People still investing in Australian residential property are just plain dumb

[np2003]

Re: Re: People still investing in Australian residential property are just plain dumb

Professional property investors = $5-10Mill plus in assets with at least 7-10yrs in property marketing.

Originally posted by dtraeger2k
Hi,

I found this line to be the most interesting:

I'd be interested in hearing how the RBA defines "professional property investors". And, if they are in fact so professional, why do they require such high yields? Shouldn't they realise capital growth is the root of all happiness?

-Regards

Dave

 

[duncan_m]

Re: Re: Re: Re: Re: Re: People still investing in Australian residential property are just pl

Originally posted by Jakk
There will be many variables of the above, but basically Property Investment is not a get rich quick solution, (for most), but the way it has been portrayed recently has lead a lot of people to believe otherwise. Those that have entered the market at the latter stages with aspirations of short term enermous gains will become quickly dissilusioned when it doesn't happen

Jaak,

You're dead right.. The other factor that causes amateur investors to sell is a distinct lack of appreciation for what their actual gain has been..

They delude themselves into thinking that if they bought a house for $200K and can now sell it for $250K that they have made $50K.. no add back of depreciation, no capital gains tax allowance, no allowance for the acquisition costs, no allowance for the agents costs on selling, no allowance for the loss of rent whilst they sell.. I'm seeing it already in my local area..

The doodads beckon!

 

[Jakk]

G'Day all,

Seems that the sky has been a falling for a long time

a thread from August 2001


http://www.somersoft.com/forums/showthread.php?s=&threadid=1962


regards

 

[MJK]

Definition- Professional investor

Someone who draws enough income from their property investments to support themselves and their chosen lifestyle. ( no other income reqired ).

MJK

 

[Serendipity]

Ocean View,

Nobody else has asked for specifics, so maybe it's poor form to do so, but if you don't ask you don't learn...

Where was the location of all that profitable land-flipping you recently witnessed?

Cheers,
M

 

[ger]

Acording to a financial expert on 3AW Today
The latest clearance rates
of auctions in Melbourne
last Weekend was below 55%
1 month ago was 72%
samer time last year was 78%

Dumb??? On Friday I was a witness to 200 sales of land at say approx $350k each. On sunday some of these buyers re sold their land for 40% more. Now thats dumb.... for 2 days work $100k in the pocket.

Acording to the Sunday Sun Yesterday

East Bentleigh Melbourne
2 of 10 blocks of land sold (cheapest ones)
all others passed in

 

[Les]

G'day ger,

Yesterday, Steve McKnight PREDICTED the auction results for the weekend in Melbourne. In his words (as near as I can remember them) "Saturday was a HOT day - and the last place people want to be is attending auctions. Therefore, on Monday, the papers will be saying how property is crashing, clearance rates are at their lowest rate in xx period, and the bubble is bursting"

I should also add though, that Steve also said that this is not a good time to be leveraging highly - a bit of caution required.

Two bob each way? I don't think so - the earlier comment re auctions was probably an astute observation relating to the extreme weather.... The latter comment was also an astute observation about the "here and now" of Melbourne property cycle.

Did he say "Don't buy anything!" - NO, he didn't, but he suggested that we should not be "betting the farm" (which is probably also not news to most on this forum).

Anyway, your comment about clearance rates reminded me of his comments - so I thought I'd share them,

Regards,

 

[suggo]

Jakk
There's a few people in that thread who I have never seen on here. That's interesting in itself! I wonder if LB will be here in a couple of years? (Don't get me wrong, I want him to be here! Unless he puts another vote up lol (I only say that because I only ever vote once for any given party, keeps em honest I reckon))

 

[Glenn]

Jeez,

What is this forum coming to?

There have been so many links pointing to sad stories of doom in the last couple of weeks that I am thinking that the only props available are temples of doom!

Are you lot going to be historians...or are you going to CREATE history?

Personally, I continue to look for properties yielding good rent that offer me instant equity.....yes current factors like interest rates\suburb vacancy rates and the affordability of the rent are factors I take into account, but things like newspaper headlines & fools going broke are not taken into account. If one pops up tomorrow, we will try to buy it.

Glenn

 

[abcdiamond]

Originally posted by Jakk
Seems that the sky has been a falling for a long time
a thread from August 2001
http://www.somersoft.com/forums/showthread.php?s=&threadid=1962

Jakk
I'm glad you brought that thread to our attention, I wonder how many people have been sitting it out since August 2001.

I'd hate to have been one of the ones influenced by their 30yrs and 19yrs "Experience".

 

[Les]

G'day Glenn,

What is this forum coming to?

