Perth Madness- new thread

[redwing]

Thought of Dazzling when I saw this News Item

Deal makers head for Perth
November 25, 2006

ITS no secret the Perth market is the most buoyant in the country and more deals involving property in the city by listed and unlisted players are expected in the coming 12 months.

Listed group Mirvac has been one of the more active, buying and developing close to $400 million worth of residential and commercial sites.

Investors are snapping up as many houses and as much office space as they can. There are a number of parties interested in Valad Property Group's 50 per cent stake in BankWest Tower.

A survey by Elderslie Finance, titled Your Interest Spring 2006, showed that Perth was considered the best value for residential property investment by almost half of the survey respondents (49 per cent).

Brisbane (23) and Sydney (10) followed, said Elderslie director Luis Garcia.

"It's clear respondents aren't just choosing their state of origin - with 18 per cent being from Western Australia compared with 39 per cent from NSW and 19 per cent from Victoria, Mr Garcia said.

"But while Perth is considered the best city for residential property investment, residential property in general is out of favour with investors. The asset class deemed the most appealing was fixed-interest investments such as term deposits and debentures, with 36 per cent of respondents considering them the most valuable component of their investment portfolios."

Mr Garcia said this was followed by Australian shares (24 per cent) and listed property (12), which was consistent with results from six months ago.

"Similarly, 48 per cent of investors considered fixed interest investments to be the safest investment in the medium term of three to five years, followed by listed property trusts (13 per cent) and Australian shares (9 per cent)."

Normal for Perth

Not sure, but I found Margaret Lomas's comparison chart of rental return and property values (similar to a set of stairs for values and an inclining intersecting line representing rents) interesting, as it showed periods of negative, nuetral and positive.

 

[Lacasa]

And, I suspect, if there is little capital growth (due to affordability limits) that rents will rise strongly.

Pete, I think your are right on the rents. My Property Manager emailed me the other day, current tenants want to break their lease (their house is finally built after a year and half). She said it would be best if they do as she can now ask for $320-330 per week, up from $270 that I was getting. My IP is a 3x2 located in Innalloo for those that are interested.

Lacasa

 

[Kennethkohsg]

From the readig of the analysis by Gavin Hedney, Rob Drbitt and John Garmony, I blieve Perth will have solid growth in next 2-3 years.

**************************8
Dear the Analyst?

1. Why?

2. What exactly did Gavin Hegney, Rob Druitt and John Garmony saying?

3. Looking forward to your sharing, please.

4. Thank you.


regards,
Kenneth KOH

 

[asdf]

Hey Celeste, I wouldn't be telling a lot of people what your friend is up to. No 6!! I hope thats over a 20 year time frame. If ATO gets a sniff, they could hit her with being a trader and demand back taxes on the income gained from selling the properties. That would be a worser outcome than having it deemed an IP with 50% CGT discount on sales. I suppose the PPOR CGT exemption is there for everyone to be taken advantage of.

 

[Celeste]

Hi all

No one knows who she is, I don't drop names - just someone I know of.

It has been over a few years - who said they were all in her name?

Celeste

 

[Jamie]

Hey Celeste, I wouldn't be telling a lot of people what your friend is up to. No 6!! I hope thats over a 20 year time frame. If ATO gets a sniff, they could hit her with being a trader and demand back taxes on the income gained from selling the properties.

I've seen people doing it once or twice a year for the better part of a decade-quite a dramatic post there

I suppose the PPOR CGT exemption is there for everyone to be taken advantage of.

The ATO doesn't specify a minimum time a PPOR must be lived in to take advantage of the exemption. If theres no time frame for the exemption, how can someone "take advantage" of it?

