I like to send you this stuff from time to time…
…but I can't send you all of the research that I'm across, simply because some of it I pay thousands for – and if they knew that I am giving away, I'd get into heaps of trouble.
However, as I bank with ANZ, I did ask permission to get this out.
Obviously they said, yes.
That was four weeks ago, so sorry for the hold up.
So what's it all about?
It's a report on the banks internal view of real estate. Now, considering they've got the most to lose of the market comes crashing down, they spend the most on watching it from all different economic angles.
You'll find this report valuable and insightful as to what the banks think will happen to real estate going forward.
Also, while I have you here…
What is YOUR view of the current real estate market?
Are you a buyer/seller ?
Have you bought anything recently at a huge discount?
Share your experience below.
I seriously would like to know.
Anyway, hope the report helps. And when I get stuff like this from time to time, I hope it's okay if I just copy you in.
Signed with Success,
Jon Giaan
Knowledge Source
This is of interest to me as I am a Real Estate Agent and I must admit I have not experienced a market this tightin fifteen years.So when I say it is tight believe me.
Rents have risen quite rapidly the last few years and it is once again becoming more viable option to purchase. However credit is still tight. I have seen some great cashfow property deals in Qld recently and I am sure we will see a lot more vendor financing in the future.
Indeed our property market is a very dangerous situation.
I personally think that STIMULUS will cost a fortune to all of us.That was the most foolish thing the government has done ever.axing our own feet.
WE HAVE NOT LEARNED A SINGLE LESSON FROM THE U.s. PROPERTY crash.
when ever there is a CREDIT fuel boom, where people took ALL the credit they could take from the bank, thinking that the INTEREST rate will not rise ever- THINGS CAN GO HORRIBLE WRONG.
It is a BUbble – prices CANT go JUST up for more than 40 years,….it has to STOP and GO DOWN.
The KEY role is the INTEREST RATE RISE…what do you think ? how much rate rise is still ahead.?
IF the economy will go good which looks like it will be going, than there will be few more INTEREST RATE rise ahead.
to give some feedback i think, at lease 12-15% price correction by this year and 8-10% for next two years would be the correction AT LEAST.
‘Please remove me from your mailing list as you don’t answer your emails.
The deflating bubble has just popped.. it will take some time longer before things are at a “huge discount”.
Let’s just say that with overseas investors gone (high Aussie Dollar), first home owners gone (no more incentives), rates rising, and overseas migrants reducing (tighter intake and higher cost), there won’t be much to gain from property investment for the next few years.
Unless someone wants negative return over the next few years, I would look to cash or a number of other areas with much higher forecast yield.
Not sure on the east coast, at least you guys have the population to justify current prices albeit a bit high.
Perth however is in EXTREME trouble. Massive house prices that are way overpriced. No one is buying, the only people with money and doing well are fly in fly outs and they are not stupid enough to buy overpriced perth property. FHB’s have fled and cant afford to buy anyway. Perth is teetering on collapse and Perth is not in a boom. Just ask the thousands of workers and factories with no work as its all being outsourced to China.
Hi all,
This is not my story. This is a person i know very well.
He just bought a property at Palm Beach ( Very Very Northern Beaches in Sydney).
It is the playground of the rich. The property he bought was on the market for more than 2 years. They originally wanted 8 million. He bought at auction. He was the only bidder. Guess what he paid….4.5million !!! He probably could have waited and gotten an even better deal. But he liked the property… so he bought it.
This is my story…nothing to do with property.
I have been in the car stereo game since 1988.
I have never seen it so quiet as it has been for the last 2 1/2 months.
The strong dollar has probably a lot to do with it…???
It is a bit scary !!
Greetings
Juerg
It seems to me that although there is some tightening in the market around properties in the “average” price range (ie $450-650k), there are some awsome bargains available at both the high and low end of the market right now. I have bought several apartments in some of the cheaper, high growth areas and prices are going up (although not at the rate they did in 2009/2010).
I think the high end of the market has also come down quite a lot over the last 6-8 months and people are buying !
Nope Real Estate nnnnnnnnnnnnnever goes down it just goes one way and that is up up and up and up and up for ever.
