Certainty ? ...... There is no certainty

Yes....I like being a crusty old sea dog.....can't you see all the wrinkles...

 

I find the 5mg Zyprexa Wafers are really effective .

cliff

 

So which hip did you have replaced ?

Cliff ( ducking as he dodges the pair of skates thrown at him ... )

 

No pressure; but alas; YES!!

 

Clitt...hmmmm..... anti-psychotics???

5 haloperidol + 5 temazepam .....best downed with a quarter bottle of scotch?

 

What ever happened to fresh air,and a long walk..

 

I sure hope you are nimble, because I'm pretty fast on my skates, you know.

 

is there a medicare item number for that

Cliff

 

Yes I agree, the flood did dampen the price and some growth was due. However Brisbane and its surrounding suburbs are expensive right now. They are not as expensive as Sydney but they are expensive.

Now the main reason behind the price hikes in general around Australia has been the cheap money that has been available to investors coupled with foreign investors.

Foreign investors arn't really that interested outside of Sydney and Melbourne. Now once the cheap money becomes expensive, the prices will drop and holding onto properties will become difficult.

This is why Sydney and Melbourne having a bigger job market, an interest from foreign investment and higher paying jobs can weather the price drops a bit better than Brisbane, Perth or Adelaide.

I cant speak on behalf of others of course but I would not say so much cheaper at all. We are talking cheaper but not a huge amount.

Again going back to the first point, I dont think it is a good strategy to buy just because it is cheap.

Because Perth is dropping. I dont think Perth is a good market yet but if someone gave me money right now and said pick between Perth and Brisbane, I would go Perth because there is enough motivated sellers in there afraid of further drop that you can grab a good bargain. This is all the while the guy in QLD still thinks his property will go up and he better hold onto it.

IMO, The only thing that will stop Brisbane / QLD drop massively when interest rates go up is mining picking back up again.

Can you imagine interest rates upwards of 7% while unemployment is high and what it will do to a market that already has high unemployment?

And you are correct. Adelaide is perhaps in the same boat as others. I would say though that Adelaide's economy has become more diversified than QLD and WA and they do have some big military projects running there at the moment

 

Because of how Australia's economy is structured.

Our economy is 70% raw products (a very large portion of it being iron ore and coal export) and around 25% service based (Finance and Insurance)

Manufacturing is almost negligible in this country.

We dont produce anything worthwhile other than raw products. The economy in this country is still very basic.

Capital invested aside, we are talking employment. You need to make something to employ people and generate wealth. We are not Middle East to have large amounts of oil and not Asia or America or Europe to have a mix of manufacturing and service based economy. Our economy is more volatile than Indian economy which is over 70% service based.

Our governments sell assets to foreign countries / companies to get by and thats bad when you find that we are among one of the highest taxed in OECD countries.

Why do you think everyone is jumping up and down that China and Qatar are buying farmlands (our only income) right here in Australia

 

Thanks Tenex for replying! My responses.
And everybody.... apologies for the long post...

They are getting there.... still a huge gap though. The big difference is 800k gets you a house in far out suburbs in Sydney. 800k buys you an inner located house in Brisbane, or even something near the bay.
You need 1.5mill or more for the same in Sydney. Huge difference still.

You can still do cheapies in Logan with good yields (7% or more) in Logan for 350k. The Redcliffe area though is getting a train line and cheaper houses there cost no more than 450k. But I feel they'll lift once the train line opens. There's minimal beach located housing around in Brisbane so once people realise there's affordable beach suburb housing with train transport.... I see a boom/transformation happening in the future for that area.

The other general thing about Brisbane is that its only just now coming to price levels matching or slightly exceeding previous peaks of around 7 years ago. If you look at any chart of Australian property prices Australian property keeps going up in price long term. Therefore I can't see Brisbane continue to stay cheaper than the previous peaks of about 7 years ago.

Sydney on the other hand is well above previous peaks. Perth did a huge run over the past couple of years and now is going backwards because I think the mining boom just made it overpriced compared to Perth's long term averages. Brisbane is due for a run imo because it has been very affected by the GFC then floods. But no floods --> no reason for the price suppression in Brisbane anymore.

Sure. Easy financing has made Melbourne and Sydney boom but APRA has slowed that right down. Chinese money has all gone from Sydney except from new OTP Apartments. So that's not really helping Sydney... maybe same in Melbourne too.

