Aussie Property Kaboom

[Guest]

Bottom line is if you own an investment prop or have leveraged up for the family mcmansion (or crumby south mel reno job) you better be praying that the ladder has a one way sign cos the yields don't make sense and the prices arn't eternally binding

http://www.news.com.au/money/propert...-1226091470380
Lol Kaboom. Why would you buy?
I have gathered half dozen anecdotal stories in last 2 weeks. Not once did the seller get anywhere near what he wanted if he sold at auction. For the majority the house was passed in and the refrain "we will wait until the market picks up again" lingered in the breeze.

[Guest]

Ok, Another little anecode..... i know the seller and i know they spent at least $250k on reno and i know they were mortgaged to the hilt and i know all this cos he used to sing about how he had done so well out of property....despite the fact he'd never sold so had never made any money....but had in fact spent hundreds of $K on interest repayment, rates, renovations, stamp duty, auction listings....etc

http://www.onthehouse.com.au/buy/pro...196961?PageNr=

So he bought it for $835K in 2005 and sold for $1050K last week. As you can see he has had it for sale since april lat year. What you can't see is the reserve was for $1450K!!!!!! And to be fair similar local properties had attained that and he had been offered months bf something similar but had decided to go for gold at auction.

So the reson why he sold it was cos he was desperate to sell cos of debt and the person who bought it did it outside of auction and thinks they are getting a bargain. Truth is there were no buyers so you could have strung him along for much lower.

Ladies and gentleman, next level is 2005. After that it is express to mid 90's

[Guest]

Your mate is an idiot. They over stretched themselves

[Guest]

Your mate is an idiot. They over stretched themselves

O OHH. We have an idiot in the room. What?.....when the slide begins the bogans start pointing to the imprudence of the sellers???? lol
happens in the stockmarket , "why would you sell at these prices?", "didn't you apply a stop loss", "just a bad sector"..........jOHN, Look at the price....its undeniable......if you apply 3% componded over 6.5 years you get almost precisely the difference btw 2005 ANd 2011 sales.
Its happening everywhere

Plus, why do you think this guys financial decisions are diconeected from your own. There are many many many grossly indebted and that is always how a property kaboom happens. Ironically it is they who get out first LOL LOL LOL

[Andrew Walker]

Ok, Another little anecode..... i know the seller and i know they spent at least $250k on reno and i know they were mortgaged to the hilt and i know all this cos he used to sing about how he had done so well out of property....despite the fact he'd never sold so had never made any money....but had in fact spent hundreds of $K on interest repayment, rates, renovations, stamp duty, auction listings....etc

http://www.onthehouse.com.au/buy/pro...196961?PageNr=

So he bought it for $835K in 2005 and sold for $1050K last week. As you can see he has had it for sale since april lat year. What you can't see is the reserve was for $1450K!!!!!! And to be fair similar local properties had attained that and he had been offered months bf something similar but had decided to go for gold at auction.

So the reson why he sold it was cos he was desperate to sell cos of debt and the person who bought it did it outside of auction and thinks they are getting a bargain. Truth is there were no buyers so you could have strung him along for much lower.

Ladies and gentleman, next level is 2005. After that it is express to mid 90's

Your mate is an idiot If he was debt ridden why on earth didnt he accept the offer months ago that was close to the reserve ?

[Guest]

Your mate is an idiot If he was debt ridden why on earth didnt he accept the offer months ago that was close to the reserve ?

LOL
"Debt ridden" is relative. Your "6 outright properties" didn't come from the sky. Aussies have the worlds highest household debt. He was no more indebted then most. He just realised owning a property that had been bought in the last 10 years was not that great.
Why didn't he accept? Are you farking kidding? Why doesn't anyone accept an offer bf things start to slide? Property prices can only go up...lol
BTW i think your personal story is full of sh$t. Gone are the days where you can believe anyone spruiking the upsides of this overinflated market.

[stephenj]

keep rising those rents!

[melon....]

