Plenty of press recently about property prices, bubbles, opportunities etc etc. In reality, it's the voice of the people that set the market rate… Wondering what everyone's collective thoughts are?
We're considering purchasing a place (in Brisbane), but all the noise in the press has added a level of uncertainty to our considerations. Help please!
How do you see the property market panning out over the next 5 years?
What have greedy real estate agents got to do with this?
After all that the picture is still not clear to you, I think there's no need to explain. My tip for you, is there are many unethical real estate agents who will do everything to sell to Chinese investors with guidance, a chained service including translator, solicitor, developers, some of them even do sessions and trick ppl buying land. You have not read the news have you?
There are agents who will convince targeting eldery local Aussies to sell their place, knowing Chinese will pay a good price so they can get huge commissions. They could have lived comfortably and even pass their house to next generation, however money talks after all. It only takes someone to get the ball rolling mate.
That's the reality.
Rich Chinese are the same as rich everyone else. They make money, they dont sit on it. Other Chinese, are just like Australian speculators who used to get advice from RE Agents to buy up the Gold Coast. Good luck to them. By the way, the Japanese were taking over Australian real estate 30 years ago.
Which stupid government, the previous or current state or Federal government or both, or either? Can't argue on commission or Stamp Duty.
As far as interest rates go, a year or so back a loan of $500,000 at 6% would cost repayments of $30,000 pa. Now I can borrow $600,000, and the banks are falling over themselves to lend it. They don't give a crap what you are buying or what its worth, so to speak, as long as you can make the repayments.
True they are like everyone else. However, there's a few notable difference:
That's why earlier I mentioned the government should regulate the property market. Seeing it as a need for everyone rather letting the free market to takeover. One person should only be allowed to own 1 residential property at a time. Why would 1 person need 5 houses? The last thing we want is to have a bubble like the US.
Not everyone can afford or is willing to buy a property and that's why we need landlords.
I think I'll need about $2,000,000 invested to generate a comfortable retirement, as I'm from Adelaide, I'll need about 5 houses. Thanks.
The federal government can't selectively regulate only Sydney and Melbourne. The property price problem is only in these area. The rest of the country is nowhere as crazy - some regions are actually going down. Sydney (and greater Sydney) is the worst.
Asking the federal government to selectively regulate these areas is like them selectively stuffing a minority section of the citizens (those who own RE in these areas and all the RE agents or folks in the industry). That is a very slippery slope.
The rest of Australia actually need foreign RE investment… so it is a very tricky situation we're in. Overall the country does need foreign RE investment.
I blame high property prices on 25 unbroken years of economic and wages growth, low interest rates and high employment rates.
My crystal ball says "Economic growth is looking very wobbly with the end of the mining boom, low interest rates are here to stay for a long time yet, and unemployment will rise."
How safe is your job? I wouldn't want to be on the sell side of property if the economy got ugly.
Depends where you are, going up in Sydney at the moment due to chinese stock market downturn… those investors are dumping money here instead for investment purposes
its going up ! whats a bubble ?? =p
If your planning on purchasing your PPOR it doesnt matter what market you buy in, when you sell and purchase later your essentially not losing or making anything anyway.
If your planning an investment, as long as your planning on keeping it long term (and you should be) even if the market goes down, it will come back up again, its what they do.
I lol at all the "this is a bubble" "wait a few more years" people making excuses as to why they cant afford/wont buy property, people have always done it, they always will. While they're busy making excuses the rest of us are investing and getting somewhere in life.
But you do lose if you have a mortgage and prices go down…
No.
You lose if it goes down, you sell, and you wait while the market goes back up to purchase again.
If the markets down, you sell and re purchase straight away your buying in a low market anyway so theres no loss/gain on a PPOR.
You loose because you are paying INTEREST!
lol, been instilled with fear by other tenants/renters?
When I was 20 I purchased my first house for 100k and everyone tried giving me "why would you purchase such a shitty old house in a suburb like that", I sold it 4 years later for 300k and purchased where I am now for 370k and the house is now worth 600k (which ive paid off with other property investments). Just turned 33 and own a 600k house on my own - whose the loser again? oh right me cause I paid the bank some interest
You lose because you can't spell it.
