Adelaide vs. Hobart: Where would you invest?

Discussion in 'Where to Buy' started by Ko Ko Naing, 27th Apr, 2017.

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Adelaide vs. Hobart: Where would you invest?

  1. Adelaide

    46 vote(s)
    73.0%
  2. Hobart

    17 vote(s)
    27.0%
  1. MTR

    MTR Well-Known Member

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    what are you seeing on the ground?
     
  2. Ko Ko Naing

    Ko Ko Naing Well-Known Member

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    If you are referring to the markets that are rising market, I definitely agree with that and I'm all for it. But I doubt (I might be wrong) Sydney or Melbourne are the markets that are starting to rise, as both have been rising for quite a few years. Don't you reckon they are already peak or close to peak? I understand no one has a crystal ball to see things in future, as one can only speculate.

    Sometimes, I got lost in all these myths/sayings related to property investing like
    "You can't predict future, you can only speculate the growth, based on what you are seeing in present".
    At the same time, another one say "You can't rely on historical data, as history might not repeat the same". So how in the h*** one decide what to look, not past data, not present data? I'm not angry, just saying :)
     
  3. Ko Ko Naing

    Ko Ko Naing Well-Known Member

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    I second this. I'd definitely go for Adelaide.
     
  4. Ko Ko Naing

    Ko Ko Naing Well-Known Member

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    I wish I bought one in Hobart last year. Again, no one has a crystal ball. I bought 3 in Logan last year, but I don't regret it.
     
  5. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    Where is the neither option?
     
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  6. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    I think you may be confusing risk with "opportunity cost". I completely agree i could buy elsewhere and make more money over a specific time frame.

    I like to compare housing market risk in a similar fashion to Equity markets. Let's use the "shiller P/E" ratio as an example. As a company/markets price rises and becomes more expensive on its underlying earnings, its P/E increases and as does its risk.

    Let's make a somewhat similar comparison to the housing market using Price/Yield/household income. Adelaide would probably sit pretty low on this scale of risk with Sydney at the opposite end. (this is just my opinion and one way of looking at it).

    Now if can use another equity market comparison. If i like a company/market index and i am accumulating shares in that company/index I don't want the price to rise until I have finished the accumulation phase.

    Same goes for property I am accumulating and hope to be for many years. for my strategy I hope the property market goes flat for the next 20 years, with personal affordability increasing with income growth over that time period.

    We are using two different strategies, and as in the Equity game there's more than one way to skin a cat.:)
     
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  7. Pier1

    Pier1 Well-Known Member

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    Poppies.....
     
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  8. Webb

    Webb Active Member

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    As a Hobart resident and investor I am happy to answer any questions. Regards.
     
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  9. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Hi Webb, its a little off topic but do you know much or have an opinion on Devonport? According to RE.com it attracts a high yield, but is struggling with growth.

    With its close proximity of Airport/dock to the mainland surely this would be a plus for the area. What is it currently missing or have going against it?

    Also noted for its price bracket, the homes and gardens/streetscape seem to be of a very tidy nature. Certainly when compared to mainland areas in the same price bracket. :)
     
  10. MTR

    MTR Well-Known Member

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    I have never suggested that investors buy in Syd market today, as its been booming for 4 years.

    Smarter option would be to look at markets that are showing signs of movement and find out what is happening ? and get in as early as possible, but generally you have 2 years to get in and make money.

    Someone has already posted why Tassie is booming? How long is the next question I guess

    No one is coming close telling us why Adelaide will boom, other than to say its cheap as chips, so are some parts of QLD, but that does not mean it will boom. Perth, well that is also getting very cheap, but I would not touch this market that would be investor suicide at the moment.

    Back to shares and property.
    What I see is we have different strategies, no right no wrong, buy and hold strategy is just that you sit and wait for growth. I guess that is called the cost averaging strategy with shares.?

    I am not poo pooing Adelaide or Tasmania, but if you can achieve your goals in a shorter time frame by simply paying attention to market conditions then why not.

    MTR:)
     
    Last edited: 29th Apr, 2017
  11. Webb

    Webb Active Member

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    Honestly my area is more down south. I do not know much about Devonport. I would assume lots of those nice tidy houses are owned by retirees who have worked in many of the industries that are now being shut down.

    Not sure about the rental market really either sorry. I can't imagine much growth there? Are you looking to invest?
     
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  12. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Nor was I, just using the example of Sydney as a frame of reference.

    Not sure if others have made that claim, but not something I have ever espoused. As far as i am aware the general consensus is a slow and steady rise.

    It's great you have enjoyed success with your strategy, I can tell you have a real passion for what you are doing. I am a big believer in investing within my zone of comfort and understanding.
    I have always been a buy and hold guy and like to apply the "KISS" principle to all my investing.

    There are many strategies out there "Buy and hold", "Momentum", "Value investing", "Technical trading". All valid and all have proponents that have used them to great success.

    But its really not what's important as there are common traits those that are successful have, that can make anyone of those applied strategies work . :)
     
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  13. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Not immediately but at some stage in the very near future, Tassie is certainly on my list. My goal is to buy something over there initially as an investment and then use for personal use after retirement. (splitting my time up between Adelaide and Tassie).

    I have a growing intolerance for Adelaide's summers and need somewhere to escape the Heat! :D
     
  14. DaveM

    DaveM Well-Known Member

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    Summertown? :D Having moved to the hills the temperature difference is a good 6-10 degrees cooler in heatwave days. Trouble is that also is the case in winter :(
     
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  15. D.T.

