- Linar wrote:Hi Katherine
I have heard some fantastic snippets of advice along my investing journey. One of them was something to the effect of:
"In 10 years time you will look back at the investment property you bought and think that it was a bargain and you should have bought more of them".
Property goes up in price. Sure it may go up and down along the way but it will always go up, just like the share market. Property today is worth more than it was 10 years ago. In 10 years time it will be worth more than it is today.
I don't have a problem at all with Adelaide (I live here). House prices in other cities may increase in value more than Adelaide or Adelaide may see better growth. I don't know. But GENERALLY SPEAKING, properties double in value every 7 – 10 years, whether it is in Adelaide, Sydney, Bunbury or Mt Isa.
If you can afford, get in the market.
Cheers
K
HI Linar, I live in Adelaide too but to say prices will double in 10 years is simply wrong.
YOu should read the report above and understand that $300,000 today are not the same $300,000 in 10 years due to inflation. And since inflation is rising due to oil and other commodities price increase, the future is not a normal 10 years ahead.
I have never seen a worse scenario in the last 30 years. This may be even worse than the recession which happened in the laste 70s since at that time there was only the oil problem. Now there are too many too list.Prices can go up and go down. Or do you think that people will buy your house for $10 Millions one day when their income is just $50,000 a year?
Please, stop the no – sense hype.
Well said Italian dragon.
Very simply put : Why would you invest into a house that costs more to 'hold' than you get back from it ?
The only reason would be 'because house prices go up'. Well, bad news for you : they won't go up in the next 2 years at LEAST.Now what happens if you buy a house and can't pay off the mortgages due to negative gearing ?
You die. Financially.Is it worth dying financially just because you are greedy and have a gambling addiction ?
No. Just look at the FACTS , watch the NEWS and learn from what is happening all around you.
Stop listening to Spruikers who want to lend you more more more so they get rich rich rich at your expense.
Stop borrowing what you can't afford. Drive houseprices down to normal levels so everyone else can live their lives normally, without having a huge debt that can only be maintained in PERFECT economic times.Think about it : What do you think Australia will do when the world economy worsens ? Do you think the debt will just be 'washed away' by inflation ? No.. what will happen is interest rate will go up to 18%, you will have to pay 100.000 per year interest-only, and what happens then if you lose your job ?!
Think about it : Can you *REALLY* afford an investment property ?
Answer : If you have to pay more than 3 times your wages you CAN NOT !!…Remember this : You cannot pay back what you owe to the bank : You will go bankrupt.
Do not put yourself in this situation, it's NOT WORTH IT.Hi ID
I didn't say that property prices will double in 10 years. I said that a house bought today would be worth in 10 years time. And the recession that happened in the late 70s? Well, property prices have gone up substantially since then.
And your suggestion that an average house (being "your house") will be worth $10 millions when incomes haven't risen at all is a hypothetical gross exaggeration. What, house prices rise rapidly to be worth "$10 millions" while the median income stays at the same level ad infinitum?
Give me a break.
K
K
Linar wrote:Hi ID
I didn't say that property prices will double in 10 years. I said that a house bought today would be worth in 10 years time. And the recession that happened in the late 70s? Well, property prices have gone up substantially since then.
And your suggestion that an average house (being "your house") will be worth $10 millions when incomes haven't risen at all is a hypothetical gross exaggeration. What, house prices rise rapidly to be worth "$10 millions" while the median income stays at the same level ad infinitum?
Give me a break.
K
K
If you are saying that 30 years are not too much to wait then I agree with you, by or before 2038 people will see higher prices more than likely.
And regarding my $10 Millions example: is not what every investor and real estate agent would like as scenario?
I learnt from my parents to invest in property. It is never too soon to get on the property ladder; especially if it is your first property. Not unless you are foolish enough not to have done your due dilligence properly and are getting a bad deal. IF you see a bargain then grab it in my opinion.
Investing in property is like going into a Casino. Everyone wants to hit the jackpot. The house (the government & market) can change the 'rules' at anytime and therefore the odds, usually not in your favour and this makes it harder. Understanding the market that you want to invest in is the first step.
If prices drop then you just have to see them through, because prices will be back up at some point in the future. That is one of the reasons why property is one of the best investments you can make plain and simple. You might even hit the jackpot big time. Far better than trying your luck at a casino. Remember to always DYOR!
Hi Scamp, someone on this forum bought a house in Adelaide in late December for $273000 & it's renting at $345 per week.
It's on 700+ m2 & can be developed in future though it's not quite worthwhile to do it right now.I was the one who brought up that property on this forum too. I looked at the house & was quite interested but I dithered a bit & quite frankly, I disbelieved the agent who said she could get $350 a week for it.
Still think it's a bad idea to invest in property?
KY
Italian Dragon,
I lived in Adelaide for many years until recently … I also agree that it is not likely that the property prices will double in 10years but they will continue to rise. In spite of the economic conditions …. the defense contracts and the mining boom will hold the SA economy relatively stable for the next few years at least …. do your homework and read the articles … Adelaide is having a Mini Boom just like Perth did and Qld did! The Govt is spending big still on infrastructure to support this …. also …. as the employment figures just came out with 20,000 jobs disappearing …. it is unlikely we will see another rate rise till next year.
Maxxi wrote:Italian Dragon,I lived in Adelaide for many years until recently … I also agree that it is not likely that the property prices will double in 10years but they will continue to rise. In spite of the economic conditions …. the defense contracts and the mining boom will hold the SA economy relatively stable for the next few years at least …. do your homework and read the articles … Adelaide is having a Mini Boom just like Perth did and Qld did! The Govt is spending big still on infrastructure to support this …. also …. as the employment figures just came out with 20,000 jobs disappearing …. it is unlikely we will see another rate rise till next year.
Dear Maxxi,
I`m afraid to warn you that due to rising oil prices inflation is not under control and we`ll be lucky in August to see only a 0.25 % rise, because I expect a 0.50 % rise if oil prices keep staying this high.
Regarding the mining boom, as happened for the asbestos mining boom many years ago in WA, once the poor ignorant people will find out how dangerous is uranium and all the radioactive stuff that RIo TInto and BHP are shifting accross SA, you`ll see that from Mining Boom we`ll go to Healt Care Boom to take care of all people diying from cancer.
Linar,
You simply can not 'assume' anything these days anymore based on the past. The past will only aid in your research, not govern the outcome. Especially with rapidly increasing fuel costs, water shortages, rising costs of materials … everything fueling inflation …. that prices will continue to double at the same rate that it has in the past. A multitude of changes must occur for this to happen including to finance/loan structures and conditions eg loan terms, interest rates etc.
It's all relative to income and supply and demand…. and global forces eg immigration and foreign investment just to name a couple.
Maxxi wrote:It's all relative to income and supply and demand…. and global forces eg immigration and foreign investment just to name a couple.
As far as I know immigration in the USA is way much higher than here, still prices are dropping an average 30 % accross the USA.
You simply don`t get it: once prices goes too high, they need to come down at some point before they rise again.
My goodness you are a lot of henny pennies running around claiming that the sky is falling down.
I will continue to invest in property for the foreseeable future. Whether or not property replicates the past, I believe that property is a solid investment. People will always need houses and I am more than happy to oblige those that can't afford to buy and need to rent. I will also oblige those who want to buy but don't know how to go about building a house themselves. I am very comfortable doing that.
Cheers
K
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