What will happen to Property prices in VIC..

[Property Meister]

HI everyone.....

Was just wanting to get everyones opinion of property prices for VIC... as I am a newbie...

in 2001 when the property prices were sky rocketing, I thought, no way will this continue, so I didn't buy any properties (prolly couldn't afford them anyways) however here we are a few years later and things have not slowed down.. i got burnt by the share bust in 2000 or whenever it was... so am a bit scared...

however, I still get the same feeling that property prices, won't necessary crash but may have no growth for the next few years, I also read all the stuff about the US crisis, and maybe 2008 will be when the property prices crash ( i know this is all subjective), however, I got burnt by shares, and don't want to get burnt......

should I just wait until end of 2008 to start aggressively investing.....

any feedback would be appreciated!!

as I am getting a bit worried to be honest!!

 

[agent007]

HI everyone.....

Was just wanting to get everyones opinion of property prices for VIC... as I am a newbie...

in 2001 when the property prices were sky rocketing, I thought, no way will this continue, so I didn't buy any properties (prolly couldn't afford them anyways) however here we are a few years later and things have not slowed down.. i got burnt by the share bust in 2000 or whenever it was... so am a bit scared...

however, I still get the same feeling that property prices, won't necessary crash but may have no growth for the next few years, I also read all the stuff about the US crisis, and maybe 2008 will be when the property prices crash ( i know this is all subjective), however, I got burnt by shares, and don't want to get burnt......

should I just wait until end of 2008 to start aggressively investing.....

any feedback would be appreciated!!

as I am getting a bit worried to be honest!!

Hi,

should I just wait until end of 2008 to start aggressively investing.....

Investing or trading?. Investing is a long term proposition and it has to do with time in the market as oppose to timing the market. You don't wait to buy real estate, you buy real estate and then you wait...or so goes the say.

Noone knows what would happen next day let alone next year. Who ever tells you the opposite shouldn't be trusted.

Work out what exactly is that you are scare off and overcome that fear. Perhaps, it is not necesary the share market, or the investing activity per se but, the guessing, the lack of planning or knowledge. We all have being there one way or another. You shouldn't be investing let alone trading on tips or some one elses opinions.

Hope this help,
James

 

[agent007]

In regard to your question on the title:

>What will happen to Property prices in VIC..

The same that to property prices in the rest of AUS. It will go up. The question is what's the time frame you're looking at????. I can almost guarantee you that 20 years from now, all will look cheap at today's prices.

Rgds,
James.

 

[alexlee]

however, I still get the same feeling that property prices, won't necessary crash but may have no growth for the next few years, I also read all the stuff about the US crisis, and maybe 2008 will be when the property prices crash ( i know this is all subjective), however, I got burnt by shares, and don't want to get burnt......

should I just wait until end of 2008 to start aggressively investing.....

any feedback would be appreciated!!

as I am getting a bit worried to be honest!!

To be fair, your feelings didn't work out last time.

Worried about what? Investing, or not investing? I think you're worried about both, which is common. Instead of choosing when to 'aggressively invest' (a term I don't use) why not 'progressively invest'? Buy cheaper properties regularly. If your borrowing limit is $500k, say, buy a $300k property a year instead of maxing out in a short period of time. It's just like dollar cost averaging for shares.

If you got burned in 2000 in shares it means you were probably in tech stocks? If you'd held ordinary blue-chips, you would have come roaring back by now. Using the same theory, buy ordinary properties tenanted by ordinary people.
Alex

 

[Kennethkohsg]

Dear Akumaslair,

1. After reading your post, I will suggest that you get yourself properly educated first regarding about basic rules for property investing as well as about the Victoria property investing/operating environment, its property cycles and market trends and conditions before you decide to invest.

2. Listen to your own inner trueself. Learn to properly confront your various inner "fears" (False Expectations Appearing Real) with facts and with your own clear mind and logical thinking. In this respect, it may be useful for you to consider using the feedback from the more experienced members in this forum as a guide for your own decision-making. Be self-responsible to make the investing call yourself and be ready to accept the full consequences for your own decision-making, whatever the outcome may be.

