NKSK version 2

To me it's another indication of how out of line it all is.

If the rental market could stand a weekly rental which was more in relation to the price of the house then we would all be paying higher rents.

The fact that we are not paying high rents suggests that the rental market actually can't afford to pay high rents - which reflects the real salary levels in WA - not the small % who are earning over $120000 a year.

steve99

Sent you a PM Paul.

To cover a $1.2M mortgage would roughly cost $7K a month, or $1600 week, those numbers the 3 of you have posted wouldnt even cover a quarter of the mortgage, sure there will be some tax benefits but the best your going to cover as an investor is going to be about 45% of that difference.

NKSK version 2

Next to the beach further north.

movetoperth

Thats what i thought.

Lynn

geordie downunder

The returns are crap,even on purchase price.Most of my properties are in Vic Park,Thornlie and Gosnells.The higher rent/capital growth has been in T and G.they rent out for $200-$220 a week and are probably worth around $350000.Vic Park tends to cost $180-$200 a week and worth $350000 possibly,I don,t know, I never look at the price of property.Average price for T and G would be $50-70000 and vic park around $110000,but I stopped buying property around 1990.Perth flatlined or went backwards through the 90,s as there was very little work around,this boom is probably a catch up phase.No expert can predict the future,otherwise the experts would be the richest people in the world,they would all have bought in City beach in the early 80,s and all remortgaged to buy shares in Dell or Qualcom,they would have bought in Perth in 98-99 (probably bottom of the market )and then re-mortgaged in 2003 and bought mining and resource stocks and banks.Then this fiscal yr they would remortgage and sink the lot into mid cap mining and uranium stocks for the 250% gain over the last 12 months,nobody can predict the future.

sinsbury family

The yields at first look are frighteningly low (and with the worlds central banks still in tightening mode and will probably continue until they break the back of the stock markets/commodity markets(short term) to give the impression of fighting inflation) and to buy property anywhere in the world right now looks extremely risky. However having said that i believe that we have not even reached half way in the great commodity bull market and after this interest rate tightening cycles out the way,commodities will rise again.No doubt Western Australia will be a big beneficiary of that.

So for me as long as the wife goes along with it i will be renting and buying gold on weakness.

geordie downunder

Why gold,I cannot think of a more useless investment,a short history.Came off the gold standard around 69-70 @US $35 an ounce,pent up demand,herd instinct ,stupidity, take your pick drove it up to US$850 an ounce by 1980 ish,the bubble burst and it dropped to around US$250 an ounce,went up again and hit $750? then fell back to around $600 now.The spin doctors,sorry, experts keep telling me if the price goes up it is because it is a good hedge against inflation.One day i cornered one of these experts and asked him if he could explain why something that was $850 an ounce in 1980 was now $550 an ounce (2005) and over the 25 yrs had not produced 1 cent in income could be a good hedge against inflation,I don,t think he was happy at the question,said he was very busy and walked away. An experts news letter i got my hands on did a reconstruction of various indices going back to 1850,US indices.From memory $1 invested in gold was worth $1.40 by the end of 2004,dow was worth $500,000,bonds/fixed interest had grown to around $10,000 and cash was around $1000.If gold is your chosen vehicle I hope it works for you.I would certainly go along with renting and investing the difference between rent and mortgage payments in something else,but something else that produced an income.Also I suffer from the same impediment as the experts,I can,t predict the future either.

temptininnit

This is what I am thinking, great thread!!

movetoperth

Why does it all have to be about investing and making money out of your home. Yes my home has risen quite a bit since i bought it but that is of no use to me whatsoever unless i decide to move away from the area, so really i couldn't care if my house is worth $20 more or $200k more than when i bought it.

From experience i know that some families settle better once they have their own home, many have never rented before and don't feel comfortable, they don't feel that the children can feel settled until their rooms are decorated etc, etc, etc. It may sound crazy to some of you, but believe me it's one of the phrases i hear most, "i feel better now that i'm in my own house", and its something i really identify with, we rented for years before we came here and no i never did feel settled. For many people a house is about more than money, its about having a home.

