- mattnz wrote:Just looking at Genworth's financial position and exposure. In 2008 their share price dropped from ~$35 to $1.12 due to their exposure to the US housing market. The scary thing is their exposure to the Australian market is far larger and any significant drop here would almost certainly cause insolvency. Of their 3.8 million LMI policies internationally, 1.4 million are in Australia compared with 1 million in USA. Given the much higher house prices in Australia, the dollar value exposure would have to be at least twice that of USA.
I can see there Office Building (Nth Syd) from my balcony. I can assure you since the QLD floods their lights (around the top floors) have been on till the wee hours of the morning.
fWord wrote:Yes, prices have crashed in these countries. Why is it so? Are there an overwhelming number of similarities we can draw between Australia's property market and those of which have crashed? And believe me, I'm not touting that the Australian property market cannot falter. In life, we can only expect to be surprised. What I am interested to know is: what is it that caused other markets to go from gangbusters to disaster and what conclusions can we draw from them?
Everything boils down to MARKET SENTIMENT.
AussieHousePrices wrote:Investors focus on the potential cash flows of the investment (e.g. rent / profitability / dividends). Of course, they might also hope that the value of their investment will go up as the potential future cash flow improves. Speculators aren’t as interested in the potential for cash flows. In fact, when it comes to property, they are happy to lose money and get a tax deduction, in the hope that capital gains will more than offset their loss. Therefore, they are speculating that the value is going to go up, regardless of what the underlying profitability of the venture is.Hmm…your statement seems to imply that people who put money into property do not focus on potential cash flows, or that "the value of their investment will go up as the potential future cash flow improves". Historically at least (emphasis on the word "historically"), house prices have risen and rents have similarly also risen. Yet the size of the loan that a buyer draws down for the purchase of a house stays the same (unless they refinance). Therefore, their cash flow actually does improve. So how can we conclude that people who buy property are actually speculating? Is the POTENTIAL for cash flow there? Certainly it is.
Furthermore, why is there the assumption that people are "happy to lose money and get a tax deduction"? IMHO, the deductiblity of a loss from a property venture is icing on the cake. No wise man on Earth has ever advocated buying property for the sake of making a loss so they can reduce their tax. This is counterproductive. Sure, you reduce your tax, but you also reduce your effective income (even if, because of the tax deductibility, your effective spending power is actually increased). For some folk on the very highest tax bracket, they might see a temptation to do it because their tax appears lower each year, plus they have an asset that historically (again, emphasis on 'historically') has grown in value and this growth is not taxable unless the owner decides to sell and take profit, in which case there is CGT.
Finally, how do we predict what the "underlying profitability of the venture is"? Based on historical (once more, emphasis on the word 'historical') performance of course. Historical performance is not an indication of future performance. But would it be more reasonable to predict the occurrence of an event based on what has happened historically, or what has yet to happen in the future? Hence, property buyers ride on the information that they DO have, believe the venture to be profitable, and hence put money into it with the expectation of a return. So, just to add more fuel to the fire, who is to say that property prices will not trend upwards indefinitely and property purchasing becomes a very unwise venture?
AussieHousePrices wrote:I would sum it up as: fear and greed, sentiment and the herd mentality.nicolas_b wrote:Everything boils down to MARKET SENTIMENT.Of course. But what I meant was, how do their economies compare to ours? What is their level of supply and demand? What about population growth or decline? What about their rates of employment and unemployment?
AussieHousePrices wrote:I think we need to see minimum 40% to get back to long-term trend, and to get back to historical norms of multiple of household income and rental returns.To be realistic, we'll have to entertain this possibility. It would be foolish to say that certain things would NEVER happen. However, this is a bold statement. We're talking about today's $500K house going on sale at $300K, and a finer $1.4 million house selling at $840K. If we're talking about a 40% decline in property prices across the entire board, regardless of location, then this is something I'd like to personally witness. It would take a big hit to our economy to see a drop of this magnitude. That is, Australia has to become horridly unpopular as a place to call home.
It is conceivable that prices in mortgage belts (or places with a large proportion of investors as opposed to a strongly owner-occupied area) could take a huge tumble when these owners default under high interest rate conditions and unemployment, but for the people with greater holding power who control property that is well-located, a downtrend in the market would probably cause such owners to hold back from even selling. Stock will thin out, and maybe till the point that nothing goes on sale such that it does not matter even if there buyers.There would simply be no willing sellers. My opinion is that for the most part, people would rather grit their teeth and hang on rather than sell out and still be stuck with no place to live.