3. Please also learn how to properly manage the various investing risks first and find ways/means to "fail-proof" your own investing strategies/plans where neccessary.

4. When you are ready, mentally and psychologically to invest with all the required supporting investment capital, always remember to start small first;- where one can afford to lose where neccessary so that one can properly learn from one's own real life investing experience where neccessary and learn to improve on your property investing strategies/plans such that you will eventually learn how to properly invest and to succeed in all your property investing.

5. Do not be unduely worried about the market. The market will take care by itself.

6. If you seriously want to "exploit" the present rising market in Victoria soon, please get yourself properly educated as quickly as you can. Know what are the various investing risks and how to properly manage them promptly as you learn/start to invest.

7. For your kind update and further considerations, please

8. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

You shouldn't be investing let alone trading on tips or some one elses opinions.

Hope this help,
James

**************************

I agree with James.


Cheers,
Kenneth KOH

 

[Property Meister]

thanks for your thoughts everyone..

I think I may have confused some people.
I should explain better,

do you know how shares over the past 12 months have rocketed up, (yes, even including the so called correction a few weeks ago), I now a buddy of mine who invested in a geared share fund probably about a week before hte correction,

now he has lost 10% on his $50k investment, I know its pure bad luck, but I simply do not want this to happen to me, what I was suggesting, was if there is a highly likelyhood of the propoperty prices to be stagnant for the next 12 months, then although I won't make a loss, however, I could put my funds in shares or emu farms or something else.

I understand that property is in the long term investment, and I do not intend to sell, however I would like to feel that I have learnt something in the share crash in 2000 or whenever it was..... I would feel like a real idiot if I purcahse one now, and in 12 months time see articles in the paper "property prices in VIC/AUS drop 20%" or "no property growth expected in the next 4 years"...

am I blabbering on ?? or am I making sense,

 

[alexlee]

now he has lost 10% on his $50k investment, I know its pure bad luck, but I simply do not want this to happen to me, what I was suggesting, was if there is a highly likelyhood of the propoperty prices to be stagnant for the next 12 months, then although I won't make a loss, however, I could put my funds in shares or emu farms or something else.

So what? What's your horizon? A year is NOTHING in property (or shares, for that matter). If you are worried about losing 10% on a $50k investment, seriously, forget about investing. Especially with property you really need the patience to wait it out. Both booms and busts, by the way: selling too early in a boom is just as bad as selling during a bust.

I understand that property is in the long term investment, and I do not intend to sell, however I would like to feel that I have learnt something in the share crash in 2000 or whenever it was..... I would feel like a real idiot if I purcahse one now, and in 12 months time see articles in the paper "property prices in VIC/AUS drop 20%" or "no property growth expected in the next 4 years"...

The two parts of your statement don't make sense. If you plan on holding for the long term and don't intend to sell, who really cares what the short term price moves are? You are never going to tip the top and bottom of the market. Think of it this way, are you going to feel more stupid if you buy and the market crashes, but you hold for the long term, or you don't buy at all?
Alex

 

[Property Meister]

alex: true true.. agree...

I personally was about to invest with my friend, but decided to hold back, and managed to get back in about 2 weeks after the share correction, and I managed to pick the 12 month low of the share fund, so now I am pretty happy about it!!!

 

[alexlee]

alex: true true.. agree...

I personally was about to invest with my friend, but decided to hold back, and managed to get back in about 2 weeks after the share correction, and I managed to pick the 12 month low of the share fund, so now I am pretty happy about it!!!

If you stress too much about the short term you're going to go nuts. I'm assuming you're fairly young.

I have one IP that's probably worth double what I got it for about 7 1/2 years ago. If it drops 10% tomorrow, it really isn't a big deal, as I don't intend to sell and I believe it'll keep going up long term. On the other hand, Brisbane has been jumping lately, and my properties are going up. Am I dancing a jig? Not really. Again, I'm not planning to sell, and it's not like I'm going to refinance to buy a car or anything.

