OZ property - rent, lease of buy

[axe168]

Read more: http://www.marketfolly.com/2009/09/top-25-warren-buffett-quotes.html#ixzz1lr1sjIAZ

I think its time to greedy.

I missed my boat.. I was in SG in Dec, opened a US trading account and decided to place some money into US stocks. The bloody company refused to collect USD cash, they demanded a cheque bearing my name. After all the ding dong, I missed buying BAC at 4.99 (my Bro in US bought @ 4.99).. now it is $8.13 !!! I missed my boat.

It is 'not' too late for property now..

 

[neddy]

why not just rent? Are prices rising? We see a slight price decline last year and a slightly bigger one this year. Next year depends on whats happening in China and the EU. We honestly dont know what the long term trend is, just that in the short term expect the correction to continue.

Renting can be a BIG problem precisely because we are living in such unstable inflationary time. Bad news is when Fixed income meet rents going up due to inflation and Juliar carbon tax.

There are pockets of areas where you can still find value in properties. Even if the prices are down, they will not cop a big negative equilty.
It is really about staying down to earth and not get emotional with houses. As a independent person helping a couple look for a place, I only concentrate on the numbers. Even have to look at toilets to tell the couple why they should not spend another $30k competing with other buyers.

Eg 1 shower, 2 toilet - very hard to justify that additional $30k to pay $450k for the property they want!

Even at $420k, I expect the price to fall to $380k at the most.
Why? I watched the price minus artifical stimulus and what happened in the depth of the GFC.
I do not like places where owners depend too much on leverage to buy the properties and influence the prices to artificial highs.
Too many cash-up migrants can be a big issue as well.

I can tell you where they live, because their property prices are now at least 50% down.
And they live close to the coast, where their emotions ran high with the sea and the yachts sailing up the canals.


Found!!!

http://www.domain.com.au/Property/For-Sale/House/WA/Mandurah/?adid=2008438465
THE ULTIMATE LIFESTYLE - MASSIVE PRICE REDUCTION!
PORT MANDURAH STAGE 1

This modern contempory home situated in stage 1 of Port Mandurah canals, is designed for comfortable , indoor /outdoor living in a relaxed atmosphere ,with all main rooms, including bedrooms, taking in the views of the waterways, parklands and marina. The property exudes a comfortable tranquil ambience with a spacious free flowing open plan design .



Sidetrack:
Anyone know the latest London's SW1 property prices?

 

[ZorrorroZ]

I have been googling available perth properties... not cheap, sia!

So what kind of moolah does a new immigrant have to have on hand when looking for a place for a family of 4? - thinking of 2 bedrooms for a start, at least 1 bathroom/toilet, and a space to park - need not be a covered car porch.

Is thinking of a +/-$300K house out of whack? Too much? Too little? How much loan can I get to buy this? - assuming I don't have access to CPF moolah (yet...).

 

[Ash007]

Interesting you mentioned leverage by cash-up migrants.

Was talking to a colleague about home loans, and was kind of shocked he only ever did an interest only loan. He plans to keep leveraging his place and refinance it every 5 years. Since that is the max you can do for an interest only loan. I mentioned what happens if his home price drops and he just said that won't happen. Some of these new migrants really playing russian roulettes with their mortgage.

.........

I do not like places where owners depend too much on leverage to buy the properties and influence the prices to artificial highs.
Too many cash-up migrants can be a big issue as well.

I can tell you where they live, because their property prices are now at least 50% down.
And they live close to the coast, where their emotions ran high with the sea and the yachts sailing up the canals.

Sidetrack:
Anyone know the latest London's SW1 property prices?

 

[Ash007]

Buy what you can afford. Not too sure abotu Perth prices, Neddy and the rest would be able to help you there. As for how much you can borrow, it depends on how much you earn and how many dependents you have.

I have been googling available perth properties... not cheap, sia!

So what kind of moolah does a new immigrant have to have on hand when looking for a place for a family of 4? - thinking of 2 bedrooms for a start, at least 1 bathroom/toilet, and a space to park - need not be a covered car porch.

Is thinking of a +/-$300K house out of whack? Too much? Too little? How much loan can I get to buy this? - assuming I don't have access to CPF moolah (yet...).

 

[neddy]

I have been googling available perth properties... not cheap, sia!

So what kind of moolah does a new immigrant have to have on hand when looking for a place for a family of 4? - thinking of 2 bedrooms for a start, at least 1 bathroom/toilet, and a space to park - need not be a covered car porch.

Is thinking of a +/-$300K house out of whack? Too much? Too little? How much loan can I get to buy this? - assuming I don't have access to CPF moolah (yet...).

Hey!

