On that minute and on the ebay market it was, but the fact that that seller (or other sellers) has no more listing for $380 and buyers are willing to pay more than $380 since then means the market has moved up. Market price is a volatile thing and does not neccessarily reflect the long term value or future price of an item. Just take sharemarket for example, the market price of a share goes up and down every minute. BHP was $25 close of today, it was $40 just a month or two ago and who knows where it might go in future. For argument sake let's say it goes up to $30 tomorrow and you no longer can buy it for $25, are you going to argue that today market price for BHP wasn't $25?
Melbourne Market--Reality Check?
- Thread starter brop
- Start date
On that minute and on the ebay market it was, but the fact that that seller (or other sellers) has no more listing for $380 and buyers are willing to pay more than $380 since then means the market has moved up. Market price is a volatile thing and does not neccessarily reflect the long term value or future price of an item. Just take sharemarket for example, the market price of a share goes up and down every minute. BHP was $25 close of today, it was $40 just a month or two ago and who knows where it might go in future. For argument sake let's say it goes up to $30 tomorrow and you no longer can buy it for $25, are you going to argue that today market price for BHP wasn't $25?
The point here is 385K....in a rising market it is easy to set a floor....but in a falling market like what we have now...the floor is not easy to set.
If we go back to the first contribution of the post...the Brighton East post is a good indication when you jump in. There are other areas where you can get your capital gains as well as cash flow.
Personally, I do not agree with Michael Yardney's selection criteria as is very narrow and focused on ...how shall I put it (cough...cough) for the advancement of Metropole. I am not saying that they do not know what they are doing...it is just that I feel that I have done better.
Why, lets do the maths....
Unit in Inner Eastern Melbourne bought in mid 2006 for say 330k (that would have been a bargain!)...price today say $420k. Minus stamps duty (16k), legals (1k), and holding costs net of rent over 2 years (30K) is a total of 52K. Thus your real PROFIT is about 43k.
House in Wyndham bought in mid 2006 for 170k and price today is 230k. Minus stamps (6.5k), legals (1k), and holding costs (12k) for a total of 19.5. Thus your real PROFIT is 40.5k. When you factor things in the difference is neglible. In fact if you bought two of these houses you would be ahrad by another 40K! Note the example I used for the house is a real one.
Cheers
Sash
If we go back to the first contribution of the post...the Brighton East post is a good indication when you jump in. There are other areas where you can get your capital gains as well as cash flow.
Personally, I do not agree with Michael Yardney's selection criteria as is very narrow and focused on ...how shall I put it (cough...cough) for the advancement of Metropole. I am not saying that they do not know what they are doing...it is just that I feel that I have done better.
Why, lets do the maths....
Unit in Inner Eastern Melbourne bought in mid 2006 for say 330k (that would have been a bargain!)...price today say $420k. Minus stamps duty (16k), legals (1k), and holding costs net of rent over 2 years (30K) is a total of 52K. Thus your real PROFIT is about 43k.
House in Wyndham bought in mid 2006 for 170k and price today is 230k. Minus stamps (6.5k), legals (1k), and holding costs (12k) for a total of 19.5. Thus your real PROFIT is 40.5k. When you factor things in the difference is neglible. In fact if you bought two of these houses you would be ahrad by another 40K! Note the example I used for the house is a real one.
Cheers
Sash
No, but I'll argue that valuing shares is vastly different from valuing property. With shares everyone pays the same price at that point in time, there are no 'special situations' like there was with this property.
In fact, property values are more like PS3 values on eBay than shares. If enough people buy 'under market' then yes, that is a downward trend and history will show that when you are able to look back. Trends develop over a long period of time (i.e. months) but day to day there are under-market (maybe 'under-trend' is a better word, to please those who like to get technical) purchases as there are people who overpay and fall in love with the asset. Property is not priced 'to the second' and not identical like shares.
Was this unit an 'under trend' purchase? Yes, I think it was.
See Michael Yardneys's post "They were all renovated and tenanted and worth much the same". No need to make weird assumptions.
I work in real estate in Melbournes inner east and from my observations properties up to 800k have held their value and those over 1mil are down minimum 10%.
The next 12 months will offer some great opportunities for those looking to upgrade the family home or looking for an investment property.
The next 12 months will offer some great opportunities for those looking to upgrade the family home or looking for an investment property.
