Now is a great time to buy

[Giddyup]

In some areas yes. Auctions 'successes' are varying in todays market:

http://www.businessday.com.au/busin...d-cold-in-a-fickle-market-20110403-1ct43.html

Some clear winners, some clear losers...

Look at it this way...in the yesteryears ( with posssible exception of 08-part of 09), demand has exceeded supply ( hence price rises). If what you say is true ( and it prob is) supply and demand are relatively equal footing, then compared to the last 5 yrs or so, is not now a good time to buy?

Corrections (yes corrections, not bubbles bursting) like this occur over years, not weeks or months. We are 2 - 3 months into the cycle, so I would guess that a better time to buy would be in at least 12 - 18 months, probably even longer. You are better off buying when the price decrease levels off, than when it has just started. Especially when the yields are so low that you would be holding onto a loss making investment for quite some time.

Vendors are only now starting to realise that they cant expect the prices they could have achieved last year.

 

[barry2007]

Hi Barry, I am not expecting great things in Townsville in the next year although once 3 RAR gets there and other Government projects are finished we should see some good movement again.

With regards to renting a 3 BR house instead of a unit, I doubt you can rent a 3 BR house in the city of Townsville or any city for that matter. By the way, my 2 BR unit rents for $360 p/w, therefore, although you wouldn't rent one for that much there are plenty of people who will which is fine by me.

Hi Kaos,

Glad to hear your units are tennanted and going well, I wouldn't call Townsville a city though lol. These "urban quater" and "bali resort" type of unit developments going up everywhere look shocking and will be an eyesore in 10 years time. If you could pick one up for around 250k (impossible) then that would be great but as your aware the new units are very expensive (brand new 330k-400k) and $360pw makes a terrible yield and wouldn't be worth the bother imho. I have many assosiates and friends living in these units around the city and they jokingly refer to them as "the bronx" or "the projects" . High turnover of tennants especially in defence can also be a problem. Not saying your investment was a bad choice as we all have our own strategies and investment goals but just warning others to make sure to extensively research before committing to units in the far north especially Cairns area.

 

[newbyinvestor]

Corrections (yes corrections, not bubbles bursting) like this occur over years, not weeks or months. We are 2 - 3 months into the cycle, so I would guess that a better time to buy would be in at least 12 - 18 months, probably even longer. You are better off buying when the price decrease levels off, than when it has just started. Especially when the yields are so low that you would be holding onto a loss making investment for quite some time.

Vendors are only now starting to realise that they cant expect the prices they could have achieved last year.

There is a house I've had my eye on for approximately 6 months , the original listing was $360,000 to $390,000 with the vendor knocking back $390,000 in December.
Last week the agent rang me mentioning the vendor needs to sell and asked if I was still interested...
All I can say at this point is that I've offered $360,000 unconditional and the agent couldn't process my offer fast enough.

IMO vendors have already started accepting last years prices aren't this years prices and knocking $30,000 off the buy price helps to improve the yield
doesn't it?

 

[halfempty]

Ive been umming and arring about buying this particular house in an estate. The estate is located in Sydney's west and this brand new 3BR house costs $420k. Rent seems to be around $450/pw. The community and surrounding area is fabulous with lots school, shopping centre, parks, and motorways.

What is your opinion on this? It will be my first IP and im in it for the long haul

 

[Ed Barton]

Ive been umming and arring about buying this particular house in an estate. The estate is located in Sydney's west and this brand new 3BR house costs $420k. Rent seems to be around $450/pw. The community and surrounding area is fabulous with lots school, shopping centre, parks, and motorways.

What is your opinion on this? It will be my first IP and im in it for the long haul

is it a new housing estate? if so, there is plenty of land to build more. go for somewhere land use is scarce.

 

[Mom]

The reason why I'm not convinced that now is a good time to buy in Oz is simply because, if I can buy similar property with similar price next year, why do I have to buy now. I'd better buy next year to minimise my risk and holding cost.

Anyway, the market has slowed down, First homebuyers are out there, but more and more Australian ppty investor are casting their net to US properties, better return and after 50%-85% discount and 7%-25% pa yield , one would think the price would appreciate again soon.

 

[BV]

The reason why I'm not convinced that now is a good time to buy in Oz is simply because, if I can buy similar property with similar price next year, why do I have to buy now.

There is no need to buy now and in fact not everyone needs to own a property.

