Hello all,
I've read the post on Bowen with great interest and good news for those who are in there.
On another note there are several areas around Sydney that are going the other way.
In Homebush Bay waterfront and in Rhodes they can't get tenants because of the high rents and now the owners are getting desperate dropping prices and offering lots of freebies.
This happened in the early 90s when it was cheaper for people to stay at home … talking to a prominent agent today they said that this is wide spread with a huge number of tenants well overdue in rent.
Whats your thoughts on this getting worse?
D
Too many apartments being built around that area..
But lots of investors/first home buyers being swayed to buy buy buy buy
It will get worse before getting better.The rental return is on the way down….
What happened to the great property shortage….
damm I might not have had to sell that kidney afterall…
property shortage??!!!! ….over 500 apts for sale around hombush/rhodes area
So how many below $350K in Homebush Bay ? For the price of one unit there I could get almost 2 in Bankstown (or a house on 600sqm block) which is about the same distance from CBD.
The shortage is of well priced apartments and of land. If price is no object man can always build upwards, the sky is the limit, but God doesn't make more land.
harb wrote:So how many below $350K in Homebush Bay ? For the price of one unit there I could get almost 2 in Bankstown (or a house on 600sqm block) which is about the same distance from CBD.
The shortage is of well priced apartments and of land. If price is no object man can always build upwards, the sky is the limit, but God doesn't make more land.Never knew you were religious Harb?
God has nothing to do with it and Australia doesn't actually have a shortage of land. Australia has a shortage of released land that has good infrastructure in place. We have a land price bubble due to development proceedures centred around developer and state governement revenue rather than sound expansion of our urban areas.
As unemployment rises, the rental situation in this country is going to get very interesting.
Its the same story in the luxury rental market in the CBD.
I have been looking into 2 bed apartments to purchase in the 550-600k range.
At the weekend I went to a rental open home to see what demand was like, it had been on the market 2 weeks at $720/week and I was told that they would take $680 per week. I was the only person at the open home.
It was a beautifully furnished (leather lounge suite, 40+ inch tv screen and the all rest) with views over Hyde Park, the Cathedral and over Sydney Harbour.
The properties I was looking at were inferior to this one, but have been rented at $720-800 to the current tenants. It seems that these rents that made them cashflow positive are no longer available as the execs are no longer getting top jobs in Sydney.
ummester wrote:harb wrote:So how many below $350K in Homebush Bay ? For the price of one unit there I could get almost 2 in Bankstown (or a house on 600sqm block) which is about the same distance from CBD.
The shortage is of well priced apartments and of land. If price is no object man can always build upwards, the sky is the limit, but God doesn't make more land.Never knew you were religious Harb?
I'm not but that's besides the point. Are you saying that someone IS making more land ?
Quote:God has nothing to do with it and Australia doesn't actually have a shortage of land. Australia has a shortage of released land that has good infrastructure in place. We have a land price bubble due to development proceedures centred around developer and state governement revenue rather than sound expansion of our urban areas.Maybe in Canberra where there are still vast spaces between the suburbs. For other capital cities there is no land to develop near the CBD, even the older properties on 700sqm+ blocks have already been subdivided.
Of course Australia has no shortage of land, take Perth for eg. Plenty of land around $150K and some even have fencing and limestone retaining walls included. Add a $150K for the house, add another $50K for landscape and finishing and you have your own house for the bargain price of around $350K. Yes, it may be 60 Km from the CBD and if you work in the city it may take you 2hrs to go to work and 3 hrs to come back but if you are after budget land there is plenty of that around.
But I suppose you'd like something in walking distance from CBD for that price, right ?Quote:As unemployment rises, the rental situation in this country is going to get very interesting.And what exactly do you expect to happen then, people moving out of properties and into cardboard boxes ? I've heard some rumors that there are some unemployed people living in rentals right now, if these are true then I expect not much will change when the unemployment rate goes up 2-3%. Unless the rents go up too much because of a decrease in FHBs and increase in renters in which case the government has to increase the rental assistance to the unemployed living in private rentals.
$150k for 1/8 of an acre 60km from the city is not budget. I know someone who just got a place in Mt Lawley for 500k on a 700m2 block and they still paid too much.
With all the governement is spending trying to keep unemployment low, how much do you think they have to spare for increased rent assistance. Aged pensioners were lucky to get a $30 a fortnight increase and that is only because others will get a decrease. Our govt is spending everything to buy our workforce time, in the hope that America recovers quickly. If America doesn't recover, more than RE prices are going to get hammered.
ummester wrote:$150k for 1/8 of an acre 60km from the city is not budget.I know someone who just got a place in Mt Lawley for 500k on a 700m2 block and they still paid too much.
$150K not budget ? You have to remember that you don't pay $150K just for a piece of dirt of 1/8 of an acre size. You also payed for the water pipes, electricity , phone lines, gas pipes and other services to be brought to estate and your block as well as the mandatory green area/ park that developers have to include. You also paid for the bitumen road with a concrete curb going past your prperty and connecting to a major road and if you are lucky you even got a limestone retaining wall and fencing included in price. If these block is the same size as your mate's $500k in Mt Lawley and lets say he overpaid by $100K why do you think this block is not cheap, what is so special about his patch of dirt ?
