he's capping everything, price of milk, fuel, housing, even green house emissions are being capped. it's great. everyone wins and nobody gets hurt
The perfect storm for Property Investors!
- Thread starter MichaelW
- Start date
he's capping everything, price of milk, fuel, housing, even green house emissions are being capped. it's great. everyone wins and nobody gets hurt
What would happen if Kevin Rudd capped rent? This has apparently started happening in Spain. (sorry I cannot recall where I read this, but it was a rude shock to contemplate)
The Labour Government abolished negative gearing - and got their fingers burnt. I would like to think that K Rudd is not sufficiently stupid to try a party trick like capping rents.
hi michael
you are right that this is the time for investors and there is alot around.
the issue at this stage is not the properties its how to fund them.
with dropping lvrs
its a case of you put more money in and you know how much I like that.
or the vendor leaves meat in the deal.
and the lower the lvr's the higher the meat in the deal.
and some of the meat in the deal are really mind boggling.
and the rates that some of these vendors are will to accept I scratch my head.
and its only going to get worse.
the people that will make money in this market are the ones that can get the deals with anything around 20% left in or have it to play with.
just don't shave your funding to get into the market or you could fry.
there is alot of money that is on the side lines and not come into the market and its the same to me as some one shorting a share price. so short drive down the price and buy at a lower value.
if you looked at the property market and you understood funding and the share market you would say some one is shorting the market and you have more buyers the sellers as the sellers are the lenders and the buyers are the investors or property owners.
and just like a shorted share people make alot f money as it goes down and goes up.
there are mutterings in the market that acouple of banks are breaking ranks and are out to lend.
just not to the 80 85% no doc lodoc stuff.
I think if the petrol price gets past the 2.00 mark and it will then alot of people are not going to be able to keep up.
this 2.00 mark will drive foodstuffs and even travel on busses just to expensive to absorb.
and then you will not see areas with huge fall out but you will see people not be able to afford to fund the house and all other costs and then you will see alot of bargains come on the market.
you are right that this is the time for investors and there is alot around.
the issue at this stage is not the properties its how to fund them.
with dropping lvrs
its a case of you put more money in and you know how much I like that.
or the vendor leaves meat in the deal.
and the lower the lvr's the higher the meat in the deal.
and some of the meat in the deal are really mind boggling.
and the rates that some of these vendors are will to accept I scratch my head.
and its only going to get worse.
the people that will make money in this market are the ones that can get the deals with anything around 20% left in or have it to play with.
just don't shave your funding to get into the market or you could fry.
there is alot of money that is on the side lines and not come into the market and its the same to me as some one shorting a share price. so short drive down the price and buy at a lower value.
if you looked at the property market and you understood funding and the share market you would say some one is shorting the market and you have more buyers the sellers as the sellers are the lenders and the buyers are the investors or property owners.
and just like a shorted share people make alot f money as it goes down and goes up.
there are mutterings in the market that acouple of banks are breaking ranks and are out to lend.
just not to the 80 85% no doc lodoc stuff.
I think if the petrol price gets past the 2.00 mark and it will then alot of people are not going to be able to keep up.
this 2.00 mark will drive foodstuffs and even travel on busses just to expensive to absorb.
and then you will not see areas with huge fall out but you will see people not be able to afford to fund the house and all other costs and then you will see alot of bargains come on the market.
rent cap = rent contol.
expect it soon.
ah labor - with the amount of bandaids they use they should have shares in J&J.
expect it soon.
ah labor - with the amount of bandaids they use they should have shares in J&J.
I don't mind, so long as they cap it at the prevailing variable mortgage interest rate.
i.e. 9.5% yield as a rental cap. No more than what you could reasonably expect the owner has to pay to hold the property... It will be a long time until we see rental yields at 9.5%.
Fair enough?
Cheers,
Michael
love your thinking.
vote 1 MichaelWhyte for mayor!
vote 1 MichaelWhyte for mayor!
Great thread Michael..