I do not know your situation, how cash up you are. How well you know Perth, or the property market here. Perhaps your relatives can help, but buying a property is a personal choice.

Do you know how to buy a property in Perth?
The Homebuyers' Survival Guide for WA
http://www.commerce.wa.gov.au/consu...g_and_selling/buyers_sellers_information.html

Is there a need to rush? Buying a property is a big thing. Buying a WRONG property is worse, unless you have spare cash to back out and get another property.

I believe your requirements will change after you understand a property here.

Eg For a start, you will need a carport at least. You have kids, so you will want to live near a good school. 3 bedroom is basic for a family of four. 2 cars.


If you have ready cash like my Sri Lankan friend, can consider building your own house. He is "smart", using the equity in his home to lent to business friends in Sri Lanka for high interest.

 

[ZorrorroZ]

Hey!

I do not know your situation, how cash up you are. How well you know Perth, or the property market here. Perhaps your relatives can help, but buying a property is a personal choice.

Do you know how to buy a property in Perth?
The Homebuyers' Survival Guide for WA
http://www.commerce.wa.gov.au/consu...g_and_selling/buyers_sellers_information.html

Is there a need to rush? Buying a property is a big thing. Buying a WRONG property is worse, unless you have spare cash to back out and get another property.

I believe your requirements will change after you understand a property here.

Eg For a start, you will need a carport at least. You have kids, so you will want to live near a good school. 3 bedroom is basic for a family of four. 2 cars.


If you have ready cash like my Sri Lankan friend, can consider building your own house. He is "smart", using the equity in his home to lent to business friends in Sri Lanka for high interest.

building own house? hmm... interesting, but daunting thought.

I have little idea of what perth is at this time. I do have a few friends scattered around WA - not really sure where - only have their emails and contacts. Will buzz them once the visa is confirmed.

For schools - 2 kids - am looking for a high school and a primary school. Should consider state school or private school?

I am not rich - have some tens of thousands on hand - and a few hundred K in CPF. Is this ok for a start?
Hoping to land a $80K-$100K+ job in IT for a start.

My migrant visa says I gotta stay in WA for at least 2 years - so I guess I should look for low cost housing around the schools I pick for my kids for a start until I can estab into a career where I can afford a better house. Can't touch the CPF for a few years until I can get AU citizenship first, before giving up SG citizenship, what?!

 

[neddy]

building own house? hmm... interesting, but daunting thought.

I have little idea of what perth is at this time. I do have a few friends scattered around WA - not really sure where - only have their emails and contacts. Will buzz them once the visa is confirmed.

For schools - 2 kids - am looking for a high school and a primary school. Should consider state school or private school?

I am not rich - have some tens of thousands on hand - and a few hundred K in CPF. Is this ok for a start?
Hoping to land a $80K-$100K+ job in IT for a start.

My migrant visa says I gotta stay in WA for at least 2 years - so I guess I should look for low cost housing around the schools I pick for my kids for a start until I can estab into a career where I can afford a better house. Can't touch the CPF for a few years until I can get AU citizenship first, before giving up SG citizenship, what?!

Get to know Perth better first. See if you like this place. Renting is a good way of appreciating what you want and do not want in a future home. Remember that you will be doing asian cooking in a open-concept home.

Perth has changed a lot, esp in the past 5-6 years. There are more and more Asian faces around town. The trouble is that some familiar Singapore/Malaysian hawker food eateries are now run by China people. Have you tried Hokkien Mee cooked by people from China? My Jap wife make better Hokkien Mee, with miso base. hahaha! This weekend, I am making Kway Chap.

Remember, there are some places in Perth that I will never take the train to, after dark. And property companies used to promote even these suburbs to Singaporeans.
And for schools in such suburbs, students do score ZERO marks in national tests and the teachers do not even try to teach students for uni. They just hope the students graduate with some life skills.

 

[neddy]

Interesting you mentioned leverage by cash-up migrants.

Was talking to a colleague about home loans, and was kind of shocked he only ever did an interest only loan. He plans to keep leveraging his place and refinance it every 5 years. Since that is the max you can do for an interest only loan. I mentioned what happens if his home price drops and he just said that won't happen. Some of these new migrants really playing russian roulettes with their mortgage.

Some people do that for tax purpose or because their butt is in the wrong place with their brain. But I don't play play with my main property. It is not too long ago when "Perth property prices never fall".

Now, I am renting out my granny flat short-term to an Irish couples who are visiting their kids who still miss Ireland.

 

[Aussie Prick]

Renting can be a BIG problem precisely because we are living in such unstable inflationary time. Bad news is when Fixed income meet rents going up due to inflation and Juliar carbon tax.