It's best to keep emotions in check. Otherwise you get ulcers. And if you spend too much time trying to pick the troughs, you'll probably end up investing less, and in the long term it's gross assets that matter (unless you really can pick all the troughs and buy them: don't kid yourself).
Alex

 

[Kennethkohsg]

what I was suggesting, was if there is a highly likelyhood of the propoperty prices to be stagnant for the next 12 months, then although I won't make a loss, however, I could put my funds in shares or emu farms or something else.

I understand that property is in the long term investment, and I do not intend to sell, however I would like to feel that I have learnt something in the share crash in 2000 or whenever it was..... I would feel like a real idiot if I purcahse one now, and in 12 months time see articles in the paper "property prices in VIC/AUS drop 20%" or "no property growth expected in the next 4 years"...

am I blabbering on ?? or am I making sense,

*****************************************
Dear Akumaslair,

1. Honestly speaking, I do not think that your post makes much sense to me.

2. I think you fail to understand the basic game rules for investing;- be it for property or/and share investing. Please note that there is this process called "Due Diligence" which all investors have to do in order to succeed in their own investing.

3. None of the forumites including myself can guarantee you whether certain things will or/and will not happen in the near future. As human beings, we are all falliable;- Only God will know exactly what will and will not happen tommorrow.

4. Being human, we all can express our own (different) opinions;- whom then, do you want to choose to believe then?... Why don't you want to do your own due diligence and learn to ascertain the proper facts required to be used for your own decision-making process instead.

5. For your kind update and further considerations, please.

6. Thank you.

regards,
Kenneth KOH

 

[Property Meister]

my oh my... it seems like I have hit some nerves judging by some of the responses

before I annoy anyone else, I will try to summarise my statement/opinion/question in short so at least it makes sense

thanks for everyones patience...

ok here it goes.

"well, I want to invest in residential property in VIC for the long term, however I am concerned by articles
http://www.news.com.au/business/story/0,23636,22445039-462,00.html

stating further dropping prices in Sydney, what is everyones opinion on property prices in general for the next 12 months in VIC due to credit fears, share fears etc. Should I simply wait 1 year to see what the effects are and then to buy in 12 months time, as I can put the funds avaialble somewhere else."

END!!!

 

[Twitch]

We can all make guesses, but no one can tell you what will happen over then next 12 months.

I think this is where advice getting ends and personal decision time begins.

 

[alexlee]

To be honest, akumaslair, I just find it frustrating because you sound like so many of my friends who ask me about property. They start off saying they believe in property over the long term, then never do anything because they're concerned about what's going to happen to the market in the short term.

They spend years making excuses about why they shouldn't buy property, all the while saying 'I wish I bought property when you did' (even though I've bought property that went down or stayed flat for a period).

My first property is now worth around double what I bought it for. Would it affect how I feel now if I'd paid 10% more or less than I did? Short term, maybe, but long term (and it has only been 7 years) it really doesn't. Say CBA is trading at $55 now. If you'd bought it 10 years ago, would you really care if your purchase price was +/- 10%?

What you seem to be doing is putting short term emotional pain above long term returns. Common but you really have to get past that to be a property investor.
Alex

 

[Property Meister]

fair enough... if these type of questions are going to piss people off, then I will just stop asking about these ones...
thanks anyway

 

[alexlee]

fair enough... if these type of questions are going to piss people off, then I will just stop asking about these ones...
thanks anyway

It just seems that you're not listening to our answers. We've all had those concerns that you have. We ignore them and push ahead. There is nothing that will really get rid of those 'what if I buy and the market tanks' fears EXCEPT experience. And if you don't buy, you never gain that experience.

Most of us have held property long enough to realise that you have to look past the short term. It's to your detriment if you don't. It doesn't benefit me whether you buy or don't buy property.

