Hi all,
It seems most people I speak with in regards to the current boom in residential prices agree that this level of capital growth is unsustainable in the long term. (If you dont agree there is a boom, example #1 Box Hill South is now a million dollar suburb: http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=box hill south)
It seems fairly obvious that at least part of this growth is due to foreign investors inflating prices, which in turn ripples further out (eg; Mitcham, Nunawading, even Ringwood if we take Melbourne as an example).
The point of my question is, if you agree with these two points, then have you thought about what will happen when the government decides to "turn the tap off" so to speak? The loosening of the FIRB policies appears to have been a direct result of kevin rudd $hitting himself as most of the western worlds residential property prices were dropping in 08-09, most would agree if his intention was to prop up the market he has succeeded many times over.
Being first home buyers, my girlfriend and I have been looking to purchase for the last 12 months, and each month that goes past we get more and more bewildered by the state of the market. We first started looking in Burwood, Burwood East, Vermont, Vermont South, gradually getting priced out every weekend. We are now considering buying in an outer area such as Ringwood or Upper Ferntree Gully, but my biggest concern is that this market is falsely inflated by foreigners buying our land.
In short, I have very little confidence in buying into this market when all it takes is a politician to sign a new piece of legislation thus wiping out a big chunk of my equity by disallowing foreigners to purchase Australian Real Estate. The contrarian investor side of me wants to wait until this happens and using it as a buying opportunity, but how long will that be?
It seems most people I speak with in regards to the current boom in residential prices agree that this level of capital growth is unsustainable in the long term. (If you dont agree there is a boom, example #1 Box Hill South is now a million dollar suburb: http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=box hill south)
It seems fairly obvious that at least part of this growth is due to foreign investors inflating prices, which in turn ripples further out (eg; Mitcham, Nunawading, even Ringwood if we take Melbourne as an example).
The point of my question is, if you agree with these two points, then have you thought about what will happen when the government decides to "turn the tap off" so to speak? The loosening of the FIRB policies appears to have been a direct result of kevin rudd $hitting himself as most of the western worlds residential property prices were dropping in 08-09, most would agree if his intention was to prop up the market he has succeeded many times over.
Being first home buyers, my girlfriend and I have been looking to purchase for the last 12 months, and each month that goes past we get more and more bewildered by the state of the market. We first started looking in Burwood, Burwood East, Vermont, Vermont South, gradually getting priced out every weekend. We are now considering buying in an outer area such as Ringwood or Upper Ferntree Gully, but my biggest concern is that this market is falsely inflated by foreigners buying our land.
In short, I have very little confidence in buying into this market when all it takes is a politician to sign a new piece of legislation thus wiping out a big chunk of my equity by disallowing foreigners to purchase Australian Real Estate. The contrarian investor side of me wants to wait until this happens and using it as a buying opportunity, but how long will that be?