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  1. #231
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    Jesus Christ.

    "At the other end of the spectrum, the most affordable property reported sold at the weekend was a one-bedroom unit at 29/8 Phillip Street, Redfern, sold for $383,000 by Belle Property Surry Hills."

    This is actually a 17.15sqm studio.

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    Quote Originally Posted by witherwings View Post

    This is actually a 17.15sqm studio.
    that is a box!

  3. #233
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    Quote Originally Posted by witherwings View Post
    I don't actually believe there's a bubble as such. Certainly not in areas where demand will always be very high. Yes I agree the growth will probably stagnate.

    Just found this now:

    http://www.domain.com.au/news/sydney...160306-gnbvp3/
    A 73% clearance rate is still above average - that means you have a 73% chance of selling your home for the price you want in less than 28 days, plus the stats don't show how many were sold in the following few days after the auction ( usually most sell within 45 days)

    There is still a massive shortage of stock so in our area of Sydney prices are still going well , we had 14 and 9 registered bidders at our last 2 auctions last weekend ( more than we actually thought we would have!)

    We have found though some banks are making it tougher with most wanting a 20% deposit on homes over $1,000,000 and the bank valuers are refusing to use last years sale prices in their reports

  4. The Following 2 Users Say Thank You to Elijahs Mum For This Useful Post:

    A-Squared  (07-03-2016),witherwings  (08-03-2016)

  5. #234
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    It's still a very strong market, but a reduction is a reduction. The main suburbs dragging down the average are the west and north west, and South Sydney. But the lower north shore was 86%! So obviously some areas do better than others. I just thought it was an interesting statistic.

  6. #235
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    Default Negative Gearing - Politics talk

    http://www.theaustralian.com.au/nati...6d1225af59953d


    "The managing director of financial planner Omniwealth, Matthew Kidd, said by far the biggest effect of the policy would be on residential real estate.

    “Residential real estate is not a great investment when you have to pay stamp duty, pay lawyers to do conveyancing and arrange mortgage funding, while there are strata fees, real estate agency fees and maintenance for holding it,’’ he said."


    How did this guy get his credentials?

    Not a great investment? What is this guy smoking? Maybe he is motivated to sell financial products rather than encourage his clients to buy real estate, but this is misleading and frankly, incorrect!

    Even without negative gearing as a sweetener, you still get to invest 20% of the value and enjoy the growth on 100% of the asset. What other asset class allows this? Mortgage rates on real estate are also lower than on margin loans and there are no margin calls on investment home loans.

    Yes you have to pay stamp duty, but you recoup that pretty quickly in the first year if you did your research.

    Also, what other asset class gives you a consistent return on investment? With shares, you don't have any say in whether dividends are paid. With rent you can choose your tenants, and depending on what area you invest in, your property is like liquid gold to renters. There's just not enough supply out there.

    Lastly, real estate is far less riskier than financial assets like shares, managed funds etc. if you hold the asset for 10 years, chances are the value will double. Recently it's been taking about 6-7 years to double, but that will surely slow down.

    So how exactly is this a bad investment?
    Honestly, negative gearing is nice, it's like the cherry on the cream which is sitting on the ice cream which is sitting on the ganache which is sitting on the cake. Just the cherry though. It's not the *reason* people buy real estate.

  7. #236
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    Quote Originally Posted by witherwings View Post
    http://www.theaustralian.com.au/nati...6d1225af59953d


    "The managing director of financial planner Omniwealth, Matthew Kidd, said by far the biggest effect of the policy would be on residential real estate.

    “Residential real estate is not a great investment when you have to pay stamp duty, pay lawyers to do conveyancing and arrange mortgage funding, while there are strata fees, real estate agency fees and maintenance for holding it,’’ he said."


    How did this guy get his credentials?

    Not a great investment? What is this guy smoking? Maybe he is motivated to sell financial products rather than encourage his clients to buy real estate, but this is misleading and frankly, incorrect!

