Hey freenterprise. from my understanding rental vacancies has increased, rents have only increased at %1-2 nationally and not the %5-8 that the so called real estate gurus where predicting at the beggining of the year, auction clearences at at %50 in sydney and %55 in melbourne and this is the best cities to buy in apparently. Brisbane, perth are at %30 clearence. Housing prices have either only increased slightly in sydney and melbourne and have decreased in perth brisbane and like you mentioned housing starts have increased dramatically. I personally beleive that the majority of people purchasing properties where investors but since they have seen the property market being flooded with new properties, prices staqbilising or decreasing and most importantly rental vacancies increasing and rents stabilinsing they have decided its time to pull out and wait so now not many people are buying because first time buyers can not afford to buy at these prices. This is why there is an oversupply at the moment because alot of new properties are not being sold and investors are trying to pull out. well at least thats my view
hello all,
I think the main issue here is where you are watching or where you are living. It seems there are great differences in what is being experienced in differing areas.
I talk to a friend in Melbourne who talks about the strength of the market and all its factors. I truely belief his comments however in my area north QLD my market is much more like eloi explains.
In my market place invesstors have been absent for at least 12 months and first home buyers are unable to afford the general asking prices. We have an oversupply of almost all product types (as many developers were catering to the now absent investors). The result has been a 20% drop in selling prices over the past 6 months. Vacancy rates are continuing to increase, rents are decreasing and properties are staying on market for alot longer.
So my question is.. Is now the time to buy (definately a buyers market) or do I wait 6 months as further the area may experience a futher reduction in sales prices. I am however very confident that our longer term market conditions will be solid.
hey.
yes north queensland or all of queensland for that matter is suffering but sydney and melbourne have started to show some signs of similar scenarios. rental vacancies have started to increase, rental returns have been neautral or %2 at most, auction clearences are at %50 and prices have not increased for the last few months and in some areas of sydney have decreased but developers are still building alot of properties which will come into the market this year or next year so the probelm is only going to get worse for vacancies and prices. in the inner suburbs of sydney houses are averaging 1.4mil + for an old house, 2 bed apartments are at 600k + for an old apartment. now you tell me who can afford these payments on 1.4 mil is about $2300 a week and on the apartments $1100 and these are old places. The average income in inner sydney is $90000 before tax so one person cant buy a house or an apartment on their own or will have to rely on rental payments but even then wont be able to eat or buy any clothes because everything goes towards mortgage
and if tenant leaves and no rental income comes through they are stuffed. SO 2 people have to buy property together but as an investor this does not work so it has to be couples with the intention of living in property. so lets assume both earn $90000 before tax then thats $180000 and after tax around $130000 so if they buy a house together in inner sydney $115000 will go towrds mortgage and they will be left with $15000 for everything else. now if they buy an apartment with $50 body corporate they will be left with around $65000 for everything else but this scenario is more likely for a young couple but what happens when they grow a family. overall the scenario is grim for anyone wanting a property in sydney un less you go out to outer suburbs but then you lose on lifestyle.The shortage is an invention of the banks and real estate vested interests
If you look at the data between the 2000 and 2006 census, the number of houses increased by a greater percentage than the number of people.
ummester wrote:And lose 50 odd K in fees and stuff for the transaction in 10 years time?
A lot of fees for today's median priced home.
I only pay around 2% in agent fees which would put your place in the $2.5M range. That's some capital gain you expect over the next 10 years unmester, and you said you weren't bullish…..
Peak Debt wrote:The shortage is an invention of the banks and real estate vested interestsIf you look at the data between the 2000 and 2006 census, the number of houses increased by a greater percentage than the number of people.
this is exactly my point. everything is propaganda to keep the economy from going into recession but unfortunatly the bubble has to pop some time and australia wont be any different to the rest of the world. If it doesnt pop not it will in 1 year but even worse if not in 1 year then 2 years but even worse that 1 year and so on and so on. it has to pop because its unrealistic and based on false numbers.
eloi wrote:but unfortunatly the bubble has to pop some timewhat bubble ?
eloi wrote:but unfortunatly the bubble has to pop some time and australia wont be any different to the rest of the world. If it doesnt pop not it will in 1 year but even worse if not in 1 year then 2 years but even worse that 1 year and so on and so on. it has to pop because its unrealistic and based on false numbers.
Firstly, a bubble does not necessarily have to pop. Two, who says what we are currently experiencing is a bubble. Three, there was an article in the Weekend AFR (not online) about the 20% plus increases in rents for apartments in Sydney, Melbourne and Brisbane, shooting down your theory about rents not rising.
eloi wrote:hey.yes north queensland or all of queensland for that matter is suffering but sydney and melbourne have started to show some signs of similar scenarios. rental vacancies have started to increase, rental returns have been neautral or %2 at most, auction clearences are at %50 and prices have not increased for the last few months and in some areas of sydney have decreased but developers are still building alot of properties which will come into the market this year or next year so the probelm is only going to get worse for vacancies and prices. in the inner suburbs of sydney houses are averaging 1.4mil + for an old house, 2 bed apartments are at 600k + for an old apartment. now you tell me who can afford these payments on 1.4 mil is about $2300 a week and on the apartments $1100 and these are old places. The average income in inner sydney is $90000 before tax so one person cant buy a house or an apartment on their own or will have to rely on rental payments but even then wont be able to eat or buy any clothes because everything goes towards mortgage
and if tenant leaves and no rental income comes through they are stuffed. SO 2 people have to buy property together but as an investor this does not work so it has to be couples with the intention of living in property. so lets assume both earn $90000 before tax then thats $180000 and after tax around $130000 so if they buy a house together in inner sydney $115000 will go towrds mortgage and they will be left with $15000 for everything else. now if they buy an apartment with $50 body corporate they will be left with around $65000 for everything else but this scenario is more likely for a young couple but what happens when they grow a family. overall the scenario is grim for anyone wanting a property in sydney un less you go out to outer suburbs but then you lose on lifestyle.Who says that the someone on the average inner city wage must be able to afford the average inner city house on the one income. Wake up. These people more often than not would have had equity or cash prior to purchasing in the inner city. They would not borrow the lot. You work your way up to things like that. <moderator: delete language>
devo76 wrote:Who says that the someone on the average inner city wage must be able to afford the average inner city house on the one income.No person says, though history does dictate.
devo76 wrote:These people more often than not would have had equity or cash prior to purchasing in the inner city. They would not borrow the lot. You work your way up to things like that. <moderator: delete language>Now you do – by substantially increasing debt at the same time. Using equity from a small rural place to buy a small city place makes you more of a slave to the bank than just paying off a small rural place. And for what? To be part of the hustle and bustle with the cloud of debt looming over your head and choking you and your partner for the next 30 years? For some crummy apartment? Come on, our cities aren't New york, where people have been conditioned to living like that over the last 60 years. They aren't even Paris, where it is more organized and a little cheaper.
Our cities, our entire country, is in the midst of a housing bubble that is sucking the economic life out of it and future generations. It can't possibly end well now, our leaders have passed up every chance to pull us out of it gently. Who knows how and when it is all going to fall apart, I don't even really care anymore. I guess I don't even really care about spreading the message that its a trap anymore, either. Too much else on my plate ATM. Probably just typing on instinct.
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