Seriously, if I had, for example, an opulent mansion fronting the sea in a thriving area that is such a joy to live in, I have no reason to sell up even if prices dropped. If I did, where else could I buy? EVERYTHING else would have similarly dropped by 40%. I do not wish to downgrade by buying into some landlocked area. And if I want to upgrade, it would still require an additional outlay of cash. If that's the case, I'd rather stay put.
Therefore, when prices do take a tumble, the properties that are desirable to EVERYONE who wants to buy in are still going to remain in demand, are going to be in extremely short supply because the vast majority of owners will choose not to sell. At the end of the day, the doom & gloom folk will be left complaining about unaffordable housing all over again because they cannot buy into an area which they had never been able to afford in the first place.
And we can be well-assured that in the environment of a property crash, no bank will, in its right mind, loan money to people to buy property. This is assuming the banks haven't already gone out of business and thrown the rest of the economy into turmoil by winding up and taking people's savings and deposits with them. IMHO, a property crash does not solve the problem of home ownership. So unless you have an individual (or family unit) that is cashed up enough to put up $300K in cold hard cash for an average house in Melbourne during the purported crash, the prospect of home ownership will not get any better for these folk. Even if they can, they will still be lamenting about that beautiful $840K house (once $1.4 million), well-located in a wonderful environment, but is is still so unaffordable.
It's nice to see you guys duke it out..
Just as an aside, what would you think this property would be worth, to buy, knowing that it needs re-stumping and that the second 'bedroom' is in fact the dining room that joins the lounge, separated by glass doors?: http://www.realestate.com.au/property-house-vic-preston-405044973
Hi Wynyard. My guess $460,000 now. About half that in 7 years.
fWord – you were the one that said the majority of investors are in the business of capital gain. And in recent times, I would agree.
I also agree with you about tax. Although, I think many property investors don’t realize that a tax deduction just reduces the loss (as opposed to eliminate it, or turn it into a profit).
Underlying profitability is the rent less expenses. To be an investor, you would have to be satisfied with the expected profitability of the investment over the life of the investment. A speculator does not care about that – as long as the capital gains outweigh any potential loss.Regarding other counties – I don’t see the need to compare all of those fundamental aspects of their economy and housing market, because I don’t think property booms and busts are driven by fundamentals.
Your last few paragraphs seem to imply that desirable houses cannot go down in value. But you’ll find it’s the top houses that go up the most in an upturn and down the most in a downturn. Look at the last graph on page 1.http://www.rpdata.com/images/stories/content/pressreleases/rp_data_rismark_home_value_index_december_31_2010.pdf
You mention banks being reluctant to lend in a falling market which is right. And this will only exacerbate the downturn. Consider this – a slight increase in deposit requirements from 5% to 10% HALVES the amount someone has available to bid on a house!AHP, would you believe(I think you would, and its true) – $800K
Are you serious? Is that actually what it recently sold for or what the owner is asking? That would be a 2% yield – before costs!
When I inspected it as a potential rental property, I asked the agent what it would be worth to buy – that's what she said. Doing a comparison online, it's probably not accurate. The back yard is pretty huge, so its just the land she is putting at that value, saying the house needs to knocked down to build flats. Which is what the owners intend to do in 2-3 years. It was renovated just to make it viable for the short term. To me, its a really nice house – shame it didn't actually have two real bedrooms or I'd jump at it, and hope that I could stay there for five years at least.
Also, to her credit, it's a nicer part of Preston, because just a few blocks down the road and you're in total slumsville, I checked out some houses there too, and it reminded me of my time living in commission houses – not pretty, freaky neighbours, bikies, neglect, a feeling of oppression that hangs in the sky. Its not the place to bring up a kid – and I'd be paying over 1/3 of our household income for the privilege.
Anyhow, a while back you asked about some other blogs to check out, I don't rate them all but they each have something informative or funny to add, and I'm sure there is plenty more:
http://realestatenavigator.wordpress.com/
http://www.whocrashedtheeconomy.com/
http://www.housingaffordability.blogspot.com/
http://www.talkfinance.net/f32/
http://www.bubblepedia.net.au/
http://www.debtdeflation.com/blogs/
http://www.simplesustainable.com/forum/15-australian-property/
http://feeds.feedburner.com/Unconventional-EconomistBut as I've said elsewhere, I'm becoming more interested in what can be done re policy initiatives than focusing on the crash. Articles like this are worth a read: http://www.cis.org.au/media-information/opinion-pieces/article/2358
If we had a 3.5% to 4,5% tax of the sale of property like the Germans, who also have 25% capital gains….
