I guess it depends on the purchasers ability to conduct proper DD. This includes understanding how to value, and an appreciation of risk.
What will you do when Rudd decides to turn the FIRB tap off?
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I guess it depends on the purchasers ability to conduct proper DD. This includes understanding how to value, and an appreciation of risk.
Have to disagree there Fudge. I reckon most FHBs who bought in 08 & 09 have already seen 20-30% capital growth, depending on suburb, house/unit etc. So naturally the market would have to fall back by that amount before they were even at risk of -'ve equity.
Thanks for the great posts here guys, its my first day on this forum, I only got the username from here :
http://www.bugmenot.com/
Hope I dont get kicked out now!!
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Have to disagree there Fudge. I reckon most FHBs who bought in 08 & 09 have already seen 20-30% capital growth, depending on suburb, house/unit etc. So naturally the market would have to fall back by that amount before they were even at risk of -'ve equity.
Thanks for the great posts here guys, its my first day on this forum, I only got the username from here:
http://www.bugmenot.com/
Hope I dont get kicked out now!!
Repayments increasing. I am not talking about -ve equity.
F
Yep Exactly, As the old saying gos, you make money on what you bought the house for....not what you sold it for.
Cheers,
F
Just from the sidelines,but what other form of valuation can you use ??? from the one that comes down too one item,the price people are prepared to pay,it never been the price just the location,and unless Australia falls into something like the US where some spend their whole in a trailer park..willair..http://www.bing.com/videos/search?q...3147AA6ACCA8BBB89F8B3147AA6ACCA8&FORM=LKVR38#
I don't think if Rudd changes the rules on Foreigners buying property will have any effect on first home buyers.
Maybe foreign buyers are having an effect on high price suburbs (IE. Balwyn) but the effect that they are having on places that the majority of first home buyers can afford to buy is pretty close to nil. Suburbs like Balwyn will never be affordable for the majority of first home buyers.
Yes people like to live in the best suburbs in the world, however for a two income family, the Australian dream is still affordable. They just have to make some sacrafices. (at least in Melbourne) people should look at Frankston , Werribee, Naree Warren, etc.
I am also a poential first home buyer with an investment property.
Maybe foreign buyers are having an effect on high price suburbs (IE. Balwyn) but the effect that they are having on places that the majority of first home buyers can afford to buy is pretty close to nil. Suburbs like Balwyn will never be affordable for the majority of first home buyers.
Yes people like to live in the best suburbs in the world, however for a two income family, the Australian dream is still affordable. They just have to make some sacrafices. (at least in Melbourne) people should look at Frankston , Werribee, Naree Warren, etc.
I am also a poential first home buyer with an investment property.
The last boom disproved that... at least to me.
Huh?
Then why sell? (If cashflow is good with the property, then why sell....just like a loss on paper with shares isn't it? You would wait until it turned positive)
F
GEE! you know so much clever stuff penny, cheers.
haha, thats what getting a job with the Department of Housing two weeks ago will do
I honestly think that this whole "foreign investor" thing is because the $300k limit on the price of a house that the permanent residents and 12 month+ visa holders are allowed to purchase has been lifted (I'm not sure to what level) and, at least in Melbourne (with its high auction culture), this would make these people much more visible participants at auctions...hence all the frenzy. JMHO.
hehe, I'm enjoying the new job, Ive always been obsessed by housing, one way or the other and now I get paid to enjoy various sides of it all day
Talk to you on Wednesday night.
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The implication being that now is the last chance to buy a property before they become priced out of our reach forever? I believe such sentiment was common during the bubble of 2006/2007?
It appears I am one of the few people here who are not completely bullish about the future of Australian property
yes but i bet you wish you bought in melb at the height of that bubble! even if u buy now and it goes down short term, long term u will be glad u bought
Hello to you Whatever 123, and to all you other somersofters who have got investments in the booming suburbs of Melbourne and Sydney.
Someone may have mentioned this to you before but it is worth saying again.
The Australian property market is more than just these selected star Sydney and Melbourne suburbs.
Not too many FHBers who have bought in any other part of Oz would have experienced 20-30% capital gains increase for their first home.
Most aussie FHBers can only wish for such gains.
Completely disagree. There are places all over Australia, regional and metro, that would have delivered these kind of gains over the past few years.
"The price people are prepared to pay" is useful to give you an idea of the price NOW. But may not be so accurate in the long term because affordability can change fairly quickly (as we have seen overseas).
Using current prices and affordability (ie what people were paying) in the USA has sent many people broke, so what did they do wrong? What other valuation method could they have used to determine property was overpriced?
I don't know the exact answer to this as there are various methods, but if buying as an investment, I would have thought positive cashflow is a must. So if you can;t get positive cashflow, perhaps the price is too high.
There's no fair - never was.
And as for unlucky; the only people who are unlucky are the ones who don't make their own luck.
Everyone looks for reasons not to buy - this whole issue of mythical Chines landbankers is just another one, drummed up on ACA and the like. Naturally, there is always more interest in the more desirable areas, and the Chinese only frequent the urban areas, so they will always be looking in these areas that you are looking.
If you want to be lucky, buy in an area that is not "hot" right now, but located in an area that will be desirable in the future.
Where is this area? Well, that's all in your research and DD.
The solution is simple when you are a FHB; look in areas that you can afford right now if are ready to buy.
Will this mean looking further away from work? Yes, probably.