 

[asdf]

Probably not an issue but thought I'd highlight the potential risk with the ATO. Perhaps another way to look at it is to call the ATO and ask if its OK for a family (fictitious obviously) to keep building and flipping for a profit time and time again. Part IVA is rather far reaching. If you think about why the legislation for the exemption was brought in, it is to give PPOR owners a break as interest on loans & house expenses are not deductible. Imagine if all we did for a "wage" was build houses, move into it, flog it off for a profit then replicate again and again, who'd actually want to work ever again?

 

[TheAnalyst]

I know a lot of people working in a building company doing this. They told me they never worried about ATO.

I am buying again at the "peak".

 

[redwing]

Agree with the Analyst

I've heard of a few Builders doing dodgys ( ha ha..whats new ) over time such as getting staff to live there for three months or so etc when in reality they are 'spec' homes for these builders..

Geez, Imagine a "dodgy builders" thread and what could be posted there !!

Though Agree with ASDF and wouldn't like to gain the ATO's attention either, at the end of the day i guess it all comes down to prudent planning?

 

[Ausprop]

it probably isn't much different to just not declaring any capital gains. IMO, 2 a year for a decade is living well over the edge. I knew a guy that went for doing this very thing. they competely dragged him over the coals and it really ruined his life for quite some time. he ended up having to actually move into one of his dodgy spec homes and was complaining to me about how he had to endure the cheap spec he had built... double adaptors / power leads everywhere and tripping over his bed, ha ha !!

 

[Ausprop]

in fact that reminds me of something I read, may have been the aTO website, where it suggested the nature of your job e.g. builder, real estate agent, developer, could see even a very modest turnover of say one every 2 years as not being eligible for PPOR exemption because you are labelled as being in the business of trading properties - will see if i can find it

 

[Ausprop]

point 3 here touches on it...

http://www.bantacs.com.au/booklets/Capital_Gains_Tax_Booklet.pdf

 

[TheAnalyst]

I bought another block today.

 

[Rixter]

I bought another block today.

Cadbury block?

 

[TheAnalyst]

No rick, I bought my neighbour's block.

 

[Celeste]

Hi all

I spotted something in the real estate section today that seems a bit odd, I need to check it out a bit more,

I bed apartments in Vic Park, I have one rented and on hold until next may 07 so of course I keep and eye on the for sales there and I have various alerts to new listing. They have been showing up a the 230k mark for 3 months now.

Today there are 3 in the paper at 279 / 299 / 319 k - I really hope they are similiar to mine and sell at these prices. they are in the blocks around mine, and 1 is in a large building 9th floor etc. I need to check the sizes. Tho I did not think there were any much over 50sqm in the area.

Celeste

 

[Ausprop]

similarly a property in kensington that was listed at $1.085m sold within days - a record price for kensington i believe. Could this be a flight to inner city and part of the typical growth pattern? i think it is referred to as the reverse ripple effect? IMO inner city is certainly looking cheap compered to outer suburbia

 

[Celeste]

Hi all

OK - checked 2 out on domain etc. the other is private sale.

OK 1st one 279k is whole complex reno in and out - very nice, looks like new building.
2nd 299k ? top floor of very large 1960's complex, reno's ( quality reno - granite bench tops, only 1 photo of kitchen - doesn't state size, from my understanding of this complex possibably 60sqm, city views - but 7 listings for this complex some with views price rang 205k - 249k mainly around 230k just I thought they should be.

It will be interesting what the actual sale price will be.

Looks like my reno may reward me a little better than I figured - I also do quality reno's

celeste

 

[sparky23]

Well the latest bank valuation just came in from my Mandurah townhouse at $450,000! That gives me another $70,000 increase in the last 6 months which is exactly the same as the previous 6 months so I am grabbing the equity quick smart on that one.

Sparky

 

[Rixter]

Well the latest bank valuation just came in from my Mandurah townhouse at $450,000! That gives me another $70,000 increase in the last 6 months which is exactly the same as the previous 6 months so I am grabbing the equity quick smart on that one.

Sparky

Sounds great Sparky. Where do you intend to purchase with it?