I personally believe we are well beyond the bottom of the market and heading towards upward movement.
Do I need to present proof? Absolutely.
The number of properties headed to market for the spring season is still nice and steady.
The interest rate is at a level which makes the ratio of borrowed money vs return quite acceptable for a lot of properties. It also means that with some reduced prices .. some properties minus the 20% deposit can actually return slightly cash positive without being in a fancy location or a great position. Thats not only healthy .. that suggests the start of a new pricing re-evaluation.
Yes .. that means an upward movement.
The limiting factors on this seem to be that for the moment .. rental demand is on hold with no pressure. That could mean a while before rent rises or increases in rental returns are possible. Capping the future potential of any current IP strategy.
As an American friend says "cut bait or fish".
Thanks christianb, love that comment, that’s a keeper.
Guessing where CG will be highest is challenging in these times.
Buying below market value on strong fundamentals seems more like “investing” to me than guessing or punting.Don’t banks demonstrate their forecasting on future interest rates by the positioning of their fixed interest rates relative to their variable rates?
That being the case, it should be easier to forecast buyer demand, which affects prices.Looks to me like Australia is as well placed to handle GFC #2 as it was to handle GFC#1 , and even better perhaps after experiencing one so recently. Less knee jerk reaction is likely, and human reaction is what makes and perpetuates a recession.
Wish my capital hadn’t been so tied up recently, could’ve bought some blue chip stocks cheaply, some banks were down just on sentiment. Oh well, live n learn.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
What Lies Ahead for the Australian Residential Property Market?
Quite an interesting article by Bill Zheng, who believes Australian Residential properties will do quite well during the next 10-20years, for the following reasons:
- Money supply will increase
- Australia is more aligned with Asia (and will benefit from its growth), than with Western Countries
- Australia will become wealthier as a nation, and most of the wealth will reside in residential properties
Hi Jack.
Your opinion on financial matters and predictions sound well informed and delivered with enthusiasm and passion.I support your right to have an opinion on the topic and to express it,
but your comments about me are unpleasant, personal and not welcome.
Forumites discuss issues, are encouraged to post their comments about issues
in order to stimulate debate about issues to exchange information to help each other.I post on this forum to help others, to contribute, keep the numbers up, but not to invite comments of a personal nature.
Focus on the topic please.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
xdrew wrote:I personally believe we are well beyond the bottom of the market and heading towards upward movement.Do I need to present proof? Absolutely.
The number of properties headed to market for the spring season is still nice and steady.
The interest rate is at a level which makes the ratio of borrowed money vs return quite acceptable for a lot of properties. It also means that with some reduced prices .. some properties minus the 20% deposit can actually return slightly cash positive without being in a fancy location or a great position. Thats not only healthy .. that suggests the start of a new pricing re-evaluation.
Yes .. that means an upward movement.
The limiting factors on this seem to be that for the moment .. rental demand is on hold with no pressure. That could mean a while before rent rises or increases in rental returns are possible. Capping the future potential of any current IP strategy.
Sounds logical to me except for the last paragraph.
Where is rental demand on hold with no pressure? Not where I am!I’m all for seeing opportunity in this marketplace. Returns are extremely high, purchase prices have consolidated, and interest rates are stable. Holding costs are very low (in general- some areas provide higher yields).
Call the agents on prospective properties you seek interest in as the visual price 99% of the time is not the sale price.
Good luck.
<moderator: some previous comments have been deleted. Abusive and/or insulting comments are not welcome on this site>
kong71286 wrote:What Lies Ahead for the Australian Residential Property Market? Quite an interesting article by Bill Zheng, who believes Australian Residential properties will do quite well during the next 10-20years, for the following reasons: Money supply will increase. Australia is more aligned with Asia (and will benefit from its growth), than with Western Countries. Australia will become wealthier as a nation, and most of the wealth will reside in residential propertiesBill is no messiah or guru. Infact he's just another self interested property spruiker promoting his property centric business with considerable bias. His article wouldn't make the grade on a 3rd rate economics 101 course.
Money supply will increase: of course it will. Fractional reserve banking and inflation guarantee M1/M2 money supply will grow exponentially See here: http://en.wikipedia.org/wiki/Money_supply
Aus aligned with Asia: has been for years however our big customer is China. The rest hardly rate by comparison. Problem is after 20+yrs we still only export minerals, education and tourism. The idea that we can diversify our exports to broaden our income base is yet to be proven. Resources (and Banking) underpin our trade surplus. (The rest of the economy under performs and is technically retreating.)They retreat and things won't look so rosy. Iron ore recently dropped from $180/t to $116/t and is predicted to go below $90/t next year. China is slowing and has substantial structural problems. It's growth rate is predicted (by credible inside commentators) to decline to 3-5% by 2013. That makes our economy look vulnerable to the impending global recession/depression from 2012/13 onwards. The common fear for the Aus economy is that we will develop the Dutch Disease – http://en.wikipedia.org/wiki/Dutch_disease
Aus becomes wealthier and that wealth will reside in property. Post war the Aus economy ran deficits for 50 years. In the last 20 we've seen the biggest credit bubble in history. Serious and credible economists see the next 10-20 years of global austerity as it deleverages (and defaults) out of the massive debts that have accumulated over this time. We may see the end of FIAT currenceies and fractional reserve banking or at least a unsubstantial modification to these systems. Once the correction begins to occur for real we're likely to see property depreciate and not reappreciate back to current levels for decades. You only have to look at how property values behaved in the 1930's depression to get a feel for a likely model of property and wealth this time around.
Bill is just another property spruiker adding to the background noise in the hope of lining his own pocket at your expense. <moderator: delete language>.
I have had to delete several more posts to keep this discussion on topic.
Additionally, when commenting on posts it is important to remember that people on our forums come from varying philosophies of investing and have different backgrounds and levels of experience when it comes to investing. They are all equally entitled to have their say and be respected for it. If you disagree, say so but keep the tone courteous and respectful. Abuse and comments of a personal nature are not welcome on this site.
Sincerely,
– Moderator
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