For me buying our home is not about making money.
Is about enforced savings.
Is about flexibility on changing the property the way we like it
Is about stability so we are not told to move when the landlord decides he doesn't like us or wants to sell.
Is about convenience and the feeling of having our own home.

IMO a good reason to buy now is the relatively easy finance.
I don't know what the future holds and if We'll be earning the same much in a year's time so I buy when I can afford to.

This strategy has worked well for me.
For example, I bought in 2004 (at the peak of the market. I bought again in 2007, 2008 & 2009/10 and in all cases I'm ahead than if I didn't buy at all.
In 2011 I'm planning to add 2 more to my portfolio.

 

[BV]

Ive been umming and arring about buying this particular house in an estate. The estate is located in Sydney's west and this brand new 3BR house costs $420k. Rent seems to be around $450/pw. The community and surrounding area is fabulous with lots school, shopping centre, parks, and motorways.

What is your opinion on this? It will be my first IP and im in it for the long haul

Is this near the M7?
Finding tenants shouldn't be a problem but I prefer established areas. It will also have to be near a train station.

 

[Mick C]

Bill- i like your buying strategy and thinking...it reminds me of what i use to do and yes it has paid off well... now im investing into the commercial and development side of things, hopefully it's financially more beneficial then the good old trust worthy residential market

Regards
Michael

 

[joeExpat]

Bob speaks ! yes now is a great time to buy (Bob's property, please, quick)

 

[halfempty]

Is this near the M7?
Finding tenants shouldn't be a problem but I prefer established areas. It will also have to be near a train station.

Yup, 2mins from the M7, roughly 10 mins from M5, 10 mins from the M4 via M7. New train station to be finished by 2015 which is 5 mins away.

 

[eeew]

The reason why I'm not convinced that now is a good time to buy in Oz is simply because, if I can buy similar property with similar price next year, why do I have to buy now. I'd better buy next year to minimise my risk and holding cost.

Anyway, the market has slowed down, First homebuyers are out there, but more and more Australian ppty investor are casting their net to US properties, better return and after 50%-85% discount and 7%-25% pa yield , one would think the price would appreciate again soon.

You are betting that the market will be the same 1 year out. It may be and thus may work...but then again, you may have called the wrong way....then what? What if the market is higher in 1 yr than it is now?

 

[eeew]

...

more and more Australian ppty investor are casting their net to US properties, better return and after 50%-85% discount and 7%-25% pa yield , one would think the price would appreciate again soon.

It depends on the individual- what your risk appetite is. The US market is risky in my opinion ( but potential risk=potential reward).

There are other threads ( on this board) talking about investing in the US, and those may be more beneficial.

 

[zed_kid]

You are betting that the market will be the same 1 year out. It may be and thus may work...but then again, you may have called the wrong way....then what? What if the market is higher in 1 yr than it is now?

I’d have to agree with Mom, can’t see the melb market moving anywhere this year unless some heavy stimulus is implemented or IR are cut by like 50bps

 

[Property Meister]

I know there is heaps of debate about which way the market is going to go in the short and long terms in australia, so im not going to add another one in there,

but my question to every one is, and id like an honest opinion

given the market conditions, is this just about the hardest time in the last 10-15 years to predict to even which way the market is going to go

I heard a couple of months ago, that we are currently faced with conditions that have never been seen before, eg record immigration, china, record low interest rates, US bust, 6-7 times average wages for average property etc. etc.

there will always be doom and gloomers, and it seems to me that at present, half of the experts and novices are saying market is fine, while the other half is saying a catastrophic bust around the corner

 

[Giddyup]

There is a house I've had my eye on for approximately 6 months , the original listing was $360,000 to $390,000 with the vendor knocking back $390,000 in December.
Last week the agent rang me mentioning the vendor needs to sell and asked if I was still interested...
All I can say at this point is that I've offered $360,000 unconditional and the agent couldn't process my offer fast enough.

IMO vendors have already started accepting last years prices aren't this years prices and knocking $30,000 off the buy price helps to improve the yield
doesn't it?

For sure... some have started, but there are still plenty of dreamers out there.

Good work on getting a $30k discount in 3 months!

 

[Propertunity]

given the market conditions, is this just about the hardest time in the last 10-15 years to predict to even which way the market is going to go...