If they didn't stay ahead of the game and do more than simply meet the calls, they are wiped out now.
Property investors should be very careful about laughing their tits off though. There is still plenty of life in this bear.
So as a property investor you can make "smart" decisions. Great! Are you sure that nobody can make "smart" decisions on the exchange? Is it fair to say that a "smart" property investor can outperform a "dumb" stock investor?
What's a PS3?
Funny how a comparison by a shares based entity would come up with that stat.
It's like asking the barber if you need a haircut, or asking your finacial planner what's better; a mutual fund or an IP?
It's like when they quote median prices and median yields for properties across a State, or even worse; the whole Country, and with regard to shares V property; there is rent, depreciation, add value, tax deductions to add into the property figures.
I'm not interested in a balanced anything,
You can do way better or way worse than any market depending on the stock or property you buy, and the sector or suburb you buy in.
Same with shares; there are no doubt many sophisticated investors making small fortunes out of this crash, while the majority are getting slaughtered.
Dave
The "herd" is always late. They thing the market is still booming long after its over.
e.g. the average WA investor still thought they were booming in early 2007 but the stats showed differently.
The smart investors will get into property before the papers report things are on the improve and the herd will again be late.
They won't buy property until they read reports that auction clearance rates are up and values are rising and the market is booming. These reports only come after the professionals have bought in to move the market
In the '80s it was an IBM 'puter. Like you I have no idea what it might be now.
It was mentioned like we all should know what it is as a given.
Probably some electronic/computer/music/video/audio doodad I simply can't do without.
You should get one Sunfish!! I reckon you'd like this:
http://au.xbox360.ign.com/objects/959/959094.html
You'll never have to leave the house again!!
[Why did they ever think this is a good idea!!??]
A blue ray is... hmm... maybe I'll stop there
I have a resident nerd in the house but apart from when I rattle his chain to fix a 'puter, we don't talk much.
When banks finance they take into account what they call the concentration risk and this is usually reflected in an "in one line" valuations.
Basically the bank says that if you own multiple dwellings at the one address then if you are forced to sell the properties they will be devalued because more than one will be at the market at the one time. If you flood the market values are more than likely to drop. So the bank come up with two different valuations. A "single dwelling" valuation and "one of many valuation". The scenario outlined in this thread has fulfilled the banks prediction that multiple properties at the same address on the market at one time lowers the value.
I recently valued an apartment block I own and the two different valuations were maybe 20% different.
Basically the bank says that if you own multiple dwellings at the one address then if you are forced to sell the properties they will be devalued because more than one will be at the market at the one time. If you flood the market values are more than likely to drop. So the bank come up with two different valuations. A "single dwelling" valuation and "one of many valuation". The scenario outlined in this thread has fulfilled the banks prediction that multiple properties at the same address on the market at one time lowers the value.
I recently valued an apartment block I own and the two different valuations were maybe 20% different.
I've been away a few days--thought I should clarify this. Proposal from two agents received 1 August. The agent with higher appraisal was selected. After discussing and modifying marketing strategy the authority to sell was signed and posted from Perth on 8 September. I agreed to marketing commencing weekend after grand final--4 weeks before proposed auction date.
I am disappointed with several parties here:
1) the agents: for either not being aware of the real market situation, or failing to advise me if they were aware. I would think that "signs of trouble" in Melbourne's market (at least the eastern/south-eastern suburbs) would have been apparent in August and certainly early September prior to my signing the authority form. Marketing material was prepared from mid-September.
2) myself for not carrying out greater due diligence e.g. by posting on this forum prior to making decision to proceed.
At least the cost of going ahead is limited to the agreed marketing costs. An expensive lesson, but a lesson nonetheless.
cheers
brop
A common error is to select the agent who gives the highest quote. This is a strategy often used by real estate agents, mainly because it works so well.
Then the next strategy is "crunch the vendor" by relaying feedback from buyers "what the market is saying", which usually means the prices other real estate agents initially quoted.
But to be fair, the world has gone a little crazy over the past month or two, with results no-one could foresee, even our fearless leaders.
Marg
Then the next strategy is "crunch the vendor" by relaying feedback from buyers "what the market is saying", which usually means the prices other real estate agents initially quoted.
But to be fair, the world has gone a little crazy over the past month or two, with results no-one could foresee, even our fearless leaders.
Marg