    Even without negative gearing as a sweetener, you still get to invest 20% of the value and enjoy the growth on 100% of the asset. What other asset class allows this? Mortgage rates on real estate are also lower than on margin loans and there are no margin calls on investment home loans.

    Yes you have to pay stamp duty, but you recoup that pretty quickly in the first year if you did your research.

    Also, what other asset class gives you a consistent return on investment? With shares, you don't have any say in whether dividends are paid. With rent you can choose your tenants, and depending on what area you invest in, your property is like liquid gold to renters. There's just not enough supply out there.

    Lastly, real estate is far less riskier than financial assets like shares, managed funds etc. if you hold the asset for 10 years, chances are the value will double. Recently it's been taking about 6-7 years to double, but that will surely slow down.

    So how exactly is this a bad investment?
    Honestly, negative gearing is nice, it's like the cherry on the cream which is sitting on the ice cream which is sitting on the ganache which is sitting on the cake. Just the cherry though. It's not the *reason* people buy real estate.
    It's "technically" a bad investment as its only giving you a 2.4% return on your investment ( in Sydney in my area anyway where our areas average sale price is $1.4 million with an average rent return of $650 per week ) so it would cost the average investor approximately an extra $800 a week to maintain the mortgage , most people can't do that for 25 years - yes absolutely the capital gain is worth it in the long term so I believe real estate is a good investment but I think technically your return is not what they consider "good "

  8. #237
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    Quote Originally Posted by Elijahs Mum View Post
    It's "technically" a bad investment as its only giving you a 2.4% return on your investment ( in Sydney in my area anyway where our areas average sale price is $1.4 million with an average rent return of $650 per week ) so it would cost the average investor approximately an extra $800 a week to maintain the mortgage , most people can't do that for 25 years - yes absolutely the capital gain is worth it in the long term so I believe real estate is a good investment but I think technically your return is not what they consider "good "
    This greatly depends on where you invest though. You could similarly put your money into shares and get zero return on investment. Or put it into a cash savings account and get zero capital growth.

    We bought an apartment in Bondi beach in 2009 for $435k and it is currently renting for $750 per week. It is currently valued at around $700k, after 7 years. It has always been positively geared. Strata fees are low because it's an older building, there's hardly any maintenance, interest we are paying at the moment is only 4.6%. I would say that is a bloody good investment.

  9. #238
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    Of course if you buy a $1.4m house you won't be able to get a good return on it. But who buys 1.4m houses as an investment property?
    If a house is available for rent online, that is probably because the owner/occupier had moved out for some unforeseen circumstances, such as work relocation or some other reason: buying such an expensive property with obviously low rental return is not smart.

  10. #239
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    Last post for now, sorry for all the rambling..

    I came across this data on realestate.com.au

    ImageUploadedByThe Bub Hub1457383493.711107.jpg

    This is the average for all apartments in Sydney (they didn't have data for houses). So some suburbs will be worse and others will be better. It's not a great return but also not bad. 4.4% rental return. And according to this average, if you borrow 80% and pay 4.6% interest, you would still be cash positive. The difference between the rent and interest is around $6200. Plenty of cash left over for council rates, strata, management fees.

    Add to this the capital growth, and you're on a winner.

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  12. #240
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    Default Negative Gearing - Politics talk

    Quote Originally Posted by witherwings View Post
    Of course if you buy a $1.4m house you won't be able to get a good return on it. But who buys 1.4m houses as an investment property?
    If a house is available for rent online, that is probably because the owner/occupier had moved out for some unforeseen circumstances, such as work relocation or some other reason: buying such an expensive property with obviously low rental return is not smart.
    No one ! that's why our suburbs have a rental shortage for houses - but people still need to rent in the suburbs , but the rents just can't keep up with capital growth , most families want houses not units , take away negative gearing and house rents will definitely increase in Sydney anyway!
    Last edited by Elijahs Mum; 08-03-2016 at 07:35.

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