Housing market misery to continue?

[random]

Yeah I more meant as maybe back in my dads day , everything went down to or onto his business's taxes. I was never sure how it all worked but just about anything could be written off or claimed.
He use to buy big farms like they were icecreams , just to get rid of some money and back then farms were huge business's tax dodges that's why every city slicker and his dog had at least one or two , even if they lost on a resell.

A lot of these guys would have perks written into their mansions.They'd mostly be down as God knows what connected with their business's .

cheers

 

[Aaron Sice]

for the record.......i'm 30.

i'm not an older poster at all.

i just remember going out with my dad to shoot roos and rabbit because we couldn't afford much to eat in the 87-89 crash, living in the country. my dad used to work 4 days 12hr nightshifts brick packing at midland brick, then 4day 12 dayshifts. he rode a small 250cc motorbike to work because we couldn't afford a car. those 2 hour rides home at 4am must have been hard, especially on the country roads in winter. i ate baked beans a lot when i was 8, too. probably why i can't stand them now. i wore sammy's shoes and had hand-me-down books. my mum did barwork and cafe work when she could.

but you're right....it was much, much easier to buy a property back then, because houses were cheaper.

 

[CaptainObvious]

just my opinion but I think from what ive seen, there will be a few more interest rises this year, and the average joe trying to sell his/her property will get a reality check that credit conditions are tough/tougher, too many sellers, not as many buyers, property prices in metro Vic will probably fall up to 5-10% for the next 2 years

those that aren't desperate to sell will just keep their prices high

those that need to sell will be forced to accept something a lot lower

I think with high levels of immigration maybe the drop might be just a few %

I think rentals will slowly rise in an attempt to catch up to the poor yields as per the investment clock.

obviously this is all on the assumption that the economy stays the same, and we don't have a recession or a depression

just my newbie opinion, id thought id at least attempt to contribute

 

[HomeBuyerStrike]

I think rentals will slowly rise in an attempt to catch up to the poor yields as per the investment clock.

While this may happen, it won't happen for the reason you mention.

The simple reason? Landlords don't set rents, the market does.

 

[Propertunity]

Landlords don't set rents, the market does.

I've got news for you. You are right that "the market sets the rents" BUT Landlord's are the supply part of the market and the tenants are the demand side.

As a LL when I experience higher costs to hold, I increase the rent. Maybe it will only be by $5pw but I will still increase it..... and regularly. Through experience I've found tenants won't go through the inconvenience of moving for $5pw. They can't even hire a truck and mates for $250.

And, No.....if my costs to hold go down, I do not reduce the rent

 

[Aaron Sice]

While this may happen, it won't happen for the reason you mention.

The simple reason? Landlords don't set rents, the market does.

hahahahahahaha - who is "the market"? Landlords!!!

all the Landlords renting their houses are the supply side of the argument. one LL changes his price and all the others do not is the market in action. so one guy gets a tenant paying less - show me one LL that will reduce the price unnecessarily.

remember that collusion by default?

is there some magic beancounter in the sky called Mr Market calling the shots on rental yields?

that's the best one yet! keep 'em coming, this one made my Friday afternoon

*edit* replied off the cuff didn't see the above post"

 

[MrCrumbpacker]

The market sets the rents in the sense that if landlords ask too much, tenants move elsewhere.

Otherwise landlords would presumably getting rents somewhere in line with costs, and not the crap yields that seem to be being achieved in much of Australia.

Think Germany, where you borrow at 3% and rent at 7+%, rather than here where many borrow at 8%, and are lucky to get 4% yield, and therefore have had to rely on Ponzi style capital gains and tax breaks to make things work.

Rents are basically dictated by wages. If it is 'worth' living in an area, you will pay for it, that is why people pay silly money for a caravan in a booming mining area.

 

[HomeBuyerStrike]

I see no benefit in arguing with trolls. I have better things to do with my time. It's obvious to a reasonable person that rising prices are not a unilateral decision on behalf of the suppliers in a market. If it were then prices would tend towards infinity, which they clearly do not. Prices are a factor of supply and demand.

 

[VYBerlinaV8]

I see no benefit in arguing with trolls. I have better things to do with my time. It's obvious to a reasonable person that rising prices are not a unilateral decision on behalf of the suppliers in a market. If it were then prices would tend towards infinity, which they clearly do not. Prices are a factor of supply and demand.

Well said.