Is it the fact that God doesn't make any more land in Mt Lawley ?
Have a look at Mt Lawley, South Perth, Vic. Park and other suburbs near Perth that used to have houses on 700sqm+ blocks using Google Earth and see how many do they still have the traditional lawn in their backyard and how many have grown an extra house in their backyards. Short of bulldozing a few of them and building 20 story apartment blocks there is not much left to develop near the city. So you see, its not a case of a land price bubbles as you claimed but rather of land shortage in close proximity to the city. And if you want to be near the city but can't afford to buy then you'll just have to pay the asking rent because if you don't someone else will.
Quote:With all the governement is spending trying to keep unemployment low, how much do you think they have to spare for increased rent assistance.
Enough to keep the roof over the head of the unemployed, and if they run out of it they can print some more.
harb wrote:Have a look at Mt Lawley, South Perth, Vic. Park and other suburbs near Perth that used to have houses on 700sqm+ blocks using Google Earth and see how many do they still have the traditional lawn in their backyard and how many have grown an extra house in their backyards. Short of bulldozing a few of them and building 20 story apartment blocks there is not much left to develop near the city. So you see, its not a case of a land price bubbles as you claimed but rather of land shortage in close proximity to the city. And if you want to be near the city but can't afford to buy then you'll just have to pay the asking rent because if you don't someone else will.We need to start thinking outside the box and de-centralising cities. There is no sustainable future in our current urban structure.
harb wrote:Enough to keep the roof over the head of the unemployed, and if they run out of it they can print some more.Hyperinflation – I'd love to owe money to the bank in that environment…. not.
ummester wrote:We need to start thinking outside the box and de-centralising cities. There is no sustainable future in our current urban structure.
Its all nice to talk about we but who wants to go there first ? There are plenty of small towns that you could move to which would eventually grow into cities if enough people made the move. Problem is that someone has to make the first move and risk his dough by moving there to open a business or be prepared to take a lower paid job or become long term unemployed.
harb wrote:Enough to keep the roof over the head of the unemployed, and if they run out of it they can print some more.Hyperinflation – I'd love to owe money to the bank in that environment…. not.[/quote]
As long as you fixed your rate for 10 years what's the problem ? Ops, I forgot…You don't like to make a profit out of speculating. In that case you just wait for the hyperinflation to be over then borrow from the bank to buy your house from a speculator who didn't mind owing money to the bank during the hyperinflation period and who will now sell it to you for 3x what he paid for it a year earlier.
harb wrote:As long as you fixed your rate for 10 years what's the problem ? Ops, I forgot…You don't like to make a profit out of speculating. In that case you just wait for the hyperinflation to be over then borrow from the bank to buy your house from a speculator who didn't mind owing money to the bank during the hyperinflation period and who will now sell it to you for 3x what he paid for it a year earlier.So what have you bought in the last 6 months? If you are so sure of the market, there are heaps of bargains out there compared to last year. Go grab yourself some. Safe as houses.
I reckon you know that we either stagnate, deflate, stagflate or hyperinflate from here and you also know that hyperinflation is just as dangerous for investments as the others. I know it's a broad spectrum but things have gotten so volatile it's hard to know exactly which way it'll go. We are not going to have normal inflation in the short to mid term and I reckon you know that too. You are just spruiking your favourite investment.
It is not a good time to buy. True property bulls will buy again when the bull market first returns and bears will buy just before hand. We are not there yet.
ummester wrote:So what have you bought in the last 6 months? If you are so sure of the market, there are heaps of bargains out there compared to last year. Go grab yourself some. Safe as houses.
Couple of dumps in western Sydney and one here in Safety Bay but still kicking myself for not getting any in Tumbarumba as you probably do. None of them keepers but will do until the risk of hyperinflation is over. The big bargains were out there last August-Sept before the pesky FHBs started to move in withe their increased grant and the sellers were being squeezed by high interest rates and the prospect of them getting much higher hence more prepared to accept a lower offer. All you've got now are the leftovers and makeovers that were bought 6 months ago and resold now. Even for that you still have to compete with FHBs and reformed bears who've finally seen the light. If I was looking for bargains as a FHB I'd be looking to buy in the midrange where prices have not began to move yet or even something at $1M+ if the repayments were not a problem. For the later I'd move in for the first 6 months then rent it out for a few years and use the tax benefits to help pay it off, it sure beats complaining about the unaffordable prices in good locations.
Quote:I reckon you know that we either stagnate, deflate, stagflate or hyperinflate from here and you also know that hyperinflation is just as dangerous for investments as the others.Always the dreamer, you may want to go over your previous dreams since you started posting here and see how close to the mark they were.
Quote:I know it's a broad spectrum but things have gotten so volatile it's hard to know exactly which way it'll go. We are not going to have normal inflation in the short to mid term and I reckon you know that too. You are just spruiking your favourite investment.And what better place to do that then ….on a Property Investing forum. I could try spruiking stocks or even gold but I doubt the mods or most of the other posters in here would be too happy about that. (foundation & Scamp excepted )
.Quote:It is not a good time to buy.I agree, the good time to buy was 6 months ago when I told you.
