Hi willair, I have not sold any property in the last 15 years - zip, zero. I have however, purchased quite a lot
I did sell one property when interest rates were 17-18% in the Keating era. That property is now worth 3x what I sold it for.
The Mother of All Booms is Coming??
- Thread starter sash
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Hi willair, I have not sold any property in the last 15 years - zip, zero. I have however, purchased quite a lot
I did sell one property when interest rates were 17-18% in the Keating era. That property is now worth 3x what I sold it for.
Then why come on a property forum then? Where the participants are quite obviously biased towards property investment
I beive that there is going to be a further run in the market and I have been saying it for years. Not going to push my view, as I will always buy. Personally I want to see the market tank and interest rates over 10% this will be where the party starts.
I dont see it though, i see not enough seats and lots of bums. Therefore prices will rise. Credit is still tight therefore there will not be a boom as such. However you release lending markets back to the laxed levels they once were and we will see the party starting.
I dont see it though, i see not enough seats and lots of bums. Therefore prices will rise. Credit is still tight therefore there will not be a boom as such. However you release lending markets back to the laxed levels they once were and we will see the party starting.
That's part of my argument. All that is finished now and yet prices are continuing to rise.
From first hand experience. Every week-end I am at Opens and auctions. I am witnessing huge demand and limited supply.....and sentiment is not being affected by piddly 0.25% IR rises that the RBA is doing.
Good property is being snapped up within hours of being listed.
These are some of the hallmarks of the beginnings of a property boom IMO.
Tell me about it!!
I've literally hung up the phone, jumped into my car and got down to the agent's office only to be told it was "under offer"??!! By who the invisible man you had sitting in your filing cabinet that jumped out during the 20 minutes it took me to get here??!! Tell me about it!!
Wouldn't surprise me if the real estate agents are snapping them up themselves!
Sure Evand...I take the spruiker of the year award...on one condition!
That you accept the Steve Keen Wet Blanket of the Year award.
As for being unbiased....yes I am biased...but I have nothing to sell as I tend to buy to hold.....and I am putting my money where my month is. 18 months ago I said that interest rates would start go down in late 2008....people disagreed...guess what happened??
I think this will one of the causes of the massive boom. As I said ...all markets including the property markets are imperfect...i.e. they tend to have boom and bust cycles due to human psychology.
You are correct that finance will further tighten....which means that less people will buy but the population is growing. This means more people compete for less rental stock.....pend up demand builds where the pressure on prices build....eventually finance loosens (Nathan has said the same above) and this causes people to buy madly till the pend up demand is met by overbuilding. This is just the normal cycle.
That you accept the Steve Keen Wet Blanket of the Year award.
As for being unbiased....yes I am biased...but I have nothing to sell as I tend to buy to hold.....and I am putting my money where my month is. 18 months ago I said that interest rates would start go down in late 2008....people disagreed...guess what happened??
Are you forgetting the growth of last year was caused by one off factors. FHBG, lowest interest rates in 40 years, massive stimulus, Govt bank guarantees etc etc.
Thats all finished now and rates are rising fast, how can you be so sure we are the start of a boom?
http://www.smh.com.au/business/home-loans-slump-most-in-a-decade-20100310-pxpp.html
I reckon prop and sash head to head for spruiker of the year award. With daylight a distant second.
Id love just for once to hear some unbiased commentary.
I think this will one of the causes of the massive boom. As I said ...all markets including the property markets are imperfect...i.e. they tend to have boom and bust cycles due to human psychology.
You are correct that finance will further tighten....which means that less people will buy but the population is growing. This means more people compete for less rental stock.....pend up demand builds where the pressure on prices build....eventually finance loosens (Nathan has said the same above) and this causes people to buy madly till the pend up demand is met by overbuilding. This is just the normal cycle.
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IMHO - good properties are as rare as hen's teeth and reasonably good priced good property is rarer and at present extinct in my area.
In my local area, new builds have decreased significantly and red tape increased significantly.
IMHO due to short supply of good quality properties, poor qualities properties have upped their prices and inexperienced buyers are trying to get finance approved on poor quality houses and being rejected by finacial institutions on correct lower valuation.
There are no good buys in my local area - except friend is looking at house that has a structural fault tomorrow and will need underpinning. Funny thing is the price has been advertised as if no fault and fault not mentioned in advertisements. I had wondered why this property had not sold in the last 6 months.
Can't blame a person for trying.
Boom - I think property needs a correction and poor quality needs to be priced accordingly BUT I can't see that happening as not enough quality properties are being built in my local area.
There are 2 new builds still for sale and have been advertised over the last 3 & 6 months - both are over prices by 40 - 50 K.
Good quality in good areas should still go up IMHO but anything over 400K has a smaller market of buyers.
I believe the market pressure will be units and Rob's strategy of buying 2 bedroom units and renovating will be the way forward.