Hehe - I'd say it's coming to what it's always been - a place for people to air their opinions, whatever they may be. As always, there are markets everywhere, and, by the way, Steve McK ALSO spent some time expanding on how to find/create positive geared property in today's markets !!! Also, since this was a Melbourne seminar, I suspect it was tailored toward that area (and I don't know that market(s) so can't comment).

Michael Croft (on another forum within this site) re-iterated the comment "How many properties you buy doesn't matter - it's how many you keep that counts". And it is with that thought (I'm sure) that Steve McK was also warning that, if you want to keep them, don't over-extend at this time. Keep going, but don't over-extend.

Doom and gloom? Not in my book - more like reading the weather, and perhaps preparing to furl a few sails ...... Don't stop, but also, don't try to set new speed records either.

And G'day Jakk - thanks for finding that one !! What a gem !! The sky HAS been falling for a while, hasn't it? Thank heaven it didn't fall on my Nett Worth (but it would've if I had been listening back then...)

Regards,

 

[ger]

Yesterday, Steve McKnight PREDICTED the auction results for the weekend in Melbourne. In his words (as near as I can remember them) "Saturday was a HOT day - and the last place people want to be is attending auctions. Therefore, on Monday, the papers will be saying how property is crashing, clearance rates are at their lowest rate in xx period, and the bubble is bursting"

Hi Les
check my post for the previous weekend results
maybe steve read those results from the papers and got on the bandwagon

302 sold
257 passed in

NOT HOT WEATHER THEN
I went to a lot of auctions the last few years with
40+ degrees and on some occassions there were hundreds of people
just because it is a hot day if you are interested
YOU WILL BE THERE
WHAT ABOUT THE WINTER
when it was poring and you used to get a full house
a few months ago????

also Yesterday Steve would have had the results of saturday as I had them yesterday morning in the sunday sun
SO How can you pREDICT something that has already hapen???

 

[brains]

Re: Re: Re: People still investing in Australian residential property are just plain dumb

NP,

Where did you get this definition from? You could get professional horse puntrers that own property on the side that meet your criteria but theyre still not 'professional property investors'.

Originally posted by np2003
Professional property investors = $5-10Mill plus in assets with at least 7-10yrs in property marketing.

As to Steve McKnights quote, thats crap - hes just talking up the market like most agents and deluded people because they cant handle the reality of a fall. Theres more than one hot Saturday in Sydney & Melbourne in summer and that doesnt scare punters away. As previously posted , if they want a property they will be there rain hail or shine. In fact if they were smart theyd think that bad or hot weather would maybe keep most other people away and create less competition at an auction.

Bill.L

Im a realist and still think the market is in for a big fall. Years in business has taught me that you cant ignore the negatives, you have to make contingency plans. Its the old saying 'manage the downside and the upside will look after itself'.

So while im predicting a property price bust, smart investors - like you and me and the rest of this forum will always be on the lookout for bargains and as Jakk says there wil be plenty around.

While im raving on - i was listening to ABC 702 yesterday morning real estate guy (he writes the column in the Saturday Herald and has written a couple of books - Jonathon Chancellor i think).

Anyway he was saying Sydney auction clearance rates fell to 51% last weekend with record number of properties pulled pre auction due to lack of interest. Also some higher price proper sold private treaty for 20% below the asking price. Apparently one person was offered something like $1.3 mil 6 months ago and knocked it back but accepted $1.05 mil on the weekend. I know thats high end stuff but its starting and the dark clouds are gathering already after just one 25 point interest rate rise.

 

[Aceyducey]

The most amusing thing I find about the gloom/glory debate is thatit doesn't actually matter to me what happens.

We have our strategies in place & will do well whatever the market does.

I think the key thing - as Brains says - is to always have your plans in place. The future is opinion, the present is real.

(this doesn't stop me having an opinion about the future too though!)

Cheers,

Aceyducey

 

[suggo]

Re: Re: Re: Re: People still investing in Australian residential property are just plain dumb

Brains once again you are talking out of your arse!!!!
Honestly, if you are going to continue with such lies and misconceptions I will have to personally come round and sort you out!!!!

Originally posted by brains
Theres more than one hot Saturday in Sydney & Melbourne in summer and that doesnt scare punters away.

More than one hot Saturday in Melbourne!!!! What a load of BOLLOCKS!!

(Queensland - Beautiful one day, PERFECT the next!!!)

 

[Les]

G'day Ger,

check my post for the previous weekend results
maybe steve read those results from the papers and got on the bandwagon

302 sold
257 passed in

Mate, I really don't know if it is something he read - but he said it on Sunday. I also have problems relating to "what is LAST weekend" - to me LAST weekend is the one we've just left !!! But I've been caught out before - I don't know if you might have been referring to the "weekend before" (i.e. 9th and 10th Nov).

