Buying Property.

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huge
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Re: Buying Property.

Post by huge »

holy crap
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Re: Buying Property.

Post by ghetto kitty »

omg.

way to turn my trying-to-be-a-grown-up-thread into a obese slut fest between two buns of deep fried meat guys.

:shock:


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Re: Buying Property.

Post by ghetto kitty »

no you're not.

:P

(use of the apostrophe just for you dan)

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Re: Buying Property.

Post by same o »

This is what CIA and I are try to say..

This is what I have learnt in economics thus far and it seems to be true. House prices at the moment are rising because demand is exceeding supply. All things being equal if demand exceeds supply the price of houses will go up at every single point. This is why I wouldn't do property as an investment.

1 - They are too fucken expensive and u get a fairly shit return and not as safe way of investing compared to many other ways of investing your money.

2 - Houses are only worth what people are willing to pay ie, if you think the house is worth for example $500,000 because you paid $300,000 a few years ago but no one is willing to pay for it then you will loose money on your return. A good example of this is when the land value of Tokyo was more than all of Canada. Eventually people rejected the prices and prices went down. Growth like it has been going cannot stay for ever.

3 - If the government releases more land to be developed then there will then be more "supply" which will reduce prices


Having said all this it may be the right investment for you, but like Shep said only invest if you know the area, make sure you are close to PT etc etc.

If I was you I would be waiting a bit, watch the market and put your money in a high interest account or perhaps even a long term savings portfolio (kind of like super but you can get your cash when you want). If you want a guaranteed return there is always products like AXA North.

Any ways up to you, but I think within 10 years prices of houses will be going down and everyone who has bought now will be kicking themselves.

But I could be wrong.

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Re: Buying Property.

Post by ghetto kitty »

all those points are totes what has been coming up again and again in my research pete.

i agree with all of them and see the sense and am now relaxing on the whole thing and am looking into other options.
i tend to get all excited about an idea and then decide it has to happen NOW. like, YESTERDAY. ahem, works for some things in my life, other things are not to be rushed into. like a 35 year debt. i hate debt!!

meeting with some good sounding financial dues in the next few weeks. told ANZ to go fuck themselves yesterday.
looking at more creative things to do, talking with some awesome people in the last week (and everything said on here) has really helped get some perspective.

so thankyou to everyone here and in reality. kitty on crack with ideas appreciated it!

:lol:

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Re: Buying Property.

Post by a1studmuffin »

I'm in the same boat ghetto. When it really comes down to it, I've figured out I just don't want to tie my money up in such a long term investment right now, even if the returns could be promising in 10/20 years. I just don't really care - my quality of life right now is more important to me than a potential few hundred thousand dollars in 10 years. So many of my friends have bought without thinking about it, simply because they or their parents were convinced "it was the right thing to do" or "it's always a good idea long term"... and for most of my friends, all I've seen is an immediate hit in their quality of life because of it. The prospect of owing such a huge debt to a bank for something that ultimately makes very little difference to your day-to-day life is just not appealing to me in any way. Home owners may disagree (and god damn, my parents do!) - the arguments I keep hearing are "What if you want to knock a wall down?" or "It's nice knowing you can't be kicked out by the landlord, esp if you have kids" or "It's nice knowing you're going to own something at the end of it"... and while some of those arguments have merit, personally they're not strong enough to sway me into what I see as quite a risky investment fraught with people trying to take a large slice of your money at every single turn with hidden costs/fees. It's like buying a used car x 10... anywhere involving that much money attracts vultures. I don't want/need that stress in my life. I'm just going to keep moderately saving/investing in the short term and enjoy my life. When I have a family/kids I'll reconsider. That's all just my opinion of course, it's a very personal decision. I still want to leave the option of going travelling/working overseas open, so the less roots I have in one place the easier it is. Rolling stone etc.
Last edited by a1studmuffin on Wed Nov 10, 2010 6:12 pm, edited 1 time in total.

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Re: Buying Property.

Post by same o »

ghetto kitty wrote:all those points are totes what has been coming up again and again in my research pete.

i agree with all of them and see the sense and am now relaxing on the whole thing and am looking into other options.
i tend to get all excited about an idea and then decide it has to happen NOW. like, YESTERDAY. ahem, works for some things in my life, other things are not to be rushed into. like a 35 year debt. i hate debt!!

meeting with some good sounding financial dues in the next few weeks. told ANZ to go fuck themselves yesterday.
looking at more creative things to do, talking with some awesome people in the last week (and everything said on here) has really helped get some perspective.

so thankyou to everyone here and in reality. kitty on crack with ideas appreciated it!

