flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 See how much rent you can get for an empty block of residential land... Hoping for land value inflation. Doesn't always work though. House sold in 2006 was dismantled a few years later. It has laid bare since with the person that purchased the block from the vendor that bought it from me, finding herself unable to fund what she intended and it has been on the market for a massive inflated price ever since. An eye sore and a dreadful waste of funds for the holder of the land. Quote Link to comment Share on other sites More sharing options...
Paul1Perth Posted August 24, 2015 Share Posted August 24, 2015 By nut I'm referring to people who say the crash is coming. And by crash they mean almost overnight drops of epic proportions. Markets seldom do that, but rather decline at a slow and agonizing pace. Hopefully you don't have any money invested in shares at the moment. Drops of epic proportions happening on the share markets. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 Obviously it is the land not the house that is where the value is. Correct. But hard to see the value in paying a cool $1.2 million + after costs. Knock the house down and replace it with another. Especially in a time of economic down turn and falling Perth prices. Quote Link to comment Share on other sites More sharing options...
Wooba Posted August 24, 2015 Share Posted August 24, 2015 Hopefully you don't have any money invested in shares at the moment. Drops of epic proportions happening on the share markets. Actually I do. Not only does this not concern me, but I welcome it. It's a normal element of the markets and brings buying opportunities. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 Hopefully you don't have any money invested in shares at the moment. Drops of epic proportions happening on the share markets. Time to buy. Quote Link to comment Share on other sites More sharing options...
Paul1Perth Posted August 24, 2015 Share Posted August 24, 2015 Why would they bulldoze and build if all the value is in the land? Chucking 300-400k.Or whatever the build costs down the drain. I've seen it happen so many times. We rented in Como when we first came and my wife saw a house she loved. It was old for Perth standards, big balcony on the front with the bull nose wrap around roofing, tastefully done on the inside, wooden floors everywhere, nice garden and pergola out the back. It was out of our price range though and got snapped up pretty quick. My wife was devastated when the bulldozers moved in and they demolished the place and a nondescript block of flats got put in its place. Quote Link to comment Share on other sites More sharing options...
Paul1Perth Posted August 24, 2015 Share Posted August 24, 2015 Time to buy. Really flag? I expected you saying the "end is nigh" or something, not coming out with something positive.:wink: Go for your life in the share market mate. Too risky for me, may as well go down the casino. Quote Link to comment Share on other sites More sharing options...
Parley Posted August 24, 2015 Share Posted August 24, 2015 The trend for younger families is to want big 2 storey houses these days. But if they want to buy into an established suburb, the only way is to buy an older house and rebuild. There are a lot of knockdowns happening in the eastern suburbs of Melbourne. Often it is Chinese families. I would love to know where they get all their money from. Quote Link to comment Share on other sites More sharing options...
akiralx Posted August 24, 2015 Share Posted August 24, 2015 Often it is Chinese families. I would love to know where they get all their money from. Well, that is anecdotal of course - a 'Chinese buyer' could be a second generation Australian citizen. Assuming there *are* many Chinese buyers, remember there are more millionaires in China than there are people in Australia. Allegedly (according to Chinese expats here) a lot of the financing comes from 'dirty' money - bearing in mind overseas investment is generally illegal in China, and those who risk it get terrible exchange rates from unofficial Forex companies, investors here have varying levels of attititude to risk. One temptation is that in China buying a property's freehold is very unusual - they generally only obtain leasehold albeit for long periods - so buying a property outright is appealing for them. Quote Link to comment Share on other sites More sharing options...
Parley Posted August 24, 2015 Share Posted August 24, 2015 In UK also officially you get a 99 lease don't you ? But pratically I don't think it makes a difference. Quote Link to comment Share on other sites More sharing options...
akiralx Posted August 24, 2015 Share Posted August 24, 2015 In UK also officially you get a 99 lease don't you ?But pratically I don't think it makes a difference. AFAIK freehold and 99-year leasehold are separate things. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 Really flag? I expected you saying the "end is nigh" or something, not coming out with something positive.:wink: Go for your life in the share market mate. Too risky for me, may as well go down the casino. Far from me to be anything other than realistic. Naturally buy when low on sell on the way up. The beauty of shares being one can invest what one can afford to lose. Hence the potential for high returns and far less costs than the over inflated housing. Risky? And housing isn't a casino? Far less to lose and easy to play. I would not partake in anything connected to a casino. Once had a friend whom was banned from many casinos in Australia for winning to much in black jack. There was of course a trick involved but the casinos could never actually catch her out. She and a few trusted friends made many hundreds of thousands. Once banned here in numerous Australian casinos they took their craft to Malaysia and beyond. Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted August 24, 2015 Share Posted August 24, 2015 In UK also officially you get a 99 lease don't you ?But pratically I don't think it makes a difference. Absolutely it makes a difference. Leasehold generally means that you do not own the land that your home sits on so most typically applies to flats. Leases are often longer than 99 years though as it starts to become problemmatic getting mortgages on leasehold properties once the balance of the lease falls below 50 years or so. The flat I owned had a 999 year lease. Quote Link to comment Share on other sites More sharing options...
