Are any investors finding it difficult to buy?

[Propertunity]

.... I don't know why people are treating this recession so lightly.

I personally treat recessions (and I've been through a few) with the contempt they deserve I did have a read up about it, and then gave it some thinking time and discussed it with the family. The upshot was we took a vote. We unanimously voted to not participate in any recession that was on offer.
The smaller kids decided they did not want a cut in pocket money - can't blame them - they continue to save some and spend the rest.
The older kids decided to do some more education in one case to get a promotion at work, in another to start a new business venture and another to take more cash home from work by doing extra duties.
The Mrs and I decided to continue to work our business and keep a positive attitude. We personally continue to be actively purchasing when we see good property deals arise.

Unemployment HAS NOT filtered through yet, yes people are being retrenched but we are yet to fully realise the lag affect of a bad economy.

Agree, but I'm not interested in participating in unemployment either . 10% unemployment (if it gets to that) means 90% of people agree with me

I am and always will be PRO property, buy when you can afford and don't be focusing on short term market movements.

Agreed

This is very important.... DO NOT FALL INTO THE TRAP OF BUYING FOR SHORT TERM GROWTH.

Agreed

Seriously consider your positions at work,

and then go and get enough skills (if they are lacking) so that other employment opportunities can be taken up if the worst happens

seriously consider the demographic of the areas you are purchasing into,

Absolutely

and read up on the economy and consider that we are in a 1 in 60 year economic event

More like 1 in 80 but don't get sucked into the mindset IMO

Now is the time to look for bargains, NOT TO BE WORRIED ABOUT BUYING BEFORE A BOOM.

Why can't we do BOTH?

 

[Propertunity]

Piston
Decreases?
Where did you look?
Just courious because that's not what I see

x 2. We are out there in the marketplace daily and we don't see it either.
...at least not in the "270-350k bracket" that piston is talking about.

Sure the top end $1M+ stuff is taking a bit of a hit but not the lower end.

 

[BV]

x 2. We are out there in the marketplace daily and we don't see it either.
...at least not in the "270-350k bracket" that piston is talking about.

Sure the top end $1M+ stuff is taking a bit of a hit but not the lower end.

piston broke must be listening to the media which was reporting that property prices fell in March.

The median price probably did come down because of massive activity at the lower end of every suburb but this doesn't mean that prices have fallen.

Why do they use the median price to gauge the market anyway?
If many new properties sell in one suburb the median goes up and people think that prices are increasing when they could be steady or even falling.

 

[Propertunity]

Why do they use the median price to gauge the market anyway?

Well Bill I guess they have to use something, since Australians are now facinated by the cost of housing...............and now I notice the TV property shows are making a re-appearance.

I cannot recall who the data provider was, but some time back now they published lower quartile medians, mid range medians and upper quartile medians. These statistcis were really good because in one suburb you could see the lower quartile gaining say 3.4% while in the same period, the upper quartile medians might have been falling 1.2%. So I for one would be happy if they went back to this..... or at least provided an explanation of how medians can be skewed, so we don't get media articles in the same paper on the same day saying "housing holds up" and "housing slides 7%"

 

[Jacque]

Let's not forget that the FHB Boost is only one of the key drivers of this current growth phase we're experiencing in the lower quartile of the market.

Record low IRs are playing a major part, not only for FHB's but investors and
2nd/3rd etc home buyers as well. When you consider that we are now experiencing the lowest rates in some 46 yrs it's little surprise property is looking attractive again to all types of buyers. Couple low rates with the fact that Sydney's housing values are still $16K lower than the peak of the 2004 market, then you have changing sentiment. Buyers are still very cautious, however, especially given the GFC and the uncertainty of the next 6-12mths (agree with Stu here that we haven't yet seen the full ramifications and fallout from this- too early to tell) and it's certainly a different mood than it was back in 2000 when the grant was first introduced.

However, with credit now getting more difficult to access, and especially so for cash-poor FHB's it's not all roses out there either. Sure, there's a mini-frenzy occurring and I don't consider it healthy, given probably short term artificial stimulation of prices (with possible value drops following after July) but it's not as easy to purchase as it has been previously. I can't tell you how many contracts I've heard of recently that have fallen over due to FHB's being unable to obtain finance.

Who knows what will happen after June 30? None of us can be sure (obviously) but one thing is for sure- the remaining FHB's (and let's not forget there's not an endless supply of them!) will not be rushing around to purchase, like they are now, if the boost is dropped. The boost can't continue indefinitely- we simply can't afford it.

If it is continued, however, I believe that the FHB's looking now will ease off, relax and save the $7K cash to lessen the load and to improve their position.

