A property I have had my eye on has been on the market for 6+ months, today the asking price jumped $60,000, now at $850,000.
wtf
Now its not even worth considering, as its negatively geared.
Paullie wrote:wtf
Now its not even worth considering, as its negatively geared.
……… How the property market has changed in the past 12 months. From "Do Positively geared properties really exist?" to positively geared properties all around the country, I kinda feel for friends of mine that wont even slightly consider buying anything but a negatively geared property…… to maximise tax returns.
I dont know if the ass is going to fall out of the market with an increase in interest rates and inflation or if the affect is one of a moderate slow down over a longer period….. All i know is, i cant wait for the ride!
Cheers!
Hi Paullie
My theory is that even though prices have at best stabilised, the vendors appear to be the last ones to realise this. In this past week, I have made two offers on properties, both at market value (one after an independent valuation) and both vendors have rejected the offers, wanting a completely unrealistic price. Both properties are development sites and at the prices the vendors are asking there is about a 5% profit in the deal. I could get at least a 20% return before the market became a buyers' market!
Cheers
K
Hi K,
what price range are they in? Are they at the bottom end of the market (below median for the area you're looking to buy in)?
I still see bottom end stuff flying out the door in the 250 K to 400 K range in Melbourne. Anything around 500 K – 600 K is stable. And stuff above one million is very slow and some good buys are to be had.
In this market, I would want 25-30 percent return to allow for any further softening over and above the contingency for construction costs.
Hi Michael
I'm hearing you!!! I won't do anything for less than a 25% return in this market. One of my vendors is simply being irrational. They have been led to believe by one REA that their property is worth about 30% more than it is worth. At the price they want, a developer will lose $50,000 in the deal after costs! I can't negotiate with an irrational party so I have just walked away.
The other vendors have a lot of debt on the property and are saying that they need a particular price to clear their debts. Problem is, no-one is going to pay that price.
There's plenty more out there. I'm cashed up and ready to buy when the price is right.
Cheers
K
Good for you K………hasten slowly. I'm sure you'll pounce when the numbers stack up.
It amuses me that vendor's reasoning for a sale price is based on their own exit numbers from a deal (or self created me$$)…..must be part of the greater fool theory
I attended a couple of auctions a few wks back in a inner northern Melbourne suburb. After the auctions had ended, the properties was withdrawn and then put back onto the market for much higher prices.
Example 1 – A 3 bedrm unit. Original price range of $340K – $380K. Highest bid was $393.5K. Put back onto the market asking for $420K.
Example 2 – 3 Bedrom Edwardian house. Original price range of $420K – $450K. Highest bid of $487K. Put back onto the market asking for $515K.
Clearly, there are many vendors with unrealistic expectations of what their property can attract, considering the current economic conditions.
Regards
DanielWell I'm after a positively geared property, and I'm after a great price on an investment property.
It was at 790k for months and months, now 850k.
I'll just keep it on my radar.
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