Judging by the media, even from one particular newspaper.
Every morning theres a property bubble and prices are going to go down, everythings going to melt down, etc.
Then by the afternoon theres a new article that says auction rates are strong, prices going up, everything is great..
Theres never really a good time to buy property, you always think its expensive..
I would buy as soon as you can but sensibility. ie. buy what you are comfortable to spend and what your happy to live in. You might need to stretch out a little to secure the property you really love since this is your PPOR.
If you wait for the prices to cool, there might be crap housing stock on offer, plus you might get tempted to wait forever. Best to see as many houses as you can, crap, average, great ones. then you will know what you like and instantly be able to put a price on how much this house is worth to you.
From the time frame suggested, are you looking at resale before the end of 5 years?
Most likely, Myrtacaea - yes. You have some thoughts?
if the property is positively geared, and you have built up equity in that property - it will cost you to sell, sales commissions and possibly capital gains. Why not keep it and use the equity gained in that property to invest further. Depending on your risk adversity - you can potentially use the equity gained in your property plus any extra cash you've saved to purchase a property up to twice the value of the initial purchase - depending on that equity stored in the property.
Of course, you should seek professional advice rather than listen to me…
We were looking to buy at the start of this year, but have decided against it, as we felt that the property market is very close to peaking, if not peaked already.
Cheers.
Down down prices are down
I noticed that in Brisbane, around my area, Nundah there are too many apartments for sell now.
Few months ago it was not so many. I also notices prices are slightly down, negotiable. etc.
Anyway, In Brisbane now there are dozens of projects on the way of building new apartments.
But I doubt if there is a real demand.
Everyone wants a house, right? better value, land!
anyone from Brisbane thinking of buying?
Also would be great to read about the Gold Coast.
Love the beach))
I'm in Brisbane. For the last few years, more or less, the property market has been jagging sideways, barely wiping its arse with inflation.
Melbourne will probably come down, Sydney will take a bath within the next couple of years. I wonder whether they will drag Brisbane down with them.
The property boom has been largely credit and migration fuelled. Property prices have vastly outpaced both income and productivity growth. At some stage both credit and migration will reach their finite limits.
However, it wont be pretty. People who think that it will be great to buy houses more cheaply should realise that their chances of getting a job to finance even that cheaper house will be abysmal.
My thought have been and will continue to be until the end of the year at least that the market will either drop or flatline for the next year or two… I'm not an expert so don't take my advice.
What market is that exactly?
Australia is a big place, many markets in markets, many areas doing totally different things at different times to others
Sorry I meant the Sydney one…
It's useless to predict, and it's a useless question.
Property prices are dependent on DEMAND. that's it. Demand is triggered by factors such as:
So you can never predict wtf is going to happen. However looking at a 10-year graph of property prices, they seem to be increase exponentially. That's not to say buying a property is the best investment decision.
There's no such thing as "Buy now" or "sell now" unless your the suburb your property is in is about to receive a major upgrade like a fast train service.
As such, all those votes above are useless.
Simple rule, buy when you have a (MIN) 20% deposit AND your repayments don't eat more than 60% of your Salary/Earnings. Otherwise you'll be the next victim of a mortgagee sale.
There are various cultures out there with massive pressure to just buy buy with little regard to the above. The people that follow these traits need to be thrown to the sharks
careful now, only each individual persons risk profile should determine with what level of debt and income/repayment ratio to which they want to take on.
If i didnt take on a 95% loan which i struggled to service 4 years ago, i wouldn't have made 50% on that place and been able to afford to buy another place worth twice that much. I took risk, it paid off - of course if it didnt i might have been in a bit of trouble, but provided i still had a job, there wouldn't have been any need for me or the bank to sell, and therefore no stress for anyone.
I do however agree to your statements about demand and prediction, however when you're investing you look at historical statistics and potential future trends - thats all you can go off - otherwise no-one would invest!
Gotta love keyboard economists :)
Short answer - probably don't wait, all things considered if you can buy now - investigate that option rather than waiting.
Since 2006 (pre GFC) the property prices dipped (more than a small percentage/and for more than one consecutive quarter) just twice, first during the GFC in 2007-2008 and again in 2011. Neither time by more than 10%. This occurred in all capital cities, and regional Australia.