Lynn

Jokat

Thanks Lynn for bringing this thread back to where it originally started! I feel very strongly for anyone who is just starting out on their crusade to emigrate to Oz (we're in Perth). We are probably what you'd describe as the average type of migrant family - skilled tradie, 2.4 kids, and a reasonable lump sum once we cashed up in the UK - certainly not affluent enough to be investing money in gold or other commodities, and not in the property investor contingent. We too, came here and just want to own our home and make a good living so that we can at least equate to what we had in the UK, rather than feeling like we've lost ground. I'm not an expert and dont pretend to be, but I'm not waiting for bubble to burst, or a property market crash, because its just not going to happen. I'm sure things will slow down and level out, eventually, but I cant even see that in the next couple of years. We're buying a block but aren't sure if we'll build on it or not, but its clear that if we didn't do anything we're going to get left behind. I was talking to a neighbour (Australian) the other day - she said that they are so fortunate to have gotten on the ladder 5 years ago, because since then their personal circumstances haven't changed that much (more kids of course), including her partners earnings as a self employed tradesman, so if they were starting out now, they wouldn't have any chance at all! And its very true to say that for the majority its doesn't really matter how much equity you have in your home - its paper money, unless you cash it in to use it for something else, or downsize to something smaller / cheaper - again this option I think is limited here, because most of what gets built is big, what is smaller is now tending to be trendy penthouse type apartments that are still relatively expensive, or you try to find an older brick and tile style house thats affordable, but needs some work, but remember that there are 100's of others after exactly the same thing, because thats all they can afford as well. Its tight, and in the short to medium term its not going to get any better. All we can hope is that we've made the right decision for our particular circumstances.
I have to add that I think it would be difficult to come across another nation that is so obsessed with the value of their homes as are West Australians - I am now used to meeting people that, within 5 minutes, are on the subject of what is very clearly dearest to their hearts! And there are a lot of very very wealthy people here who aren't phased at all by the effects of the boom on the housing market, they're simply riding on a crest of a wave, and even if the impossible happened and the property market crashed, they would still be wealthy, and come out of it relatively unscathed, because they already have so much equity in their house(s)

nicanjoe

No one knows what the future holds, but don't believe for a second that a crash in impossible. We live just outside Toronto, and we have been having a great time with housing prices, no one thought it would end....but it has. The estate agents said they have just been waiting for it, and it came almost overnight. A house went for just under 700K and 8 weeks later another house about 10 houses along sold for 468K. It won't come down to prices of 3 or 4 years ago, but the boom will end and prices will drop, maybe only 40 or 50K it's just a matter of when and the only definate thing is that no body knows when that day will come.

Nicanjoe

movetoperth

Actually, i would put you in the "luckier than average" migrant family bracket. Many families arrive here with a small sum of money, they perhaps haven't had a house to sell or have lived in an area where house prices haven't risen by a large amount, or haven't owned their home for very long. Many families come here with enough money to put down a small deposit on an average family home and are more than happy to have a home they enjoy with a mortgage they can manage and a lifestyle unlike they have had before, but they still have to be careful with their money.

I don't know of too many families who could afford to buy land and just sit on it, so if i was you i would think yourself more fortunate than most, as they days most people couldn't do it........ make the most of it

Lynn

walla

A house in our street is on the market, personally I think it's over priced.

It was open today for viewing and only one person turned up to view it. I compare this to last year when another house on the street was up for sale, you couldn't get another car in the street due to viewers, it was that chocka....

thebears

Its also funny how suddenly I have had agents calling me back.

OriginalSunshine

hmmm - we're an early 30s couple with 1 young kid.
we couldnt afford to buy in the UK, and if we emigrated we would just about have enough for a deposit, but barely that for deposit+stamp duty.
I'm scared at the prices in Perth - sh1t - I wish we had lived 20 years ago and could afford the "dream" house++pool