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From: H T
With the current huge leap in values i've seen in an area that I consider myself to be an "expert" in, I was wondering when the boom will slow.
Consider this. Currently in a bayside suburb in melbourne, you can buy a nice little 2 bedroom vico. place for about 500k. It was only about 5-6 years ago that they were half that cost.
You maybe lucky to currently get (20k) 4% GROSS return on that.
If property is going to slow down in growth in that area to about 10% (typical of inner city prop), in 7 years you have a property worth 1 mill with a potential yield (assuming a typical 3% growth in rent) of about 24,500 and a GROSS yield of about 2.5%
My question is, will anyone in 7 years be wanting to invest in property in these areas in inner melb with returns like that?
With the slowdown in yields, how long before we see this reflected in demand in those areas? ( i know much of it is own.occ)
Will the average 10% growth in property that we've seen since 1960 be in for a fall?
Another reason why prices cant continue to increase at this rate is the lack of wage growth ('cause of low inflation) that has occurred in the last few years
Any thoughts?
HT
With the current huge leap in values i've seen in an area that I consider myself to be an "expert" in, I was wondering when the boom will slow.
Consider this. Currently in a bayside suburb in melbourne, you can buy a nice little 2 bedroom vico. place for about 500k. It was only about 5-6 years ago that they were half that cost.
You maybe lucky to currently get (20k) 4% GROSS return on that.
If property is going to slow down in growth in that area to about 10% (typical of inner city prop), in 7 years you have a property worth 1 mill with a potential yield (assuming a typical 3% growth in rent) of about 24,500 and a GROSS yield of about 2.5%
My question is, will anyone in 7 years be wanting to invest in property in these areas in inner melb with returns like that?
With the slowdown in yields, how long before we see this reflected in demand in those areas? ( i know much of it is own.occ)
Will the average 10% growth in property that we've seen since 1960 be in for a fall?
Another reason why prices cant continue to increase at this rate is the lack of wage growth ('cause of low inflation) that has occurred in the last few years
Any thoughts?
HT
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