Should I be buying now?

[whiteknightoz]

I bought an IP last year, it was a brand new freshly built 4 bedroom place. Back then I had planned to buy another property or two later this year and now am in the financial position to do just that but with the latest economic conditions I am wondering whether I should hold off or is it right to take the plunge now?

I was looking at investing in some established homes possibly in the Townsville, Hervey Bay or Logan City areas...

confused

 

[Aaron Sice]

as long as it has good fundamentals, a scarcity factor and a good yield then buying now makes great sense IMO.

 

[Rob Williams]

as long as it has good fundamentals, a scarcity factor and a good yield then buying now makes great sense IMO.

That pretty much sims it up!
Bill Zheng says the that the time to buy is when YOU are ready for the market as opposed to waiting for the market to be ready for you. These basic rules always apply, regardless of the market cycle.

 

[Rockstar]

I bought an IP last year, it was a brand new freshly built 4 bedroom place. Back then I had planned to buy another property or two later this year and now am in the financial position to do just that but with the latest economic conditions I am wondering whether I should hold off or is it right to take the plunge now?

I was looking at investing in some established homes possibly in the Townsville, Hervey Bay or Logan City areas...

confused

You don't have to rush into anything as the market is going nowhere for a while but you are in a great position to be negotiating a beneficial deal. Take advantage of the buyers market and begin scrutinising the areas of you preference. Don't be embarrassed to make offers well below asking price. If it were me I would be sticking to your familiar territory in the Brisy area rather than going way north unless you travel up there regularly.

 

[quoll]

but with the latest economic conditions I am wondering whether I should hold off or is it right to take the plunge now?

I'm trying to sell now and it seems like 99% of the population is thinking the same thing. I would say it's a fantastic time to be buying, keep a good eye on the areas you like and put in low offers on properties that have been listed for a couple of months. You should be able to build some instant equity with solid purchases below bank valuations, just remember every property COULD be a good deal, it just has to be at the RIGHT price!

Work out average rental yields for your target areas and have a look at lots of properties, get to the point where you can quickly judge the price / rent but don't be afraid to purchase quickly if the numbers stack up on that first outing.

Cheers
Graeme

 

[sproket]

That pretty much sims it up!
Bill Zheng says the that the time to buy is when YOU are ready for the market as opposed to waiting for the market to be ready for you. These basic rules always apply, regardless of the market cycle.

LOL

Jump off the Titanic and man the lifeboat when YOU are ready.......damn the water and drowning and physics and stuff.

Good advice that. Think positive and you can breathe water!

 

[josko]

If you are capable of servicing the loan, have done your numbers and have a back-up plan for any economic situation, then go for it.

It is a buyers market and there are some great bargains around. personally, if I was in the position to buy, I would be!

Regards JO

 

[Ausprop]

as long as it has good fundamentals, a scarcity factor and a good yield then buying now makes great sense IMO.

the trouble is the resi market even at its best never had good fundamentals or yield and the recent boom conditions have distorted this even more. unless rents were to double, triple or dare i say quadruple, then I cant see the point in buying an asset that falls in value and costs you money to hold?

 

[Lukey13]

the trouble is the resi market even at its best never had good fundamentals or yield and the recent boom conditions have distorted this even more. unless rents were to double, triple or day i sare quadruple, then I cant see the point in buying an asset that falls in value and costs you money to hold?

I must be misunderstanding your post... So you're saying that property is basically a poor investment?

 

[Ausprop]

I must be misunderstanding your post... So you're saying that property is basically a poor investment?

yeh - why would you buy it? i cant see any good reason, unless you wish to bet against the tsunami of sellers and punt that values are on the up

 

[Lukey13]

yeh - why would you buy it? i cant see any good reason, unless you wish to bet against the tsunami of sellers and punt that values are on the up

Is the market really that grim in Perth?
Geez, fortunately things are looking a lot more optimistic in my neck of the woods at the moment.