:lol:
def see a planner.

also u have to remember with mortgages often also comes life insurance so the banks protect themselves which can be an added cost

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Re: Buying Property.

Post by shepherd »

Houses are only worth what people are willing to pay ie, if you think the house is worth for example $500,000 because you paid $300,000 a few years ago but no one is willing to pay for it then you will loose money on your return
that's the same with everything. stocks, forex, cars, consumer goods. Shares especially - but how safe are shares given the prevalence of shorting etc? if the govt release more land there will be technically more supply yes. But where will that be? In areas that already have excess supply - it won't impact metro house prices. it's not comparing apples with apples unless there's awesome undeveloped land in large volume within 10k of the CBD in Melb and Sydney we don't know about.

With PT as it is and infrastructure generally taking 25 years to realise in this country, housing is not going to go down in price. You can release all the supply available in areas 50k+ outside of the city centre ... but the rest of the equation is not feasible so unless there's amazing infrastructure (schools to educate kids, food, markets, public transport, freeways) it will take a long time for people to accept living in semi rural/fringe areas as a replacement to metropolitan living. I'd love for the housing "bubble" to burst (for me to buy into Sydney in a place I'd like - house, 3br, 5k from CBD it will cost 1.5-1.7m ... which is crazy money and money I don't have) ... problem is I don't think it's going to happen.

Good luck GK!

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Re: Buying Property.

Post by witty_pseudonym »

Buy a nice place in Canberra and I'll rent it. :)
...

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Re: Buying Property.

Post by nic »

wish i had of bought something 4 years ago lol
cant now
spent it all on piunging holidays b2b teh uk currency is pittance compared to wot it was
:(

ill just moev to tasmania i reckon and get a giant workshop ride bikes and grow good weed tbh (for teh premium export market)

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Re: Buying Property.

Post by Sociopathic »

Defence housing? Secure returns, rents always gonna get paid. Always gonna have people living in it.

Just a thought.
I know nothing about this kinda stuff cept you can negative, positive and neutral gear. and what each of those mean.
That is the entire extent of my knowledge. I have however heard add's on radio about investing in defence housing and I have a friend who's dad's in the navy so he always lives in defence housing places. damned nice place they have at the moment too.
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Re: Buying Property.

Post by huge »

lol me too. i could have bought a house 8 years ago, then i spent it all on records.

whos idea was that anyway!?
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Re: Buying Property.

Post by C.I.A. »

So Shepherd, you don't think our housing market is in a bubble right now and that prices are going to continue to double every seven years?

Households are increasingly overextended, with two people having to work to service a mortgage that what was once possible on one income. The Case Shiller index suggests that Australia has one of the most inflated property bubbles anywhere in the world.

A recent review by The Economist (21 Oct 2010) cited Australian house prices as overvalued by 63.2%:

"Our analysis of “fair value” in housing, which is based on comparing the current ratio of house prices to rents with its long-run average, suggests that China has less to worry about than the likes of Australia, which is again the most overvalued of the markets we track. This comment was made in light of the fact that house prices had "soared 20 per cent in the 12 months to March"
Findings of this study differed little from the previous one where Australian property was found to be the most overvalued of any of the 20 countries we track. One RBA official offered a candid comment on the pursuit of profits based on the proviso of capital growth, citing the nexus to rental yield. Asked if lower yields meant a limit to the rate of price appreciation, the Head of Financial Stability at the RBA recently said:

The short and simple answer is – yes. If rental yields are very low, investors are buying properties without really thinking about the rental yield," and that "Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble".

Rental yields are very low in Australia and on this basis, Japan, Germany, Switzerland and the US offer best value to investors.

I may be an idiot and not know much about housing, and prices may continue to rise, but I think that we're going to see at the very least some cooling in the market... Auction clearance rates dropped last month in Melbs, and the RBA is probably going to continue pushing up interest rates.

On top of this, our commodities markets are very strong, but how many people have seen this wealth trickle down? Interest rates are up but median salaries on the whole aren't keeping pace with the insane increases we've seen in housing prices.
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Re: Buying Property.

Post by ghetto kitty »

great discussion guys.