62% of German rent and a very large number of them invest into the mutual funds that owns the housing. Speculation has been frowned upon from Hitler on…..Here?
1. New credit laws to make it harder for anyone over 35 to get a loan…..did that…..
2. Pressure banks to follow rba……did that
3. Cut down population growth to 1.1%…… did that
4. Talk about changes to asset tests on the PPOR for the aged for aged care and pensions……did that
5. Massively increase public construction (50% of all units bulky in June 2010 were public units)…… Did that, then stop it cold, also did that…..
6. Support interest rates going up to fight inflation driven by the mining economy……did that
7. Casualise the workforce……did that
8. Cut the FHOG……did thatMy god what else can I do? Maybe a commodities price bust? Grow unemployment?
Really you ask to much, prices have peaked and are on the decline, get used to it……
AussieHousePrices wrote:fWord – you were the one that said the majority of investors are in the business of capital gain. And in recent times, I would agree.
Sorry, you've got me confused here. Which statement are we referring to that leads you to bring up this point?
AussieHousePrices wrote:…many property investors don’t realize that a tax deduction just reduces the loss (as opposed to eliminate it, or turn it into a profit).Not entirely true. With depreciation benefits and the deductibility of losses from a property venture, it is possible to make a property neutrally or even positively geared. This is especially so for people in the highest tax bracket. It's a pity I just returned that library book, otherwise I'd be quoting that example here.
AussieHousePrices wrote:Underlying profitability is the rent less expenses. To be an investor, you would have to be satisfied with the expected profitability of the investment over the life of the investment. A speculator does not care about that – as long as the capital gains outweigh any potential loss.IMO, underlying profitability is not necessarily rent less expenses. In the line of property, we could look at underlying profitability being the eventual sale price plus rent, less all expenses. That is how you get your eventual loss or gain from the venture. There is no 'one-size-fits-all' equation that determines how we calculate profitability from every form of investment.
For example, some people buy shares in order to get dividends as a form of passive income. But consider also there are people who buy shares from companies that offer little to no dividends (and hence very little in the way of an immediate reward for the investor), but the purchaser is buying with capital growth in mind. On this note, there are some investors who much prefer to buy shares in a sound company that offers little to no dividend because this may indicate that the company would rather invest in itself and then grow exponentially, rather than feeding its investors little bite-sized rewards that in turn affect the company's profitability.
AussieHousePrices wrote:Regarding other counties – I don’t see the need to compare all of those fundamental aspects of their economy and housing market, because I don’t think property booms and busts are driven by fundamentals.Well then, if we don't look at fundamentals, how do we know when it is the 'right' time to purchase? To a certain extent, a market rebounds after a crash because enough people have looked at the fundamentals and decide things are underpriced or the market is oversold. So the fundamentals can be a driving factor in determining market sentiment or public perception. Wasn't it the fundamentals (eg. wages, inflation rates, the economy, affordability index etc) that made you (and some others) believe that property is overpriced to the tune of 40%? Without the fundamentals, how can people quote the figure of '40%'?
To ignore the fundamentals completely is probably not a wise move. I appreciate that market sentiment and public perception has a big role to play in what the market does. However, how can you look at a crash that has occurred in a country with say, a massive oversupply of houses and predict a crash of similar magnitude in a country with an undersupply?
Just going back to Singapore's property market for a moment. I personally think that prices are awfully high, however the sheer density of living and the size of the population will continue to put upwards pressure on prices. I don't see a property crash occurring in Singapore because, high as the prices are, that's just the way it is. You either decide to buy or decide to rent. That's a personal choice.
AussieHousePrices wrote:Your last few paragraphs seem to imply that desirable houses cannot go down in value. But you’ll find it’s the top houses that go up the most in an upturn and down the most in a downturn. Look at the last graph on page 1.http://www.rpdata.com/images/stories/content/pressreleases/rp_data_rismark_home_value_index_december_31_2010.pdfThe stuff I wrote in those paragraphs does not imply in any way that desirable houses cannot lose value. If you read carefully, my emphasis was on 'location' and 'area', not on prices. Well-located property will be in the highest demand relative to poorly-located property and this is irregardless of market conditions. Does a property crash make a good location less sought after? No, in fact, with a property crash, prices in these areas get even cheaper, and hence become MORE sought after. Would someone prefer to buy in an industrial dump compared to a leafy, beautiful suburb in a property downturn? Guess not.