 

[CaptainObvious]

I read in an article recently that suggested that in Melbourne, inner city units are probably not a good investment, I cant remember the reason but thats what I recall

I see this article today

http://www.heraldsun.com.au/news/vi...r-cent-in-a-year/story-e6frf7kx-1225988566446
-
-basically says that many not so blue chips did very well in the last 12 months, with 10%+ gains!!

-with a slump in house prices until July

-suburbs such as Balwyn, Box Hill and Eltham were the ones to watch in 2011

 

[Graemsay]

I read in an article recently that suggested that in Melbourne, inner city units are probably not a good investment, I cant remember the reason but thats what I recall

I've got a feeling that there's an oversupply of units in central Melbourne, which means that they aren't selling as well as they should. Haven't a few projects been cancelled as a consequence?

There was an oversupply of apartments in city centres in the UK in the run up to the 2007 downturn, and that didn't end well for the investors who largely bought up the developments. Prices dropped sharply and fingers were burnt.

 

[Beebop]

Profit yet to come online in the mining industry indicates interest rates are a sure sign to rise next year. What will the effect of dampening employment, more properties on the market and rising interest rates have on properties ? Minging industry creates high paying employment which forces up prices ?

 

[VYBerlinaV8]

Profit yet to come online in the mining industry indicates interest rates are a sure sign to rise next year. What will the effect of dampening employment, more properties on the market and rising interest rates have on properties ? Minging industry creates high paying employment which forces up prices ?

Rising interest rates in the short term will likely mean increasing employment and wages growth. The issue is more inflation, I suspect.

 

[Deltaberry]

Profit yet to come online in the mining industry indicates interest rates are a sure sign to rise next year. What will the effect of dampening employment, more properties on the market and rising interest rates have on properties ? Minging industry creates high paying employment which forces up prices ?

I think we will see a market-wide crash before 2012. Or you can delay the inevitable but at the end, the inevitable is the inevitable. If I were owners now I'd sell for a 10-15% loss if I had to before they end up with debt that is 10x their annual salary and negative cashflow equal to 25% of their annual salary.

 

[CaptainObvious]

I think we will see a market-wide crash before 2012. Or you can delay the inevitable but at the end, the inevitable is the inevitable. If I were owners now I'd sell for a 10-15% loss if I had to before they end up with debt that is 10x their annual salary and negative cashflow equal to 25% of their annual salary.

i must admit, ive got family members who have been saying this since about early 90s

and I was one of them, I thought there would be huge crash after the property boom created by those property seminars in the early 90s or whenever it was

unfortuantely, im still waiting for the crash, so ive recently started to think there won't be one, doesn't mean im right though!

 

[Deltaberry]

i must admit, ive got family members who have been saying this since about early 90s

and I was one of them, I thought there would be huge crash after the property boom created by those property seminars in the early 90s or whenever it was

unfortuantely, im still waiting for the crash, so ive recently started to think there won't be one, doesn't mean im right though!

The harder you run, the harder you fall. That's all. Because there hasn't been one all along, when it does happen all landlords will be wiped out, possibly even ones with say 30% gearing.

 

[zed_kid]

The harder you run, the harder you fall. That's all. Because there hasn't been one all along, when it does happen all landlords will be wiped out, possibly even ones with say 30% gearing.

I LOL'd good trolling sir

 

[csc2]

crash.cant see that..

flat to trending down for a few years...definitely in most areas.

trending up; not in the six areas i invest in.

outlook long term ie: 20 years; business as usual...ride the highs and lows if you can afford to or leave your money in the bank cause real estate isnt your cup of tea if you panick about tomorrow. to me those that do are too heavily geared.

for me cash is king mostly while we wait and see what happens later this year

 

[investor2009]

Lol, someone better tell the banks then cause I'm sure they'd like to know what's going to happen with all the bad debts!
Seriously man, c'mon..

The harder you run, the harder you fall. That's all. Because there hasn't been one all along, when it does happen all landlords will be wiped out, possibly even ones with say 30% gearing.

 

[mrsdawnrazor]

The harder you run, the harder you fall. That's all. Because there hasn't been one all along, when it does happen all landlords will be wiped out, possibly even ones with say 30% gearing.

Why would landlords have crystalised losses if prices fall? As long as they can meet their mortgage repaments then they are fine. Only issue comes if they need to sell. If you can aford to wait it out what is the problem.