NSW Newcastle 2022

Hmm I wonder what todays inflation data (Annual CPI @ 5.1%!!) will mean for lending rates and the RBA's next move given that the NZ central bank put rates up 0.50 earlier this month.

I reckon RBA puts rates up at the next board meeting or in June at the latest after the election?

May 'in play' for a rate hike as cost of living surges by most in 20 years

Might be time to batten down the hatches

 

$1m Newcastle house sales grow by 70 per cent in a year

https://www.realestateview.com.au/n...mZcP9bBjgV9IxqDaLJW7Pgvc9J6uAhxVmjMH2Unq1KoIw

 

Well looks like RBA has stepped in and cash rate and cost of moeny is now normalizing back to the 2.00% - 3.00% range.

Was nice to lock in rates while they were cheap, but the property market couldn't keep running like this with 20% annual increase forever otherwise Australia would be a GFC level economic disaster if a shock hit us.

Hopefully, things become a little more normal and orderly from here.

Historically borrowing cash comes at a cost - its never risk free.

Love this quote from Warren Buffet - "Interest rates are like gravity in asset valuations. If interest rates are close to 0%, the value of any asset can become almost infinite. If interest rates are high, that's a huge gravitational pull on asset values compared to risk-free interest from a bank."

Asset prices have run very hard over the last two years because of low cost of money.

 

If investors have managed their risks with loans and interest rates (lock them in etc), they should be fine. Some kept their powder dry for the last 2 years and ready to get back in, like myself.

 

Agree Larry.

Although have to say after RBA telling the market in 2020 and 2021 that cash rate would stay at 0.1% until 2024 and would continue with a quantitative easing strategy by buying govt bonds, they have now lost all credibility.

Talk about getting so terribly wrong with their guidance. Take what they say in forecasts with a grain of salt.

 

i guess this is true: control what you can, the rest is outside our control. Have to accept this.

 

Yep, who knows where inflation could go and the impact on rates. Will RBA pause at 2-3% ??

Hope so for everyone's sake.

They need to watch household debt levels very carefully or could crash the entire economy similar to early 1990s.

 

Well, some certainly dont think the market is cooling...
https://www.domain.com.au/93-gordon-avenue-hamilton-south-nsw-2303-2017783193

sold 18 months ago for $1,262,000. Now with a price guide of $3.7m

 

The before photos:
https://www.realestateview.com.au/property-360/property/93-gordon-avenue-hamilton-south-nsw-2303/

 

Yeah it's essentially a brand new high-end build inside the original brick, plus extension, plus pool, plus studio, plus landscaping etc etc etc etc. They've done an immaculate job.

P.S. Market is definitely cooling.

 

Hi,

I am new here would like to ask your thoughts about https://www.domain.com.au/13-durban-crescent-east-maitland-nsw-2323-2017745951
or Cessnock area? Thank you.

 

what about specifically? is it for investment or for owners occupied? are you focusing on rent or capital growth? for either one, what is your acceptable returns on investment? type of renters? more renters or owners occupier in that area? is there going to be more development on the land opposite the house? what attracts you? why?

 

Hi Larry, Thank you for your reply. We are looking to have our first IP. Looking for an area that has potential capital growth. Cessnock is a bit cheaper than East Maitland. Thinking of holding the IP for longer period. Mix of both good rental & capital growth. I am also not sure if these area get flooded badly.

We were also thinking in Qld but not sure of areas that are not prone to flooding.

Our budget is 800K, where do you think is best to try IP?

Any insights would help. Thanks.

 

How long have you spent researching? You need to get on the ground to research, speak to people etc. Flood map - get from the council.

 

been searching for a month now...attended a few house inspections around Quakers Hill area. But it gets 950k up around Western Sydney.

 

Well considering the cost of building a large high-end luxury inner-city home at the moment, finding the site, getting high-end plans approved, fighting with neighbours, finding a high-end builder, worrying about cost of materials and if builder might go belly up during the build process leaving you up sht creek with the bank.

$3.7m for something turn-key that you just get the keys and move into sounds about right when you consider the above ... otherwise good luck building it yourself.

 

When I first bought in newy in 2015 I think...i drove up from Sydney on weekends and speaking to investors on this forum...and read up... as i wanted to be satisfied with my due diligence. those who are invested near Maitland will be able to offer something but you need to do your own research.

 

Thank you Larry this forum has been a wealth of information for beginners like me.

 

With that said - seems people still paying good money for 'blank canvas' brick period homes in city locations with the view of renovating themselves and adding their own custom touches.

Then its worth $3m+ if you do it as a high-end build with all the bells and whistles.

https://www.domain.com.au/63-veda-street-hamilton-nsw-2303-2017698278
$1,816,000

 

I actually understand that. I go past that place almost every day... Would love to have been in a position to snap it up! And I guess if you then go and do a premium reno, as you say, the price stacks up.