Parley Posted August 24, 2015 Share Posted August 24, 2015 Absolutely it makes a difference. Leasehold generally means that you do not own the land that your home sits on so most typically applies to flats. Leases are often longer than 99 years though as it starts to become problemmatic getting mortgages on leasehold properties once the balance of the lease falls below 50 years or so. The flat I owned had a 999 year lease. what I meant though was I thought at the end of the 99 years they just start another 99 years or something like that. I'm not too clear how it works but I thought it was something like that. Or does a new 99 year start when you buy the property off someone ? Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 Well, that is anecdotal of course - a 'Chinese buyer' could be a second generation Australian citizen. Assuming there *are* many Chinese buyers, remember there are more millionaires in China than there are people in Australia. Allegedly (according to Chinese expats here) a lot of the financing comes from 'dirty' money - bearing in mind overseas investment is generally illegal in China, and those who risk it get terrible exchange rates from unofficial Forex companies, investors here have varying levels of attititude to risk. One temptation is that in China buying a property's freehold is very unusual - they generally only obtain leasehold albeit for long periods - so buying a property outright is appealing for them. Remember also that it was Rudd that allowed the lifting of limits of 50% of any development to be in overseas hands. Allowed developers to cater for entirely a foreign market. He also allowed foreign students to buy while in Australia pursuing their studies. They were expected to sell legally with a certain time of departure. Never really followed up and abuses appear to be everywhere in the foreigners buying investment property area. Pretty much impossible for local buyers to compete the way things stand. It would appear certain real estate agents as well as banks were compliant to varying degrees with all having vested interests. Chinese overseas buyers being in such large number have the real potential to impact on numerous foreign housing markets and are like Canada/USA/ UK/ New Zealand . The printing of cheap money in China facilitates the ease in getting loans there besides the laundering of dirty money. It wouldn't be too hard for the small Australian inner/near city locations to be overwhelmed. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 what I meant though was I thought at the end of the 99 years they just start another 99 years or something like that.I'm not too clear how it works but I thought it was something like that. Or does a new 99 year start when you buy the property off someone ? It will usually state if can be released or not. The generations of the future would need to work out if the cost warranted another extension or not. Of course it is possible to purchase into far cheaper leases at periods of 40 year leases as well, for those wanting out of existing lease. The original title anyway would ensure none would be around at time of potential renewal. Quote Link to comment Share on other sites More sharing options...
Guest Anya Posted August 24, 2015 Share Posted August 24, 2015 With increasingly sound reason. Australian property is hardly a good deal. A house just a couple of blocks from where we live, was sold in Oct 2012 for $1.2M (I think there were 3-4 bidders then). House next door to this, exactly the same size, also a knock-down sold for $2.455 M in May 2015 with 6 bidders. Absolute madness. It is after seeing the frenzied bidding at about 100 odd auctions in summer and autumn of 2015, made me convinced that we have a bubble and prices have gone unrealistically high. Sadly for some, I think this is going to end in tears. Fwiw, I am a property owner, and yes, I am extremely bearish about house prices. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 24, 2015 Share Posted August 24, 2015 A house just a couple of blocks from where we live, was sold in Oct 2012 for $1.2M (I think there were 3-4 bidders then). House next door to this, exactly the same size, also a knock-down sold for $2.455 M in May 2015 with 6 bidders. Absolute madness. It is after seeing the frenzied bidding at about 100 odd auctions in summer and autumn of 2015, made me convinced that we have a bubble and prices have gone unrealistically high. Sadly for some, I think this is going to end in tears. Fwiw, I am a property owner, and yes, I am extremely bearish about house prices. I'm afraid many Australians have some resemblance to a psychotic DNA imbalance around housing. It is a very unhealthy national obsession where the air can only be cleared when a rebalance in pricing occurs and the rears shed have dries. It can't come too soon in my book. Problem being outside interference constantly continues to distort the market making it unable to gage. Quote Link to comment Share on other sites More sharing options...
