What Does Yardney Have to Say???

Broad market sentiment as I have said before is better used as a measure of likelihood of decent gain.

If I invest in say a telecommunications stocks because data says that the telecommunications category as a whole has been going really well, then there is a reasonable likelihood that my investment should too make a good gain.

But I could invest in a telecommunications stock even when data says that the telecommunications category as a whole has been going really very badly, yet still make a good gain just because I happened to pick a stock that bucked the trend.

Exactly the same thing happens with property markets in my view.

 

Correction should read 'stock' not 'stocks'

 

Having just finished reading a book of Michael Yardney's his advice doesn't come as a surprise.

Yardney advocates for investing in capital cities preferentially as close as possible to CBD's (BUT NOT IN THE CBD) and in inner ring / desirable middle ring suburbs. Yardney believes that in the future there will be a discrepancy in capital growth between the inner ring and outer suburbs.

His premise is that as the population grows larger people will continue to put a higher premium on living closer to the CBD.

By contrast living in the outer suburbs will become undesirable, which will see people abandoning detached houses for villas/townhouses.

He advises against investing in regional areas and investing for cash flow.

In the most recent edition, which was edited in 2016 he still believes that property can provide a 7% p.a. capital return over the long term.

At the time he was also promoting living off equity but I suspect his stance on this may have changed- He mentioned APRA and conceded that capital growth could be more moderate in future years, which makes the LOE strategy volatile.

 

You cant LOE that strategy is dead..... APRA....

 

@2FAST4U - we are seeing that growth disparity between inner ring and outer suburbs in Perth now. Inner ring detached housing is increasing in price while housing prices in outer suburbs are still decreasing.

 

… Yes..... inner city is in demand, but......no its not increasing/rising this is incorrect? I must say sales prices are still not at pricing at 2007. I have been monitoring sales and this market is still price sensitive.

I know many Perthites are stating inner city is going great guns but this does not mean its a rising market.. its not. But I have monitored sales yes demand but we are not at 2007 price point. Also my property purchase 10 years ago in Mt Lawley is still not at 2010 price when we purchased. We are down around $150K.... ouch... I think buyers are getting confused because they actually don't understand pricing at 2007... no offence intended

Our friends just purchased in Subiaco, lots of competition, however they purchased a property in great location for less than sales price in 2007, according to RPD

Great time to upgrade primary residence being saying this for some time. But we certainly not at 2007 levels when market crashed. How far off?? Sadly I think it will take some time year... APRA has been the nail in the coffin

MTR

 

A mate just bought in North Perth. Competing with 5 other offers. Had to up his bid twice to get the deal. Sold over asking.

Another one in Bayswater had to increase hid offer twice to get the property. Sold over asking and higher than he wanted to pay.

Detached inner city housing is not booming but prices are creeping up.

Top end is also creeping up

Perth's two-speed housing market revealed as top end shows turnaround

 

Yes I know this, not saying there is no demand...… however, am stating its not at 2007 levels prior to peak, there is a massive difference.

I guess I am comparing when the market crashed or at peak to todays prices and we are still significantly down.

So you say prices increasing, I just don't see this? Friends purchased at 1.7M in Subi, and this property was worth over $2M in 2006/7.... there were multiple offers.
Perhaps they are very lucky

 

For sure the market is not back to 2007 levels in some areas. That's not what I'm saying.

Prices are creeping up from 12 to 24 months ago, depending on the area. Look at the current trend. Inner city detached housing is trending up, where far outer suburbs are still dropping. That's the disparity I am seeing, which has nothing to do with prices 10 years ago.

 

Right.

 

Even though prices are trending up North Perth is bloody cheap for the location. My mate bought a very nicely renovated older style family home for just over $1 million. He was horrified but I reckon that's a great price. Once in a lifetime deals out there now.

What are you seeing in your area?

 

I am not so sure. This is 20kms from the Brisbane CBD and priced close to $5M:

139 Kamala Drive, Pullenvale, Qld 4069

 

Same here in bris.
Although outer suburbs, I wouldn't say are decreasing.. . They are variable and timing plays a more important role.

 

That's expected for a 4ha mansion 20k from cbd...although ...let's see what it gets...could be quite different than what the seller wants.

 

AS JDP1 has pointed out that's an anomaly!

Generally inner/middle ring Brisbane is vastly outperforming outer ring Brisbane. As others have stated this trend is occurring in Perth and also in Adelaide.

 

That's 4 hectares though. He's talking more residential houses on residential sized blocks. Like this for $259,000

6 Gidran Road Baldivis WA 6171 6 Gidran Road, Baldivis, WA 6171

 

I believe it is way overpriced.

I have heard that it is now sold. I do know the offered price but don’t want to disclose on PC at least until after it settles.

IMHO, the offer is still overpriced .

 

Great example.
reiwa.com - Suburb profile for Baldivis

 

I was going to say that Butler is not much better... then I looked at the graph.

reiwa.com - Suburb profile for Butler

 

Agree with you good price

Definately seeing demand for period homes

I think anywhere upto $1.7m flying out the door if priced correctly and multiple offers
I just want prices to soar back to 2006/7