brisnick

full story: http://www.finance.news.com.au/story...-31037,00.html

House prices fall, rent instead: analyst
By Nicki Bourlioufas
March 23, 2005
From: NEWS.com.au

House prices are expected to fall more than 5 per cent over the next two years as a property correction unfolds, according to a leading analyst. HOUSE prices are expected to fall more than 5 per cent over the next two years as the property market corrects, making it more attractive to rent than buy, a leading analyst said today.

RogerUK

This is poor advice! 2.5% house reduction per annum - 1) How does he know? 2) What about the rent money you would have to pay? OK if you are prepared to live in a hovel costing next to nothing.
I am in UK and 2 years ago my neighbours son who is in his late 20's said he was delaying buying a house as he thought prices were coming down, and of course they increased 60 or 70%. Do not forget a house is primarily to LIVE in and enjoy!
I am off to Oz in 10 days and I will buy as soon as I find a suitable house, not rent. It will be a house I will live in for many years hopefully, its value will be quality of life and peace of mind - no rent - no landlord - all mine. And I am fairly certain it will increase in value.
Roger

ozzieeagle

Surely now or even better in around 12 months, would be the best time in years to trade up ? or buy an investment property ?

How can it be better to sell an existing house and buy a more expensive house on a rising market than a falling one ? Someone please explain !
A fall in house prices is very unusual, and is usually followed by a boom, Selling and buying on a booming market would have to be the worst time to trade up, as prices could rise 5 pct in 2 months, which is the average settlement time for selling a house.

ABCDiamond

The interesting thing is that prices have already fallen in some areas, and a lot of these reports are based on December quarter information. Some reports are saying that these areas are now in for some small growth. Other areas of course may drop a bit.

If you know for sure what will happen, you would be in a great position.


Financially speaking, prices would have to drop a fair bit to make it worth selling and then rebuying at a lower price. The Agents fees, on selling, and Stamp Duty on the next purchase, when added together can make a up a large sum.

steveyp

I agree with the rent not buy scenario.

Things are totally out of reality at the moment. How else could I rent a $900k house for the price of a $250k repayment (25 year mortgage?)...

And pay no water rates or council rates and get my pool and garden maintenance thrown in?

We are in WA and while I don't see prices biting the dust (5-10% fall seem quite believable), house price inflation will be virtually 0% IMHO over the next 3 years...

The buy to let investor figures just don't stack up anymore, even with negative gearing. First time buyers are very thin on the ground... the market is going to run out of steam soon.

4lex

What he said. IMO the only argument in favour of buying currently is the mine-all-mine school of thought, which, while comforting, is (comparatively) expensive at the moment.

ozzieeagle

Ahh yes, personal circumstances come to the fore here abcd, My gaffe, here in Coburg, Well basicially everything I've done to it, has stuffed it lol, the extension looks a bit like a shed. (one of those queensland sun rooms) The stumps, plumbing, and electrics need doing etc etc, and worst of all only one karzy and bathroom. Valuable position though. I cannot afford to buy the kind of house I want in this area, cos it would cost circa 700,000+, I really really dont want to move to the outer subs Unless I get everything, "inground pool, rooftop terrace or big big balcony, Views, Hometheatre/blokes room etc with bar" like you said it costs a fair bit to move, so doubt if i would get the lot at change over price.

My cousin is heavily into Investing in property (my English cousin that is here) It's a bit of a hobby for him. 4 houses he has purchased so far. He said I was mad not to go for the following....

Cairns, brand new 3 bed room house, 220,000 of the plan, full cost including legals, 7 years tax depreciation guaranteed, tax assisted inspections every 6 months (aka tax assisted holiday ) Guaranteed tenants for 1 year at 290 bucks per week !!!!!!

I may take a serious look at investing when i get back from england lol

Megalania

States being roughed up over stamp duty:

The states have rejected the Federal Government's call to stick to the 1999 GST agreement and cut $8.8 billion worth of indirect taxes such as stamp duty in exchange for receiving all GST revenue collected by the commonwealth.

Costello firm on state taxes cull

"The agreement says the states will eliminate their taxes.

Government won't play GST games

Talks to abolish a range of state taxes broke down in Canberra yesterday, and state treasurers and the Federal Government set a six-week deadline to resolve the impasse.

States seek better tax offer

ABCDiamond

The normal rent/cost ratio has, for average houses, been $1 per week rent for each $1,000 value. eg: a $300k house would rent for $300pw.

And most landlords have been happy with that even though it would be costing them about $380 pw in interest. A lot of the shortfall being covered by taxation benefits.

However, a $900k house for under $400pw would be a bargain for the tenant

Megalania

A $300k house for $133.33 would be irresistible.