    D.T. Specialist Property Manager Business Member

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    The solution is to live walking distance to the beach :)
     
  16. ATANG

    ATANG Well-Known Member

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    I stayed over 15 years in ADL, owned over 10 ips across all blue chip areas. I loved the city from the bottom of my heart, it's seriously the most underrated city in Aus, where most people i talked to especially in Melb, first thing they said is as if it's alice spring, where there's only one street and the nothing else (and they have never been there!). The livability is truly the most underrated one.

    However, if a friend came to ask me for advice about investment in ADL, i would tell them.....really, it's what you want. As i said before, if you are going to use it for own living for few years, it's no brainer. You can't measure quality of life using $$. But say if you only have this amount of budget and you need it to grow as quick as possible (e.g. 5 - 10 years plan), sadly i have to tell them go and look else where... ADL is truly awesome but it's got some problems of its own and so has other eastern cities, but the ones ADL own are no good for investors. It seems to always be the land of missed opportunity (and i blame it on the government).

    I'll give you an example. Jane and Jessica both started working after graduating the same year. Jane stayed in ADL while Jess moved to Melbourne for another position. They both started with the same salary, worked hard for life and purchased a PPOR with the same price of $350k. 10 years gone by, Jane's place in ADL worths $450k, while Jessica place worth $700k. Now I am not saying every houses in ADL or Melb would follow that growth rate, but that's very common.

    For me, I think it's really sad to see your savings not increasing much after you worked hard for years and years. Of course there are some success stories of investors making a buck in ADL but trust me, that's really rare unless they bought it before 2008. Economy hasn't been good since 2010 and it's only going downhill. And we are talking about general trend here. And if you are saying $100k over 10 years is a stellar growth, then clearly we are not on the same page. I am not a negative person and i want the city to get better more than anyone else as i still keep those houses... but i do feel the general economy isn't doing great. Renting place out takes longer, prices are stagnant, and businesses are closing, young graduates hard to get jobs. The main reason prices still grow a little bit is due to inflation and also a lot of government spendings. Organic growth from migration or foreign investment is basically.... extremely low.

    But then if you are not fuss about the profit so long it has some growth, then it is a good place to live. You get to enjoy a peaceful, family friendly city where there's literally zero pollutions from development. I found one very funny thing from these investment journey that is.... Adelaidians seem to feel proud about their low and "sustainable" house price that there's no housing bubble and people can raise family live happily; whereas Melbournians seem to feel proud about their high house price (even though one could probably never afford one), they feel confident about their city and the future prospect, etc.

    No matter what, ADL will always be the bottom of the list in terms of economic growth and this will hardly change but that's okay, cuz it will always stay on top of the livability list and at least there's still a place to retire when you've made your money from other cities.
     
    Last edited: 29th Apr, 2017
  17. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Often there are benefits to exploiting popular misconceptions and taking the contrarian view. :cool:
     
  18. MTR

    MTR Well-Known Member

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    Well said:)
     
  19. Gockie

    Gockie Life is good ☺️ Premium Member

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    Well written... interesting viewpoint. I think while historically Australia used to have all cities going up at roughly the same % over time, I think its changed. Sydney and Melbourne are international class with international and national employment, demand and house pricing. I think they'll always have a premium price on them relative to other Australian locations. Like New York and San Francisco. Housing supply does not keep up with demand... especially in Sydney. (Go red tape?!)

    Adelaide may just remain slow and steady like @ATANG says... there isn't too much in the way of international and national jobs to push it along. It really is a nice place (some northern suburbs excepted), I could happily retire there, use it as a home base. Manufacturing is on the decline in Australia so i'm not sure how it can reinvent itself for employment.

    Perth and Darwin are very mining driven. When mining's hot, its boom and growth time. Mining sneezes, they go down with nothing much to sustain them. And after they added capacity with the boom, that's when prices drop. Too much capacity. Note: this is from the impressions I get from the forum and from all the other things I've read.
    So I think they might be basket cases for a while (sorry to say).

    Brisbane is trying to be more like Sydney and Melbourne but it doesn't quite have the international pull and the international jobs. It can attract interstate migrants from Sydney who find Sydney expensive though.

    The rest of Queensland's cities and towns doesn't seem to be too great for jobs. (Note: Gold Coast I think can do it, be solid... still follows the tourism dollar though...)

    Canberra is very political cycle driven. If the government is employing, house prices go up. If not, then it falls back.

    Hobart is small, not a big player in any way. It has its own unique niche and charm though being on a small island. People will visit for tourism, fresh food. General employment though... still very much a niche locality.
     
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  20. jins13

    jins13 Well-Known Member

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    I think now with the pressures in the lending criteria and from the regulators involved, it's going to be extremely hard to just consider the main cities alone. I know some people in the PC community have done extremely well with properties that were selected well and timed perfectly, but maybe this current climate is an opportunity for people to diversify out to other markets and take a calculated risk.

    Below are two examples of properties that's been on the market for an extended period of time with several price cuts to the property. As mentioned in my previous comments, houses are still getting sold in the area but apartments are not in some areas. I've also seen in other areas like Baulkham Hills, Carlingford and etc experienced price reductions on their listing but in the blue chip areas in the Northern Beaches or Eastern Suburbs, still selling like hotcakes.

    First example: Experienced three price reductions
    39/8-12 Kerrs Lidcombe NSW 2141 - Apartment for Sale #124754042 - realestate.com.au

    Second example: Price reduction
    17/7 Harrington Avenue Castle Hill NSW 2154 - Apartment for Sale #124731714 - realestate.com.au

    Personally for me, I would like to invest in both Tasmania and Adelaide in the future to balance my portfolio out abit.
     
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