Put it this way, if you're looking for someone to tell you 'you should buy property at so and so time because after that the boom will start', it's just not going to happen. There is no such thing as perfect confidence when buying. There is a risk, that's why the returns are there.
Alex

 

[s_t]

I think some people are just a little frustrated that you'd like an answer to something that is unanswerable, and don't seem to recognise that it is unanswerable!

Everybody is happy to tell you what they expect to happen to prices in Vic over the next 20 yrs (they will go up), and to most of us that is what is important!

You probably would have been better off had you not successfully picked that 12month share fund low - for psychological reasons. It seems you now think that picking the timing or forecasting a year out is something you/others should be able to do - hence the unanswerable question to this forum.

You are welcome to ask questions, but I think you've already got your answer to that one

 

[Property Meister]

ok.. let me change the question, so that I can get some answers

I am looking at Box Hill In Vic, the advertised price is $420-$460k, other then going through recent sales, $xxx per sq m, and other key factors (pros/cons) such as close to shopping centres, close to public transport, too close to main roads, noise levels, safety etc. etc. etc. what else should I be looking at. am looking to buy as a investment property....

I am unsure what price I should offer or how I should approach it???

further more as an example, if my research indicates that the recent sales indicates that the property would be worht approx $435... how should I approach making offers????

hopefully this will get some answers

 

[TheAnalyst]

No I truly understand you mate

akumaslair,

I truly understand what you are feeling as a new player. Even I am a 3-5 year player and I am still very nervous on the market.

I totally agree with you that you do not want to see your investment drop 20% next year (market term). My opinion:

1 - I agree partially with Kenneth and Alex on the property investment thing -- long term; but you do want to see your property perform.

2 - As you can not see the future of the market, but you do not want to lose another opportunity in the potential up market, then to minimise the down turn, you have to buy wise --- it is only way you can stay happily and will not see your property down 20%. You must buy cheap NOT try to sell expensive.

 

[Kennethkohsg]

I am looking at Box Hill In Vic, the advertised price is $420-$460k, other then going through recent sales, $xxx per sq m, and other key factors (pros/cons) such as close to shopping centres, close to public transport, too close to main roads, noise levels, safety etc. etc. etc. what else should I be looking at. am looking to buy as a investment property....

I am unsure what price I should offer or how I should approach it???

****************************
Dear Akumaslair,

1. If having done your own personal research and you are still not confident on your own decision, can I humbly suggest that you consider engaging an buyer agent service like those offered by Metropole Properties or/and Monique Wakelin Group in Melbourne for a fee, please?

2. Are you looking at a new house or an old house? If an old house, you will need to engage an experienced building inspector to inspect the house for you first before committing to any property purchase.

3. It may also be helpful as part of your own personal research to find out the long term and short term capital growth data/trends for the "Box Hill" suburb, its rental vacancy rate, median house price and median household income and average household's present mortgage loan repayment as well as to understand what the prevailing key growth drivers for this suburb.

4. Study the comparable sale data over the last 12-24 months for the Box Hill suburb or/and postal code to see the house sale price movement patterns and trends. Consider investing into a Property Report from Residex/HomepriceGuide etc to have a preliminary guide on the property market price and its likely performance over the next 12/24 months.

5. Where neccessary, engage an independant valuer to conduct a pre-purchase feasibility study or to do a pre-purchase valuation report for you regarding your intended property purchase.

6. The Melbourne property market is presently in a "rising market" condition. How long will the market boom and eventually peak out? What happen after that?.... To understand this, you may need to research to its past property cycle trends and market performance;- even though it is openly acknowledged here that past market performance is no guarantee for present/future market performance.

7. I am personally not familiar with the "BoxHill" suburb myself. However, I know other forumites living in Melbourne including the more experienced members like Michael Yardney, would be more than able to better guide you in this area.

8. I agree with Alex and Analyst that we need to "buy" well when we invest. If we are able to effectively negotiate and buy properties at below their respective market values/pricing, we are likely to succeed in our property investing.

9. For your kind update and further considerations, please.

10. Thank you.


regards,
Kenneth KOH