Anyway... rental yields in Brisbane aren't so bad. Better than Sydney and Melboune anyway. That gives support from investors for Brisbane, with it's much cheaper buy in prices and better yields and additionally, Sydney is just not the place to invest right now. So, logically, where else are equity rich Sydneysiders going to invest?
Interestingly, seems like Canberra has also very quiety lifted very too. But that had also dropped back from peaks so I guess it was due for some growth. Also, personally, I feel the change in PM doesnt hurt either.

Brisbane is heaps cheaper. 800k gets you a house 20km from Sydney city. 800k buys you Inner City Brisbane. 450k does not buy you a 2 bedroom unit in Parramatta (which is 20km from the city centre) anymore. But you can still buy a fair proportion of houses in metro Brisbane for that price. Huge difference there. Purchasing power in Brisbane is far superior than for Sydney, $1 goes much further over there.

Maybe. If you can get a bargain, absolutely. I just don't know when Perth with start to turn upwards. Could be years. In the meantime I'd still want my money to do something. Wouldn't you hate to buy and the market continues to go backwards for anther 1 or 2 years? Have you heard of the phrase, "trying to catch a falling knife"? Because that's what you are doing when buying into a falling market. I'd have to get an amazing buy in price to want to buy into that scenario. Or do a really really quick reno and flip, or some other add value work, but its a bit hard to do that from Sydney though for Perth. Not impossible, but not so easy.

Massively feels like an overstatement.
If enough people lose their jobs, yes. Then people will want to sell if they can't get tenants or people cant pay their mortgages. But will it happen?? And I'd guess the average mortgage in Brisbane is a lot lower than for the equivalent average mortgage holder in Sydney due to the extreme prices here in Sydney. I do not feel that the wages between the two cities differ that much to justify those price differences. Therefore, similar wages but lower Brisbane mortgages. Very large job losses would have to occur for Brisbane to have lots of forced distressed sales. Another flood though... that will make people leave the Brisbane market though. I feel confident on that.

The affordable parts of Adelaide are affordable enough for Centrelink recipients. So there will always be support for the lower priced Adelaide housing market. (No comment on the rest of Adelaide from me though).

 

I got this from Wikipedia?? Where did you get your 70% figure from?

https://en.m.wikipedia.org/wiki/Economy_of_Australia
The Australian economy is dominated by its service sector, comprising 68% of GDP. The mining sector represents 7% of GDP; including services to mining, the total value of the Mining Industry in 2009-10 was 8.4% of GDP.

 

Rates at 7% are not high historically speaking, but they are a loooooooooong way from where they are now.

What would cause them to rise in the foreseeable future?

Especially in your bleak view theoretical higher unemployment scenario?

 

Few points .

Overseas investors are buying in Brisbane . Mainland Chinese co-worker has several friends who have moved from investing in Sydney to Brisbane .

Personal observation is Brisbane is half price at least compared to Sydney.

Large 2 bed unit 2/2/1 , good area , teneriife , one suburb off CBD 600 . Try and get anything comparable in Sydney well over one mill .

Waterfront unit manly Wynnum , views straight over water ... Ok mud at low tide . Mid 600's . 2 garage spots .... Something comparable is Sydney . High 1's

Entry level 3 bed ex houso's . Sydney high 400's ? 500 .

Brisbane ...... We've picked up several in the low 200's in recent months including one at 199 which rents for 270.

At the moment , prices are going up slowly , stock is going down and vacancy rates are at the lower level of normal ( low 2's )

I'm surprised you didn't mention rates going up to 18 % . It's easy to say what would happen is x occurred but it doesn't actually achieve anything except giving you a reason not to invest .

Latest figures show increasing employment in brissie . Unemployment same as Sydney . So Brisbane isn't the basket case some seem to imply it is .

Cliff

 

On this we agree Cliff. Not only Bnisbane ....but they are also promoting Sunshine Coast and Gold Coast in China.

Also agree about the employment turning around. Not as good as Sydney but a damn sight better than it was under the Newman government.

The only issue is vacancy rates...it is now heading up as FHB are also getting in. So people will need to be more prudent in managing this.

Having said that.....Melbourne has also proven to be very resilient...another story altogether. But I have stuff in both Brissie and Melbourne....so having a bet both ways.

 

I guess someones gotta ask the question,if you don't mind that is,are these properties in Brisbane ?.

 

@Gockie & @See Change

I am not arguing that I know better and definitely not arguing against your point. Lets hope you are right, I dont benefit or lose from this, one way or another.

I will say this though.

I have been in IT search and headhunting business since around 2006 and have watched the employment markets across Australia for at least that long.

