ossigeno

No. Perth still seems to have steam left in it. The other markets are on a downhill slope. I wouldn't buy at all at the moment, but if forced to I would rather buy into a market that is still rising than one that hasn't yet bottomed.

ozzieeagle

Looks like more sellers than buyers down there at present.... Imagine being able to pick this up at sub 570,000, http://www.realestate.com.au/cgi-bin...=&fmt=&header= not beyond the realms of comprehension the way the market is going.

Especially if you can do a guaranteed 30 day settlement.

Tasty isn't it

lauralollipop

Yea, I want more land than that tho........I will keep waitin till the prices drop, not to keen on the townhouses even if they are close to the waters edge... I am looking at the ones near carrum, near the beach and river with a bit of land too.........do yo uthink that they will keep droppin in price then or what?

Laura

ozzieeagle

The key seems to be, if they start to auction places rather than have private sales (or prices up against them) then it's a buyers market. Looks like 90 pct plus are private sales over there at present.

If you look closer into Melbourne, you will still see that Auctions are they way most houses are going, so prices there have not been affected and may still be rising slightly.

So I'd say around Patterson Lakes, they could be still dropping. I cannot understand why anyone would want to sell a house in this market, which could mean that most people, selling may have to. Lots of leverage in that kind of Market.

BadgeIsBack

I was too young and not in a position to buy before the last big boom, so am quite interested to know what it will be like to see another huge boom arrive in 10 years. Knowing my luck, it will never be like the current one where prices really. really rocket...it wasn't hard presumably to see it coming as it had been a good 7 years since the last one..

I remember being told to get in to property in 1998. I was so blissfully unaware I just shrugged. If I had bought in 1998, maybe I would still be living in the UK happy with my lot and smug. Instead I am smug and happy with my lot in Australia, having paid 1998 prices for my 2004 house.

This current one has been so sustained that I really wonder what the next 10 will bring.

lauralollipop

I did buy in 1998 in England, thing is with me, I wish I had sold in 2002 when people were actually sticking notes through my door wanting to pay me a fortune for my house which wasnt even on the market...... But I didnt cos I thought that if I hung onto it, it would continue to rise.......what a fool I was. now I cant sell the damn thing and I rented it out before I came here........

Now all my money is tied up in the UK property and we are having to start from scratch again here...... I cant sell UK house till Feb 2007 as tennant has a contract till then, plus I dont fancy my chances of paying UK mortgage and Aus rent while tryin to sell then damn thing. Cant remortgage again as I have done this twice since I came here and now rent only just covering the Mortgage payments.......

I want to try and keep as an investment for retirement fund, but who knows, if housing market here doesnt drop soon, I will need to sell in Feb......

Laura
x

Hutch

Prices in the South Coast area of NSW where we're looking to buy have done as much 'correcting' as they're going to and are now starting to rise again. We won't be buying as soon as soon as our feet touch Australian soil, but hope to have found somewhere within a couple of months. We need a home, not a retirement nest-egg.

geordie downunder

You lose from negative gearing,not gain.Example borrow $300,000 @ 7% ,interest is $21000,rates insurance etc take the cost up to $25000 a year shall we say.Rent is $15000 a year so you lose $10000 every year (the negative bit).You get $3000 back off the tax man,spending a dollar to get 30cts back in tax is not investing,it leads to bankruptcy,you are totally depending on capital gain,which will be taxed when/if you sell as income cannot be written off against CGT.Think of it as the govt pays $3000 per year to house people while you take all the risk,a bargain for little Johnny or whoever is in power. There are other writeoffs (depreciation etc) but that is the basis of it.People that bought in the last boom in Perth (88-90) may be breaking even now if they managed to hold on through unemployment,high vacancy rates and high interest rates (19%).After the big drop in prices the market went sideways and then started going up again in 98 -99 approx .Property booms and busts just the same as any other financial market,that is from 25 yrs experience investing (gambling?) in Perth property,there are far easier and better investments.

BadgeIsBack

agreed. People say, I bought a new ute for the tax savings. yadda yadda. You are still SPENDING money first though, and cashflow is king.

ozzieeagle

My cousin who walked out of a marriage 9 years ago, broke, had about 2,500 dollars to his name plus his superannuation. He and his new girlfreind (both prison officers) started to purchase investment property in Queensland. He also had the advantage of having some sound financial advisor/investment background, having worked as financial advisor for 5 years prior to working in the Salaried prison service. To cut a long story short. He really was broke 9 years ago. He has in that time bought 4 houses throughout Queensland, from Cairns, through to Gladstone, and on the Goldcoast, He retires from the Prison service in July, With a combination of Negative gearing and capital gains. He comes out with a house, which he will move into on the gold coast, and about 170,000 Aud. Plus along the way, he had 4 "inspection" trips a year from Victoria up to Qland. heavily subsidised by the Tax system.

One factor you mentioned that I did notice, was he managed to have Fixed interest, even if he refinanced his properties.

Whilst owning those properties, he said it was imperative for tax reasons, that he rented his house down here.

I'm not exactly sure how the system works, but It's not quite as grey as you put it.

Factories in laverton, circa 180,000 aud, are apparently the go right now, no stamp duty as they are being built, and Laverton will be the new epicentre of Manufacturing on this side of town, as the inner city factories close down.

ABCDiamond

The main principal that long term investors work on is the Capital gain.
It has for a long time been a pretty safe bet for property to at least double every 10 years, eg: Melbourne values were 1984 : $68,600 and 1994 : $146,100 and 2003 : $361,300.

So if the $300k example doubles in 10 years, there is $300k profit, less about $73,000 in tax at full rates = $227,000 less the holding cost for 10 years of (10 years at $7k per year) $70,000, still leaving a net profit of $157,000 (That's $16k per year after tax, for just one property)

There is of course the (minimal) risk of property prices dropping and never rising again.
There is also the risk of running out of funds to keep the property going.

But people with funds, and confidence, should make it work.

A few investors are now returning to the market, both in NSW and QLD, but looking for the bargains.