Time to invest?

Well said Badger.

The international capital meltdown has been slowly working its way into the real economy and we now have banks around the world being nationalised. Though Oz banks are sound, the world economy is on the brink of – at least – a soft recession and GDP growth in China will halve. 

Anyone who thinks this won't have an effect on the Australian economy is delusional or CHIS…but I repeat myself

Well… 4 years ago people are buying into apartment yield for 4.5% in sydney
Now with rental increase and falling property price with falling interest raes… and 'newish' apartment are yielding >6% plus depreciation= 8%plus ??? Sure it is much much time on today price and few years back….

Look at brokers were telling investor to buy buy buy last year… but now sell sell sell… It is really confusing…
I thought it should be reversed… again time will tell…All ords at 4400-4500… sure looks much better than 6500??

Perhaps those that take your advice might also end up wishing this was so!

I think a lot of people are taking sides in either doom gloomers or positive spinners. Instead of just taking the information to make a better decision or doing your own homework. Some of the information as to the state of the rest of the world is plain wrong. However some of the advice from the same contributors may be right. We are at a point in the worlds economy that we have never seen before to this extent. It will be interesting to see how it plays out. So do your homework when (if) buying don't half ass it on hope and prayers.

Ohricey,

Before you make a decision based on weather or not to rush into buying a property, I’d check on what you are entitled to in regards to the FHO grant. I’m assuming your 6 month time frame is because you are getting married and you think you won’t be entitled to the grant then because your fiancé is only a resident? 

My husband emigrated here from the UK in 2003 (before I met him) and received the FHO grant to buy a block of land 6 months after arriving. He was only a Permanent Resident at the time, so you and your fiancé may very well be eligible. 

Don’t rush in to the first thing you can afford. Make sure you look at lots of properties in the area /range so you know when you are looking at a bargain or something over priced. I have just bought 2 town houses at 17% under what they were going for 18 months ago. One of them started advertising at $260 and was down to $240 when I viewed it. I eventually got it for $225. My point is, at the moment in most areas, there are 2 sorts of sellers, those that have to sell (and eventually have to take what they can get) and those that are oblivious to the market and want what they would have got 2 years ago. If you don’t research and view lots of properties you may pay too much. 

Another tip I can give you is to get a good buy, don’t want it too much. Be willing to walk away if the numbers don’t stack up. Work out what your maximum amount you are willing to pay for a particular property (don’t disclose this to the agent) and make your first offer lower than that. You can always make a higher offer if it isn’t accepted. And there will always be another “bargain”, “once in a life time opportunity” etc etc. Have lots of options so you can go to the next best property if your first choice is overpriced and the vendor won’t come down. Don’t be surprised if you have to offer on 4 or 5 properties before you have a reasonable offer accepted. 

When viewing a property always ask these questions.

1. How long has this property been listed? (if it has been listed for longer than say 3 months, if the price hasn’t come down in that time, it is probably overpriced)
2. Have there been any offers? ( if there has been offers the agent will probably tell you what they were and you will gauge what your offer has to be to secure the place. Sometimes you will get told the vendor will only accept full asking price and you can cross that property off your list straight away and not waste your time if you don’t want to offer full asking price. Sometimes they will just plain lie and tell you a made up offer to get you to offer over that price)
3. Why are they selling? (how motivated are they, are they just testing the market and can hold out for a top price or have they moved or paying 2 mortgages and need to sell now)
4. Who set the asking price? (if the vendor has, they may be asking for an unrealistic price)

 I’m sure there are many others that other forum members could add. Don’t be too enthusiastic about the property in front of the agent. 

Also, you must understand the selling process. Make sure you research clauses to insist on being in the contract of sale before you offer. For example, I would never enter into a contract without a “ 14 day subject to finance clause”. Others you could get are “10 day cooling off period”, 5 % deposit. I am in NSW so these may only be relevant for this state. It may be a good idea to ring a conveyancer in your area to ask them about the process and what clauses would be good for you. Be aware that once you enter into a contract of sale and the cooling off period is up, you will forfeit your deposit if you pull out of the contract , hence a good idea to have the finance clause. 

Get your finances in place before you look. You don’t have to know what property you are buying, just a max amount the bank will lend you. Have lots of paper work to give to the bank.. For the loans I have just gotten, I had to supply far more paperwork than I have ever had to supply, even from 12 months ago. Have 6 months worth of bank statements, credit card statements, birth certificates, marriage certificate, any other bills paid etc etc. Find out what you need before offering on a property so you are ready to go straight away.  

When you have done the property research, know about clauses, have finance in place and feel pretty good about a property, make a confident offer subject to your contract clauses. You must sound confident to a REA cause if they think you are a push over you will probably pay more. Just remember, a REA is NOT your best friend and is working for the vendor not you. You probably should get a book about buying real estate to give you some ideas. 

Bit long winded this post, sorry.

 Hope this helps you.

We bought our 4 bedroom house in Sydney in Oct 2005 for $490k with interest rates around 7%.

We cannot currently sell it for more than $460k.

This is a nice house in a cul de sac located about 20km from the CBD. Close to a train line, low crime area and lots of schools around etc.

Someone made a comment about macro/micro markets. It is true. You can still make a buck in property if you are in the right time/place. However, that window of oppurtunity for time/place is currently very very small. It will get larger as time goes on but you have to wait for a number of things to happen first:

1. Interest rates need to drop further
2. Economy needs to be proven to be sound, not just talk from politicians
3. Credit needs to flow
4. A *severe* housing crisis needs to occur. This has not happened yet – you can still rent for a decent price, and you can still shack up with mum and dad who probably live in a 4 bedroom house with plenty of space anyway.
5. People need to forget how much money they lost post 97-03 boom

When is all that going to happen? It is certainly not going to happen while share markets are tanking and/or going sideways, which will be at LEAST for the next 12 months.

I dare you to disagree.

6. Prices need to fall. A lot.

todays bargains are tomorrows margin calls……….

i put in an offer (high 300Ks) on Monday and on Tuesday I was informed it missed out on the house.

then later that afternoon the news came thru about the 1% drop in rates. No, I didn't do a knee-jerk reaction and think 'yeh, i can boorrrow more'. i went home and read a lot of comments on the net where many ppl were saying that we are braced for a recession.

i'm now sitting trying to come to a decision whether to buy or not.  i'd be happy if house prices go down 10% within the next 6 months or so, but at the same time, I'm a little worried that this may not happen.