After decade of growth - apartment glut in US

Sounds like the problem we will soon have in Australia.
So many new developments coming onto the market will affect us in the same way.

I was suprised to hear there could be an oversupply of properties in the US. How could that be with 200 million inhabitants?
I guess it just goes to show that we could handle a 1000% increase in our population and we'd still manage to have a place to live.
If we lived like they do in Holland we could fit a billion onto just the liveable land in australia and we still wouldnt need to chuck the unfortunates in the desert.
Has anyone noticed the vast amounts of coastline we have that are virtually non-inhabited.
I know I've prattled on about India before but its interesting that even there they arent too 'full' to be forced to live in the desert (well not the Rajasthan one anyway).
 
I am not surprised as there are books in Singapore talking about the impending housing bust in America next year in 2004.

Setting aside personal ethics, whether the market is up or down, astute investors will always still find opportunities to invest.

I am being told that potential investors are now standing by to buy over the "over-supplied" inner city apartments in Melbourne at steep discounts of 20% or more.

So, there is always 2 sides to a coin/situation/picture and opportunity does exist in every crisis as well as risks/dangers in every opportunity/boom. The issue is how well informed and educated is an investor to minimise his calculated risk and make his investment a worthwhile venture.


Regards,
Kenkoh2000
 
Originally posted by L Bernham
Sounds like the problem we will soon have in Australia.
So many new developments coming onto the market will affect us in the same way.



L. Bernham,

I do not agree with your assessment for Australia. I find it too bleak.

Personally, I beleive that there is some room for properties in WA to rise further, though the overall Australian market has peaked/peaked over this year.

Invest at your risks and with due diligience,please.


Regards,
Kenkoh2000
 
Hi,

Although I dont actually have any stats on this I thought it was worth noting the difference in property structure between US and Australian. From what I know, US has a significantly larger proportion of appartments:houses than Australia does. I'd say this why they have a bit of an oversupply. Even some suburbs in Perth are at an oversupply.

The other point worth noting was that this was from a newspaper article. Since when have newspapers accurately recorded such events? :p

-Regards

Dave
 
What I hear from this article is that there are still opportunities for good CG & rental return in selected apartment markets in the US despite a glut in much of the country.

What does this say to anyone who wants to be a property investor?

- DON'T FOLLOW THE HERD BLINDLY

- BUY SELECTIVELY ON THE NUMBERS NOT THE EMOTION

- LOOK FOR PROPERTY WITH AN INHERENT ADVANTAGE (location, land, demand)

- KNOW YOUR MARKET (research, research, research!!!)

- LOOK FOR OPPORTUNITIES, DON'T WAIT FOR THEM TO LOOK FOR YOU


Basically the same key points that serious investors have re-iterated on this forum many times.


Whatever the market is doing there are always opportunities.

But no matter how the market is doing, some people only see the downside - fear, risk, loss, disaster - what if, what if, what if.

I call these people PAUPERS.

Cheers,

Aceyducey
 
This article made a serveral observations which I have also notices across several visits to the US in the last few years. The most interesting is:

"The US economy runs on coffee". :rolleyes:

I find it highly amusing that free cups of coffee would be something that would sway would a potential tenant. The sad thing this that I think Australia is following the trend.

Here's a thought. Charge and extra $15 per week and throw in a free coffee machine. It's bound to appeal to some tenants and is completely tax deductable!:D
 
.
But no matter how the market is doing, some people only see the downside - fear, risk, loss, disaster - what if, what if, what if.

I call these people PAUPERS

What about those that only see 'downside - fear, risk, loss, disaster ' when the market is clearly overheated as the recent annual survey of 231 bankers, regulators and analysts in 31 countries said about Australia.

What would you call them?
I would probably call them REALISTS.

And what would I call those that are getting into the market with the thoughts of what if, what if (what if I could be a property millionaire!)
I'd probably call them 'soon to be PAUPERS'
 
Hi LB,

Regarding those 231 bankers / analysts in 31 countries.

What is their knowledge of real estate in Australia, and which "markets" were they commenting on?

-Regards

Dave
 
Sorry mate, I dont have a list of their names or their qualifications.
What they generally do is compare fundamentals of the overall property market throughout the world and when one country rates highly on a various number of indicators it rings alarm bells.

Some of these could be
Earnings multiples/ rental yields
Affordability
Vacancy rates
Population growth
Available inhabitable land
Market Value of all RE in a country v GDP

When they see one country shifting rapidly up these lists in a short period of time they look at what may have changed in that time to justify this.
ie a mass influx of (wealthy) immigrants to a country with little land could justify this. Note this does not include having an natural level of immigration that has hovered around the same level for years.

If there were no real changes in drivers that may have contributed to the value gains.
I would think they also look at the number of investors that are getting into the market (a sign of artificial demand) which causes short term volatility.

LB
 
I commented on the opinions of 231 analysts/bankers-who-have-never-set-foot-in-Australia-but-are-considered-experts-on-our-housing-needs in another post, but just though I'd add:

How many of them have ever done a drive-through a suburb in Australia to get a real feel for the market? :)

I prefer feet on the ground to nose in the air.

More realism that way.

REALISTS are not doomsayers - they look at the market objectively, then pick the opportunities.

If you look for the doom and gloom, that's what you'll always find, not the opportunities :)

As a totally unknown person once said - 'You always get what you are looking for.'

Cheers,

Aceyducey
 
If you look for the doom and gloom, that's what you'll always find

When I returned to Australia, I started looking for houses to buy for investments and to live in but all I found was overpriced properties with low yields and a manic herd of people trying to get as many properties as they could to become property millionaires.

I didnt look for doom and gloom. It walked up to me,stared me in the face and wacked me round the head with a 4 by 2! :eek:
 
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