That's a bit harsh; I'm Gen X!
Re building societies:
http://www.widebayaust.com.au/corporate_information/our_history/
And more: http://www.absbuildingsociety.com.au/about.html
What would Ian and Jan do in November 2008?
- Thread starter WinstonWolfe
- Start date
That's a bit harsh; I'm Gen X!
Re building societies:
http://www.widebayaust.com.au/corporate_information/our_history/
And more: http://www.absbuildingsociety.com.au/about.html
Feel free to destroy my argument.
But before you do, do a search on the topic here. Us oldies had free uni, cheap houses, a million investment opportunities that we were just too dumb to take up. It's a never ending topic among X&Yers.
I will, however, accept a simple "Not me" because I know not everyone in a group has the same opinions. Peace!
Mackay, Queensland. PPOR purchased in 2003 for $120k. IP over the back fence purchased 2001 for $86k. 3 very similar houses within a 200m radius sold within the past 3 months for $495 - $550k. I am still scratching my head about these recent sales. Isn't there supposed to be a downturn?
Louise
I don't know what a ranch style kern built house it but I am guessing it is one of those flat roof butterbox things.
Ours are highset 1930's Queenslanders on big bocks in a very nice area. When we bought the IP it was filthy, overgrown, rodent and cockroach infested and full of and surrounded by garbage. Now it is very nice, oozing character and rented for $1000/week. It is also awaiting construction of a second dwelling on the block. I think we might have to hang onto it for yield.
Louise
Mark,
How will we know when the "overshoot of despair" has arrived? Why may it be "this time next year"?
Cheers
I think we might have to hang onto it for yield.
Louise
As you would.
But why din't you tell the whole story first time? There is no way you would get a grand a week for a run-down, overgrown, rat infested "Queenslander", anywhere. You have done more than a "quick reno" on this, in fact I suspect you have done much more than that. It may have been a labour of love that you enjoyed doing and saved money via DIY but this is not the "same" house you bought.
But the "mining town" effect has died in Perth, and is dying in Townsville, so don't be too sure it won't do so there. I can't say it will, just be aware that it has happened elsewhere.
Mackay, Queensland. PPOR purchased in 2003 for $120k. IP over the back fence purchased 2001 for $86k. 3 very similar houses within a 200m radius sold within the past 3 months for $495 - $550k. I am still scratching my head about these recent sales. Isn't there supposed to be a downturn?
Louise
That is amazing stuff. And $1000 a week rent. Well done.
Probably shows though how big this whole bubble got.
See ya's.
Fantastic return though I think Mckay is a special case not the norm as the region has grown very fast due to the mining boom.
I think if anyone wants to upgrade to an up market PPOR and has the capacity not to sell the current one, then this is this is a good time to get a bargain. I would buy a river front one in my street if I had the cash.
I think if anyone wants to upgrade to an up market PPOR and has the capacity not to sell the current one, then this is this is a good time to get a bargain. I would buy a river front one in my street if I had the cash.
As you would.
But why din't you tell the whole story first time? There is no way you would get a grand a week for a run-down, overgrown, rat infested "Queenslander", anywhere. You have done more than a "quick reno" on this, in fact I suspect you have done much more than that. It may have been a labour of love that you enjoyed doing and saved money via DIY but this is not the "same" house you bought.
4 times $86k is $344k plus cost of renovation by builder $180k = $524k.
It was valued at $320k prior to the renovation. All we did personally was clean up the mess, and what a mess there was!
PPOR has had new paint, new roof and a deck added, so some work done but not exactly major work.
Louise
Well I certainly don't know what Ian & Jan Somers would do, and I suspect my own take on what one would /should do right now in the property market will very much depend on a number of variables that could be as different as night and day between one person and the next.
However, and I am sure more knowledgeable people on this site may have a different take, but fundamentals don't change, even in these credit restricted times. Tactics might.
So with regards to property fundamentals this would apply to both bullish and bearish times.
* Well located property eg close to transport, schools, amenities/entertainment or shopping precincts, major arterial roads
* A property type which suts the demographics of the area (eg period home or contemporary residence in inner city areas, larger blocks and homes in more family orientated suburbs)
* Scope and opportunity to improve or add value and/or rental return to the property
* An adequate rental return to service loan obligations
Longer term risk management techniques would also mean looking at having a
* Buffer of cash for the unexpected expenses
* Insurance (Income protection, TPD, Life & L/Lord)
The one skill is to be ahead of the market/herd whether buying or selling (if you have to). This one I suspect is learned over a lifetime, well at least over a few cycles. Maybe allows better perspective and less panic (and of course arguably a bigger investment base). Well, maybe!