That's what all FHB's usually need to do unless their parents can kick in and help.
I remember getting off the tram with my mother at the end of the line on Burwood hwy as a 5 year old, and walking quite a ways down a dirt road to visit her sister (my Auntie).
Burwood was a new estate then; I'm talking mid-60's, and my Uncle and Auntie lived there, and he worked in St.Kilda rd.
That's what they had to do to buy their dream home as a young couple.
hi, new here so i thought id post something to get things moving .
A house only worth what some one is willing to pay . case in point
scarborough w.a. one street of beach bought early 2007 380k.
sold 2008 (owned 18 months) 545k
since rezoned from 16 villa's to 57 units with ocean view as 8 story limit.
same place sold feb this year 455k
makes a mockery of the media beat up of prices ..
i still own property but that is 5 acres near rainbow beach paid 79k for .
wouldn't buy in the city again as the prices are not sustainable .
if prices grow at an average of 7 % and wages grow at 5% some one tell me in ten years how this can work . starting with 480k average house to 60k average wage please tell me the wage in ten years time and the average house price .. think some will get a suprise and then see that it wont work .
the next few years going to be very interesting to say the least .
fundamentals in the stock mkt don't add up either .governments all over the world propping up bubbles left right and centre with borrowed or printed money .
A house only worth what some one is willing to pay . case in point
scarborough w.a. one street of beach bought early 2007 380k.
sold 2008 (owned 18 months) 545k
since rezoned from 16 villa's to 57 units with ocean view as 8 story limit.
same place sold feb this year 455k
makes a mockery of the media beat up of prices ..
i still own property but that is 5 acres near rainbow beach paid 79k for .
wouldn't buy in the city again as the prices are not sustainable .
if prices grow at an average of 7 % and wages grow at 5% some one tell me in ten years how this can work . starting with 480k average house to 60k average wage please tell me the wage in ten years time and the average house price .. think some will get a suprise and then see that it wont work .
the next few years going to be very interesting to say the least .
fundamentals in the stock mkt don't add up either .governments all over the world propping up bubbles left right and centre with borrowed or printed money .
This may be a simplistic opinion what I'm going to attempt to say, but I don't see why certain properties can't keep increasing if you buy well. Not everyone is on the same wage, and different industries will grow at different rates. Therefore why couldn't you say that if you bought well, i.e. an area that is in very high demand and low supply that would keep going up faster than the average wage. As population keeps increasing, demand will keep increasing for those areas, so it might push out those on a certain income level and bring in a higher level of earners. So whilst the average salary might only be increasing with inflation for example, the demographic of an area could change. People accept they can't afford a particular area, so move into another with their higher than average salary, then pushing up that area. I'm no economist, and what I'm trying to say makes sense to me in my head, although not sure I'm getting my point across very well.
This may be a simplistic opinion what I'm going to attempt to say, but I don't see why certain properties can't keep increasing if you buy well. Not everyone is on the same wage, and different industries will grow at different rates. Therefore why couldn't you say that if you bought well, i.e. an area that is in very high demand and low supply that would keep going up faster than the average wage. As population keeps increasing, demand will keep increasing for those areas, so it might push out those on a certain income level and bring in a higher level of earners. So whilst the average salary might only be increasing with inflation for example, the demographic of an area could change. People accept they can't afford a particular area, so move into another with their higher than average salary, then pushing up that area. I'm no economist, and what I'm trying to say makes sense to me in my head, although not sure I'm getting my point across very well.
here is the answer at 7% growth the average house price in ten years would be 944k
average wage grows by 5 % in ten years time 97k
repayments on 944 k are 76k a year .. that 97k is pre tax .
ok so your saying richer people will move into the area to maintain price growth .where are these riches coming from .
the public debt in australia is now approaching 200% .its has to be paid back and we cant mow each others lawn forever and sell each other ever increasing houses . we need to get the country back to producing something .when the piper comes a calling things will shock people
Ah, the return of the D&G.
I look at it this way... its not just Chinese. Its Indians and all sorts of different nationalities. And they're all bringing in way more $ than pretty much every aussie I know.
Question may be if we didnt have foreign investment with all of their $$$ where would Oz be propertywise - the US? England? (I dont know so I'm legitimately asking the question).
To allow FI to increase means $ which state govts are desperately lacking and for us as the investors/owners of properties means we get to be the beneficiaries of this.
I look at it this way... its not just Chinese. Its Indians and all sorts of different nationalities. And they're all bringing in way more $ than pretty much every aussie I know.
Question may be if we didnt have foreign investment with all of their $$$ where would Oz be propertywise - the US? England? (I dont know so I'm legitimately asking the question).
To allow FI to increase means $ which state govts are desperately lacking and for us as the investors/owners of properties means we get to be the beneficiaries of this.
Had a similar experience in 2007. Between the time we started looking, Jan 2007 and the time we bought Nov 2007 prices had moved up around 25-30% in the areas we were looking in. We did buy at the peak though, then in late 2008/early 2009 values were down maybe 20%. Prices are now well ahead of those 2007 levels.
I think you need to make a decision based on the need for a house rather than giving thought to trying to time the market.
Having said that be very careful about "buying just to get in". Make sure the house is definately ticking alot of boxes for you, if it takes alot of time to buy that is how it is, what direction the market will take is just a gamble and even if it falls the right house still might not come up when it does.
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