MARYROSE02 Posted August 24, 2015 Share Posted August 24, 2015 I'm afraid many Australians have some resemblance to a psychotic DNA imbalance around housing. It is a very unhealthy national obsession where the air can only be cleared when a rebalance in pricing occurs and the rears shed have dries. It can't come too soon in my book. Problem being outside interference constantly continues to distort the market making it unable to gage. House prices go down as well as up, like most things. Quote Link to comment Share on other sites More sharing options...
Wooba Posted August 24, 2015 Share Posted August 24, 2015 Hard to say. I saw prices fall in Australia's North West rather quickly and substantial ones at that. When the market dries up there is little to sustain prices. Fact being no one really knows what could set the crash scenario off. Houses are only worth /what someone is prepared to pay for them. I'm not familiar with the area, but I'm going to take a guess that it is sort of rural and/or very reliant on one or two industries? In major metropolitan areas and the surrounding suburbs prices tend to take a while to drop. When sales first decline, many people refuse to sell "for less than it's worth". Eventually there will be people who have to sell, for whatever reason and that starts the ball rolling. Anything is possible of course, but that's typically how it goes.. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 25, 2015 Share Posted August 25, 2015 House prices go down as well as up, like most things. Yes but they shouldn't propel upwards to the extent they have. Very abnormal. Very dangerous. Like you say they go up and down. Funny few in Australia seem to consider that so. A house is not an ever growing gold mine or a substitute to work. Many consider it so. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 25, 2015 Share Posted August 25, 2015 I'm not familiar with the area, but I'm going to take a guess that it is sort of rural and/or very reliant on one or two industries? In major metropolitan areas and the surrounding suburbs prices tend to take a while to drop. When sales first decline, many people refuse to sell "for less than it's worth". Eventually there will be people who have to sell, for whatever reason and that starts the ball rolling. Anything is possible of course, but that's typically how it goes.. Yes both those assumptions. One area which was resource based other area due to a government initiative that was later removed. Odd though few on the ground saw it coming or wanted to see it more the case. Perth is rather like you describe. In my area I could swear houses are still rising in price. I expect competition among the real estate industry forces them to offer to sell the pile at an inflated price to the seller to win the business. It can work as well. Others linger with For Sale signs and little willingness it would appear to confront reality. Quote Link to comment Share on other sites More sharing options...
Parley Posted August 25, 2015 Share Posted August 25, 2015 It will be interesting to see what the effect on the Australian housing market is by the sharp slowdown in China and their stockmarket correction. Chinese people may want to pull money out of their market and country and may see Australian real estate as a safe haven. Thus providing a boost here. Longer term a slowdown in our property is expected. Although I don't see a collapse as the underlying economy is actually not bad. And foreign money coming in as the AUD dips will keep us buoyant Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted August 25, 2015 Share Posted August 25, 2015 The point being it depends when people will finally digest an asset is hardly an asset but more a milestone around the neck with a massive debt to service. It would appear to have already got through to many First Home Buyers, now with increased mortgage payments on lenders and more required deposit, along with finally alleged greater policing of foreign abuse in the housing market (now in the hands of the tax department to administer) we may well see a greater reality address the housing fiasco. Time will tell but things certainly cannot remain as are. Quote Link to comment Share on other sites More sharing options...
Paul1Perth Posted August 25, 2015 Share Posted August 25, 2015 Yes but they shouldn't propel upwards to the extent they have. Very abnormal. Very dangerous. Like you say they go up and down. Funny few in Australia seem to consider that so. A house is not an ever growing gold mine or a substitute to work. Many consider it so. It's not an Australian phenomenon like you make it sound flag. Happens all over the World and I'm sure you saw it in the UK too. When I left Uni and was looking to buy the first house with my wife house prices were going crazy. Adverts on TV about get in now or you never would, News items about how much they had gone up in a single day, as if it was all a good thing. Drove people who had never considered owning a house into panic buying. A guy I worked with bought a house with his Sister because he believed the hype about if you don't buy one now next week they are going to be 10,000 pounds more. Happened in America before the GFC. The older generation, like us, know that there has to be a correction sometime and hope we are happy with where we live. I don't think Perth is anywhere near as bad as Sydney and Melbourne and I think it's there that the rot will start. There may be a slowdown and a bit of a correction here but if you haven't over extended yourself and happy with where you live you shouldn't have too much to worry about. Quote Link to comment Share on other sites More sharing options...
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