 

[Ausprop]

Is the market really that grim in Perth?
Geez, fortunately things are looking a lot more optimistic in my neck of the woods at the moment.

prices are off 10% at best, up to 30% or so in the burbs and for speccie OTP stuff. I have mates trying to drop apartments etc at $300k+ under what they paid but who would buy them - banks aint got the cash or if they have they aren't letting on, leaving the few cashed up bargain hunters to have a field day but even they have had the bageesus scared out of them. With this crisis taking grip there seems to be only one way for property inthe medium term and that's another drop of 10 to 15% at a wild guess. Commercial devy sites are the next in line to feel the pinch, set to drop 20% as banks wont touch anything without large equity contributions and heavy presales in place. Office yields are set to power higher on the accute lack of space. At least in Perth we have been insulated to some extent but I am starting to read of more resource projects being shelved (across the country), so IF resources cools then we could be in for trouble. Gotta wonder wjat's in store for Sydney with the core of its economy gouged out... more of the same I would say, cooling prices matched with rising yields

 

[stumunro]

Yes one has to wander the affects of the bludgeoning tool the RBA refers to as monetary policy. Too much surface skimming of the situation with no appreciation of underlying wounds that the nsw economy is taking. In terms of business we have been feeling the affects for a couple of years now and it's hard to gauge how things are going to pick up.

Unfortunately for things to get better they have to ultimately get worst

 

[boomtown]

I have mates trying to drop apartments etc at $300k+ under what they paid but who would buy them

Wtf lol? People trying to flip apartments at 300k less than they paid OTP?! Did they spend 2 million on an OTP apartment as an IP?

If so - they are madder than a hatter to start with.

 

[Sunfish]

Is the market really that grim in Perth?
Geez, fortunately things are looking a lot more optimistic in my neck of the woods at the moment.

Are you sure?

 

[Max Carnage]

Are you sure?

Sure/Optimistic... same diff?

Besides, I paid Residex a bunch of $$$ and they said...

 

[Ausprop]

Wtf lol? People trying to flip apartments at 300k less than they paid OTP?! Did they spend 2 million on an OTP apartment as an IP?

If so - they are madder than a hatter to start with.

not so mad when everyone else is doing it and picking upa few hundred k on settlement day! yes there are plenty of examples, prime ones would be:

BURSWOOD by mirvac
http://www.realestate.com.au/cgi-bi...er=&cc=&c=38927734&s=wa&snf=rbs&tm=1223255950

Steves Hotel (also mirvac!)
http://www.realestate.com.au/cgi-bi...er=&cc=&c=40411022&s=wa&snf=rbs&tm=1223256095

Spec homes - think this was australand?
http://www.realestate.com.au/cgi-bi...er=&cc=&c=40411022&s=wa&snf=rbs&tm=1223256095

And street after street in Mandurah where they beg you to take one off their hands
http://www.realestate.com.au/cgi-bi...er=&cc=&c=34904057&s=wa&snf=rbs&tm=1223256242

oh i nearly forgot this... some pain to come here too. Sold out in about a day at its launch
http://www.realestate.com.au/cgi-bi...er=&cc=&c=72677451&s=wa&snf=rbs&tm=1223256641

 

[Sunfish]

Sure/Optimistic... same diff?

Besides, I paid Residex a bunch of $$$ and they said...

On fundamentals, Lukey is right. Townsville has a lot going for it but I'm sure you've noticed the difference in tone of voice of the salesman, depending on whether you a buyer or seller be.

I've had a house on the market for a while. No offers! Will be putting a tenant back in it now.

 

[sash]

Hmmmm......its like watching lemmings.....wonder what sort of hit these people are taking? Given the current credit crunch....it would be interesting to see what happens to people who can't settle. Also these properties will be quite hard to finance....unless you have a 20% deposit.

Very interesting......I am not usually a bear...but there are some storm clouds brewing...particularly in WA?

Sash

not so mad when everyone else is doing it and picking upa few hundred k on settlement day!

 

[Ausprop]

Hmmmm......its like watching lemmings.....wonder what sort of hit these people are taking? Given the current credit crunch....it would be interesting to see what happens to people who can't settle. Also these properties will be quite hard to finance....unless you have a 20% deposit.

Very interesting......I am not usually a bear...but there are some storm clouds brewing...particularly in WA?

Sash

i know one in the steves hotel went under $400k below purchase, plus stamp, plus agents com, plus legals etc so the vendor was about $600k out of pocket on that pearler (was a $1.9m apartment).

I think the storm has unleashed most of its rain already in WA. ironic given the strenght of the economy here, it's surprising to hear that other parts of the country are doing better as theoretically they should be doing much worse. Either some people are in serious denial, the storm is yet to hit, or... I dunno.