As you mentioned, the most expensive houses fluctuate the most in value. There is the chance of a greater loss if you make an ill-informed purchase. But let's look at the flip side of it: a knowledgeable buyer also stands the chance of the greatest gain by buying this sort of property.
Everybody has a different 'risk profile'. Those who are willing to take bigger risks should rightly, be rewarded with the greatest reward if they buy right. What's a common regret that older people have? That's right. They wish they took more risks. Of course, they're referring to 'calculated risks'.
AussieHousePrices wrote:You mention banks being reluctant to lend in a falling market which is right. And this will only exacerbate the downturn. Consider this – a slight increase in deposit requirements from 5% to 10% HALVES the amount someone has available to bid on a house!More importantly, and without sounding as if I'm repeating myself, circumstances like these only make things more DIFFICULT for people wanting to buy a house. So again, does a property crash really help to improve the prospects of home ownership? If not, then why are people spending so much energy stating that property is overpriced when a property market crash isn't going to help anyway?
Wynyard wrote:Also, to her credit, it's a nicer part of Preston, because just a few blocks down the road and you're in total slumsville, I checked out some houses there too, and it reminded me of my time living in commission houses – not pretty, freaky neighbours, bikies, neglect, a feeling of oppression that hangs in the sky. Its not the place to bring up a kid – and I'd be paying over 1/3 of our household income for the privilege.
This is precisely the effect that location has on price of a property. There's a small number of places that a large number of people would prefer to live in. Large demand, small supply. Guess what happens next.
I think it's pretty pointless for everyone to expect to be able to live in the same desirable locations. It is simply not realistic. When people fight over such property, money obviously comes into the picture and the people with the deepest pockets will buy up. And the people who aren't as well-endowed then go around saying that property is unaffordable. Of course! How can people with a low income expect to buy into blue-ribbon suburbs? They just have to look further afield. Why not look at an area that you can afford, buy in, and wait for the place to clean itself up in the years to come?
Just out of interest, what is the weekly rent of a place in this slumsville part of Preston?
AussieHousePrices wrote:Hi Wynyard. My guess $460,000 now. About half that in 7 years.In seven years time, we'll hear a roar of laughter coming from somewhere. Someone is going to be very wrong.
DWolfe wrote:Well, the big development companies have made buckets. AV Jennings and Stockland have made a giant profit.Bubble? Pop? Where?
D
More specifically, when?
Having mainly traded shares, I'm kind of new to property. I don't own a house but I have been researching it for at least 5 years now (It is one the biggest decisions one can make). I've come across many characters in the game; friends that have made a lot, and friends that hope to make a lot. It seems everyone is a property expert because they went to X seminars of have X properties, or parted with potentially large amounts of money to hear someone's 'expert' advice.
I have been to some of these seminars, I have friends that run them. From 2000 they have said the same things. They're becoming more desperate to attract new "investors" to their game than ever, and the majority that have made their bucks would have less to fear. There just seems to be an increasing sense of desperation from everyone, banks, "investor clubs", real estate agents and the media to keep this unsustainable machine ticking over.
All in all, I must say that there is overwhelming evidence to support the outcome of a downturn. Any evidence I've come across suggesting otherwise is usually pushed in my face as a "selling point" or "reason to buy". I'm in the medical profession and a lot of the time you make evidenced based decisions, these almost become 'gut feelings'.
This gut feeling isn't good.
fWord wrote:Sorry, you've got me confused here. Which statement are we referring to that leads you to bring up this point?I was referring to when you said “Hmm…your statement seems to imply that people who put money into property do not focus on potential cash flows” but I may have misunderstood.
fWord wrote:Not entirely true. With depreciation benefits and the deductibility of losses from a property venture, it is possible to make a property neutrally or even positively geared. This is especially so for people in the highest tax bracket.Agreed. But non-cash expenses are dwarfed by cash expenses. So, the only way that tax can turn a cash flow negative investment into a cash flow positive one is if it was on the verge of becoming positive anyway.
fWord wrote:Well then, if we don't look at fundamentals, how do we know when it is the 'right' time to purchase?Good point. I do believe in looking at the fundamentals of Australian property when deciding whether it’s over-valued. But I don’t see the point in studying the fundamentals of another country that I’m not considering investing in.
