Is it just me, or is there a change on this forum?

[Ajax]

I get the feeling this is 2000 all over again. I love the feeling of deja vu.

I remember in 2000 the advice from one property expert (BIS Shrapnel) was that Sydney prices would be flat after the Olympics. The exact opposite happened. If I recall correctly we had solid rises for about 4 years

One guy in the suburb where I rent bought a house and land with prime ocean views for $2m and subdivided it 18 months later selling the lot with only land for $1.9M.

 

[Rolf Latham]

Buying up G C yet rolf ?

Cliff

there are some good stock items around- more so in the prestige sector -the 700to 1,2 mill mark that buys a 3 bed fibro shack in Syd buys some nice acreage .

Yields on lower priced stock are still patchy compared to your old stomping grounds

ta
rolf

 

[Player]

there are some good stock items around- more so in the prestige sector -the 700to 1,2 mill mark that buys a 3 bed fibro shack in Syd buys some nice acreage .

Yields on lower priced stock are still patchy compared to your old stomping grounds


There are some colourful cheapie deals around


ta
rolf

Agree with Rolf. The upper end still has some compelling buying on the GC for PPOR type properties. When the market recovers they will have good growth IMO albeit yield is likely to be ordinary for those holding if they are purchased as growth type IP's.

Residential properties (houses) up to around 600-800 K are seeing better clearance rates with vendors becoming far more realistic than say a year or ago. There are still some dreamers however overall stock at that level is selling. No growth yet (unless you buy from a desperate seller and there is little other interest) however I reckon houses form my observation bottomed in that price bracket late last year to early this year.

MTR, it's time to buy now.

 

[quoll]

The Somersoft measure

Most users ever online was 576, 01-07-2013 at 08:18 PM.

 

[attrill]

Always a good barometer of the property market is the number of property shows on tv.

 

[DavidMc]

Sim used to be able to give some insight on the number of new sign ups and user activity.

From memory there was a strong correlation between 'the Somersoft indicator' and price rises.

 

[china]

As an aside, but quite relevant to the "newbie" topic/ idealogy you wont use your big LOC to buy a place will you ?

Im sure the banker advised you that once you have drawn the funds to switch and split out all the used component into a Term loan with a 10 year IO period.

You already know the reasons and probably asked the banker the same about the "reviewability" of the LOC product - because some lenders even have "repayable on demand" in their LOC product contracts.

BTW, when you get your CIP, being a risk cautious fellow, perhaps look at smaller brands of money that offer NON reviewable loans CIP loans which your current bank does not

ta

rolf

I was thinking of using LOC as a deposit on the IP. I will then use another lender to borrow the remainder of the purchase price secured against the IP.

We did not talk about a term loan with a 10 year IO period. What is this about - I thought that the LOC was the loan that I will be paying IO only?

Could you explain more about "reviewability" - I did not discuss this aspect either - what is the benefit of non reviewability?

 

[The Y-man]

I was thinking of using LOC as a deposit on the IP. I will then use another lender to borrow the remainder of the purchase price secured against the IP.

We did not talk about a term loan with a 10 year IO period. What is this about - I thought that the LOC was the loan that I will be paying IO only?

Could you explain more about "reviewability" - I did not discuss this aspect either - what is the benefit of non reviewability?

Maybe start a new thread on this as it deserves.

The Y-man

 

[Aaron_C]

Could you explain more about "reviewability" - I did not discuss this aspect either - what is the benefit of non reviewability?

In commercial loans, most lenders (i.e. the majors) require the loan to be 'reviewed' every year. This means mandatory submission of all your tax returns/financials each year each September, otherwise a penalty applies. They also require regular revaluations of your property every 2-3 years (which you pay for). A lender that doesn't require reviews means that this will never happen - a classic 'set and forget'.

 

[ok180]

Noobs = $$$

 

[china]

In commercial loans, most lenders (i.e. the majors) require the loan to be 'reviewed' every year. This means mandatory submission of all your tax returns/financials each year each September, otherwise a penalty applies. They also require regular revaluations of your property every 2-3 years (which you pay for). A lender that doesn't require reviews means that this will never happen - a classic 'set and forget'.

So why doesnt everyone go with the non-reviewing lenders?

 

[Aaron_C]

So why doesnt everyone go with the non-reviewing lenders?

Because they don't know any better and/or they don't care and/or the rates are cheaper for reviewing lenders if you are on say bank bills.

 

[el caballo]

I was thinking of using LOC as a deposit on the IP. I will then use another lender to borrow the remainder of the purchase price secured against the IP.

We did not talk about a term loan with a 10 year IO period. What is this about - I thought that the LOC was the loan that I will be paying IO only?

Could you explain more about "reviewability" - I did not discuss this aspect either - what is the benefit of non reviewability?

Rolf / Y Man,

Agree that a new thread is required on this - I use my LOC with CBA for buying residential IPs. Does the aforementioned imply that I am precariously placed, or that I need to do something subsequent to the purchase - Rolf's mention of a term loan with a 10 year IO period - to ensure a bullet proof outcome?

