Is Holding Resi Property attractive today?

Discussion in 'Property Market Economics' started by MTR, 1st Aug, 2016.

Join Australia's most dynamic and respected property investment community
Tags:
  1. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,572
    Location:
    Sid en e - olympic city
    I never played against those in business :)
     
    Sackie likes this.
  2. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,189
    Location:
    Adelaide and Gold Coast
    Ya monopoly is great, used to play it as a family while out camping when I was a kid
     
  3. hobo

    hobo Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    682
    Location:
    FNQ
    I prefer 'Acquire'. Anyone else played it??
     
  4. PropStar

    PropStar Active Member

    Joined:
    3rd Jul, 2015
    Posts:
    25
    Location:
    Nsw
    it sounds like people are getting fearful. It must be just about time for me to get greedy.
     
  5. Natedog

    Natedog Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    373
    Location:
    Brisbane
    We have just listed for sale one of our IP's to free up some $$$ for a development of a site that will become our PPOR.
    We will possibly sell our current PPOR when we move also.
    This will leave us with a good chunk of $$ in the offset account..... But .... To me it seems wasted and idle just sitting there.
    I've looked at some areas of Brisbane and Melbourne of interest to me and it's harder to find "value".
    For the first time in 10 years I may just do nothing!
    It's hard to wrap my head around....

    It almost feels wrong...
     
    MTR likes this.
  6. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World
    Here is an eye opener



    Real home values are lower than they were 7.5 years ago in Brisbane, Adelaide, Perth and Hobart.

    [​IMG]

    Sydney and Melbourne are the only capital city housing markets in which real home values are now above their previous peaks.

    Sydney home values are 31.6% higher than their previous peak in March 2004 and Melbourne home values are 12.4% higher than their previous peak in September 2010.

    Across the remaining capital cities real home values remain lower than their respective peaks.

    In Brisbane, real home values peaked in March 2008 and are currently 9.3% lower.
     
    charttv and SOULFLY3 like this.
  7. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,034
    Location:
    Vaucluse, Sydney.
    There are always deals, in every state. Just need to have the right strategy for the right investor. Most of the stats and graphs are all hocus pocus to me and I ignore a majority of them.

    If graphs and stats were so reliable and told the complete picture of what is happening on the ground in all the markets, then any fool could look at them and say 'ok we avoid here, and buy here since CG this year is up 8%" etc etc".

    In reality it doesn't work like that. I have a friend who just purchased a great site in Brissy and will settle in 3 months. He's already made his money unless the market drops 25-30%.
     
    MTR and Cactus like this.
  8. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    6,776
    Location:
    ....UKI nth nsw ....
    I think you can look at all the data you want most times it's a over supply of data..
    Plus i was thinking about this while under a rental property to fix 9 stumps that have all lowered yesterday..
    Bought this one 22 years ago,paid 52k all up with legals transfer"s ect..
    next door the property small block was sold for just under 500k 17 weeks ago,they have spent over 60k ,new deck bathroom kitchen,paint
    and i was talking to the owners late yesterday,they asked the same question is property investing worthwhile??..
    I just told them the simple maths,this property we control the property gone up 500kplus,in 22 years,rental return over 300k over that time frame,both just looked at each other in shock..
     
    Cactus and SOULFLY3 like this.
  9. Cactus

    Cactus Well-Known Member

    Joined:
    18th Jan, 2016
    Posts:
    1,445
    Location:
    Melbourne
    Agree. Data is so easily skewed. Median house prices even get skewed by a period of crap stock being sold or a period of brand new townhouses getting sold or a few big dev sites. Look at rockbanks growth recently prob explained buy a couple of land estates being purchased for development.
     
    Sackie likes this.
  10. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,034
    Location:
    Vaucluse, Sydney.
    Agree @Cactus happens all the time. I have bought some of my best deals contrary to what the stats would say is an 'optimal' buying time. It doesn't make any sense. Think about it. If the stats, graphs and all the 'experts' were so accurate and consistent, it would be so easy for investors to find the great deals and build wealth every day of the year. We know that just aint so. A surburb could be at say 11 oclock which means its quite heated, but you may be able to nab a deal with good strategy and negotiating and pay say an 8 or 9'olock price. Or a property might be 600k which is not worth the buy at all for the location, price etc but you may be able to get it for 480k, reno and sell for a profit as you have identified opportunity in that market.

    It just aint so simple to look at the stats and graps. I think strategy and negotiating well are never emphasised enough of their importance. You rarely if ever see people talking about negotiating strategies in depth. If A happens then you do B and if B Happens then you say C, D or F. And if they come back with this offer, then you strategise using X or Y. The nuts and bolts of doing this rarely if ever gets discussed in detail. That's the stuff that really builds wealth fast imo. But the people who do this aren't bothered to really get into it :) So only other way to learn if someone wants to is to start reading, learning and then develop the skills through trial and error.
     
    Perthguy likes this.
  11. Perthguy

    Perthguy Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    11,767
    Location:
    Perth
    I am holding shares in 2 properties in Perth. First is rented out and we are going to contract this week on building a 4x2. The other is being converted to a 4x2 with potential to build on the back in the future. Once renos/developments are complete, the two properties should be making us around $10k per annum (total) with Perth's low rents. So yeah, low returns for sure, for now. Still, prices and rents will eventually increase :)
     
  12. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    Would've done better holding some A2 milk potentially?
     
    MTR likes this.
  13. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World
    Resi has had amazing growth in Syd and Melb, and the power of LVR from 2013 trumps this surely:) Power of Leverage
     
  14. NHG

    NHG Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    640
    Location:
    Sydney NSW
    Brissie is good for quick turn around. Their process is stream lined.

    Resi doesn't have the appeal that use to be there, that's for sure.

    Logan at $270k for $320/week return was all the rage, yet at the time St Marys was $250k for $330/week return + granny flat potential.

    I see the next run in boarding homes and hmo's. That said, mates still pulling big profits numerically from developments. Though as a % it is much lower than a decase ago.
     
  15. Chris White

    Chris White Well-Known Member

    Joined:
    7th Aug, 2015
    Posts:
    142
    Location:
    BRISBANE | SYDNEY
    Hi @MTR, what is plenty of fat in the deal? Seems to me be that most sites with plans and permits are around 15% at best, maybe a bit more for 6 plus townhouse sites.

    What are you finding.
     
  16. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,034
    Location:
    Vaucluse, Sydney.
    For me residential real estate in Australia has always been an attractive proposition though I don't focus on or invest for yield with this type of asset in Australia.
     
  17. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World
    Did not find suitable site in Melb, returns are getting too skinny

    Moved into US market, We are starting our 5 townhouse deve in Atlanta next month, a different beast to Oz, we expect 30-40% profit, fingers crossed
    Will post photos at all critical stages
     
    Last edited: 4th Aug, 2017
    SOULFLY3 and Sackie like this.
  18. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World
    The difference is that St Marys property is probably worth more than 500k today
     
    Last edited: 4th Aug, 2017
    NHG likes this.
  19. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    It was pretty interesting to see some of the answers in the YIP magazine on what some of the established investors would do with a $1 million dollars.
     
  20. Barny

    Barny Well-Known Member

    Joined:
    16th Oct, 2015
    Posts:
    3,189
    Location:
    Australia
    What did they say?