Hi all
Every day on the news we hear the same old s**t about the reseshion, the global reseshion. Well what about it. The talk of gloom and doom, the big scare. Whats it mean to the property invester or FHB? Is it a bad time to buy as we are now in a resesion, so we are told? Whould we wait and live in a tent incase we loose our job? Or rent to some smart ass who brougth 6 years ago and is very happy with there investment.
Buying in a reseshion, good or bad idear?????
Lets think about it, Intrest rates to fall even lower, yes, lower. Immigration still high ( I thought we had an unemployment problem) Lets bring in some more non english speaking people who are unemployable, give them some tax payer money and tell them to spend it, thats got to help stimulate the ecomomy.
So the demand to house these people helps hold up the demand for housing, right. So housing is still in demand. So no over supply, No over supply no price reduction. Lowest intrest rates in 30 years or so ( dont hold me to that one) but they are low. Low rates and possibly falling (not going up anyway) home buyers return to the market as the fear of not being able to pay the intrest has gone for a few years. FHBG Boost, yes, the Govenment givest and the builder takes it away with price increases. But the 26 K + is tempting to any person.So it seems to me why all the negative talk of a resseshion leading to falling house prices. Low intrest rate, FHOG + Boost and still some demand for houses. The share market up and down like a brides nightie. Super funds not performing and fixed intrest at the bank after tax retures less than the inflatuion rate. Why would you not buy a bloody nice house even if we all agree they are over priced, resseshion or no resseshion.
Whats the down side of this global ressesion on the houseing market, I still see people building and buying Investment properties. As you can see Im not an ecomomist, politition or mathamatition just a working Ozzy with a few bucks to invest.
So please share you oppinions on the global reseshion and how it will, if at all, affect the housing market in Australia.
Thanks to all.Kind Regards
T………………….Tony
I don't have a huge opinion on this, but will just make one point. Don't get too cosy thinking property is immune to big falls like the share market. It may not fall to that degree. But if circumstances come together and there is a panic (and that's the key) you never know what might happen.
There is a tendency to take comfort in the points you make, trying to convince yourself everything stacks up and nothing can go wrong. This is the sort of thinking that pervaded the mining industry. And it all turned to s..t. Some sources believe the Aust property market is highly overvalued. Can we say they are wrong without a shadow of a doubt?
Nothing is guaranteed, and you should keep in mind the outcome you least expect is a possibility.
we are in a reccesion and things are deffinitly slow for lots of businesses and i think if you buy property over the next 2 years you should make sure you can afford to pay the payments good or bad. theres lots of people out there at the moment that can't get finance which does not make it easy to sell a house, so there will be more coming on the market and prices will drop.
i think it comes down to your personal situation whether its a good time to buy or notWell guys thanks for the replies. The news to days is another interest rate cut tomorrow for sure, yes again. Maybe a 1% or more. Making interest rates the lowest since the 60s. Most people buy on a loan not cash. I'm sure this will bring people back to the market. Man soon the rate will be like the USA next to 1%. If property is slow to sell, why have not the builders dropped their prices to get more work. I don't see any out of work builders. Sure things can go wrong, but I don't see the great fall of the housing market in Aust. happening. Banks wont lend money to people that cant pay because they know at the mortgage sale they want cover the loan. The banks dont do the low doc. loans as much, and they check the value of the property well first before giving the loan. They are being careful but still leaning money to people.
As I pointed out and will stick to it. Whats the option for a cash investor. Shares, No, Fixed interest, No well I guess that's property left. Even in this harsh economic climate sellers will not sell for less than they paid. So they still believe the home they brought 2 years ago is worth 30k more and you see it sit in the window for months. But make an offer and they will not move more than 2-5 k. I know I have tryed many times.
Ive watched the market for some time now and I agree its not easy 100% guaranteed to make money on property. I would not like to be selling a home now. Or buying property as a major part of my ger rich quick plan, because you will not.
If its not the global recession, then what?
What will make the housing price fall in Aust.? Or why will people wait to buy? I think it is a mix of social, economical and political. But more social at the moment.
People need to live somewhere. Option: pay rent or pay your own home off.
A need to live close to where you work, people change job locations, thus shift, sell then buy.
The Government bailing people out, cash hand outs to stimulate the economy and keeping interest rates low. The bloody cause of the recession was people getting into debt with home loans and not spending money as they only had 20 bucks left at the end of each week. The Gov. will not see people out in the streets. Poor economy, need more spending = lower interest rate and more hand outs, all good news for home buyers.
FHOG will most likely to be extended.
The great Aust. dream of own your own home.
A place to raise your kids.
Security and having an asset of sorry to say it (bricks and mortar).