If you owned a property today, was tenanted not sure why anyone should panic. In fact, its probably the opposite. Increasing rents and falling IR's, despite them coming off high levels. Limited supply underpinned by large falls in building activity, will keep a supply-demand imbalance for a few years yet, driving up returns. Increase cost of building new homes will also, increase the price of exsting dwellings. For example, how many older style but renovated apartments sell for similar (and in some cases where they are period style apartments eg Art deco for more) than newly built apartments?
I try and keep things as simple as possible so maybe I am oversimplfying the current climate. I guess the one important point is that in most circumstances, you need your job. (Well I know I do). And sometimes, that might be beyond your control.
However, and I am sure more knowledgeable people on this site may have a different take, but fundamentals don't change, even in these credit restricted times. Tactics might.
So with regards to property fundamentals this would apply to both bullish and bearish times.
* Well located property eg close to transport, schools, amenities/entertainment or shopping precincts, major arterial roads
* A property type which suts the demographics of the area (eg period home or contemporary residence in inner city areas, larger blocks and homes in more family orientated suburbs)
* Scope and opportunity to improve or add value and/or rental return to the property
* An adequate rental return to service loan obligations
Longer term risk management techniques would also mean looking at having a
* Buffer of cash for the unexpected expenses
* Insurance (Income protection, TPD, Life & L/Lord)
The one skill is to be ahead of the market/herd whether buying or selling (if you have to). This one I suspect is learned over a lifetime, well at least over a few cycles. Maybe allows better perspective and less panic (and of course arguably a bigger investment base). Well, maybe!
If you owned a property today, was tenanted not sure why anyone should panic. In fact, its probably the opposite. Increasing rents and falling IR's, despite them coming off high levels. Limited supply underpinned by large falls in building activity, will keep a supply-demand imbalance for a few years yet, driving up returns. Increase cost of building new homes will also, increase the price of exsting dwellings. For example, how many older style but renovated apartments sell for similar (and in some cases where they are period style apartments eg Art deco for more) than newly built apartments?
I try and keep things as simple as possible so maybe I am oversimplfying the current climate. I guess the one important point is that in most circumstances, you need your job. (Well I know I do). And sometimes, that might be beyond your control.
Morning WillG,
It may take longer than 12 months.
As i first mentioned, i am invested in shares and cash.
Been involved in the sharemarket for 24 years.
Am not a daytrader.
Learnt a few valuable and hard lessons along the way.
As previously mentioned i have never bought an IP and don't profess to know all the ins and outs of the property market.
What i call an "Overshoot of Despair" is when Unemployment rises to significant levels whereby many people are forced to lower their standard of living significantly. Mortgagee Auctions and Forced Sales will be rampant IMO.
Both commercial and private bankruptcies will increase exponentially.
It might take alot more than 12 months for the Credit Crunch to completely unfold. We are very much dependent on China. Just read somewhere that they are introducing a stimulus package of $586 Billion to help fight the effects of a Global meltdown. Will it be enough?
The meltdown is gathering pace and we are only at the early stages.
There is still the biggest problem to face. The Derivatives market.
This still has not been addressed. Governments throwing money left right and centre to help prop up the economies of the world is only a band aid treatment and will not fix this mess, but rather, it will prolong it and with a greater negative impact
If you were to look at the stockmarket, you will see a fair few companies whereby their shareprice does not reflect their true value. In a number of instances the shareprice is lower than their cash backing not including the rest of their assets. Some would argue that they have been oversold and therefore have reached the bottom. However, sentiment says they have a lot further to fall because no one is prepared to pay the asking price.
At some future point in time i would expect the same scenario to play out within the property market. It might take a lot longer for the property market
to unwind. But the telling signs are starting to emerge. Brisbane seems to be leading the field. Sunshine Coast needs a reality check.
Someone here mentioned that they were either a builder or a developer.
Can't remember which. I think they scoffed at my notion that house prices need to come down to 3.5 - 4.0 times the single average income. His argument was that it costs that much to build a house. Maybe he is right.
