Capital growth over the last 12 months

[Belbo]

Just my opinion, but think we have seen bottoms now [ with the exception possibly of brisbane, perth is too tough to call]. I cant see sydney and mel going further down in the remainder of the yr. There are a few reasons for this:

1. Supply has reduced a bit, not by much but a bit.
2. The $A has come down, making them more affordable to overseas investors. Cnotinued issues in US/Europe and also the Middle east cannot be solved in the near term, so volatility, uncertainty will reign in the short term. This has tendencies for the $A to fall against the $US.
3. Other investment classes especially shares are so damn volatile, investors are seeking more safer places such as fixed/physical assets like gold and property.
4. Tough to see interest rates increase for the rest of the year. Yes, inflation is high, but the RBA has already said they think its manageable and that a lot of it is due to 'one off' factors such as floods etc earlier in the year. Last time I read, the market has priced a 50% chance of a .25% cut in sept [ or a 50% chance of hold in sept- markets pricing 0% chance of rise in sept]. I generally agree, they will either be cut by .25% or left or hold. The threat of rising rates for the year seems to be muted [ not the case 3 months back].More and more investors are thinking the same.
5. Buyers have realised that vendors wont keep discounting. Properties that have been discounted have pretty much been as much as they can. And with rates either on hold/falling in the next few months investors are thinking the market may have bottomed out. I think we will see in around Nov-dec that prices will regain an fair amount of lost ground, but not all of it.

It's just my opinion, but I reckon your opinion makes sense. Still, happy to wear a bit of flack if my opinion of your opinion turns out to be wrong!

 

[pieman]

I stand by that prediction so I guess we'll see. I can't remember exactly when I started suggesting 15-20% (I'd have thought mid 2009 when seeing the effects of the boost), but if it was September 2008 then you excuse my timing being a little off given the vendors boost which started 1 month later
.

Interesting to reflect on old posts isn't it.

Who amongst us that own property in the big cities would be a little disappointed if they had sold their properties in 2009 for the pending melt down of real estate prices? I know a rental I own in Highett has probably seen a 300k increase since then and even allowing for no growth over the next few years, it would appear to be a not too bad investment when I purchased it for half its current value 8 years ago.

Pays not to listen to the doom and gloomers and buy what you can afford when you can afford it - as long as you have a 10 year timeframe in mind. Money is real cheal atm, currently locking away pre-paid interest at 4.6%, so given rent is gross about that, it would need to go up about 10k at the very most, to justify holding it.

 

[hobo-jo]

Who amongst us that own property in the big cities would be a little disappointed if they had sold their properties in 2009 for the pending melt down of real estate prices?

I thought it would be around 15-20%, we got a circa 10% correction. Some cities today are still sitting around the same level or even lower than their peak from 5 years ago. Not everyone lives in or invests in Sydney & Melbourne. I don't pretend to have a perfect guesstimate record.

buy what you can afford when you can afford it - as long as you have a 10 year timeframe in mind.

I could dig up many individual sales (i.e. same property, repeat sale) where that hasn't worked out for the buyer. Even today I spotted an example in Sydney (though value is not your typical investment size).

http://www.propertyobserver.com.au/...anthony-bell-sells-bondi-beach-penthouse.html

 

[hobo-jo]

By the way, this thread brings up a username I haven't seen in awhile. Used to butt heads with ol' Belbo as I recall. Last I remember he was buying up big near the peak in South Hedland... I wonder how they will go if he holds them for 10 years, not off to a good start:

http://www.sqmresearch.com.au/graph_median_weeks.php?postcode=6722&t=1

Might even be lucky to have them tenanted at this stage:

http://www.sqmresearch.com.au/graph_vacancy.php?postcode=6722&t=1

 

[see_change]

Hi hobo

where's south headland ?

Cliff

 

[hobo-jo]

WA, south of Port Hedland. Spec mining town, busted along with the carnage in iron ore.

 

[see_change]

WA, south of Port Hedland. Spec mining town, busted along with the carnage in iron ore.

Hehe

Logical place to buy IP's

Cliff

 

[MTR]

WA, south of Port Hedland. Spec mining town, busted along with the carnage in iron ore.

Absolute disaster for anyone who purchased in the peak, where medians were around $1M, property prices in Port Hedland, South Hedland, Karratha have had falls of 30% and still free falling, same with rents, over supply.

Can it get any worse, yes, they can not sell these properties, no one wants them. I think someone posted a property at 40% discount on SS and no takers.

Seriously burnt, yet there are those who still want to jump into this market, need to see a shrink I think

 

[Deltaberry]

Had a colleague put her money into two Gladstone properties in 2010. When I visited Gladstone with a client, I commented "it'd be nice to visit the town center". The client said to me, "this is the town center".