Quote:True property bulls will buy again when the bull market first returns and bears will buy just before hand. We are not there yet.So the bears will buy before the true bulls ? If that's the case I hate to be the BEARer of bad news nut that train has left the station. Most of your bear buddies from the bearsRus forum who could afford to buy have already done so over the last few months and have either moved into their own properties or are in the process of doing so.
harb wrote:Always the dreamer, you may want to go over your previous dreams since you started posting here and see how close to the mark they were.Ok, so interest rates didn't go up – you were right about that. I expected governments and banks to deal with this credit crisis sensibly – silly me.
That said, you claimed house prices wouldn't drop, and yet they have – just not as far as I expected yet. The point is, niether of us could judge how this would unfold accurately, which means niether of us can know exactly where it goes from here.
We are going over the same old ground again, though. And, as fun as it is from time to time, this still hasn't played out fully. Good luck with your tenants and rent increases.
ummester wrote:I expected governments and banks to deal with this credit crisis sensibly – silly me.Just how would allowing a property crash to happen be sensible ? Its not good for the banks, its not good for the government and its definitely not good for the majority of the population who already own a house. The only people that would benefit from a crash would be speculators who are waiting for a crash to swoop on some poor soul who lost his job or had some other misfortune which prevents him from keeping up with his mortgage repayments. Bloody vultures in bear skins.
harb wrote:ummester wrote:I expected governments and banks to deal with this credit crisis sensibly – silly me.Just how would allowing a property crash to happen be sensible ? Its not good for the banks, its not good for the government and its definitely not good for the majority of the population who already own a house. The only people that would benefit from a crash would be speculators who are waiting for a crash to swoop on some poor soul who lost his job or had some other misfortune which prevents him from keeping up with his mortgage repayments. Bloody vultures in bear skins.
It's not about the pain right now, it's about the future.
PPOR mortgage holders shouldn't really care if their house is worth more or less than what they paid for it. In the long run (10+ years) it should always be worth more. Long term investors wouldn't suffer too badly either.
A crash will hurt 4 main areas. Overleveraged and specualtive short term investors. Mortgage holders who have spent too much against their equity. Banks. State government revenue. All of these groups will have no-one but themselves to blame if it goes south.
I know retired homeowners who want their houses to be worth less because they can't afford the rates – not that the governement wouldn't find a way to increase rates even if the UV value of their land dropped. I know middle aged homeowners who would be happy to see prices decline so that their children can comfortably enter the market.
ummester wrote:PPOR mortgage holders shouldn't really care if their house is worth more or less than what they paid for it. In the long run (10+ years) it should always be worth more.
Is that so, then why didn't you get yourself a PPOR instead of complaining about properties being overpriced ? You shouldn't really care if you pay too much now, in the long run (10+years) your property should also be worth more.
harb wrote:Is that so, then why didn't you get yourself a PPOR instead of complaining about properties being overpriced ? You shouldn't really care if you pay too much now, in the long run (10+years) your property should also be worth more.Only works when not tailing the biggest boom in Australia's house price history. if prices stagnate we have 10+ years of no growth. If they drop, then they will only start increasing again after they have bottommed.
I will get a mortgage that does not compromise my current standard of living even if interest rates go above 10%. Sure, I could use my deposit and get a mortgage at todays variable rates that would actually cost less then renting (not including rates, bills and maintainance on a house that is probably less comfortable to live in) but if interest rates go up and my wage doesn't then the standard of living goes down.
ummester wrote:harb wrote:Is that so, then why didn't you get yourself a PPOR instead of complaining about properties being overpriced ? You shouldn't really care if you pay too much now, in the long run (10+years) your property should also be worth more.Only works when not tailing the biggest boom in Australia's house price history. if prices stagnate we have 10+ years of no growth. If they drop, then they will only start increasing again after they have bottommed.
You seem to considering only the 2 out of 3 options available. What about the third more plausible option – a smaller boom tailing the biggest boom ? Except for the unemployment rates which will increase slightly all the other ingredients for a mini boom are there.
Quote:I will get a mortgage that does not compromise my current standard of living even if interest rates go above 10%. Sure, I could use my deposit and get a mortgage at todays variable rates that would actually cost less then renting (not including rates, bills and maintainance on a house that is probably less comfortable to live in) but if interest rates go up and my wage doesn't then the standard of living goes down.The banks came up with the 10 & 15 years fixed rate for people that are to scared of the unknown to make a commitment.
Anyway, the return on 3 month fix deposits has been halved so it looks like the rates still have a bit more to fall. But lets say you are right and interest rates go up, if they do its because the inflation is picking up and if inflation is picking up your rent will go up to cover your LLs extra costs. Unless you're renting from your employer and the rent is pegged to your wage you still get shafted by higher rates. Not to mention that with higher inflation, higher rates and higher rental returns you get higher house prices so even if you change your mind and make the move then you'll get less house for your mortgage and at a higher repayment rate. Just something to think about.
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