It's interesting, though, to read on here of how many investors are holding back to gauge activity- perhaps prompting a rush come the latter half of 2009
Will this cause price drops? I think not. Enough investors in the market can have a similar effect to FHB's. Then again, who knows?
Tues night might reveal some budget changes that none of us can foresee.

Interesting times ahead.

 

[jingo]

I am more conservative then everyone/some here.

Me too!

Unemployment HAS NOT filtered through yet, yes people are being retrenched but we are yet to fully realise the lag affect of a bad economy..

I am in regular contact with an agent in the inner suburbs of Melbourne. He is an experienced investor and believes that there will be significant downward pressures on the FHB end of the market. His view makes sense considering that many FHB's rushed to buy properties up to $500,000 to make use of the grant. Should they loose their jobs they may be forced to sell. This could present investors with an opportunity to buy at a forced sale.

I am and always will be PRO property, buy when you can afford and don't be focusing on short term market movements.

This is very important.... DO NOT FALL INTO THE TRAP OF BUYING FOR SHORT TERM GROWTH.

DO NOT FALL INTO THE TRAP OF BUYING FOR SHORT TERM GROWTH...

Or you could buy something at a depressed price, and add value to create your own equity - without waiting for capital growth. I think that strategy would work too.

Seriously consider your positions at work, seriously consider the demographic of the areas you are purchasing into, and read up on the economy and consider that we are in a 1 in 60 year economic event which will have serious affects on the money supply and sentiment. The two very things that will create growth.

Now is the time to look for bargains, NOT TO BE WORRIED ABOUT BUYING BEFORE A BOOM.


--------- Seek professional advice, do your own research and form your own strategy --------------

I would agree stumunro. Think carefully before you buy. Selling in a depressed market can be difficult!

Regards Jason

 

[sparky23]

What's happening now that's happened before is that those selling real estate keep touting it's a great time to buy.
Buy Now! Be Quick!... yeah right.

The thing is that because we are 'on the ground' we are just letting people on here know what is actually happening right now as opposed to media stories that are behind the times. Take it with a pinch of salt if you like but we certainly don't need to be talking up the market when it has legs of its own!

 

[Piston Broke]

BV I've posted many times what I think of the media and it's experts.
We don't need them. Coming from you though it's a rather cheap shot since you post links to media releases constantly, while I'm the one constantly slamming the media (and most experts) as bogus.
Median prices also went up when new homes were being developed in existing areas with older homes. When that happened everybody pointed to them and yelled "Boom!, Buy!, Boom!, Now!", including the front cover of API.
Yeah I think they are not worth much as a yardstick, but many count them as relevant when it suits them. Mostly RE agents, REIA, buyers, BA's and others who say "it's a great time to buy now".
It's pretty much all over the W & SW of Sydney.
I talk to a variety of people all the time, bankers, REs, accountants, lawyers etc. I have many convos "off the record" with these people who seem to
give leading indicators of what's happening. People like Token Funder are worth their weight in gold when you can get them to speak candidly.
I would never say they're always right, but it's a good chance.
As long as prices are being subsidised by tax payers, then they will remain
fairly stable and any decrease will be slow imo, and D-Day is postponed until
they run out of cash to give away, or they can keep it up long enough for
people to be cashed up and have work.

 

[BV]

BV Coming from you though it's a rather cheap shot since you post links to media releases constantly, while I'm the one constantly slamming the media (and most experts) as bogus.
.

Haha funny...

Mate, I could be posting links to articles which could be of interest
daily but this doesn't mean that I agree with the writer.

On the other hand, you could be bagging the media daily and I have no problem with that but you shouldn't adopt their position without checking it out first

and don't tell me you are out in the suburbs looking and you actually saw prices coming down because thats impossible.

 

[Piston Broke]

Your absolutely right!
Why do all those silly people use medians anyway.
They don't have a clue do they?

Summary:[/B]My gut feeling is that the Sydney median price will rise but I don't believe that it will be driven by the upper end as it did in 2007. This time it will be mostly driven by increases in what is still affordable housing.
IMHO

House prices for postcode 2148 Blacktown (from the CBA property value guide)
April 2003 median approx $310K
July 2004 median approx $387K Market Peaked
Aug 2005 median approx $368K
Aug 2006 median approx $378K
Aug 2007 median approx $360K
Oct 2007 median approx $372K
It also states that in the last 3 months, median property values for postcode 2148, NSW (Kings Park / Marayong / Prospect / Blacktown Westpoint / Blacktown Dc / Arndell Park / Blacktown / Huntingwood) have increased by 3%.

The median price for WPHills is higher than Cherrybrook by $110K so it's a considerable amount for a lot of people.