LOL
"Debt ridden" is relative. Your "6 outright properties" didn't come from the sky. Aussies have the worlds highest household debt. He was no more indebted then most. He just realised owning a property that had been bought in the last 10 years was not that great.
Why didn't he accept? Are you farking kidding? Why doesn't anyone accept an offer bf things start to slide? Property prices can only go up...lol
BTW i think your personal story is full of sh$t. Gone are the days where you can believe anyone spruiking the upsides of this overinflated market.

His story is believable. Since 2000 Ive renovated or rebuilt 4 properties. Each has returned an average profit of 250-300 K. Not a bad return for an 18 mnth-2 year turnaround on each. You got to do it smart and it helps if you do alot of the work yourself. Not the structural stuff, but stuff like landscaping and decorating/painting. Yo save thousands.

property is still king, but you need to buy blue ribbon. You dont spend 1 million in Rouse Hill expecting to get 2 in 3 years time. You do in Crows Nest, or St Leonards though. or anywhere within 5 kms of the city or Nth Sydney. Thats just one example.

Houses come and go....they are just rocks and mud. Location has always been the secret to real estate.

[crikey chris]

You can always polish a turd in the right area!

Some on here are just talking shit, especially the idiot with 'the plastic watch'. Yes you can lose on property. Unfortunately some in the community believe all the crap from real estate agents re potential/market movements/projected renovated prices etc. All they are interested in is making their commissions!

All reliant on price paid, potential/market of the street/area, and keeping to a budget. Novices do get caught out. I have seen some crazy shit at auctions, where bidding wars end in tears. Keeping emotions out of decision making and keep to your budget is the key.

Maybe I am oversimplifying this, but there are some golden rules. Always do your own research, get the basics right, do it right, make money.
Reno tv shows create the illusion that everyone succeeds, wrong. It is harder than it looks. Once you do a few of these, you know where to shop (not Bunnings!), tradies to use, the necessary local council requirements, tax benefits/land tax etc etc. If you do it right, it is very rewarding to your self and your bank balance!

Have done a few, some I keep for investments, others are sold.
Those on here that criticise the industry just don't get it.

Location, Location, Location!

Dumb investors get caught out. Smart ones succeed

Just keeping it real.

[Andrew Walker]

For the record. Not one of the 6 properties we own is in Sydney. They are in places such as Tuncurry Bonny Hills Port Macquarie and one on the Gold Coast The latter is the one we are selling. Its a done deal waiting on settlement now. We only brought this as a real estate agent whom we are friends with tipped us off saying it was going to boom their real soon. We planned to keep it for 10 years and sell it on. I will also say this. Whilst we have made a good profit on this place had we sold in in 2009 we would have got another 50 grand for it as the market up their was red hot back then. So we won on the deal but at the same time could have made another 50 grand had we sold 2 years earlier

Our only rule when buying property was not to buy anything further than 1 kilometre from the ocean.

[Guest]

A typical punter with a 10% deposit on a $500k apartment will have the following payments:
- $40k pa in interest payments
- ~4k$ pa in strata and council fees
- Let's say a conservative $1k in repairs and maintenance.

That is $45k pa.

On the same apartment, the renter would pay about $500 per week in rent and earning interest on their savings. Let make it an even $25k pa.

$45k - $25k = $20k = 4% of the value of the apartment. The value of the apartment needs to be going up 4% pa or the renter is in front. In the last decade median house prices have gone up 50% which works out to be almost exactly 4% compounding annually.

As far as rent vs ownership is concerned it has been a mute point for the last decade for most people. Thanks to our ridiculous tax concessions property investors have ended up in front about 20-25% . Again no big deal compared to other investment strategies in the last decade. If you factor dividends then even our choking stock market would have you much further in front than real estate over the same period.

The question remains, what will the comparison be like in the next decade? Given interest rates are low and debt levels are falling (http://www.rba.gov.au/statistics/tables/xls/b21hist.xls) I can personally not see how it would be possible for house prices to go up another 50% in the next decade.