Just ask the people in Japan
i am a realestate agent in the outer east of mellbourne the market here has come back around 10%in the last few months and i am expecting a little more to come .
there is still demand in estaablished homes ,but new home enquirey is very slow.
first home buyers have all but gone as well .
the good news is that i have now noticed buider willing to be more negotiable
i have 20 sq house and land packages for $330,000 in good locations this is 30k less than what they were selling at.
As good developed land is in short supply i dont see much more of a price drop
Hi Jon,
It is definitely a buyers market at least in the west of Sydney and Blue Mountains and sellers are reducing prices quite considerably in some cases, especially if it a high price and it has been on the market for a while.
Real estate prices in Narrogin, Western Australia at the low end of the market have dropped over the last 2 years by up to 30% with no relief in sight. Quality of tenants is also not there as a poor series of 4 farming seasons has seen a drop in employment and prospects. Farmers are in serious trouble in much of the wheatbelt if there is no rain soon and a bumper crop to cover recent borrowings and erosion of equity. Some farmers may never recover and there may be a sad loss to our farming community of decades of experience by bank mortgagee auction.
City people just don’t seem to ‘get’ that poor farming seasons and resultant lack of spending has a dramatic effect on what everyone else has to spend.
Homeswest has created many new dwellings in town, so that has taken up some of the rental market, although they are toughening up on family income levels and forcing some tenants even slightly over the income guidelines to vacate. About an even split then in that market.
Expect this and similar markets to remain static at least for a further 12 months, possibly 24.
Have a laugh !
I totally agree with “malay” regarding the stimulus package.
However I disagree with the opening statement.
I am close to retirement & bought another property last Xmas at a 50,000 discount in my own suburb at Lake Macquarie with great rent return.
I am looking for another to add to my portfolio & there are more coming on the market every week. My problem is choosing the one.
Honestly if you are an investor or thinking about it start digging ’cause there is gold out there for the taking.
When the media says things are bad’ to me that’s a sign to get active & when the media says things are hot its to late.
re. Juerg 13. May, 2011 at 3:46 pm
I would have thought that the car stereo industry was in it’s twilight years. Nearly every car you get now a days has a very good car stereo in it from new. Some with a CD player
Hi jon.
Firstly – love your daily pick-me-up e-mails; thanks.
I wanted to let you know that because of you (and because of Property Investing too, to be honest) I have bought 4 residential properties this year.
I got over my procrastination and took the plunge.
They are out there, you just have to search.
Cheers,
Gerry.
Not only does he not answer his emails he also sends material out FOUR WEEKS LATE! A month is an eternity in the world of finance. His emails often contain misleading and deceptive half truths as well.
Very interesting..Thanks for the info Jon.
Hi, I belive in realestate. I have 7 properties in Australia, I have a loan of about 1mil to the banks, Im 34 now and bought my first property when I was 19. It has not been easy but i hope to retire from rental income at 40. realestate is not a quick profit thing its a long term investment that needs to be managed. I failed maths at school so the graphs and percentages dont mean anything to me but when it comes to money I seem to catch on very fast. If I could buy more property I would. I also believe that if you cant afford it at the worst case senario then dont buy it. Rents have gone up a bit in the last few months on my propertys which helps. the current down cycle is all a part of the cycle. The next boom will be bigger than the last and the next crash will be even bigger than this one. But if your not in for quick profit and can afford what you have then you will never lose.
Are there still any smaller lenders willing to give you a loan if you have assets. The big banks have vitually stopped lending since January if you cannot substantiate your income. Yhis also includes SMSF’s.
If you have had a good experience or a good broker let me know as I would like to buy a property or two.
Thanks
OUR PROBLEM IS CRETED BY HUMANS.
