Is now the time to buy Cheapies in Queensland ?

[see_change]

As anyone who follows the Queensland Market will know , the lower end of the market has been softer over the last month.

There is a simple reason for this.

On first of May , First home owners in Queensland will no longer have to pay stamp Duty.

As a result They're not buying, so in some areas a reasonable amount of the buyers are standing on the sidelines waiting for the First of May.

There are occasional motivated vendors , and talking to agents some vendors are not as optomistic in what they can achieve , but generally there's a bit of a mexican stand off. There is more stock on the market.

It will be interesting to see what happens after First of May . The Media is still reporting Queensland as the place to buy. We havn't had any further rate rises and there hasn't been much talk of further rate rises recently.

Will we look back in a couple of months saying , gee I wish I'd bought then.

See Change

Disclaimer . I have one house in Logan on the market ( Which is why I know what's going on ...) , but that is to pay for a Reno on PPOR ....

 

[Dos]

Seech,

It will be interesting. Surely the stand-off situation could potentially cause another drive could it not? Lots of first home buyers looking to buy and sellers will know this and can potentially wait until they get the right price from a large market. Might be time to buy??

Dos

 

[MarkB]

As I mentioned in the chat room a little earlier today, any fall in the level of stamp duty (be it in Queensland or anywhere else) will have a more than proportionate positive effect on the prices of property (owing to the increase in demand - the demand curve will actually shift upwards).

Why does demand increase?

Consider a buyer who has 5% plus costs and who intends to borrow at 95% LVR and assume those "costs" include $1000 in stamp duty.

If that stamp duty is reduced to zero, then his 5% deposit has just grown by $1000.

Assuming servicibility is not an issue the buyer now has the capacity to spend an extra $20,000 on their property ($1k of their money, $19k borrowed).

This increase in their capacity to spend is, in economics terms, an increase in demand (as demand is defined by desire to buy at a certain price backed by the actual capacity to pay that price).

While this may sound good for buyers, I'd argue otherwise.

After all, anyone else who gets the benefit of the cut in stamp duty also has more to spend - how much more depends on their LVR and servicibility.

Buyers have additional spending power > other things being equal (supply held constant) buyers are forced to use their additional spending power > market as a whole gets forced up (perhaps to the tune of around $20k in this simple model).

Now could be the time to buy but either way bring on that cut in stamp duty - I could use some CG.

Re: interest rates

Just on SC's point. I am not nearly as bullish on interest rates as I was even a month ago. We could be playing the waiting game with the RBA for a few months.


MB

 

[see_change]

The sad thing for first home owners ( though not for investors ) about the FHOG, was that it drove prices up by considerably more than the value of the Grant.

In share terms at the moment , the market is in a consolidation phase. It's moving sideways , with the buyers and sellers waiting to see who blinks first.

If we have a heap of buyers coming in we may well have a surge in prices, though that will be determined by how many people out there are long term buy and holders and how many are in for the short term.

Last year the market moved up in a series of steps , rather than in a steady growth. I won't be suprised if May to July sees another step up.


See Change

 

[ger]

Hi Sea change
What is the rental return in logan
for a 3 Br house

Thank You

 

[see_change]

Hi Sea change
What is the rental return in logan
for a 3 Br house

Thank You

Starting around 170/wk up .

Ger I'm Looking in Townsville at the moment. It has moved, but you can find an occasional undervalued property. Rocky has moved about 30k in the last six months ( IMHO ) . It has only slowed down at the moment , unlike logan which probably did move down sl from it's peak in late last year.

See Change

 

[Aceyducey]

Just to clarify - a First Home owner is basically anyone over 18 who hasn't bought a house before - state of residence OR nationality don't matter do they?

Cheers,

Aceyducey

 

[see_change]

Just to clarify - a First Home owner is basically anyone over 18 who hasn't bought a house before - state of residence OR nationality don't matter do they?

Cheers,

Aceyducey

Not sure Acey . I've never had to worry about it , so I havn't checked....

See Change

 

[Kennethkohsg]

As anyone who follows the Queensland Market will know , the lower end of the market has been softer over the last month.

There is a simple reason for this.

On first of May , First home owners in Queensland will no longer have to pay stamp Duty.

As a result They're not buying, so in some areas a reasonable amount of the buyers are standing on the sidelines waiting for the First of May.

There are occasional motivated vendors , and talking to agents some vendors are not as optomistic in what they can achieve , but generally there's a bit of a mexican stand off. There is more stock on the market.

It will be interesting to see what happens after First of May . The Media is still reporting Queensland as the place to buy. We havn't had any further rate rises and there hasn't been much talk of further rate rises recently.

Will we look back in a couple of months saying , gee I wish I'd bought then.

See Change

Disclaimer . I have one house in Logan on the market ( Which is why I know what's going on ...) , but that is to pay for a Reno on PPOR ....