Also if the s__t hit the fan and we have job losses if you have your own home you may be in a better situation than a renter.Im sure there is no formula for it or a mathematical sum to say what will happen. To end I think property will not fall as many have said. It may not go up and it will be dependant on location. But as an investment option it is better than other investments right now.
This is only my thoughts on the matter as this recession is on the way and it will be interesting to see what impact it will have, will we see houses for 30 -40% less or not?
Like to hear some more opinions on the subject. Thanks.
Kind regards to all……………
T……..
North Gold Coast – Coomera / Upper Coomera and other Mermaid Beach mansions have all had 40% + reductions in the past year.
One mansion priced at 5.5 mil wants to sell for 3mil
another mansion priced 2.4 mill – sold for 1.6 mil.home 4 bed DLUG north GC priced $480 – sold 280k.
Your property is only worth what you can get when your circumstance requires a sale.
Tony B,
This is the latest today.
http://www.news.com.au/business/money/story/0,28323,24995663-5013951,00.htmlTony B,
you can't be looking to hard then my friend, there are plenty of builders going down the gurgler -even as we speak. My wife works for a very large company that supllies the building trade and just about everyday she brings homes tales of woe. now having said that, i don't think anybody really knows where we are heading or whats going to happen, plenty of experts offering opinions and there are plenty of differing opinions being offered. I remember more than one "expert" this time last year warning of 12% rates, and petrol $2 per litre.As for Williams talk on 5.5 million dollar mansions drop two million, well thats life in the top end. I just hope that one day i have the money to play in that end of the market.The house at Upper coomera bought for 480k sold for 280k, i am sorry but that has got to have something more to it, the agent that let it sell at that price should be lined up against a wall and shot first off, I know that area like the back of my hand, deal in those suburbs everyday with investors and no one is dropping 40% (can't speak for mermaid beach, i don't really know that area) and in fact for the lower end market such as the townhouses the area has shown growth. the PDS live website shows the median growth for upper coomera to have stalled but not dropped, the number of sales has plummeted but the pricing is relatively stable. If someone over extends and ends up waist deep in the you know what, the market can't be held accountable, the banks sure!! but not the market.
there is a lot of rubbish talked in the media – good news dosen't sell newspapers i am afraid – and on some forums , most of it second hand info passed down through many ears and shapeshifting each time. All i can say is do your homework, it's not hard to do and you should be able to steer clear of trouble.
Tony B,
Sorry, I have to say this. Will you please check your spelling, I enjoy your posts but please read them before posting.How many ways can you spell "Recession" ?
WJ
Thanks for the link, I new the index was out today and was going to take a look. So what does this mean. ABS one of the most reliable sources on the state of the economy lol. I think this is taken from an average of all the over priced place in the millions. Not sure. I made a few comments on the forum Value adding. If you go out and try to get a house advertised for 400,000 and offer 360,000 based on the ABS stats see what the vendor says. It may be true, prices are on the down, but how much 10% here 40% in Sydney, 3 % in Melbourne.I think the stats are good to look at for sure. However, its up to the buyer what you what to pay, what its worth to you & me to buy. And of cource what the vendor is willing to take & how despret they are for the money. Im not going to believe the house prices will fall that much as to 20%. Ive work too hard doing the rounds of auctions & opens and I see the last boost has put people back in the market. I think house prices are over price for sure. But Australia has been the lucky country for a long time. Try buying a house in London or NY or Beijing, Aust. is still cheap in comparison but for how long. Im sure the factors I mentioned make sense, Immigration, Lowest interest rate since Adam built the Ark. Investment options, cash rate at the bank 4 or 5 %. Surly I could not do any worse in property and plenty like me will be buying rentals with a positive cash flow.
Thanks for reading my post & for the link.
Kind regards
T………………WJ
Yes I new someone would say something about it. I have 3 Degrees and still cant spell, I do have a problem called dislexia (I hope I spelt that correctly) which is a real pain on these forums as it take me ages to check. But I have discovered the spell check on this site. Im sure you will see a marked improvement. I also enjoy your posts.
Cheers
T………Digger
Thanks for the reply. I'm not in that much direct contact with the companies but hang out with a few builders and am on site often. In Victoria I have not seen that many go under. They may be in the red on paper and with any business including mine things can go up & down. I'm sure its harder for the small independent builder as they can not compete with the volume builders.
The house at Upper coomera bought for 480k sold for 280k, i am sorry but that has got to have something more to it, the agent that let it sell at that price should be lined up against a wall and shot
Yes I totally agree with you. I was going to ask William to show me this place on the net. As we know there is something out of place there.
there is a lot of rubbish talked in the media – good news dosen't sell newspapers i am afraid – and on some forums , most of it second hand info passed down through many ears and shapeshifting each time.