The REIA March quarter data shows median house prices rose most strongly
in Darwin and Canberra during the quarter, rising respectively by 13.0% to
$260,000 and by 11.7% to $377,800.

And I posted:

Average & Median prices can be very deceptive if you dont know whats happening in the area. They get quite distorted by the type of property sold in that time frame.
So it needs repeating, be very careful before using that info to make a decision.

What I mean is that the published median price movements for the area were way off my actuals.

The other point I did'nt mention was median prices.
I learnt long ago that they are meaningless unless you know what happening in the local area. They were so wrong for my IP's it was funny.
The funniest was a few years ago when API touted 2560 as the highest gains.

And in a postcode that was touted as having a 20% CG about a year or ago, including on the front cover of API. Such is the fudgyness of those "expert" median figures.

Stop taking hypocrytical cheap shots, you have been going on about median prices for years. My stance has not changed for years.
I would also add read my post, as you obviously haven't, but it seems you dont even read what you post yourself.

 

[BV]

Piston
First of all when I post something it's only relevant to that particular thread.
What's your point?
We often refer to data from various sources

I would also add read my post, as you obviously haven't, but it seems you dont even read what you post yourself.

Maybe you should read your posts as well and then tell us where you saw those imaginary price falls

 

[steveadl]

Interesting to read people's observations on property interstate - thanks for sharing. Any SA members care to comment on what they're seeing?

I'm not following the market as closely at the moment, but from what I can see in the areas I still look at - FHB'er territory hasn't really 'boomed' like it seems to have in the other states in the lead up to June 30. Just seen the continual movement upwards gradually, but nothing overly exciting. I would assume then if the other states were in for a drop after June 30 (which I'm not saying they will), then Adelaide should experience less effect as usual. I don't follow the higher priced areas such as eastern suburbs - I'll leave that for Rob.

SA as usual just seems to plod along quietly in the corner out of sight of most people, but it also takes the edge off the extreme highs and lows. For this reason I can't see a big drop post FHBG, plus yields seem to be doing ok as well with rents rising. Anyway just an observation from what I've seen - any SA'ers disagree?

 

[Piston Broke]

Here is what I posted:

I went out the burbs looking yesterday, and what i see is a whole heap of properties in that 270-350k bracket coming on the market, and another round of price decreases.

It is very obvious reading your posts that you have referred to median prices often in regards to property values. If you've changed your mind about median values, then great, we agree.
But don't tell me I follow the media & medians. The relevance is your trying to pin on me the opposite of what I posted here for years.
Buyers seem to be dropping off, be it the FHB effect coming to an end, or the coming end of the financial year, fear & indecision or whatever.
Yes there's still a few investors out there looking for bargains, but they aint the ones pushing the market up.
Old fibro homes on the cheap end seem to be holding on to their values a bit better
than other type of properties. They also had the biggest percentage gain during the boom.

If your research tells you different, then you go with it.

 

[josko]

Food for thought:

I had dinner with a friend who is in a management position with Australand.

He is adamant the FHOBG will be extended for NEW HOMES.

Seems like a great incentive for new development projects.


Regards Jo

 

[sash]

Josko,

The Fed. govt and state govt (Vic has already done this) will continue to offer more for buidlign a new home as this stimulates growth!

As for rushing in now......well that is a different story. I am part of the wait till after July 1 2009 crowd.

I believe that unemployment will cause a drop in confidence. In my view buy only the bargains!! ....not a lot left in the lower end!

Food for thought:

I had dinner with a friend who is in a management position with Australand.

He is adamant the FHOBG will be extended for NEW HOMES.

Seems like a great incentive for new development projects.


Regards Jo

 

[Piston Broke]

The extension of the FHBG to Sept 30 may change the W & SW RE landscape giving those selling a longer window to sell at a better price.
I still see a few more >350k homes coming to market, but the extension may
stabilize prices or reduce the downwards pressure.
This would of course depend on how many new sellers appear on the market, and will the out of town buyers make take up the extra stock where it's more affordable for them to buy.
FHBs will still be the main crowd to keep demand high (if there's enough of them left) as
most investors seem to be still recovering from their ~100% LVRs.
Will they recover by Sep 30? Have they had enough for the next few years?
Will they still have a job?

 

[handyandy]

I have noticed a lot more stock coming onto the market and I also believe that most FHB who were going to buy over the next 6-12 months have already been brought into the market.

Given these two factors (as I see it) there should now be a slow down and most likely even stall the mini FHB boom.

The stalling of the market is even more likely if job losses finally start to bite the lower earners.

Cheers

 

[BV]

Given these two factors (as I see it) there should now be a slow down and most likely even stall the mini FHB boom.
Cheers

I hope so, these FHB's are paying too much and if this continues they'll make us pay more as well