A1 - i hear you man. totally agree with everything you said tbh. it's only me and yoshi right now, which is why i cant live in a flat somewhere, my family as it is wont allow it! :lol:

sameo - got put onto a good sounding guy from a friend who is working with him on other stuff who helps 'creatives', based out of sydney but coming to my work in a couple weeks to chat. sounds positive!

huge - friend of mine had $10k ten years ago, and bought a place on nicholson st, now its worth 5 times what she paid for it. but ive never had to cash nor the foresight for even a five year plan till now :lol:

and shep and cia - this is what i think my 'sources' are talking about more than a freddie and fannie type crash >
C.I.A. wrote: I may be an idiot and not know much about housing, and prices may continue to rise, but I think that we're going to see at the very least some cooling in the market... Auction clearance rates dropped last month in Melbs, and the RBA is probably going to continue pushing up interest rates.
On top of this, our commodities markets are very strong, but how many people have seen this wealth trickle down? Interest rates are up but median salaries on the whole aren't keeping pace with the insane increases we've seen in housing prices.
this makes logical sense to me.

one of my 'hippy' friends runs this organisation, and while some of their stuff seems quite out of the box, i think there is definately factors here that we are not being told about, or considering in the aussie/american dream of home ownership etc.

http://www.earthsharing.org.au/

interesting. i listen to a lot of stuff and take it all with a grain of salt.

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Re: Buying Property.

Post by Fents »

Love my little house in Watsonia best purchase i have ever made by far.

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Re: Buying Property.

Post by deviant »

ghetto kitty wrote:it's only me and yoshi right now,
He's really not pulling his wieght financially though is he?... Lazy bastard, living off your handouts. GET A JOB

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Re: Buying Property.

Post by ghetto kitty »

:lol:

i know. and fuck does he SNORE. at least he keeps the house free of flies. tasty morsels.

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Re: Buying Property.

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ziggy caught a fly the other night. i was astonished.
He's climbing in your windows, he's snatching your people up.

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Re: Buying Property.

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i taught him kinda.

not by example, but by making it seem like it was
a) exciting and
b) tasty.

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Re: Buying Property.

Post by aroes »

fucking lol

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Re: Buying Property.

Post by quiet roar »

nic wrote:ill just moev to tasmania i reckon and get a giant workshop ride bikes and grow good weed tbh (for teh premium export market)
Tassie's not so cheap now, either.
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Re: Buying Property.

Post by shepherd »

CIA I'm not saying I don't agree with the factors you outline ... but housing has been increasing price wise more than median salary for a long time ... personally I don't understand the logic but the reality is for most buying a house probably isn't a solely logical decision so logic plays a limited role. It's not like shares or straight business where you can apply very rational ratios to work out what is or isn't a diligent decision.

Remember too - people buy houses to live in them (I only say this as a lot of the time I forget). Most people I'd say aren't looking for an income stream nor huge appreciation over time. They want 4 walls to keep the weather away and an asset to validate their hard work.

Numbers show that median house prices in relation to median HH income is at the same multiple (just under 5) that it has been since 1993 - http://www.businessspectator.com.au/bs. ... Format=gif

There may be some cooling - by cooling I mean a period where increases stop or you see some drop in more exposed areas but we must be agreement that Oz isn't going to see the arse fall out of the housing market. But long term housing will still be strong. I saw the Economist piece, I am aware AU is the most 'inflated' housing market in the world ... but again we're not talking about something dictated by logic. Plus Interest rates now are still super low when compared to 20 years back and even 12 years back - (when they sat around 12% and sometimes as high as 18%)

I would never have guessed 5 years ago I;d be having a spirited debate on a music forum about housing price fluctuations and referencing the economist (and economists) but here we are heh :)

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Re: Buying Property.

Post by ghetto kitty »

shepherd wrote: I would never have guessed 5 years ago I;d be having a spirited debate on a music forum about housing price fluctuations and referencing the economist (and economists) but here we are heh :)
I would never have guessed that it would be ME posting such a thread. :lol:

but here we are indeed.

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Re: Buying Property.

Post by quick »

we said Sheps... for an ex breaks dj, u know a thing or 2... :teef:

but seriously, for long term investment and a place to live, property in Aus is solid, for just an investment, i think a little more research is needed, but it is still land that you own, and that is value... land will always be valuable...
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Re: Buying Property.

Post by ghetto kitty »

yes, it looks good in theory.

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Re: Buying Property.