Yes you have to be careful how you interpret the so called info. I don't know if I'm right but you cant sit on the fence, not in my current situation anyway. Ive heard talk of the recession ( sometimes spelt resession, resesion, ressesion) and as you said it hard to know what will happen and when. Plenty of experts but it does not help me. I'm currently of the opinion that I have to buy now as the lower interest rates + FHOG Boost + Immigration + inflation will slow if not stop the price fall. What do you think?
Kind regards
T……..Tony B wrote:WJ
Yes I new someone would say something about it. I have 3 Degrees and still cant spell, I do have a problem called dislexia (I hope I spelt that correctly) which is a real pain on these forums as it take me ages to check. But I have discovered the spell check on this site. Im sure you will see a marked improvement. I also enjoy your posts.
Cheers
T………Tony,
Firefox has real time spell check. It's also a lot safer than Internet Explorer
Hey tony,
As far as the builders go i can only comment on SE QLD , i certainly can't claim to have any knowledge of the Melbourne scene. It's never good to watch anybody lose their livlihood, so here's hoping it stays that way down your neck of the woods.
I believe that in the low end of the market, where i happily spend my time, the prices have stopped dropping and even increased over the last year. I don't know the market your are looking at Tony, but I believe in going with your gut more than listening to the barrage of differing opinions from "the experts". It's seems pretty much a given rates will drop tomorrow and yes, i can not stress how the FHOG has kept the low end market bouyant over the last few months.You sound like you have a pretty good hold on whats happening around you, so do your homework and you should be fine.
And hey, just refer to it as "The R word" I'll know what tour talking about.
One more thing Tony, maybe i should add, i am on the Gold Coast, where the population boom is keeping the market reasonably attractive, once again i am talking low end, and the rents are still climbing. My opinions are definately area specific. Having said that i can't for the life of me get over how a lot of people who are apparently in the know and some magazines that are mentioned through out forums such as this were spouting on about mining towns being the place to buy with growth over 50%+ – so lets say something worth 150K a couple of years back now worth….wait for it……$225,000. But hold on, I can't actually sell it for that now, damn those Chinese. MAybe i can sell it $199,000 less agent fees, less CGT, less…you get the picture. i think they just gather statistics without actually do too much research.
Just my opinion.
The media talks doom and gloom, and sure there's an impact, though I'm of the opinion it's being overhyped. As for "Property values plummet" (Front page of ninemsn.com.au) all I can say is the relative overall growth of my property portfolio has increased 13% in the last 12 months. I've also noticed less listed properties in my area and increasingly higher asking prices (I keep track of them month to month).
Personally I believe the top end of town will and has dropped back, the medium end of the market is quite mixed depending on location, and the lower end properties are on the up.
As digger said – bad news sells newspapers. And at last glance at the price of media shares, they need to do something to increase their battered share prices. I guess they're hoping that by running shock articles they'll sell more papers and increase their revenue.
Its time to stop talking things down and try and be possitive, because at the end of the day it's you and me that make up the local economy. If businesses and individuals reduce spending in case of recession, we'll end up in one whether we were going to or not.
One Plumber wrote:North Gold Coast – Coomera / Upper Coomera and other Mermaid Beach mansions have all had 40% + reductions in the past year.One mansion priced at 5.5 mil wants to sell for 3mil
another mansion priced 2.4 mill – sold for 1.6 mil.home 4 bed DLUG north GC priced $480 – sold 280k.
Your property is only worth what you can get when your circumstance requires a sale.
Wow thems a lot of biscutes and I have seen similar in my area but there are a few angles which confuse me a little with not only this type of property but the rest of Australian property right now .
For a start , Gold coast properties suddenly come of age and so prices through the boom , personally would say way too of age to be realistic .
Only 10 yrs ago those 5 million numbers would have been 5 or 600k – if they could sell them . So you have roughly an 800% rise instead of the normal 100 – 150% . Depending on the place of course but it should only be 2 million anyway , well sort off !And the same along many coastal areas leaving owners selling now being very out there in their asking price to begin with.
So it becomes really tricky because allot in my area for example have dropped 30 or 40 % too before they've sold but is that gap the sellers just beginning with ridiculous prices or is it the times ?
Many in my cases were just starting with ridiculous prices which anybody could have told them they aren't going to get .The 480 home , most likely 80-140 k depending on what it is only 10 years ago and again like a 400% or 500% increase when they are only suppose to double within that time and that has happened across Australia .
So the realistic price of that home is actually only the 280 anyway get my drift ? So has it really dropped 40% and do things like this mean they all will drop 40% ?