Whatever, it was probably more of a "throwaway line" from Steve. Got a bit of a laugh anyway.

What was MORE important (IMHO) were his comments on the state of the market generally, and his words of caution.


And Brains

hes just talking up the market like most agents and deluded people

You must've missed the rest of the post !!! He was doing quite the opposite !!!

As I said to Ger the "hot day Saturday..." was a throw-away line. The rest of the post was Steve's current take on things. Read it again, mate. Then let me know what you think.

Regards,

 

[ocean view]

dumb

Brains I would tend to agree with your comments. But again only in certain sectors.

Non Lifestyle areas such as CBD SYD , In outskirts. high value homes.
Signs this week are still strong for western sydney. Houses under $380k. But THAT COULD change with two more rises.

But coastal towns & seachange areas are still alive & kicking,
It will take many more rate increases to even dent these places.

Some agents don't even bother to put the homes in the window. They have retirees on data lists which will last for 5 yrs. These people have cash ,,,,,,,NO LOANS NEEDED. SO THEY DON'T GIVE a dam about rates. So that type of market should see through the dramas of rates & doom & gloom talk.

I know where I will continue to buy...anyway

I bet umina & ettalong wont have a less then 8-9%PA cg in the near future.??? But that market is already high in value so even high value homes in certain areas will still dominate

We tend to include all property in Doom & gloom talk. We always have. But talk to the public ,, walk the streets ask some of these people on their plans for the next 5 years. You will be shocked.
People forget that in the next decade more people will retire in that time frame compared to the last 100 years. And also more than the next 3 decades.

If Anyone disagrees that certain areas will continue to rise in value. Quite Simply these people have not bothered to research the matter & just let their fingers type emotion.

To people who are new to investing reading this,, don't slit your throats, the Train has not left the station yet.......research these lifestyle places,, Some of them are in Baby stages so plenty of good ventures to leap into. The Main problem is the professionals,,(what is a professional) They are the ones right now buying dozens of these types of homes in seachange towns. Buying whole streets at a time. Acres & acres of non income producing land........Why???? Have a think for a moment.
While some decide to type warning posts & wait. '
YOU ARE NOT DUMB!!! so don't let the doomsdayers & polls end your journey before it starts

These comments are not pointed towards most on the forum. As most of us already have our minds set & reading this sure won't change views.,,,,,,,,,,,,
But to people who feel frustrated & have not yet purchased any IP'S,,,,,,,,,,,,,, feel confident & tread lightly.

Arn't opinions great!!! Mine R free of charge!!
ocean

 

[BV]

Reduced clearance rates in auctions
doesn't mean that property prices won't keep on going up.

Buyers will get over the recent interest rate rise very quickly
when they see that its just media talk more than anything else.

People will still buy because there is no other reliable investment vehicle at the moment.

Some of you will say buy shares mate, but I can't forget the last statement I received from my super fund not long ago. (its still suffering from losses in the share market). If the experts can't make money in the stock market do you think I can?

Does everyone remember what happened last time we had interest rate rises (in 1991?) construction nearly stopped and it started to affect the economy.

Lots of trades people (painters etc) became unemployed and then the RBA realised their mistake and reduced interest rates.

The property market is what keeps the economy going.
If the interest rates go up a lot people won't sell their houses, they will just reduce their spending. This will affect everyone
from the corner store to retail stores, holiday resorts, airlines, etc.

So the interest rates are not going to go up by much.
Nothing has changed for me, I see my portfolio increasing nicely at the expected 10%pa.

Bill

 

[brains]

Re: Re: Re: Re: Re: People still investing in Australian residential property are just plain dumb

OK Suggo, they have only one hot Saturday in Melbourne every summer...Yeah Right!! .....my point was obvious regardless of how many they have.

I bought my first property at an auction in 1988 and ive been to so many since then ive lost count. There's been packed auctions in boiling hot weather on a week day and empty auctions on a beautiful spring Saturday morning and everything in between, my point is its got absolutely nothing to do with the weather.


And as far as you 'personally' sorting me out....well.... Id like to see that!

Originally posted by suggo
Brains once again you are talking out of your arse!!!!
Honestly, if you are going to continue with such lies and misconceptions I will have to personally come round and sort you out!!!!














More than one hot Saturday in Melbourne!!!! What a load of BOLLOCKS!!

(Queensland - Beautiful one day, PERFECT the next!!!)

EVERY

 

[np2003]

There has been some posts around the forums lately with Real estate agents seeing a huge decline in the amount of people acquiring real estate. Before the rate rise, most properties were being bought in the same week...