fWord wrote:Just going back to Singapore's property market for a moment. I personally think that prices are awfully high, however the sheer density of living and the size of the population will continue to put upwards pressure on prices. I don't see a property crash occurring in Singapore because, high as the prices are, that's just the way it is.How then do you explain the price crash in Toyko?
fWord wrote:Well-located property will be in the highest demand relative to poorly-located property and this is irregardless of market conditions.I’m not following – it still sounds like you’re saying nice places in nice areas can’t fall in value??
fWord wrote:Circumstances like these only make things more DIFFICULT for people wanting to buy a house. So again, does a property crash really help to improve the prospects of home ownership? If not, then why are people spending so much energy stating that property is overpriced when a property market crash isn't going to help anyway?Personally, I would rather struggle to save a 30% deposit and buy a reasonably-priced house than easily save a 5% deposit and struggle to pay back the super-sized mortgage plus interest for the rest of my life.
In addition, I’d imagine it will be tough DURING the crash but once prices have stabilised, prices will be affordable and lending should become reasonable again.
"Just out of interest, what is the weekly rent of a place in this slumsville part of Preston?"
$310-350pw. Same as the nice area just a few blocks away.
"And the people who aren't as well-endowed then go around saying that property is unaffordable. Of course! How can people with a low income expect to buy into blue-ribbon suburbs?"
I'm not talking about no blue ribbon suburbs. As I said, a lot of Preston is the dogs balls, and that will still set you back about 12 x the average income of an inner city worker (plus interest!). The progress of places like Thornbury, where I have lived, has been so slow, that maybe in 20-30 years it will be a new hub for culture, but the problem is, everyone who can afford to live there now has no money to do anything but pay the mortgage off. The main street is still full of failing businesses. In the last five-ten years, nothing has really changed except the prices. Sure it will one day, but we'll be nearly dead by then.
Do you really think property in under-developed inner suburban as offering value for money, right now? Would you care to explain your point of view, because I just can't see where you are coming from.
AussieHousePrices wrote:Agreed. But non-cash expenses are dwarfed by cash expenses. So, the only way that tax can turn a cash flow negative investment into a cash flow positive one is if it was on the verge of becoming positive anyway.That's besides the point. The point I was trying to make is that is is not entirely correct to suggest that tax deductions cannot eliminate a loss or generate a profit from a property venture that is otherwise costing money to maintain.
AussieHousePrices wrote:Good point. I do believe in looking at the fundamentals of Australian property when deciding whether it’s over-valued. But I don’t see the point in studying the fundamentals of another country that I’m not considering investing in.Then why bring up the point earlier that property values are crashing (or have crashed) in other countries to say there is no truth in the claim that property values will trend upwards? If we have not studied the fundamentals in these countries, we cannot draw any conclusions about the reason for their property market crash, nor make any comparisons between their bubble and ours in Australia.
AussieHousePrices wrote:How then do you explain the price crash in Toyko?Well, I don't know, and maybe you can clue me in. I would think that people researching on bubbles and such would be well versed with all this information. But of course, in tying in with the above point, I've learnt that you're not interested in finding out what has happened in other countries to cause a crash, which could give us information to predict the reasons behind the crash you believe we need to have (and which we could indeed have) in Australia.
AussieHousePrices wrote:I’m not following – it still sounds like you’re saying nice places in nice areas can’t fall in value??Frankly, I don't know how much clearer I can make this. Since when did I say or imply that prices in these areas cannot fall? I am merely stating the obvious: well-located property will always be in demand and will always sell for more, relative to properties in outlying areas that are devoid of something unique, desirable or trendy. That is of course, unless some disastrous things occur in our country to make it unlivable as a whole (ie. widespread corruption, war, riots, a tumultuous economy) or even another GFC.
To say that however is just making a very broad statement without any commitment whatsoever. In the same vein, a lot of people KNOW that the world is coming to an end SOON, in which case everything will become worthless and cease to exist. Should we then, hole ourselves up in a mountain, eat porridge all day and meditate? There is no point preaching that the end of the world is coming if we cannot predict with any degree of certainty when and why it is going to occur.
Has anyone actually thought about this: what if the property crash that you're desperately waiting for doesn't come during your lifetime? What if the end of the world that you hope for (so that you don't have to worry about house prices) doesn't come during your lifetime either? Would you be lying in your deathbed, wishing then that you had taken more risks in life? What degree of certainty does anybody have regarding WHEN a crash is actually going to come?
