Canberra Market

[geoffw]

I'm not sure ifI'm in the right forum.

But I'm getting a lot of feedback here that rings alarms.

Yes, there is a definite shortage of property for sale, much too short for the demand.

Prices have been rising rapidly. I've had some welcome price rises in the property I own- but, of course, that means an unwelcome rise in the property I would like to buy

But, the reason I'm posting in this forum.

In the last week, I've had four colleagues ask me about investing in property. That's about twice as many in the previous two years.

It's not quite the taxi driver asking. But I have had a conversation with the cleaner baout his property.

Rapid price rises may indicate overheating.

But have any people also experienced the same rise in "interest rates' from people around? (not just Canberra).

 

[Mondie]

Yep, certainly Geoff.

It seems to have become the national passion at the moment, rather like shares were 3 years ago. Everybody was/is having a go until the bubble bursts and only the long term committed investors remain. How many property related segments have there been on those bits of dribble that pass as current affairs, ACA and TT recently?

l have 2 friends at work here who have bought properties with little or no research just because they felt like they were missing out on something. l believe they made poor choices and think it pretty likely that they would unload if interest rates rise even slightly (1-1.5%). l bet there are thousands of 'investors' in the same situation and wont that kill the market should it/when it happens!

l am currently thinking of borrowing 500k and gearing into shares and giving property a rest until the current situation settles down. If the bubble does bust then l would then look at moving in and hopefully picking up some reasonably priced properties.

 

[Aceyducey]

Geoff,

Agree with your sentiment.

It has been hard for us to find a property we're prepared to buy (at the price the vendor wants) in the Canberra market.

We've seen run-down places getting 4 or more offers on the first showing & those offers are well above our calculations of what would be a fair price in order to afford a renovation & make a profit or even breakeven on the after-reno valuation.

Everyone & their dog is talking property - I hear it from around 50% of the parents at my kids' school - they're all renovating, buying or planning to become real estate agents.

I hope that this indicates a readjustment is coming - more money to be made at the bottom of the market, provided you're structured right

Cheers,

Aceyducey

 

[WillG]

Agree with all your comments,

Last year a lot of workmates were telling me 'the market is overheated' and now they are keen to get into it after seeing good gains on their PPOR's, renovating and watching the ACA and TT's.. They want a piece of the action while the market is rising.

Rental demand is currently high in Canberra but rents are close if not on the limit of what renters can afford (IMHO). Something has got to give !

When the new units (Kingston, Braddon, Turner, Barton ...) come online there may be an oversupply and rents will decrease to compensate. When will this happen ? - next year sometime

If all of this coincides with a rise in interest rates there could be fireworks as first time investors have trouble paying their PPOR and IP loans. This is all crystal ball stuff !

Who is buying houses in Canberra at the moment ...

First time Investors,
Bushfire effected families
Well paid professionals upgrading PPOR's
Sydney investors wanting higher yields and instant capital growth
experienced Investors ??

Disclaimer :-
This is only my ramblings and only reflects areas of the market I have investigated. This should not be taken as advice, rather idle comment.

 

[Jas]

Must be time to look into shares...

Jas

 

[crusty]

It is definetly HOT down here , I have had awesome gains but it is definetly time to sit and watch.

You are hearing of record prices in just about every suburb each weekend.

So you just get revalued, increase your loc, and wait for the bargains to come back around, there is no way i am going to compete with 4 or 5 people too buy a house or unit when really they are just increassing my equity anyway.

Shares have to be the go at this time in the cycle.....


Crusty