Officer Dibble

Comparing the apples to oranges income, it would seem that an Aussie landlord would be mentally ill not to cash in you lot. Bearing in mind your propensity to compare what you did pay in the homeland to what youre prepared to pay now, the mark is tailormade and everyones benefitting. Wish I bought property now.; Good God, I should've.

Suck it up.

ozzieeagle

I'm absolutely convinced that the Chinese were the major factor in keeping the Melbourne Real Estate market running around the start of this year.

moneypenny20

Surely it depends on the amount of money transferred over and having a job after arrival? Every migrant will be in a different position. Or am I simplifying things too much

FHI

Your right every migrant will be in a different position, however, most will be hit by a double whammy of poor exchange rate and house price falls in the UK that have not been matched here.

moneypenny20

The article concerned is aimed at all migrants, not just British.

coolshadows

i hear house prices in south australia are likely to double in the next 5 years.

Geelong Gent

Yes from $10k to $20k

mindblower

The Asiain connection for Australia is gonna be too big a juggernaught to help avoid a housing crash i think.

Ps. I still think you pay too much for what you get tho..hmm..life's a bitch.

IndieG

Absolutely...agree on both points.

Petals

A house is only worth what someone is prepared to pay no matter where it is or what the statistics say.

IndieG

Yep, I am not sure I'd like to shell out so many $$$ for a ramshackle in a desirable area or fewer $$$ (but still not worth it) for a nice house in a not so desirable area...think we will wait.

hiyer

I don't understand the economics of buying a property in Australia. As previously commented by someone that the Dutch family living in a $500,000 property and paying $1,500pm rent which is 3.6% of the property value - why buy?

Someone else commented in South Australia property prices expected to double in 5 years - I don't believe this. But even if it does, it is only 20% return per annum gross - you still have all the maintenance costs, taxes etc to keep the property for 5 years.

I have owned properties in Australia and at that time the so called tax benefits 'negative gearing' drove me to invest in properties. None of my properties gave me a net income of above 5%. Even a simple fixed term deposit in a Big 4 bank would have given me better return on the investment without all the troubles I had to put up with the tenants.

I now only invest in shares. Much better return, no maintenance, no tenants headache, no showcasing your property for letting or selling, don't have to deal with real estate agents (if you have not experienced dealing with real estate agents - it is bad - I have had more than 6 properties and dealt with a number of them).

I have also learnt that if you rent a more expensive property, the rent as a percentage of the property value is lower. For example, you can rent a $1 million plus property for below 3% rent. Investing the same $1 million in various investments and earning double digit return and renting for a mere 3% is my plan. The myth that Landlords can at anytime evict you does not happen in real life. Most landlords worry too much about losing a good tenant who is paying the rent on time! I have been one of those.

In my view, it does not make commercial sense to invest in property in Australia - it is just an Australian dream to own a house.

Alfresco

Did you pay cash for the whole amount for your properties, or did you use a deposit and mortgage (interest only or capital)?

Did you make a profit when you sold them?

How long did you hold them for?

hiyer

Alfresco

I am an accountant, I have done all the number calculations. Answering your questions - some of the properties I bought with cash and many were on mortgage (interest only).

On the sale of properties, again I made capital gains on some and some I made loss - yes sold below the purchase price after holding it for 4 years. I had properties in Melbourne, Sydney and Brisbane. Cheap below $100k properties to expensive 4/5 bedroom houses in acreage blocks, - units, flats and house - old properties and brand new properties. I also had DHA 'sale and leaseback' properties. It was not just one sector of the residential property market. Overall, in real terms my property portfolio made a loss and this was over a 13 year period. It took me 13 years to realise what I was doing was wrong. I am not arguing that you cannot make money on property, there are much better and easier options to make better returns than Australian residential property market.

By the way, I am only talking about Australian residential properties. I strongly believe that very few (I was going to say 'none' but someone will come up with an exceptional company) large companies get into residential property market as investment to make money. Completely different situation with commercial properties.

In my view, people get sucked into 'negative gearing', and 'gearing' (with a small deposit and huge borrowed money) to make money on the property market. Australian property market is not best suited for this. If you do the same 'gearing' as you do in the property market in other forms of investments (eg. share, bonds, deposits, forex, commodities etc) the returns are substantially higher with none of the property related headache like the tenants. Again it is my view, the risks are no different.

Another myth - only share prices go down and property prices never go down. I bought a property in Melbourne in 1989 and sold in 1993 for 18% less than the purchase price. I did that because, it was costing me too much to hold on to that property (huge repair bills, rough area, no stable tenancy) plus that year, I had substantial capital gain and didn't mind off-setting the capital loss on the Melbourne property.

Another point to consider, the personal emotion attached to investing in properties. Some people buy properties because they like the kitchen or colour of the carpet, the view etc etc - not necessarily focussing on the financial return. When you invest in other forms there is very little of this, hence the focus is on whether the investment is sound and return in line with the risk I am taking.

This is just my 13 years of residential property investment experience in Australia and overall conclusions. Other people may have a different view - that is fine.

Kiwi-Irish

Sorry, I normally reside in the NZ forum, but occasionally view here.

Be thankful you're not going to NZ, its even more expensive there ... earnings relative to cost of living.