...in 1993 my wife and I purchased our first house in Adelaide for 88.5K after renting for around $150 a week. The P&I repayments were less than our previous rent. At the time there were lots of articles in investment magazines saying that property was a 'dud buy' and they were probably right from a capital growth perspective (we spent 3K (all over spare cash) doing it up over the next 5 years and sold it in 1998 for 91K.)
As a property market watcher for the past 10-15 years I think the cycle will repeat.
This is what my crystal ball says the future scenario is (with timeframe and magnitude dependent on many external factors - credit crisis fallout, China/India scenario, oil price etc)
1. Rents will continue to increase to eventually be similar to average mortage repayments (and may eventaully be helped by falling interest rates) - this event is well on its way
2. Capital values will be flat or fall slightly (on average) over the short-medium term (I think last years growth burst was unjustified and therefore this needs to be rectified) - we are on the brink of this
3. Pressure will continue to build as a result of the supply vs demand equation setting up for the next boom. But I think this is still some time off, as it will require affordability to improve and this means increased incomes (a slow process)
Cashflow allows you to hold your assets and capital growth delivers the weath. If holding quality assets, then increasing cashflow over the short-medium term will deliver weath in the medium-long term.
Happy to be shot down (ie constructive criticism)...any other scenarios/crystal balls out there?
...in 1993 my wife and I purchased our first house in Adelaide for 88.5K after renting for around $150 a week. The P&I repayments were less than our previous rent. At the time there were lots of articles in investment magazines saying that property was a 'dud buy' and they were probably right from a capital growth perspective (we spent 3K (all over spare cash) doing it up over the next 5 years and sold it in 1998 for 91K.)
As a property market watcher for the past 10-15 years I think the cycle will repeat.
This is what my crystal ball says the future scenario is (with timeframe and magnitude dependent on many external factors - credit crisis fallout, China/India scenario, oil price etc)
1. Rents will continue to increase to eventually be similar to average mortage repayments (and may eventaully be helped by falling interest rates) - this event is well on its way
2. Capital values will be flat or fall slightly (on average) over the short-medium term (I think last years growth burst was unjustified and therefore this needs to be rectified) - we are on the brink of this
3. Pressure will continue to build as a result of the supply vs demand equation setting up for the next boom. But I think this is still some time off, as it will require affordability to improve and this means increased incomes (a slow process)
Cashflow allows you to hold your assets and capital growth delivers the weath. If holding quality assets, then increasing cashflow over the short-medium term will deliver weath in the medium-long term.
Happy to be shot down (ie constructive criticism)...any other scenarios/crystal balls out there?
Sure Unemployment is going to go up.
From 4.5% to say 5%.
But for years we were told by economists that 10% unemployment is "structural" - that's the best we'll ever get.
So more people have jobs and the slight rise in unemployment shouldn't be a problem
Last edited:
I'd like to start making some crazy offers and snap up some bargains...if only I wasnt so HG-ed
My lesson from the late 90s. Should work if history repeats itself.
I think we need to look further back to the 70's for the lessons in this market.
Most people are assuming that interest rates will go down, and that during recession/downturn they will decrease.
But they decreased for the last 20 yrs during an equities boom, and the RE boom.
And even though I think we have been in recession for quite a while, the RBA will tell you that our economy is hot. They seen no hint of a recession till recently.
Based on that, like a few others here, I see much more downside potential than upside for RE prices, and a chance of much higher inflation & interest rates.
In the 60's we were told "We we never have high interest rates"
In the 80's "High Oil is here to stay" & "There will be no oil by 2000"
In the 80's we were told "Low interest rates will never come back" & "New era of high infaltion"
In the early 90's "RE is dead"
In the mid 90's we were told "It's a new era of low inflation, high interest rates will never be back"
In the late 90's "After the Olympics RE will dive"
Early 2000's "Property never goes down"
Every time the premise was "This time is different"
But there's is no reason to believe that all those scenarios will not repeat. Along with >7% unemployment.
