What happened to house prices in the early 1990's when we had "the recession we had to have" and interest rates hit 18%. Did they actually go down or did they just flatline?
Is there anywhere on the internet where you can track property prices in cities and regional Australia over the years?Hi
The difficulty now is there has been a lot more renos going on in the investment property game – the original purchase price on the official records – department of natural resources – doesn't take into account the capital invested in renos prior to sale of the properties so whilst sometimes it may look like the prices didn't drop – from a true value point of view the investor may not have got back all the capital invested – purchase plus improvements.
We are in a 2 speed economy at the moment – the mining sector and then everyone else. Many parts of the economy are starting to struggle – lower retail sales whilst people change focus to debt reduction.
Often, if at all possible, most people will hold onto their properties for dear life – as they are emotionally attached to them – they will reduce their spending elsewhere to keep the properties. However, the ones that are sold during these periods would geerally be "forced" sales or "fire" sales meaning that the sale prices would generally be quite low compared to other unforced sales where the owner can hold the property if they don't get the price they want.
If you find out who had bought properties with no and lo doc loans these are likely to be the forced sale properties!
Some would rent their property out and move in with the relatives before selling the property!
Best of luck with your research.
CHIS wrote:Is there anywhere on the internet where you can track property prices in cities and regional Australia over the years?Yes :
Happy digging.
I was hoping for graphs over the past 50 years to compare price trends with respect to the economy. The best I can find is over the past 1-5 years when the house prices have gone up. The shizen has hit the fan and is about to get worse
There were other issues in the economy at the time of high interest rates and that included the introduction of capital gains tax and the removal of negative gearing tax benefits. So it is probably not relevant or pertinent to look at this issue in isolation you will need to get an understanding of the economy and its drivers as a whole.
I bought /sold 2 of them in WA, don't remember the rates when I bought/sold them but it did go 18% while I held them.
Old asbestos dump bought for 62k sold for 78k after 13 months and a paint job.
The other a brick & tile bought for 89k sold for 107k after 14 months, a paint job and garden cleanup.
Could not be bothered with tenants at the time plus the high rates so I sold them. In hindsight I should have got a PM kept both and maybe subdivided, even in today's slow market each would have easily sold for 600k+ to developers.We got quotes on our home around 1990 at 250-270k in 1990,12 mths later could not sell for 200k ,12mths after sold at 215K.
Had clients that bought at Mosman for around 600k sold 1 year later for 500k and had paid 100k interest in the year. Yep 200k to live in the top end for a year. (Oh yeah he had lost his top end job by then.)
My favourite was Carla Zampatti the fashion designer, bought a commercial in Double Bay for around 3.9 and sold around 18mths later for around 2.6m. (exact figure are a little fuzzy but pretty sure she lunched a mill.)
Had a tradie who was renting a factory Unit that had been sold for around 240K, in 1988-1989, he and his partner bought it and three others in the complex for around 140-160K.
So yep, lots of people lost out, some in spectacular ways.
GPT share is now less than A$ 1.50.
It was > A$5 dollar not long time ago.
And GPT invested in blue chips properties tenanted by blue chip company.
I am just wondering what happen to commercial properties invested by small investors?
I am sure that residential property will NOT immune as well…If GPT share can be halved… why Not our residential/ commercial properties….???
Correct me if I m wrongCommercial that I have been watching has been kind of immune to the boom. In the same area seems to sell for less psm that residnetial even if renting out 50% higher psm.
Never saw significant growth in price, seems still locked in on return.
Residential returns in many areas halved, not so in commercial or industrial at least from what I have seen
http://www.somersoft.com/forums/showthread.php?t=43415
HI there you may like to review the above – as the same question was raised on that forum
thanks
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