In Sydney and Melbourne, at least, prices have almost doubled over that 2006-2015 period, and while it has been a bumper 10 years, i couldn't find a long term graph on short notice which would actually show a similar, yet flatter trend.
Prices may go down, however that will likely be short lived, and also unpredictable. Prices may plateau, to the rate of inflation only, but on all counts prices will grow. Most economists say alot over the next 12-18 months and then slow, but at the very worst, you will always pay more for a house wherever you are looking TOMORROW, compared to if you paid for it TODAY. My apartments in Ultimo and Cremorne both are appreciating in value each day by more than i personally earn in that day, so if i were trying to buy another, i would be having to save at least 20% of what i earn every day to meet the deposit i would like to put down on those properties in the future.
Of course, the information in this post has been prepared without taking account of your objectives, financial situation or needs. Because of this, you should consider its appropriateness, having regard to your objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Reference: see Housing Prices - http://www.rba.gov.au/chart-pack/household-sector.html
It really depends where you live - Sydney shows no signs of slowing.
In saying that (and this is coming from someone of Chinese descent), it is no doubt that prices are being driven by wealthy Chinese coming into Australia - just look at auctions, inspections, etc.
A large portion come through the Significant Investor Visa and also other channels to encourage investment in apartments etc. to spur the construction industry (in the hope if flows to the rest of the economy).
A recent newspaper quote:
"Until now, Australia only offered Significant Investment Visas (SIV) to rich migrants, which didn’t require any skills, but instead a commitment of $5 million to be invested in specific ways.
Of 1679 applications since the scheme began, 90 per cent were Chinese migrants, mainly looking at NSW and Victoria. “The majority of people have been from China because of property prices,” migration lawyer and Results Migration managing director Christian Dawson told news.com.au. “There’s the casinos, like in Sydney."
Now we will have the Premium Investor Scheme for those with min. $15 million… think that will slow it down?… think again. In Canada they have scrapped these scehemes: "Under the (Canada) scheme, would-be migrants worth a minimum of C$1.6 million (HK$11.2 million) loaned the government C$800,000 interest-free for a period of five years… An estimated 45,500 mainland Chinese in the queue for visas in Hong Kong will have their applications "eliminated" and their fees returned." That is a truckload of potential funds.
A good article if you have AFR access is here which also compares what happened in Vancouver (and what has happened here, Hong Kong, Singapore, etc. i.e. a disconnect between wages and sky rocketing property prices)
http://www.afr.com/real-estate/residential/the-big-dangers-o…
I think the Government and people need to also understand that the rationale of many of these investors is different - examples:
- a loss is not a major issue for them as they are sitting on a truckload (many also do not want it kept in China whereby the government could scrutinise it)
- speculative nature - just look at the non-rationalistic valuations of the Chinese stockmarket (even now), some of the valuation ratios were just completely crazy (and how does the stock market rise by 75% in a year).
- Australia and property are seen as general safehavens when looking at legal and regulatory framework and general volatility.
First Hong Kong, then Singapore, then Canada and the US, then Australia and UK now Japan apparently… I guess if you flood geographically constrained metropolitan cities with cash then it's not a bad investment.
Thinking about future generations for the east coast we really need a fast rail network which could allow population to shift out of the unaffordable metropolitan areas.
Melbourne has a 2050 strategy, focusing on rapid population growth, so no prices wont decrease. They may flatline is less desirable areas, but generally will appreciate.
+1 Totally agree with you there. Well said.
There has been no regulations and even with laws to restrict overseas investors buying existing properties, it's not going to work because it will not be enforced properly.
The problem already gonna worse because they use their kids in uni or school to buy and also relatives doing it for them. You just can't tell if they are doing it for someone
I can tell you right now there are specialists who act as the middle man and purchase properties on behalf of the big bosses in China. They know the loopholes.
Lastly the developers are also in this buying up old houses, demolish and rebuild to gain profits.
The properly market is totally out of control
Go to Eastwood and other shopping mall see how many flags are up under these so call developments at new areas everyone wants a slice of this pie