would you put off purchasing for a little while while rates drop?

[BV]

Hi BV,

Which area are you looking at? I noticed your from Sydney. I am currently looking at entry level units in Western Sydney.....

I am monitoring listings of houses in several Sydney suburbs (mostly North & South West).

Have you bought any units yet?
You can still get 2 bedroom units in Liverpool for considerably less than $200K but from what I see on the net they go very quickly.

The NSW First home buyers grant is now at $17K ($14+3K) for established properties so there will be a lot of competition for entry level units.

I am interested in houses though and I am currently trying to get my finances organised (waiting for 2 valuations to be done). Hopefully people will stay away for a bit longer because I've heard that prices will drop by 40%...

cheers

 

[Tash_85]

Sitting back.
Holding some good stock. Mostly newish. Low gearing.
Waiting to see some real bottom to all of this.
Never been through such uncertain times.
Travelling and studying a lot of areas.

When I can see some positive movement i will look to buy.
I imagine Sydney will be the litmus. If I miss that i will circle out from there.
Then move interstate and repeat.
What you miss somewhere you pick up elsewhere.

Always opportunities.


But not at the cost of lifestyle and sleep factor.

Gee Cee

(Bored laying at the beach & eating Aldi Choc cake)

LOL- sorry just saw that- eating aldi choc cake!! Is it good? I cant shop there some basics are okay but my parents hate the coffee its a fake nescafe made in thailand its vile. I drink the poppers from there and the muesli bars they are yum. Gosh i sound like a kid ha ha

 

[Gee Cee]

The small jars of Nescafe are OK. Do not buy the large jars

 

[sparky23]

Whats going on Aldi seems to be taking over the forum! LOL

 

[yadreamin]

sparky
There are a couple of positive write ups in our Sunday Times today about Rockingham , hope it helps you with a sale or 2.
cheers
yadreamin

 

[Nth Brisbanite]

Personally we'll be sitting on the fence for the next year or so.
Not because of rates but because these are strange times in the market and there's potential for significant price drops in the next 12-18 months as things tighten up....

R

I agree with you ArJay. I can't see house prices going up at all over the next year. With unemployment increasing and credit being restricted, property is likely to go down in the short to medium term.

You are crazy to invest in something which is going down in value even if it is cash flow positive and interest rates continue to drop. It's the very reason why very few are buying real estate in Japan and USA even though it is so easy to get cash flow positive property. Interest rates in Japan are close to zero while in USA they are at record lows and still, people won't buy real estate.

I probably could buy something now but will wait until "real" bargains come along before I make a move.

 

[Y33]

Nth Brisbanite,

Why do you think people are not buying property in Japan?
There is a lot of development going on and new residential areas being created.

 

[MichaelW]

I agree with you ArJay. I can't see house prices going up at all over the next year. With unemployment increasing and credit being restricted, property is likely to go down in the short to medium term.

Not a bad strategy. Why add risk to your portfolio before you have to and before the future is more certain. Debt = risk, pure and simple. So despite the servicability equation, it is a risk mitigating strategy to minimise debt in times of uncertainty.

I liked this article today:

The bottom of the interest rate barrell is a long way off

Australia's situation is fundamentally better than that of the northern hemisphere. Losses in the financial system are less severe, there has been no housing market collapse (and won't be, although lower house prices are inevitable), the country's main export destination is the one part of the world still showing reasonable growth despite China's slowdown, and even after yesterday's larger than expected 1 percentage point cash rate cut, there is considerable room for more stimulus.

I think this commentator has got it about right. The housing market won't collapse for all the reasons we've espoused here ad nauseum, but it is inevitable through a tough recessionary type environment for prices to soften a bit. If you don't need to buy now, then there's no real rush. 2009 might be an even better time to buy, and by then the future will be more certain. However, if your personal income is secure, then now isn't a bad time to buy as competition is already significantly reduced. It remains a buyers market.

Just my thoughts. I personally still plan to develop my MUH site in Mona Vale in 2009 and take on more debt as the significant improvement to my cash flow position justifies the additional debt (risk) IMHO.

Cheers,
Michael

 

[Jacque]

...The NSW First home buyers grant is now at $17K ($14+3K) for established properties so there will be a lot of competition for entry level units.

Actually Bill the extra $3K supplement is only for new builds. Established properties qualify for $14K only... though it's still very generous, in MHO.

http://www.osr.nsw.gov.au/benefits/first_home/