There are pockets of areas where you can still find value in properties. Even if the prices are down, they will not cop a big negative equilty.
It is really about staying down to earth and not get emotional with houses. As a independent person helping a couple look for a place, I only concentrate on the numbers. Even have to look at toilets to tell the couple why they should not spend another $30k competing with other buyers.

Eg 1 shower, 2 toilet - very hard to justify that additional $30k to pay $450k for the property they want!

Even at $420k, I expect the price to fall to $380k at the most.
Why? I watched the price minus artifical stimulus and what happened in the depth of the GFC.
I do not like places where owners depend too much on leverage to buy the properties and influence the prices to artificial highs.
Too many cash-up migrants can be a big issue as well.

I can tell you where they live, because their property prices are now at least 50% down.
And they live close to the coast, where their emotions ran high with the sea and the yachts sailing up the canals.


Found!!!

htid=2008438465
THE ULTIMATE LIFESTYLE - MASSIVE PRICE REDUCTION!
PORT MANDURAH STAGE 1

This modern contempory home situated in stage 1 of Port Mandurah canals, is designed for comfortable , indoor /outdoor living in a relaxed atmosphere ,with all main rooms, including bedrooms, taking in the views of the waterways, parklands and marina. The property exudes a comfortable tranquil ambience with a spacious free flowing open plan design .



Sidetrack:
Anyone know the latest London's SW1 property prices?

Surprise surprise. Rents have increased quite a bit since last time I checked (2009). Agree with the shortage of housing issue, we are flooded with data on the housing industry - but most comes from "spruikers", people who have vested interest in the real estate market in AU. Most people in Australia seem to know what is actually happening though.

Used to to be renting netted an owner a single digit capitalization rate but now it seems renting has caught up with price appreciation, so its just a saturated market. That USED to be the deal down under - rent costs lagged the broader market.

I really wonder where this market is headed in the future - will first time homebuyers and lower interest rates once again pick up the slack - or is this increase in available properties, inventory, going to translate into a 2-3 year correction? The RBA pausing is just a reality check on inflation. Glad to see you are aware of this because in Singapore our inflation peaked at 5.7% and yet the govt managed to keep it quiet. Obviously the consequences are more serious.

Another surprise. I remember Mandurah , abt 45 mins outside - went there once with Singaporeans to "go crabbing" Saw those waterfront homes and ALSO saw the price skyrocket last 10 years - and now prices are coming down?

Very interesting. pls keep us posted.

 

[neddy]

Surprise surprise. Rents have increased quite a bit since last time I checked (2009). Agree with the shortage of housing issue, we are flooded with data on the housing industry - but most comes from "spruikers", people who have vested interest in the real estate market in AU. Most people in Australia seem to know what is actually happening though.

Used to to be renting netted an owner a single digit capitalization rate but now it seems renting has caught up with price appreciation, so its just a saturated market. That USED to be the deal down under - rent costs lagged the broader market.

I really wonder where this market is headed in the future - will first time homebuyers and lower interest rates once again pick up the slack - or is this increase in available properties, inventory, going to translate into a 2-3 year correction? The RBA pausing is just a reality check on inflation. Glad to see you are aware of this because in Singapore our inflation peaked at 5.7% and yet the govt managed to keep it quiet. Obviously the consequences are more serious.

Another surprise. I remember Mandurah , abt 45 mins outside - went there once with Singaporeans to "go crabbing" Saw those waterfront homes and ALSO saw the price skyrocket last 10 years - and now prices are coming down?

Very interesting. pls keep us posted.

If I am correct, this project is a big time failure where the developers pull out and the project company close down.
Why,
the people fail to account for environmental consideration during the building and as a result, every summer, there are massive algae buildup that has nowhere to go, and cause a big stink over the area. a local univeristy has came out with a possible solution but no one is picking up the bill$ for solving this big stink.

 

[neddy]

Is Australia heading back to the banana republic days ?

YES
Commercial banks ignore RBA interest rates moves?
Mortgage rate hikes in Australia spark anger
http://tvnz.co.nz/business-news/mortgage-rate-hikes-in-australia-spark-anger-4720257

and Juliar and ALP is running the country !!!


NO
Optimistic RBA puts rates on ice as economy stabilises
BY: DAVID UREN, SENIOR ECONOMICS CORRESPONDENT From: The Australian February 08, 2012

THE official interest rate is on hold indefinitely, with the Reserve Bank seeing fresh signs of strength in the mining boom as fears of a European meltdown recede.

Who is telling the Truth?

 

[axe168]

Look into the stock market, it'll tell you the crisis is over ! Support level has risen and rally started in Nov 2011. Stock market is an indication of the future - well at least for the next 3-6 mths .