 

[jaspn]

I joined the SS forum last month because it's an appropriate time for us to buy our first investment, and I felt I needed help. It had nothing to do with external influences or what I have read. This Sydney business just makes me move a little more quickly than I otherwise would have, that and the fact my wife is expecting our first child

How did I find the forum? Via a Google search result, which was about the same time Jake Milne mentioned the forum in one of the investment property magazines (thanks Jake), I guess in my mind solidifying it as a good source of information, and one of the many tools to help the acquisition process. In the meantime I've found a fantastic community of people willing to give their time by giving feedback on my ideas and answering my [many] questions.

 

[Deltaberry]

As someone mentioned earlier, the best market is the high end now. Around $3m+ is good value.

 

[one world]

As someone mentioned earlier, the best market is the high end now. Around $3m+ is good value.

Can a $3m, house in a decent neighbourhood rise massively in price? Maybe if its on a huge redevelopable block. Or maybe if local salaries rise exponentially.

Personally I'm a bit sceptical of the capital gain opportunities of the top end.

I have bought property, mostly ugly old low-end houses on large blocks, that went up 8-fold in as little as 13 years. Without a doubt, I'm a low end fan. The only problem seems to be the tenants - at the low end of the market, one usually has to deal with bogans and ferals. Not easy.

 

[Rixter]

Somersoft's Official Start of the New Property Cycle Indicator thread I started over a year ago.

It seems to me that more and more people are flocking to this forum wanting to buy their first IP. It might just be my perception, but it really feels like it to me.

If this is true, I'm guessing that's just another sign of the current boom not being isolated to Brisbane, inner Melbourne and western Sydney, but that it could become wider spread than that.

 

[one world]

Somersoft's Official Start of the New Property Cycle Indicator thread I started over a year ago.

Pretty good prediction Rix. Well done!

 

[Sim]

Sim used to be able to give some insight on the number of new sign ups and user activity.

From memory there was a strong correlation between 'the Somersoft indicator' and price rises.

Unfortunately, these statistics are now tainted by bot signups.

We manage to stop most of them from getting approval to post (otherwise we would be flooded with spam, literally thousands of posts per day).

However, they do get through the basic registration process, which shows up as a new user (and as a user online/recently online for a while).

I'd have to do some deeper analysis stripping out the bots to get the real statistics of new (valid) user signups.

Basically, don't trust the stats you see on the forum home page - they are very misleading now.

Just to give you a hint of the scale of the problem we have to deal with every day, we currently have 178,853 user "waiting for moderation" (that is, waiting for manual approval to activate their account and start posting). These are a combination of bot registrations and human registrations which failed our automated registration checks.

I will start to purge these users from the system soon - the current system keeps the data for checking of future signups, but the new system about to be implemented won't require the historic data.

 

[see_change]

Can a $3m, house in a decent neighbourhood rise massively in price? Maybe if its on a huge redevelopable block. Or maybe if local salaries rise exponentially.

Personally I'm a bit sceptical of the capital gain opportunities of the top end.

Yes

Everything goes up . eg In 1969 my parents bought a place in Davidson AveWarrawee for the really expensive price of 25 K . Can we afford it ....

About four years ago someone bought it for around 1.5 and put a bulldozer through it and would has spent well over a mill building . Would sell for 2.5 - 3 mill at the moment and that's at the start of the current cycle. Prices have been flat there for the last 10 years .

Outside this forum I have a couple of friends who are clued in about the property market ( most aren't interested ) . One bought a waterfront penthouse in Lower northshore in that over 3 mill Price bracket about a year ago and are now putting their cheaper house on the market now they've seen some good growth in that in the last year .

The other is thinking about buying a 4 mill waterfront on Sydney because , in his words , they're never going to be this cheap again . He's also tired of paying 50 k a year in land tax on his investment portfolio , but that's the thing that enables him to do this.

These three of these properties will double in the next cycle because they have been doubling in each cycle before. Once the economy picks up and the mac bankers are getting their Mill dollar bonuses , they will be fighting to pay the extra 2 mil to upgrade from a 4 mill property to the right 6 mill property.

Mainly we're talking about people in their 50's who are on their 4-5 home having got into the market 30 years ago or the occasional younger highly successful business owner or orthopedic surgeon.

If you look at the recent poll on value of our portfolios , there are obviously people on the forum who could afford there properties .

There's a penthouse in Bangaroo that's being marketed OTP at ten mill at the moment . I can't afford it .... but I think if you could that will turn out to be a really good buy in around 4-5 years. People will fight over that when it comes on the market . I'm fairly certain who ever buys it will flip it once it's finished and walk away with several mill in profit.

Growing up and living on the north Shore I know many people with considerably more money than what we have , including mac bankers , CEO's of ASX 50 companies and dot com millionaires.

Having worked for 19 years in 2770 I know the other end of the Sydney very well including a CEO of a major bikie gang > ( Cliff , if that guy' s causing you problems I can fix it ..... )

People who invest in the bottom end wonder why people would pay such alot of money for those . Who could afford to rent them

People at the top end , look at the bottom end properties and wonder why anyone would want to rent or pay more for that.

Bottom line , you can make money at both end of the market. Everything goes up . The main thing that doesn't change is people's prejudice.

It opens up more opportunities if you invest in more than one price bracket.

We didn't do that in the last cycle but are doing it at the moment.

Cliff