G'day Letiha,
Ah, but what would ANOTHER Bank value it at? If they want your business, it may well be a more reasonable valuation (based on current comps - rather than "history")
Regards,
Yes it was with another bank
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G'day Letiha,
Ah, but what would ANOTHER Bank value it at? If they want your business, it may well be a more reasonable valuation (based on current comps - rather than "history")
Regards,
ahhhhhh...YEP!!!
IMHO, the only thing that will slow down those figures at the moment is that there is a distinct lack of stock across most markets and sales are down as a result.
the irony in that (or rather the effects of supply and demand) is that if there was to be more stock come one, things would probably skyrocket even further...
ahhhhhh...YEP!!!
IMHO, the only thing that will slow down those figures at the moment is that there is a distinct lack of stock across most markets and sales are down as a result.
the irony in that (or rather the effects of supply and demand) is that if there was to be more stock come one, things would probably skyrocket even further...
My view is the $400K median is the absolute peak for Brisbane. People in Brisbane earn around $50K to $60K (household income) so despite the lack of supply or otherwise they simply won't be able to get the cash. Especially with the availablity of credit tightening. I actually predict a "lack of credit" induced price drop - to $350K median (or less) by mid 2008.
Feel free to save this post and laugh at me mid next year but I'm pretty confident.
The only thing that might keep it up there (post $400K) over the medium term would be government intereference in some way (higher first home buyer grants, tax relief for owner occupiers, allowing shared equity schemes or some other stupid policy like that).
very interesting, are you saying it would be worth to wait for a while?
My view is the $400K median is the absolute peak for Brisbane. People in Brisbane earn around $50K to $60K (household income) so despite the lack of supply or otherwise they simply won't be able to get the cash. Especially with the availablity of credit tightening. I actually predict a "lack of credit" induced price drop - to $350K median (or less) by mid 2008.
very interesting, are you saying it would be worth to wait for a while?
We don't have any IP yet and was planning of getting one in Brisbane/Gold Cost soon, but after reading posts like yours, I don't know what to think anymore.
I know some people will say if you can hold long enought etc. it won't be a problem, but if prices will drop next year, what's the point to buy now??
I'm not sure the average in Sydney is much more than $50 - $60k, you know. Yet Sydney median prices are consistently above $400k.
I think the market is WAY too fragmented, with too much happening in terms of income distribution to be able to tell anything from city-wide median data.
Alex
But long term the distribution of properties should come close to the distribution of incomes. i.e. high income = large house in nice area --- poor income = small house in bad area. Does this sound illogical?
Anyway - my point about the availability of credit still stands. If credit is pulled back the market will have a hickup.
I know some people will say if you can hold long enought etc. it won't be a problem, but if prices will drop next year, what's the point to buy now??
At the macro level over the long term I can't see property as a category going up 5% annually. Why? Because if it goes up that is because somebody else is prepared to pay more than you did. If credit / wages is tight now, why will it be easier for your future buyer?Can you afford to wait buying an IP even if values just go up 5% annually?
I liked Dazzling's point in a recent post, saying that he just doesn't bother about the macro economics and but gets to know his market really well so that he can make money in any condition. And look at what he's acheived!
kaf
At the macro level over the long term I can't see property as a category going up 5% annually. Why? Because if it goes up that is because somebody else is prepared to pay more than you did. If credit / wages is tight now, why will it be easier for your future buyer?
There are surges and then periods of no activity I agree but 5% annually forever (when wage growth is 3% for example) just can't happen. If you think far enough ahead can you imagine somebody making $1000 for the week, putting $900 into his house, and living on $100? It can't happen. If you think even further ahead you end up with the situation of somebody making $2000 a week and putting $2500 into his house - that definetly can't happen!
So I think if you are playing at the macro level then timing is everything - need to get in low and sell high. At the micro level (to Dazzling's point) it might not matter. If you find a good location it may perform regardless of the macro environment. So I agree with you there.
alexlee - I am talking macro and long term, you are talking micro and short term so both can be correct.
At the macro level over the long term, people can not keep paying more and more of their wage towards housing - there is a hard limit and that is 100% of wages. In actual fact it will be much less than 100% as credit restrictions and other blockers come into play (i.e. the requirement to eat!). Now I am sure you don't disagree with me there - that is simple. Hence housing at the macro level will surge, stay still for a while, surge but it will never break free of wages.
At the micro level over the short term (i.e. I consider even 15 years short term), yes it can break away from wages for a time (via increased debt usually) and certain areas can do well as the income of the population living in the area changes.
But my point is this. Just buying anywhere anytime and believing on the "house prices always outstrip wages" is naive and fairly illogical if you think it through. At the micro level though it is possible to do well - good timing and good location.
What has been your experience with your own property investments?.. Lets come back to this forum in a year and see if I got it right!
alexlee - I don't think there is a lot of disagreement here especially on the micro trends.
The only point I'd make is that macro does have an impact and shouldn't be ignored all together. No areas are completely isolated from the rest of the property sector. Lets say you buy a property that will do 30% better than average for example - good location, higher income people moving in etc etc. But then the average of the sector drops 20%. In that case you are still 30% above average but the average is now 20% less. So that is where I was getting at - micro is always important but your timing on the macro factors is important too.
So, back to where this all started - my view on Brisbane. I think we are entering a new stage of the macro cycle where credit will be very hard to come by and it will impact demand across the whole sector. So I think waiting a year could be valuable as there may be some bargains available. And I acknowledged I could have this wrong - its just my view. Lets come back to this forum in a year and see if I got it right!