Therefore, he will be out of a job as will many others in the building industry.
Sorry about the doom and gloom.
However, that is how i see it and am prepared to be patient.
When i think the time is right i will be more than happy to step into buying a home again. Funny enough, i already know the area i will be buying into.
Sunshine Coast.
Cheers markcoinoz
comes back to my theory (maybe I should become a media tart too? just need some coloured graphs to shock people)... anyway people need housing yet they can't afford it. McMansions will become unaffordabel and we will see the return of 70s style 3x1 hosuing, more grouped dwelligns (1 bed villas) and trailer parks - maybe not the later tho. as much as they are needed councils have a habit of imposing their wish lists on the developers, thus preventing people being housed.
as power and wealth transfers from west to east, our living standards will adjust and in a similar fashion we will move from 4x2's to 2x1s etc. The power based cities founded on snake oil industries such as finance will face enduring recession and the growth states that have real based economies will continue their growth path. It's all just part of a biger trend
Understood and agree that there will be an increase in Mortgagee Auctions, Plasma Tele's in the trading post, cheap 4WD's and V8 ute's. These people have to live somewhere and will be forced to rent.
As mentioned in other posts, expensive holiday houses will be sold when big Land Tax billls arrive - Summer holidays will add further pressure as holiday makers opt to 'stay at home' or go camping rather than paying $1200 per week!
There will be some good buying in the future.
Side Note: Will we see baby boomers re-entering the workforce to 'make ends meat'? If we do, unemployment will rise purely because there will be more workers and fewer jobs.
Cheers
Hi Rockstar,
No i have not read the book nore have i heard of Jan and Ian.
Perhaps Jan and Ian have a completely different view on things.
Suppose i don't feel the same need to use property as an investment vehicle.
Have only ever invested in shares. Much easier to liquidate and maintain.
At some stage i will buy a property. However, it won't necessarily be as an IP.
Maybe i can't see the point in buying something now when i am very confident the prices will come down a lot further within the next year or two.
Cheers markcoinoz
Fair enough mate.
Well I can recommend at least you read Ian's interview to understand what their strategy entails.
http://www.somersoft.com/forums/showthread.php?t=27049
Well I can recommend at least you read Ian's interview to understand what their strategy entails.
http://www.somersoft.com/forums/showthread.php?t=27049
Thanks for the link Rockstar - I haven't read that interview before.
The main points that I picked up from Ian's interview are:
- If you are a long-term buy-and-hold investor, who cares (about the current market)?
- If you can afford it, it is always a good time to buy.
- When you can afford it, buy another property, and another, etc, etc.
- Don’t be a “gunner”.
Cheers,
Bazza
Thanks Rockstar,
Interesting reading with some common sense strategies.
It appears that what started out more as a hobby than an investment turned out to be a full blown wealth creation strategy for them. Ian mentions having shares in a local shopping centre. I hope it wasn't Centro.
From what i gather, the major reason why they have been successful is
1) The timing of their initial investment
2) They had no intentions of selling
3) They used the old addage. KISS
4) They did not have high expectations
5) Their philosophy is based on simple living and not greed.
Unfortunately, many from what i gather in more recent times have not based their investment decisions according to the above and are so heavily geared that it is only a matter of time before it will bite them. Many will lose everything. Same goes for people in the stock market who have leveraged themselves to the hilt using Margin loans & playing with fire trading CFD's.
I am sure Ian & Jan will be looking out for their next investment property.
Cheers markcoinoz
Interesting reading with some common sense strategies.
It appears that what started out more as a hobby than an investment turned out to be a full blown wealth creation strategy for them. Ian mentions having shares in a local shopping centre. I hope it wasn't Centro.
From what i gather, the major reason why they have been successful is
1) The timing of their initial investment
2) They had no intentions of selling
3) They used the old addage. KISS
4) They did not have high expectations
5) Their philosophy is based on simple living and not greed.
Unfortunately, many from what i gather in more recent times have not based their investment decisions according to the above and are so heavily geared that it is only a matter of time before it will bite them. Many will lose everything. Same goes for people in the stock market who have leveraged themselves to the hilt using Margin loans & playing with fire trading CFD's.
I am sure Ian & Jan will be looking out for their next investment property.
Cheers markcoinoz
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