IF WE DO CONTROLL THESE TEN THINGS WILL BE IN HEALTHY STATE
1. NO ONE CAN OWN MORE THEN ONE PROPERITY
2. ALL MUST SALE THEIR SECOND HOUS.
3. THERE WIL BE PLANTY HOUSES AVAILABLE FOR NEW BUYERS.
4. ALL PEOPLE WHO AR E HAVING MORE ROOM HOUSES SHOULD BE OFFICIALLY ALLOWED TO RENT THE EXTRA ROOMS.
5. GRANY HUSES MUST BE GIVEN TO PEOPLE ABOVE 65 YEARS.
8. NO GRANY HOUSE SHOULD BE EMPT. COUNCILS SHOUD TAKE OVER ITS ALLOTMENTS & ALLOT THE PEOPLE OF THAT AREA ONLY.
9. OWENERS MUST UNDERSTAND IT WILL BRING SECURITY TO UR PROPERITY & SAFET OF PROPERITY & UR CHILDREN & FAMILY
10 . IT IS THE DUTY OF THE GOVT THAT EVERY HUMAN HAS A ROOF TO LIVE, RIGHT TO WORK, EDUCATION & FREEDOM OF SPEACH
11. ALL THE LAWS MUST BE FOLLOWED & INDIVIDUAL MUST KNOW THEM & FOLLOW THE.
FOND REGARDS TO ALL
I know CBD of melbourne over built ,but what about Travancore 1.5 kms north of The melbourne kids hospital is it worth a look at …. pedro
THE REAL ESTATE MARKET IS IN DIER STRAIGHTS.BANKS WONT LET POEPLE HAVE ANY MONEY.YOU WILL ONLY BE ABLE TO LEND MONEY IF YOU ARE ALL READY WELL OFF.MY 2 BOYS WILL NEVER BE ABLE TO BUY A HOUSE.
Thanks for your updates, Knowledge source. I guess Real Estate will continue as it has been up and up rolling here and there, unless of course there is some unexpected /unforeseen reason for it to be arrowing downwards? ( Someone mentioned Japan). Anyone know how the areas in Queensland that were affected by the major flooding getting on ?
Best to keep a positive outlook and not be too concern or focus on any negative or doomsday predictions that may well affect the skyrocketing values of real estate especially in Melbourne. (e.g:earthquake warnings like: “… University of Melbourne geologists have uncovered evidence that parts of South-eastern Australia recently stirred from their geological slumber and are in an active mountain building phase…” Source: Australians ‘complacent’ to earthquakes ABC Science Friday, 27 March 2009 ).
I recently renovated my two old houses which are on rent one was a major renovation which required raising the whole structure down since it was bandly done, the other one just needed a new roof, painting and mending cracks.I have also three plots to develop. Houses in Zambia don’t depreciate only appreciate. The house I bought at $ 1000 dollars ten years ago can fetch the same amount in five months time in terms of renting it out. If I sold it I would get thirty times the amount I bought it. I that not a deal. Your knowledge is driving me mad to have more real estates.
Hi Jon!
I am a buyer at this point in time until I run out of borrowing power –I’m almost there- however.
I have some concerns with the political innuendo in our country and the fighting all over the world for the so called DEMOCRACY. Adding to that, the uncertainty of when is work coming up, and the inflated prices that real estate agents put on housing to collect a greater commission aggravated by the threat of raising interest rates from the ARB topped up by bank’s greediness creates a market just for some. The majority of citizens are on just above the minimum wage salary driving such potential buyers to rent instead. Rents are more attractive than paying interest rates, water rates, council rates, power, insurances, fuel, as well as those goodies that a working person and family needs to be provided with to enjoy some time besides working.
So yes, I am buying to sell to provide for my retirement, but scared of the future. Meanwhile, I am trying to be positive (it’s hard) believing in medium term (not more than 5 years) property investment benefit.
Are there still any smaller lenders willing to give you a loan if you have assets. The big banks have vitually stopped lending since January if you cannot substantiate your income.
Gordon
All lenders have stopped No doc loans to individuals.
No doc loans are available as long as they do not come under NCCP (National Consumer Credit Protection Act). Basically they can not be an individual, but a coporate trustee can obtain one.
Restrictions: Lower LVR, and higher Interest Rates
John Smith
http://www.inpiredfinance.com.au
Dan, sorry to inform you but real estate DOES go DOWN. My neighbour in Perth in a prime suburb had her house on the market for 2.9 million about one and a half years ago and there were no takers. It was reduced to 2.19 m after a year and was then sold for 2.09 m after being on the market for such a long time.
Japan is quite different to Australia. For starters, the country is much, much smaller so there is a shortage of land there. Similarly, in Singapore, there is a scarcity of land there and a reasonably nice apartment will set you back over a milion.
Thanks for some good infromation. For others on here I would recommend checking out http://www.housepricecrash.com.au for unbiased buying and renting info.
It is a new site all about the australian property market and being someone who is looking into buying myself Ive found it a really helpful resource. Im going to be careful about not getting too ripped off now and Ive realised that renting isnt always such a bad thing!