 

[neddy]

Wholesale Bank Funding Costs
Posted 2 days ago
Three and five-year bank funding costs have shot up to levels not seen in the last five years, as markets grow increasingly nervous about the state of Europe.

Source: Bloomberg, ANZ


That leads to this

http://www.landgate.wa.gov.au/corporate.nsf/chartfiles/$file/mehpm.pdf

 

[ZorrorroZ]

scary... prices really shot up from 2005....

From the graph, what's the blue and orange legend? i mean the bottom most graph with the blue and orange house graphics.

 

[axe168]

Neddy, ya graph is self explanatory. Those that reckon the property prices will drop, don't have a clue. Perhaps they are too dump to conduct a due diligence research prior their biggest purchase. I dont get it - some would buy a $50 skirt using 2hrs in shopping but $500,000 using 1min of gut feeling...

 

[ZorrorroZ]

oops... LOL... sorry, I did not read the graph correctly - the orange and blue houses represent alternate years..

 

[neddy]

scary... prices really shot up from 2005....

From the graph, what's the blue and orange legend? i mean the bottom most graph with the blue and orange house graphics.

In year 2000, all the mning engineering equipment are rusting in the yards. Then we have this economic boom, thanks to 9/11.

2005 on. I still remember, it was so scary when my investments gains (shares & properties) were reaching stratosphere level. It was a lot better than Singapore in 1994.

During those days, Perth builders need capital in Singapore promised 15% returns. But shares were returning 20%

2000: AUD$1=SGD$0.9
2012: AUD$1=SGD$1.3

Neddy, ya graph is self explanatory. Those that reckon the property prices will drop, don't have a clue. Perhaps they are too dump to conduct a due diligence research prior their biggest purchase. I dont get it - some would buy a $50 skirt using 2hrs in shopping but $500,000 using 1min of gut feeling...

That is why I do not like property auctions.
You think Aussies know financial planning? They are spoilt by the govts.

Inflation has a way of making price numbers look good

 

[axe168]

Heng ah... I have already secured a house 1.5km from Toorak :-)

http://news.domain.com.au/domain/real-estate-news/developer-plans-20m-toorak-pad-20120204-1qyfp.html

Developer plans $20m Toorak pad
Simon Johanson
February 4, 2012
Comments 30

The Federation-style house at 39 St Georges Rd has been demolished to make way for the mansion.
BUILDING will start this month in Melbourne's blue-chip suburb of Toorak on one of the state's largest and most expensive new homes.

The manor of soft drinks distributor turned property developer Harry Stamoulis at 39 St Georges Road is expected to rival neighbouring Toorak mansions Stonnington, Miegunyah and Cranlana in size and take 2½ years to complete.

''The project could be considered one of the largest commissioned single residential projects in recent Victorian history,'' said Wayne Krongold from builders Krongold Constructions.

Advertisement: Story continues below
Mr Stamoulis' most recent venture was the Vogue apartments in South Yarra. His company was also behind the Fender Katsalidis designed Argus Centre in Lonsdale Street.

While neither the project's architects Bruce Henderson or Mr Krongold would comment on the Toorak home's cost, industry sources suggest it will take more than $20 million to complete.

Mr Stamoulis bought the half-hectare property in one of the suburb's best-known boulevards for a record-setting $24 million in January 2010 near the height of the market. The Federation-style house at 39 St Georges Road that had been in the Baillieu family for 70 years was subsequently demolished.

 

[kingat33]

I do not buy the shortage of stocks myth as I have personally came across a few individuals holding many properties and some companies having hundreds of properties in their portfolio. Many of these properties are vacant or empty blocks. They bought it for tax purposes and this shortage of stock myth must be exposed. Look at the vast land size in NSW and even in Sydney alone, there are plenty of empty lands and developers are afraid of building more for fear of not having demand. This goes to show the truth is there are less demand than supply. Banks are also holding on to many distressed properties and will be a matter of time before they released it. The stamp duty exemption for first home buyer have expired and now, demand for property have almost collapse from first home buyers. Investors are shying away from this buyer market as they know it will be a matter of time before steve keen prediction comes true. Media and RP data are having vested interest in this property spruiking game so pls do discount their comments. The truth is easy to see, just look at the auction results and lo and behold, it is at a historical low clearance rate of 50% with many agents not reporting it. Next look at the sold prices at realestate.com.au, many agents do not even put it down anymore. Why? becos the actual sold price is much lower than what the vendor wants and they are censoring it for fear of causing a panic selling scenario. Conclusion: property spruikers are running out of ideals and are panicking. Aussie banks knows it and as the bulk of their revenue which comes from giving out home loans which has been on the decline, aussie banks are retrenching staffs on a massive scale. Why do that if property market is good and there are demand for home loans? Food for thoughts izzit it?