Regards
Sheryn
PS - Respects to Dazz if I could afford > 1m commercial property with cashflow that would be better but in the meantime I will do something as to do nothing is not an option if one wants to get ahead - even if mistakes are made.
Agree 95% with you.
As an aside and off topic - we tried to reopen/reactivate and or open new accounts with previous trade suppliers this week and 2 Office Administrator's who know my Hubby and are aware that we previously had accounts and paid on time had refused us a credit account as:
a) we couldn't (and didn't bother) to find 3 or 4 other trade suppliers to verify we could pay X amount of $
and the kicker
b) the concrete supplier wanted a guarantor's signature and yet we had previously paid for thousands of dollars worth of concrete over a 10 year period with this supplier, it is just we haven't needed concrete for a while.
CREDIT drying up is not just banks its businesses too. Risk management has gone overboard IMHO.
Anyway Hubby told Concrete company he would just put the concrete for the duplex footings on his credit card but he expected a discount AND if he doesn't get a discount he will move onto the next concrete company for the two double garage slabs and not to forget there will be two driveways as well.
I think trade suppliers will be downsizing staff shortly as they aren't growing their business by accepting new accounts & that will push up houses prices in some areas.
Still off topic - don't forget the upcoming changes to Home Warranty Insurance. http://www.fairtrading.nsw.gov.au/A...New_home_warranty_insurance_arrangements.html
Also the trade industry has to digest the changes as they move to National Registration - I think Plumbers and Electricians are the first trades in 2012 to move to National Registration - which IMHO will be good for Australia when achieved but rocky as implemented.
I work in another area moving to National Registration this year and a large portion of older employees in my industry are telling their bosses already they can't be bothered, I will just move to an 'easier on the physical body industry'
Red tape, red tape, red tape - Oh did anyone mention the harmonising of the different states OHS laws and lets not forget the combining of different state awards to reduce number of awards, with the impact that in some states employees will earn less than they have previously, particularly when they change employers in same industry.
I predict a 'rocky' few years and will be an interested observer on the sidelines by the end of the year but will maintain my currency in my industry through CPD points.
Cheers
Sheryn
Nah, it's just shortage of housing and when interest rates go up to 9+%
people will be crying again like they did in previous years.
I think in the short term there is some money to be made but not huge amounts to justify taking huge financial risks.
IMO we should concentrate on building up our portfolio with good yielding properties and should not overborrow because at some point down the track lending could be pulled back.
I say this because there is a lot of debt out there and one day those who lend us the money could ask for it back and not because we or Australia as a whole are going to default on our loans but because there is a risk that others will.
So take it easy guys, property prices will go up because of demand but IMHO high prices are not sustainable in the long term and correction or stagnation will come (like it did before) due to affordability and/or by tighter lending.
cheers
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Tell me about it!!
Doesn't this tell you that the market is crazy and judging by the recent Melbourne performance possibly close to it's peak (if not already peaked) and if you are not already in the market you shouldn't go near it?
I would be skeptical to buy under those conditions, it reminds me of Sydney at the peak of the market in 2003/4
An interesting article from todays West Australian newspaper
Call to act on land supply fears
There are fears WA could run out of land within a year, with 40 per cent fewer blocks on the market now compared with the last pre-boom period.
The Urban Development Institute of Australia said there were 1382 blocks for sale in the metropolitan area, compared with 2266 in pre-boom June 2005.
UDIA expects the next boom will drain land supply as quickly as the last one, which reduced lots on the market to only 337 at its peak in June 2006.
UDIA WA chief executive Debra Goostrey said State Government reforms to streamline the process for turning vacant land into lots had not yet been passed. But she said even if it were to come into effect soon, it would not free up the necessary number of blocks to meet accelerating demand.
"Land supply has been hovering around the same levels for the past few quarters and it's just not getting anywhere near the levels we had in 2005," she said. "We are underperforming in the delivery of dwellings for Perth and WA, especially considering our net migration of 65,000 people a year. There could be big supply problems within a year."
Ms Goostrey predicted that by the end of 2010, some buyers would return to desperate tactics experienced in the last boom.
This included camping out at development companies days before lots were released in new estates. She feared the curb on finance to developers, a result of the global financial crisis, would add to difficulties in bringing new estates on to the market.
Ms Goostrey called on the State Government to make land supply a priority by co-ordinating the efforts of a range of relevant departments, including those dealing with the environment and water.
But the Real Estate Institute of WA said the State was moderately well insulated against the property shocks experienced in the previous boom.
REIWA president Alan Bourke said there were more vacancies in the rental market, at 4.7 per cent compared with one per cent in December 2006, which would help absorb demand from WA's growing population.
REIWA statistics showed there were more listed properties, including established homes, which would also sop up demand. There were 10,372 listed properties on the market in the December quarter last year compared with 4793 in June 2006.
Mr Bourke said the market would come under less investor pressure because of a curb on finance.
He believed up to 20,000 blocks had been withheld from the market by smaller investors wary of selling during the downturn, which would become available as prices picked up.