AussieHousePrices wrote:Personally, I would rather struggle to save a 30% deposit and buy a reasonably-priced house than easily save a 5% deposit and struggle to pay back the super-sized mortgage plus interest for the rest of my life. In addition, I’d imagine it will be tough DURING the crash but once prices have stabilised, prices will be affordable and lending should become reasonable again.Sure, that goes without saying. I'd rather save a 100% deposit and own a house wholly and not be tied to a mortgage. But is that realistic? What is a 'reasonably-priced house'? Would that be the $500K house of today (which is going to be worth $300K if prices drop 40%) or a $1.4 million house of today (which is going to be worth $840K under similar market conditions, assuming EVERY property in Australia drops at the same rate)? Or somewhere in between?
Under these conditions, there will STILL be people complaining that that $840K house is so unaffordable even though there are cheap $300K houses (worth $500K today, if I might add) sitting everywhere just waiting to be bought.
At a 30% deposit, that's $90K for a $300K house. Still quite a lot of money. And would the bank loan $210K to cover the rest of the costs? I bet my bacon they wouldn't, not in a property market crash. Going back to what was mentioned previously: to buy that $300K property under those conditions, you'd better have the $300K in cold hard cash yourself. That's provided your bank didn't wind up and pay your savings out to other shareholders, or worse, the CEO!
And whether or not affordable prices coincide with the return of reasonable lending remains to be seen. I'd be betting that reasonable lending goes hand-in-hand with 'unaffordable' prices, rather than the other way around. After all, some propose that the 'bubble' has occurred because of unreasonably lax financing. Let's imagine for a moment that all the banks shut their doors and decided not to loan any more money for the purchase of property, or less extreme: banks only loaning to the point of 60% LVR. It would slow or stop the market dead in its tracks. People cannot take out increasingly large loans (compared to their ability to service) and drive up prices.
Additionally, I'm getting the impression that 'bubbles' seem to get bigger and bigger everytime. If we had a crash, I'd be waiting for things to stabilise and the next big bubble to come.
Wynyard wrote:"Just out of interest, what is the weekly rent of a place in this slumsville part of Preston?"$310-350pw. Same as the nice area just a few blocks away.
Geez, at that kind of rent for the 'slumsville' you describe, I'd be looking elsewhere.
Wynyard wrote:I'm not talking about no blue ribbon suburbs. As I said, a lot of Preston is the dogs balls, and that will still set you back about 12 x the average income of an inner city worker (plus interest!).Well, who's forcing you to buy there? Buy something that is within your means. Why do people worry about the house that they CANNOT afford rather than researching on the areas that they CAN buy into? This is the thing that baffles me to no end. For some reason, people know how to look at cars and go, 'Oh, that Aston Martin costs $300K, I really can't afford that. So I'll buy a second-hand Mazda for $12K.'
Why does this same line of thinking not sink in when we're talking about buying houses?
Wynyard wrote:The progress of places like Thornbury, where I have lived, has been so slow, that maybe in 20-30 years it will be a new hub for culture, but the problem is, everyone who can afford to live there now has no money to do anything but pay the mortgage off. The main street is still full of failing businesses. In the last five-ten years, nothing has really changed except the prices. Sure it will one day, but we'll be nearly dead by then.Haha, so is that their problem or yours? Why are you worried about THEIR problems? They chose to live far in excess of their means and so they are paying the price. That's just simple isn't it? Who forced them to buy a house that's going to cost them like $700-800K? There's cheaper houses all around. Why not look at Fawkner (median price $450K) or Meadow Heights (median price $350K)? I know, people are going to jeer, '#(&^!! I'm NEVER gonna live out there!'
Well, then choose: rent in an area you'd prefer, or buy into an area which you can afford. The choice is up to you.
Wynyard wrote:Do you really think property in under-developed inner suburban as offering value for money, right now? Would you care to explain your point of view, because I just can't see where you are coming from.No, I didn't say that property in these inner suburbs offers value for money. That's why I bought regional property. But to entertain your question, first of all, let's consider the term 'value for money'. What does this term really mean? It has different meanings to different people.
What does that term mean for you? Is it a big backyard? Proximity to a school? A train line? Shops? The beach or parks? Five bedrooms, three bathrooms and powder room, tennis court, lagoon-style pool and triple garage? All of the above? Hence, what is 'value for money' to someone is not necessarily so for you. And besides, because of price alone, not everyone can afford even a universally 'good value for money' house.
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