This is the real cloudy area for me and one reason I personally think 40% is actually a highly viable estimate !
diggerdigzit wrote:One more thing Tony, maybe i should add, i am on the Gold Coast, where the population boom is keeping the market reasonably attractive, once again i am talking low end, and the rents are still climbing. My opinions are definately area specific. Having said that i can't for the life of me get over how a lot of people who are apparently in the know and some magazines that are mentioned through out forums such as this were spouting on about mining towns being the place to buy with growth over 50%+ – so lets say something worth 150K a couple of years back now worth….wait for it……$225,000. But hold on, I can't actually sell it for that now, damn those Chinese. MAybe i can sell it $199,000 less agent fees, less CGT, less…you get the picture. i think they just gather statistics without actually do too much research.Just my opinion.
Don't worry the same experts have been telling me for the past two years mining stocks are the place to be for the next 10 yrs , possibly 20 and Rio will see 190 by early 09 . Maybe it's all just a hickup !
Cheers
For a start , Gold coast properties suddenly come of age and so prices through the boom , personally would say way too of age to be realistic .
Only 10 yrs ago those 5 million numbers would have been 5 or 600k – if they could sell them . So you have roughly an 800% rise instead of the normal 100 – 150% . Depending on the place of course but it should only be 2 million anyway , well sort off !And the same along many coastal areas leaving owners selling now being very out there in their asking price to begin with.
So it becomes really tricky because allot in my area for example have dropped 30 or 40 % too before they've sold but is that gap the sellers just beginning with ridiculous prices or is it the times ?
Many in my cases were just starting with ridiculous prices which anybody could have told them they aren't going to get .The 480 home , most likely 80-140 k depending on what it is only 10 years ago and again like a 400% or 500% increase when they are only suppose to double within that time and that has happened across Australia .
So the realistic price of that home is actually only the 280 anyway get my drift ? So has it really dropped 40% and do things like this mean they all will drop 40% ?
This is the real cloudy area for me and one reason I personally think 40% is actually a highly viable estimate !
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Mister, with all due respect,what you are saying is total speculation on your behalf, and frankly the figures you are quoting you are just pulling out of thin air. i would venture the home for $480,000 would have been new and probably sold within two years , maybe five at the oldest. $280,000 for a four bedroom home in that area is ridiculous and i refer back to my original post, that something is just not right with that sale and most certainly can not be considered normal. I would also, and this time speculation on my behalf, say the figures for the 5 million being only 5-600k ten years ago is a little pessimistic (or is that optimistic). I can not see a fall 40% happening, in fact the ten percent JP Morgan are quoting kind of sticks in my throat as well. Per haps some areas may see ten percent but certainly not on a whole. Maybe I just want to be positive in my little world instead of having to swallow all the negativity be thrown around with almost joyous abandon.
but once again , i have to say, i like to spend my time bottom dwelling in the market place where it's pretty safe.
I lived in a similar area in Loganlea (about 15 k to nrth) with a Uni and train and public amenities, brand new say 5 years ago plus bus, hospitals, 2 freeways nearby etc, build new for 188k sold for 300k 9 mths later, very crazy place between Brisbane and Gold Coast and this was a time when dumps around the corner were trying to sell for 300k with one carport 3 bed one bath…
The best part is if investors or mum and dad ones are around without time to really follow the game locals can win.I know a couple and all they do is get in first and then trade or sell to investors : buy 2 keep one which was paid for by out of town investor.
Anyway these are old stories because in just about every industry in 2008 no one was listening…all the attention was toward the mess…
Gold Coast has its own supply demand curve because generally speaking people love the dream of living here. You would not believe the turn over of people who do not last past 6 months in business or lifestyle or property…
People treat you as a long term local if you live here for 2 years. Get to now you if you stay longer then 6 months and because of this records either way still happen although the local agents are dropping water front bargains but not much else. It seems location is the driving force even for super cheap deals. Sadly some people did pay the mad prices and they have shown they are not worth it.I am not a great believer in the perpetual boom on the gold/sunshine coasts. I still believe that this market will follow its path of the 70's-2000's ie it will suffer a very long period of depression with little or no growth for 10 – 15 years (as it did up to the late 1990's when it started to pick up dramatically, to play catch-up with Syd/Melb, and has now crashed so dramatically as well). This market is subject to a much longer cycle than some other capital cities.
So the demand to house these people helps hold up the demand for housing, right. So housing is still in demand. So no over supply, No over supply no price reduction. Lowest intrest rates in 30 years or so ( dont hold me to that one) but they are low. Low rates and possibly falling (not going up anyway) home buyers return to the market as the fear of not being able to pay the intrest has gone for a few years. FHBG Boost, yes, the Govenment givest and the builder takes it away with price increases. But the 26 K + is tempting to any person.
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