Property Market Hotting Up

I had to go out and didn't finish post.

My strategy has changed to have good cashflow/deductions as well as growth.  I now believe you need a combination of growth/cashflow investments.  I'm still quite confident of Perth's market being steady for well positioned properties over the next few years.  I plan on selling prop 2 in about a year – pay off mortgage on PPOR, and a chunk off mortgage Prop 1.  We're thinking of planning a 3 month trip up north WA – Hubby's Long service Leave – which would be really nice with our 2 young kids.

After that will have to reassess.  Possibly purchase another property that will be changing zoning to higher density.  Sub-divide and sell.  Pay off mortgage on Prop 1.  Develop Prop 1 into 12 townhouses.    Keep as many as I can afford and hubby can retire.

I was looking at a 2 bed duplex, 5 yrs old, 350 sqm block, potential to add value in Bris 15k from city for $260k but missed out.  Market in Bris is hot and I'm not that patient to keep searching so will focus on my Perth properties and pretty prop 2 up ready for sale.

My properties combined have gone up approx 250k+ in past 12 months and are well positioned.

Regards, Linda

Hi I’m just beginning –
Can someone tell me where to look for the auctions passed in? Thanks

It is rather interesting how property market fluctuates from location to location. Some places are slow and others still boom.
I would think, naturally, when it is boom – whole town (say Brisbane) is selling HOT, and when we start fluctuating, isn't it indication of becoming unstable?

interesting to hear about all the places around australia booming,western suburbs of sydney seems to be bucking the trend bigtime.loads of repossesion auctions very cheap,just bought a 3 bed brick house  for $155,000 ,put in a washing line and rented out for $220 per week straight away .just need to wait for the next wave to come along here.

Hey Linda,
We haven't bought anything recently; our last purchase was a block of land across the road from our existing PPoR in Dromana(better views than ours) just before we left to come over here in '05, which will be for new PPoR in a couple of years. It was on an 18 month settlement (happened 2 weeks ago); the block cost $300k and the Bank valued it at $330k for finance, so 10% in 18 months on that. We have just been in debt consolidation phase since then leading up to the block settlement.
Our PPoR has seen a 15% rent increase over the same period, and has doubled in value since '01. Owned outright.
Other I.P's –
one in Frankston bought 3 years ago has gone up 30-40%, and rent gone up 15%. This was neg geared, but we new the area was about to go so bit the bullet.
2 in Kalgoorlie; a unit and a house. Both were pos cashflowed at purchase (bought in '03). Unit has doubled in value, with rent increase of 30%, the house has gone up by 50-70% (can't find many comparables) and has just had a new 4 year GEHA lease signed; rent increase of 10% now, with yearly rent reviews.
So, overall, the cap growth has been nice, and the rents are going up; pos geared; we are happy.

Mystery and other investors – do you expect Bris to continue at this rate or do you think affordability issues will affect Brisbane's growth?  Quite a few people I've spoken to in Bris lately with well paid jobs and 1 – 2 properties want to invest in property but can't afford it.  Is this a common scenario?  Linda

Hey millions, I expect Brisbane to grow don't forget it has been flat for a few years but I don't know much that's why I am sticking with Residex for locations they seem to get it right and they are saying 15% growth for the next 8 years where I am buying.  There are many areas that are still affordable and potentially good investment areas, the big end of town is still appreciating rapidly as well.  There is a lot of major infrastructure projects on now, low unemployment, diverse economy, big population growth and housing supply problems.  Don't forget also that loan products are more sophisticated making it possible to buy more properties so although prices are up you can still get finance to buy them this in its own will support price growth.  I was looking at waterside properties 3/2/1 today less than one hour to Brisbane CBD under 500k.

Properties in Kingston Tas seem to be on the up in the median price range anyway. A basic 3BR brick veneer tiled roof house with ensuite and with storage under purchased for $205000 31/2 years ago sold in less than 2 weeks for $295000 this month. Even after $10000 spent on improvements and allowing for $10000 agents selling commission not a bad return. Borrowed 100% + costs + improvements and was getting $260 per week rent. Paid $400 for a valuation that suggested $280000 and rental value of $280 per week. That is 1 of 4 negatively geared properties out of the portfolio.
Rather pleased I paid for the valuation before putting it on the market.
Best Wishes
Hawks1

Cool, I bought a unit at Toowong in February for $254,000. Bank val for July was $290,000. So $36,000 in 5 months, and that's on a relatively cheap property!

I wish I could have bought into Ashgrove when I wanted to at the start of the year… that's gone from $390,000 minimum for a house to around $450,000 minimum now.

August 2006 we purchased a rundown war service home with a DA in place in the old state housing part of Ashburton VIC (IE: south of High St between the railway and Warrigal Rd) for $465000. The idiot valuer from Commonwealth Bank said we paid too much! Challenged them and got it revalued to the purchase price.

Two weekends ago beautifully renovated and extended version of our rundown old house 100 metres around the corner sold for $783,000.

To prove it wasn't just the "value-add" of a renovation, last weekend we went to another rundown war service home two blocks away in the same area and bid to $680,000 and it eventually sold for $740,000.

That Commonwealth Bank valuer should eat his shorts!

Red hot market? I'll say!