Up until around 2009 / 2010, if you had a pulse and a degree in one of the IT applications that Rio or BHP or one of the medium sized miners (Or Boeing / BAE systems) were interested in QLD you were hired on a good daily rate.

Business was good and both private and public sector were splurging money like there is no tomorrow.

Since around 2011 that boat has sailed. In between 2011 till now hiring in private sector has dropped by 70% (We just had a client that put a large number of jobs on hold in Brisbane while we had several candidates lined up for each of them), hiring in public sector is almost non-existent and if you go year by year they have less people hired in public sector than they had several years ago when the axe came down and a large number of people were made redundant. Since 2011 I have had several contractors who are travelling from QLD to NSW on weekly basis. The reason is, work is seasonal and very often on low pay in QLD.

We were on QLD government preferred supplier panel to appoint contractors between 2013 till the beginning of this year. Not even a single contractor was hired in that time from us. This is while we placed at least 20 contractors per year in NSW, VIC and some in SA.

It got to the degree that when it came time for renewal of QLD government panel they asked us (the supplier) for money so they can have a system to manage their jobs. It went without saying that we felt their embarrassment and decided to tell them we no longer wanted to be their supplier.

IMO the prices are going up because every John and Jo is borrowing money to buy and they can afford repayments and think there is an endless supply of tenants waiting to be housed and will be there forever. It's more of a buzz than actual fact.

Perth used to be more expensive than Sydney at one point, look at where it is now and what caused it to drop like this. Seasonal / non existent employment platforms . Otherwise there is no reason why Perth should go backwards at the time when we have record low interest rates.

I am a humble observer and was just expressing my opinion. Lets hope all of Australia does well in terms of property prices not just QLD.

 

Darwin is slumping hard..and deservedly so. But the fundamentals here are still good. There's plenty of work and industry and government and defence and tourism...don't get me wrong, right now is not the time to buy...but maybe next year?

 

Hi @Tenex,
Its not just IT in Brisbane that's slumped but possibly Australiawide. I work in IT in Sydney and even with 12 years experience what I make now is 91% of what I was getting 2 or 3 years back, and that was a full time permanent position. I'm now fixed term contract and on a lower pay.

I know IBM has really cut back on many roles and managers are being asked to put up with lots of s#it, totally understaffed so whoever is left has to deal with so much c#ap.

Its easy for companies to move a lot of IT jobs to cheaper countries, I also used to work for Amex and they moved all Finance roles over to India. All IT was outsourced to IBM and anytime you had an IT ticket to lodge it would cost Amex over $200. I now work at CBA and they thankfully doesn't outsource jobs overseas though it really could, and make the shareholders even richer. So i'm thankful to have a job I enjoy, with a great work environment. The pay is what I consider a little low but it ticks most of my boxes so I am happy.

I think you'd possibly see a lot of outcry (possibly temporarily) from Australians if CBA moved these jobs overseas. Also all call centre jobs too. Shareholders would possibly support the move though. But this company cannot afford any technology stuffups, it would get crucified.

My previous company was NRMA Motoring and Services and we are lucky they don't outsource their jobs overseas. Good thing they have a call centre on the Central Coast... keeping jobs in Australia. But they do feel pressure to not lose money, which is why they more or less lost their travel wholesale business. It was not doing well financially. Not so good for staff, but it had to happen.
So, its not easy for IT staff in much of Australia, not just Brisbane. And even jobs in Sydney have felt a cutback.

But there are still jobs, maybe not so many in some fields, but there are still jobs about...

 

That's interesting you bring up I.T. @Tenex and @Gockie. Back in the day, I lost my I.T. job in the tech bubble crash. I had to move to a very low paid contract job. I hated it. Anyway, after 20 years in I.T. I decided to retrain in a different field, got my Masters and didn't look back. The reason I am interested that you posted this today is because of a newspaper article I read this morning:

Australia’s freelance economy grows to 4.1 million workers, study finds

AUSTRALIA’S hidden economy added a further 370,000 to its ranks in the past 12 months, with nearly one third of the workforce now taking part in freelance work, according to a new study by jobs marketplace Upwork.
With sites like Upwork, Freelancer, Airtasker, 99designs and Expert360 rapidly gaining popularity, it’s no surprise that an estimated 4.1 million people, or around 32 per cent of the workforce, have done freelance work in the past year.
...
“As companies begin to value it more we’ve seen the average daily rate for freelance and consulting work go up to about $1500 a day, which is about three times what you would get in an equivalent role,” she said.​

http://www.perthnow.com.au/business...s/news-story/629dedfaea13340797c68822f4f2a469

Interesting stuff.