************************************************
Dear Sea_Change,

All things being equal, come 1st May 2004, when stamp duties is no longer to be paid, the cost of investing will become cheaper accordingly.

However, I rather sit tight and wait for the prices to further soften first and see how the market will unfold itself first as the present property down cycle trend develops further.

Lower investing costs does not neccessarily higher demand and thus higher housing prices. It does however means that housing has become more affordable overnight for an average home-buyer and investor. Whether this will effectively translte into higher housing demand and thus higher houysing price is let to be seen over time.

My 2 cents worth.

regards,
Kenneth KOH

 

[see_change]

************************************************
Dear Sea_Change,

All things being equal, come 1st May 2004, when stamp duties is no longer to be paid, the cost of investing will become cheaper accordingly.

However, I rather sit tight and wait for the prices to further soften first and see how the market will unfold itself first as the present property down cycle trend develops further.

Lower investing costs does not neccessarily higher demand and thus higher housing prices. It does however means that housing has become more affordable overnight for an average home-buyer and investor. Whether this will effectively translte into higher housing demand and thus higher houysing price is let to be seen over time.

My 2 cents worth.

regards,
Kenneth KOH

Most investors are not first home buyers , so they will have no benifit.
If you were planing on buying anyway then it would make sense to buy now, simply because there are less buyers around.

I wouldn't be using this as a reason as to whether to buy or not, but if you're already going to buy, then it could influence your timing.

See Change

 

[Sunstone]

Dear Seechange,

Now is always the right time to buy the cheapies in QLD. But then I am allowed to be biased.

That said yields on certain deals are going up. It is all about finding your type of fish and the ones you can hang onto.

Hope the PPOR reno is for the right reason.

Cheers,

Sunstone.

 

[see_change]

Dear Seechange,

Hope the PPOR reno is for the right reason.

Cheers,

Sunstone.

It is definitly for the right reason. Vicki wants it done .......
oh ... and .... we also need to do it to do our Dual Occ.

See Change

 

[younginvestor]

Will they stop stamp duty in Victoria as well?

 

[Sunstone]

It is definitely for the right reason. Vicki wants it done .......

Dear SC,

Important to keep your partner happy.

Back to the original question. I believe that eliminating stamp duty can have an impact. My concern however is that whilst it was publicised prior to the state election it is not being publicised now. Also I feel that bringing it forward from the 1st of July to the 1st of May has not been well publicised at all.

How well are RE Agents and those with vested interests going to market this point? The stronger it is pushed the greater impact it will have.

Will they stop stamp duty in Victoria as well?

Young Investor -Unfortunately mate don't get your hopes up. It was done only in QLD by the local state government just before the state election. Not in VIC or anywhere else.

Cheers,

Sunstone.

 

[abcdiamond]

Just to clarify - a First Home owner is basically anyone over 18 who hasn't bought a house before - state of residence OR nationality don't matter do they?

Cheers,

Aceyducey

The law currently states anyone who hasn't owned a home in "Australia".

Therefore you can get migrants selling up in their home country, and being a first home buyer here, and getting the grant.

This is currently being looked at, with a view to changing it to a more logical situation.

 

[Jude78]

Hi Guys

To anwer the original question; at the moment the market in SEQ in most parts has softened and i am finding it easier to find higher yeilds in the middle ring of Brisbane (5%). There are some really motivated vendors out there who want out because they feel the market has busted. Some forecastors have predicted a fantastic year for 2005 for the property market in SEQ due to the population gowth. Agents are also dropping off like flies and some buyer's agents are also feeling the pinch. It is a much easier market to negotiate in and have the time to consider deals that come up. In saying that however it is always vital to do your own due diligence on any deal and not swallow all the alleged facts from the financial stakeholders of your deal (ie agent and vendors). There are still many suburbs in SEQ which in my opinion are still well undervalued (compared to other similar areas in other metropolitan areas) and in the current climate is a great opportunity to get in.

Thanks for reading

 

[willair]

imho,
I still think Brisbane inner city real estate market peaked late last october,
for investors this works several ways,some properties i have looked at have come down in price,others still wait for high price they list at.The next12 weeks/ imho/ will bring a oversupply of property into the market,that may be the time to make offers again,it all depends on if the interest rates and i think they will rise.25% this week..
good luck
willair..

 

[Cat09Tails]

Jude,

Is 5% yield a decent yield? So that would be a 400k property with $200 a week rent? There are still MANY Qld quasi-city areas where it's simple to find a 7.5% yield.

Cat

 

[astroboy]

You need to do your sums again Cat.
ab

 

[abcdiamond]

Jude,

Is 5% yield a decent yield? So that would be a 400k property with $200 a week rent? There are still MANY Qld quasi-city areas where it's simple to find a 7.5% yield.

Cat

$400,000.00 at 5% = $20,000.00 /52 = $384.62 pw.

$400,000.00 at 2.60% = $10,400.00 /52 = $200.00 pw