Where are you buying now?

Brisbane. Found some great ripple areas with solid add value potential.

Also have my eyes on certain stock in Sydney that I've identified as softening and offering great add value potential by building first level and redesigning ground floor open plan living/kitchen with updated contemporary facade. Sydney is such a huge market comprising of thousands of sub-markets, I've always believed it's very short sighted to write off all of Sydney during the 'correction' phase. Sydney is not like other cities.

 

I voted Other Capital and you may interpret that as Perth (no surprises there)
Buy something you can value add (reno, retain and build, develop)

 

I feel like Perth is where Brisbane was at in 2012/2013
Prices have dropped significantly due to a crash in commodity prices , Brisbane has a huge flood
you won't see huge gains on the average house over the next 5 years - maybe 5% a year
but at the moment and maybe for another year you will be able to pick up a development sized block with little premium priced into it

if you wait a few years and the market has risen 15-20% you can guarantee the development blocks would have gone up 50%

 

Regional NSW, Perth and Adelaide. Follow the borrowing capacity....

We are going to see much lower , slower cycles from now on. Think 12-15 years, maybe even 15-20 years, rather than 7-10 years. Without significant wage inflation and rental inflation , there's a one in a million chance of 7-10 year cycles while the APRA regulations are in place.... except, possibly, maybe ... in the cheaper cities and regionals, where price points allow for it within the current constraints.

Buy in less expensive locations, with a focus on yield, and look to hold for 12-15 years while paying P&I. You're going to forced onto P&I anyway after 5 years, so you may as well avoid the pain of 50-55% repayment increases when that day comes, by going P&I from Day 1.

 

Spot on, which is why I think Perth is definitely worth monitoring closely

The principle of investing as according to Warren Buffett - "Be fearful when others are greedy and greedy when others are fearful."

Cheers,
David

 

I'm watching Perth at the moment. Bought there in Jan and plan on buying there again in August/September

 

Perth.

 

Agree on the protracted cycles. In Perth, one can pick up some houses for 2007 prices, which means the pour souls that bought in 2007 and refused to sell during the peak have to hold until the market turns again.

I for one am happily bargain hunting in Perth for dev potential sites with good yields to make most use of my borrowing capacity. Not that hard to find good quality dev stock with 4%+ yields not that far from CBD in Perth.

 

Whereabouts are you buying/looking?

 

Will look at houses as close to cbd as possible within 3-400k.
When I was in perth 5 years ago I thought it was quite expensive. Nowadays I see some value.

 

Precisely what I did few years back. Bought development sites and rolling them out now. In the process of purchasing the next batch of sites for development in 2-5 years.

 

Excuse my ignorance mate, what exactly is a development block? A large site with a house on it that currently washes its own face?

 

froffies?

 

Where the Chinese are buying apparently.

Considering the latest immigration stats, the more important question in the future may be, where are the Indians buying

 

if you wait a few years and the market has risen 15-20% you can guarantee the development blocks would have gone up 50%[/QUOTE]

What is your rational behind devlopment blocks rising by 50 percent?Just curious.Some perth have big development blocks but prices are subsided due to other macro factors specific to the area.

 

What is your rational behind devlopment blocks rising by 50 percent?Just curious.Some perth have big development blocks but prices are subsided due to other macro factors specific to the area.[/QUOTE]

ok lets say a townhouse in an area is currently worth 300k
so end sales value of a 3 townhouse site is 900k
say the costs to produce each townhouse including sub div etc is 200k each, so 600k for the 3
let's say land value is currently 200k- which means 100k profit in today's market

fast forward a few years Nd median price has risen 20% - townhouse sales value is 360k

total sales value is 1.08 million
less 600k for cost to produce = 480k
less current value of land assuming 20% target profit - 300k

so 180k profit if the land costs 300k

land price now = 200k
land price for dev site when finished product go's up 20% = 300k

total gain on dev site = 50%

magic

well you can play with the numbers however you want but you get the picture
development sites hold little value in bust times especially in non blue chip areas

 

In the vote I picked 'other regional' though what I meant by that is the US.

I've just finished two there. Once the deals are done and both are rented I can share them in a new post on here.

Rationale: for my own personal investment goals and where/how I need to get ahead, I do not find any favorable AU markets currently that meet my yield requirements. I have high yield needs in order to start paying down debt en-masse for my portfolio asap (whilst interest rates in this country are still super low). Its a major goal on my 2019 goals list (yep, I write up my goals for every year ahead, in Dec, plus do a check-in every June on progress).

 

Melbourne SE - upgrading PPOR suburb.

 

Closing 3 deals in USA between now and end of Jan
35k - 2 bedroom home (montgomery Alabama) - rent $600+ month
88k - 4 bedroom home (montgomery Alabama) - rent expected $1000 + month
87k - 3 bedroom (Atlanta, Georgia) - older brick home already rented $950 month