Personally, I think that it was back in 2008, in the GFC, that it was the hardest time to predict what was going to happen next.

If you are into cycles, then depressions come along about every 80 years. The last one was 1930's. This one was a little early (but not by much). Lots of D&G then for sure and yet the RE market in Sydney & Newcastle was booming along. Who'd have thought that was possible?

I can't speak for other places like Melbourne, but Sydney last peaked in 2003 and Newcastle shortly after that in 2003/4. Then until late 2008 it was relatively flat (some up, some down, but mostly trending sideways). Then we we had some decent growth in 2009/10 the D&G merchants turned up again, saying it can't be sustained. What the? If it was to return to trend, as most things always do, then it was perfectly reasonable to expect it to continue (to me anyway). Maybe that is too simplistic

Fact is though, that the areas that we as a BA company focus on buying for investor clients is still going up. It may well be a narrow band of suburbs that we look at, but that is specialization, and it has so far, and continues to be, in high demand and perform well.

As a risk mitigation strategy, many of our clients are engaging in renovations as well. If CG does not happen organically, then they manufacture CG thru a reno. Even if the market goes backwards, they have some locked in protection thru the value-add that their reno has achieved. In reality though they are getting CG both organically & thru their reno.

 

[eeew]

Many reports such as this one
http://au.finance.yahoo.com/news/Home-values-continue-flat-run-abc-1881319602.html?x=0

...showing that home prices are flat, the supply of houses out there gives prospective buyers room to choose and negotiate.

Buy in a low market, now is the time to buy. Rates look steady ( wont increase for a couple of months, wont decrease either).

I also dont think the market will drop any further (all this talk about a bubble bursting and a crash ensuing is pure speculation). The long term outlook for real estate prices are very favourable. Only short term corrections will happen as we are seeing now.

Stick to the tried and true tenets of real estate: location, size, features,etc and you will be fine in the long term.

I know i will look at buying. Some attractive prices to be had out there. Quite a bit of choice as well.

Seems like other people agree as well:

http://experts.realestate.com.au/buying/buying-news-timing-the-market-is-now-the-time-to-buy

 

[tom32]

I reckon it is as simple as looking at the stock in your area v sales to paint a picture of short term pressure on price when it comes to making a buying decision.

This goes for nearly any commodity, asset

Sure it says nothing of long term movement but if you know that the short term movement is down or at best sideways than why buy for a long term gain?

example;

Southwest perth has in many suburbs 100% more stock than it had in 09. Prices are already weak and weakening further.

Melbourne has had so many completions and stock coming to market that I think it is a risky proposition.

Look at Sydney and it is different to the above two. While prices are not going up the stock levels are still quite low. Looking at Baulkham Hills their are half the number of homes for sale in a suburb with 35,000 people v suburbs in Perth with 10,000 with more than double the homes for sale.

So while stock does not tell us what prices will do in 12 months or 5 years, who cares while their are 400 for sale in my local with very few clearing and the number growing month on month I don't see any reason to buy right now short of picking up something at a discount, a discount that factors in whatever outcome you might think applies to clear current stock levels.

Look at the stock in *your* market and decide on buying based on that. I reckon it is that simple and I am sure the likes of RP data use stock more than any number to predict future price movements. At present all they can say is weakness short term but things should turn around next year etc. I'd be waiting for stock levels to at least start falling and then move.

This principle goes for buying anything not just houses. Where stock for sale grows it takes a price fall or a change in the market to affect the stock level. Sure government stimulous can change the stock levels without a need for price falls to clear stock. A falling interest rate could do the same but would it not be more prudent to wait or pitch really hard if you are buying. When you have more to choose from just don't fall in love with any one property keep your options open. This is hard for me as it is a PPOR I am looking for in Australia.

Different proposition for the investment I am looking for in the USA to go halvies with the folks keeping enough for a large deposit on a PPOR here which I want to keep above the 25% level so I can get safe approved finance and puch for a bargain when the time comes, i.e. subject to nothing. Again lots of stock over there but their it has reached a plateu so there are still plenty of options, still no evidence of that in Australia.

 

[Melbournian]

i reckon now this a good time to buy.

Prices have dropped back 10-15% on median or on average but you can still make a high sale on your property through manufactured growth and having the right networks.

A lot of people don't understand the intrinsics of apartments in melbourne CBD and it is not like landed real estate as there are a lot of factors to play into.