Property set to become worst investment

Discussion in 'Property Market Economics' started by TMNT, 20th Oct, 2016.

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  1. Kangabanga

    Kangabanga Well-Known Member

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    yes and what other sources giveth, they can taketh just as easily ;P
     
  2. Cimbom

    Cimbom Well-Known Member

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    If that happened, demand would also reduce significantly.
     
  3. MTR

    MTR Well-Known Member

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    Property has been the most brilliant investment for many investors who purchased in the booming markets in Australia which started in 2013.

    Moving forward... because property prices have increased dramatically over these years rents are coming off at a low base and not attractive

    Rents in Perth have fallen back at least 15-20%, though prices have also fallen back.

    Tomorrow will property prove to be a good investment not if property starts to soften??

    Here are some reasons why markets soften. I may have left something out??

    So I guess you could ask yourself are any of these boxes ticked already, or is there a potential in the very near future?

    Interest rate rises
    Lending squeeze
    Economy slowing down
    Unemployment increasing
    Market sentiment changing
    Immigration slow down
    More stock coming to the market
     
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  4. TMNT

    TMNT Well-Known Member

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    totally agree with you MTR,
    however they do say buy in gloom, sell in boom

    my strategy is (if I can get it right) wait until the falls stop, and thne either start buying at the very bottom or a slight recoevery, as there is no point getting a screaming bargain in a falling market at a price that will be the market price a few months/years down the track

    however, the current booms in various areas dont seem to be slowing down, eg all of melbourne its not hot hot hot any more but it seems nothing has plateaued,
    except the regionals.....which sux for me
     
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  5. radson

    radson Well-Known Member

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    Capital Gains, business incomes, dividends, rents,licensing, royalties, arbitrage etc etc.
     
  6. Perthguy

    Perthguy Well-Known Member

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    Love it! :)
     
  7. MTR

    MTR Well-Known Member

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    I have heard that outer burbs in Melb is hot whilst some areas are stagnet? not sure not looking at the moment

    Many ways to skin a cat

    I prefer buying in rising markets and selling prior to peak, making money in shorter timeframes, all to their own
     
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  8. Blueskies

    Blueskies Well-Known Member

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    I agree, the price of an individual property can increase faster than inflation/average wages pretty well indefinitely provided there is ongoing population growth and density increases in a city.

    Pick any blue chip house in the 10k ring of a capital city, 100 years ago it was rural, 75 years ago it was industrial, 45 years ago it was houses on the outskirts, 25 years ago it was mortgage belt battlers, today it is cashed up professionals, in 20 years it will probably be executives and business owners, in another 20 it'll be high density apartments. The piece of land hasn't changed but the demand for it has outstripped inflation for over a century, no reason to expect that to change until the population density stops growing.
     
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  9. MTR

    MTR Well-Known Member

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    But like any asset class regardless of whether it is blue chip or not there will be highs and lows, booms/crashes..... you can still lose money if you get the timing wrong and buy at peak, buy the wrong product etc etc.
    I think your point is if you hold on to property long enough it will make money, sure, but that's not necessarily the smartest way to approach property investing, just my humble opinion.

    MTR:)
     
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  10. Blueskies

    Blueskies Well-Known Member

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    My post was more refuting the idea that property values can only grow in line with wage growth. When you talk in averages and medians this is true but not when you get down to the individual property level.

    I definitely agree with you about timing being critical but I am still pretty bullish on markets outside Sydney and Melbourne. It feels a bit like one interest rate rise (outside of RBA) and the sky is falling. seems a bit overblown to me. More about bank profitability and capital requirements than the start of serious inflation. The global economy seems as shaky as ever, can't see a case for any sustained rate rises in the short term.
     
  11. MTR

    MTR Well-Known Member

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    got it.
    You could be right, don't know... my concern is market sentiment, when this happens markets turn? my gut tells me this is what we are seeing now, only early days. But what do I know? time will tell:)
     
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  12. Perthguy

    Perthguy Well-Known Member

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    Some of the hot markets certainly seem cooler. I mentioned my parents have their house on the market in Ringwood. Development potential, renovated house, not much interest. Hopefully something will happen in the next week but I am worried it is getting close to Christmas. Maybe they just listed too late in the year?
     
  13. MTR

    MTR Well-Known Member

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    Really.
    What my agent told me was that since government has changed policy with regards to foreigners buying it has significantly impacted in these areas. Chinese really loved Ringwood and Croydon.

    Also, do your parents know how many units they can get on the block?
    Still early days though.....
    Perhaps they may need to drop the price? don't know.. Could also be time of the year close to Xmas?

    I sold my Croydon DA within 2 weeks to a builder, there was fair bit of fat in the deal and concerns that the market may change??? so offloaded.
     
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  14. Perthguy

    Perthguy Well-Known Member

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    They have offers... just not quite enough yet... ;) :)

    Good move I think.
     
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  15. Tekoz

    Tekoz Well-Known Member

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    yes, somehow anything with *wood in it attracts Chinese buyer like in Sydney NSW:
    Eastwood
    Burwood
    Chatswood

    ...not sure about Earlwood and Villawood :cool:.

    maybe next time when the council open new H&L package area with the name:
    Richwood
    Goldwood
    Dragonwood
    Goodwood

    it would be more attractive to Chinese buyers :).
     
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  16. MTR

    MTR Well-Known Member

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    really but Croydon does not have a wood in it and apparently Chinese like this area:p
     
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  17. Brickbybrick

    Brickbybrick Well-Known Member

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    You forgot Eightwood:p
     
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  18. TMNT

    TMNT Well-Known Member

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    Off to start an estate called 888goldendragonwood888
     
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  19. Ted Varrick

    Ted Varrick Well-Known Member

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    Alternatively,

    Hot Doggies!

    Hot Doggies!
     
  20. aussieB

    aussieB Well-Known Member

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    Only if the job markets hold up over a period of time. And all it takes is for a bogan to rough up an Indian and there will be concerns about racism which will slow up the migration, imo. They will still come though - just a tick later.