Call to act on land supply fears
There are fears WA could run out of land within a year, with 40 per cent fewer blocks on the market now compared with the last pre-boom period.
The Urban Development Institute of Australia said there were 1382 blocks for sale in the metropolitan area, compared with 2266 in pre-boom June 2005.
UDIA expects the next boom will drain land supply as quickly as the last one, which reduced lots on the market to only 337 at its peak in June 2006.
UDIA WA chief executive Debra Goostrey said State Government reforms to streamline the process for turning vacant land into lots had not yet been passed. But she said even if it were to come into effect soon, it would not free up the necessary number of blocks to meet accelerating demand.
"Land supply has been hovering around the same levels for the past few quarters and it's just not getting anywhere near the levels we had in 2005," she said. "We are underperforming in the delivery of dwellings for Perth and WA, especially considering our net migration of 65,000 people a year. There could be big supply problems within a year."
Ms Goostrey predicted that by the end of 2010, some buyers would return to desperate tactics experienced in the last boom.
This included camping out at development companies days before lots were released in new estates. She feared the curb on finance to developers, a result of the global financial crisis, would add to difficulties in bringing new estates on to the market.
Ms Goostrey called on the State Government to make land supply a priority by co-ordinating the efforts of a range of relevant departments, including those dealing with the environment and water.
But the Real Estate Institute of WA said the State was moderately well insulated against the property shocks experienced in the previous boom.
REIWA president Alan Bourke said there were more vacancies in the rental market, at 4.7 per cent compared with one per cent in December 2006, which would help absorb demand from WA's growing population.
REIWA statistics showed there were more listed properties, including established homes, which would also sop up demand. There were 10,372 listed properties on the market in the December quarter last year compared with 4793 in June 2006.
Mr Bourke said the market would come under less investor pressure because of a curb on finance.
He believed up to 20,000 blocks had been withheld from the market by smaller investors wary of selling during the downturn, which would become available as prices picked up.
Of course mate they are biased toward property investment here. But it would be good to hear unbiased commentary on property prices and the constant spruiking of the upcoming BOOM.
Its getting boring. Its like listening to the real estate industry and the REI's with their constant spruiking of prices.
I love property investing but i'm realistic and i have no barrow to push.
btw: heres a good one:
http://www.smh.com.au/business/housing-market-shows-signs-of-cooling-20100310-pz8t.html
Its getting boring. Its like listening to the real estate industry and the REI's with their constant spruiking of prices.
I love property investing but i'm realistic and i have no barrow to push.
btw: heres a good one:
http://www.smh.com.au/business/housing-market-shows-signs-of-cooling-20100310-pz8t.html
Then why come on a property forum then? Where the participants are quite obviously biased towards property investment
Not really, not if the prices are still "respectable" to investors (who are most likely the one's snapping them up right now). When the sellers catch on that there is an influx of buyers and a shortfall of available properties, that's when they will ask for more $$$ and prices will escalate considerablely/too much for (bargain-hunting) investors who will think "whoa this is too much for an IP" and slam shut their purses/wallets!!
I have to say it is really tough atm. As an investor and broker - the banks are asking for everything bar the kitchen sink.
ANZ have dropped their servicing on Rental Incomes down to 70% from 75% and I wonder how long it will be before other's follow. Positively geared or neutral has never been more important than now. SO while one would expect servicing to be sligghtly better with these better yields, the banks are adjusting servicing criteria to compensate.
PB - I don't know how you can say undersupply is not a factor or were you referring to immigration in relation to undersupply. If so - agree that immigration is not enough. Sydney however cannot keep up. While Brisbane seems to have gone beserk and over compensated - development in Sydney is stagnant and there really is not enough new stock coming through.
Regards JO
Have you not noticed that they all have a vested interest?
Why paste & copy, get your own opinion instead of just agreeing because it's matches your interests as well (as many here do).
Prices could escallate a bit more but remember that you'll be buying a negatively geared property so you'll be feeding it $ for a long long time with the hope for capital gains in an environment where interest rates are set to rise further and in a market which already seems expensive.
Just my thoughts....
I've heard the same thing. It does astound me as to how many instances of this there are (happened to my brother just last week). Granted the banks are tightening and playing funny buggers here and there with CRA excuses etc - but speaking for myself, I always make sure my finances check the boxes and I know I'll get a loan before I go hunting.
The only thing I generally leave until the purchase time which could effect the deal is the bank valuations on my existing places, and even those I know but I realise it can be dependent on valuers playing funny buggers. I can't comprehend why so many people get rejected with finance, do some simple calcs. before you start making offers all over the place.
I noticed that apart from monopoly all the posters on this thread are not from melbourne.
The boom has happened and is happening here. 10-20 percent above reserve is a boom.
Sydney siders are way less optimistic.
The rest of oz is just warming up.
The boom has happened and is happening here. 10-20 percent above reserve is a boom.
Sydney siders are way less optimistic.
The rest of oz is just warming up.