Uncanny. This is extraordinarily similar to my own view. I think we are likely to see a repeat of the 90's as we wait for people's ability to buy to catch up. I wouldn't be at all surprised to see 4-8 years of little or no growth, followed by another decent boom when everyone realises "I can own for less than I rent for". My strategy is unchanged - to buy an IP every year or so for the next 8-9 years, seeking a good deal each time.
>"In the 80's "High Oil is here to stay" & "There will be no oil by 2000""
Apologies, this was the 70's.
It seems that most people here don't remember what it's like to have a real recession, well we might just have to have another one. (even though i think it's already underway)
Apologies, this was the 70's.
It seems that most people here don't remember what it's like to have a real recession, well we might just have to have another one. (even though i think it's already underway)
Last edited:
There is one great thing about the doom & gloom stories...
MORE PEOPLE DESPERATE TO SELL CHEAP! More people want to get out of property, and less people want to buy, so all the houses on the market... [size=-10]the're all mine... MINE MUAHAHAHAAAAA ALL FOR ME!!!
I want to buy it ALL, even your children! How much for the children?[/size]
MORE PEOPLE DESPERATE TO SELL CHEAP! More people want to get out of property, and less people want to buy, so all the houses on the market... [size=-10]the're all mine... MINE MUAHAHAHAAAAA ALL FOR ME!!!
I want to buy it ALL, even your children! How much for the children?[/size]
[size=-10]the're all mine... MINE MUAHAHAHAAAAA ALL FOR ME!!!
I want to buy it ALL, even your children! How much for the children?[/size]
lay off the drugs vincenzo!
The only problem is when,for every desperate vendors outhere there is just as many FHB,Investors desperate to buy back in,unlike the ASX Equities markets were investors can be wipede out over several daysThere is one great thing about the doom & gloom stories...
MORE PEOPLE DESPERATE TO SELL CHEAP! More people want to get out of property, and less people want to buy, so all the houses on the market... [SIZE=-10]the're all mine... MINE MUAHAHAHAAAAA ALL FOR ME!!![/SIZE]
[SIZE=-10]I want to buy it ALL, even your children! How much for the children?[/SIZE]
property markets take time to find a balance,property is slow moving target..willair..
Actually very similar to my view as well. Although I think CG can be achieved by specific demand for good suburbs, and suburbs which offer something extra, like proximity to train stations, bus stops, employment etc will have good prospects for good CG, even though the wider market will appear flatter.
What often happens during higher interest rates is people stay put and renovate their houses. So I think there will be a build up of demand before it all starts again. And the longer it builds, the bigger the 'explosion'. If rates stay high, and inflation stays high, business confidence continues to be low, unemployment rises etc then the demand will continue to build. Once rates start to turn, it will probably take off then becuase people will bank on their repayments continuing to drop.
There is one great thing about the doom & gloom stories...
MORE PEOPLE DESPERATE TO SELL CHEAP! More people want to get out of property, and less people want to buy, so all the houses on the market... [size=-10]the're all mine... MINE MUAHAHAHAAAAA ALL FOR ME!!!
I want to buy it ALL, even your children! How much for the children?[/size]
lol.
Great thread Michael,
and great read everyone.
Back to unemployment. I think we will see a greater % rise in the next quarterly figures. I don't think this quarter has shown the real figures. That ought to keep consumer spending down and help us hit the bottom we are are waiting for.
Just out of interest. - North Avoca - beachside suburb on the Central Coast saw 46% growth in the last quarter.
We also had a beachfront house at Terrigal sell for $5.6 mil last weekend - record breaking for the coast.
The house next door to me was bought as a holiday home by a banker from Macquarie Bank.
There is money out there and the people that have it are not buying shares are they?
Regards Jo
Nice post Piston,
Does anyone remember the recession of 9/11?
It was plastered all over the front cover of Times and the Bulletin. "World Economists say Recession is now Ïnevitable."
Regards Jo
Exactly tubs. Simple parallel, is whilst the ASX is in a bear market, there are plenty of people investing in sectors and companies that are providing very solid returns. Same applies to property.
Similar threads
