Volatile market and why? Explained.



From: Jim Kouta

There are three crucial factors one has to consider when buying into Real Estate NOW, especially Sydney\Melbourne 8km radius around the city.

1. Owner\occupiers
2. Investors
3. Renters

1. Owner\occupiers have bought forward their purchase due to lower interest rates, as a result this has inflated prices.

2. Investors have moved out of shares in droves and put their money into property, as a result this has inflated prices.

3. Renters have also bought forward their purchase due to the Government grants, as a result this has inflated prices.

As you can see, prices have escalated almost 100% in some areas. So even though it's affordable now, even a slight interest rate increase will deter many buyers in the future. The Government Grant won't last forever and investors will turn back to shares in the next year or so once they realise creating wealth through property takes a VERY LONG TIME. Most people don't want to enjoy life at 65 when gains are realised. Given that prices have increased so much, it's inevitable there will be a correction, how big, nobody really knows. But remember, the bigger the boom, the bigger the bust.


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Explain This!

Reply: 1
From: Cathy Baxter

Sly Dog

Would your regional properties be on the coast or inland - ie west of the mountains?

Experience shows me that inland properties have had minimal growth and some negative. Virtually nothing grows here unless you create it yourself.

But coastal properties are a different category altogether and are benefitting from lifestyle relocations -particularly the sea change by baby boomers.

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Explain This!

Reply: 1.1
From: Sim' Hampel

No... explain this Sly Dog... you've got a name... you're no longer anonymous... yay !


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