to fall. It just seems completely illogical to assume otherwise. The lowering of the interest rate will help cushion some of the impact but what good are low interest rates if you don't have have a job? If there are 2 consecutive quarters with negative growth in house prices sellers that have been holding out for a high price will panic and sell before the market gets any worse. I think many people will just decide to cut their losses before the economy sinks any further. Best time to buy will be in another 6-8 months.
In my local area (coastal mid north coast) I have found that the first home buyer grant has definitely boosted the prices in the lower end of the market. Those properties owned by people still wanting top dollar have been sitting there for 5 or more. Well priced units and houses are being snapped up quickly. However, the prices are still less than they were 18 months ago. I expect the market to soften when the FHOG ends. Rental vacancy rate is very low – less than 2%.
blogs wrote:Bought in Kensington banks. Capital growth seems to be fine if you like at the stats, plus considering you need in excess of $400k to get a 2 bed town house now I gues cap gains would be around 10% per annum over the last two years. Doesnt matter if the area is 'full of town houses'-only so many places within 5 k's of the city that you can even buy a town house-no brainer IMHO…..I agree with you blogs. a really good investment in a good area. I have been looking around and like the countrylike lifestyle in that area. Really nice area and close to all the amenities.
Cheers
Abhishek
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