Post by spiral »

yeah if you can work out who actually owns the title and if the bank had the right to foreclose - looks like lots of banks being sued in US now

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Re: Buying Property.

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Hello, Im attempting to be adult again.

anyone who has been to a financial planner - i have been reccomended to these guys by someone in the music industry who i respect who has their head screwed on in a number of ways. this is the quote ive been given for advice only.
Financial plan(statement of advice) is $660
Finance and property strategy session $495.
As you are doing both we combine them to $995.

this is a lot right? or not? im confused again. hahah.

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Re: Buying Property.

Post by quiet roar »

^^ Rip off, imo.
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Re: Buying Property.

Post by spiral »

ghetto kitty wrote:Hello, Im attempting to be adult again.

anyone who has been to a financial planner - i have been reccomended to these guys by someone in the music industry who i respect who has their head screwed on in a number of ways. this is the quote ive been given for advice only.
Financial plan(statement of advice) is $660
Finance and property strategy session $495.
As you are doing both we combine them to $995.

this is a lot right? or not? im confused again. hahah.
unless they can magic money out of thin air I'm not sure what advice beyonds common sense they could offer

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Re: Buying Property.

Post by deviant »

lol....

best advice would be....

"set up your own financial advice business!"

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Re: Buying Property.

Post by ghetto kitty »

quiet roar wrote:^^ Rip off, imo.
helpful comments as always guys.

is this comment based on experience with financial advice rob?

spiral - erm, what?

dan - this is true :)

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Re: Buying Property.

Post by deviant »

I WOULD NOT under any circumstance give someone $1000 to tlel me what to do with my money.....

not speaking from experience... (see above comment)

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Re: Buying Property.

Post by huge »

flippo's old man is a mortgage broker or something i think?

anyway, dont financial advisors come for free at banks?
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Re: Buying Property.

Post by ghetto kitty »

dan - yes but free advice is not neccesarily good advice - no?

i have been given free advice lately that when checked more - was dodgy as fuck.

hugh - nope, the banks charge you too. flat rate, and the advice they give you is of course, skewed to benefit them.

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Re: Buying Property.

Post by quiet roar »

Sorry kitty, mean to be direct and concise rather than flippant.

Paying for advice doesn't necessarily mean it will be good, kitty. The industry doesn't have the best reputation (pushing investments where they get kick-backs rather than what they think is best for you). I'm sure there are some good ones out there but I wouldn't want to try and pick them out amongst all the average ones.

Shout me dinner one night and I'll listen to your situation and give you my honest opinion on what is the best approach for you.
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Re: Buying Property.

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i hear you rob, i do.

i know everyone is out to shave some off the top and look after their other interests. I am not just googling these people, they are coming reccomended by others i respect.
i read over the forms they sent and so did my folks, and they are quite detailed, some of the most in depth questions i have been asked yet, which is better than anything the bank or other dudes have asked me yet imo.

i also said - okay, a grand for advice, but how much to implement said advice? and this was their response >
The initial fee will give you a complete blueprint of what you need to do moving forward. It will give you which areas to buy in, what to look for in a property and on my side what is the best super fund and what insurances you need to protect your wealth.

Our ongoing fees to you are very minimal. For example. If you take up my advice for the super and insurances. I get paid by the insurance companies and we charge a one off 4.1% on the balance of your super. So based on your current balance of say $10k it would $410. This comes from your super as well. Chris gets paid by the lenders which again does not come out of your pocket and is based on the loan amount.

Now the property side of things in most cases we are paid by the person selling the property as is in most cases in real estate. We would only charge a fee if you asked us to seek out a particular type of property and we had to spend our time looking for it.
so at least they are being honest about where their cash is coming from. When it comes down to it, I know what my goals are, I know what I want to do with my $$ (as in how much i want to put towards diff things etc), and I almost know how comfy i am borrowing, investing in certain things.
I actually just want to find the right dudes to hand it all over to, who i trust enough, who want to know me enough, to do these things for me. I want to learn about what all this crap is, but I dont have time to micro manage it!

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Re: Buying Property.

Post by mrj »

lots of armchair experts in this thread hey.

GK there is definite value in going to see a financial advisor, as long as you find a reputable and trustworthy one. However its very true that its an industry that has long had a bad rap (valid), mainly because of commissions that they get for selling products of various institutions.

It's best to see an independent financial advisor, but still be cautious as most independents are still aligned to a financial services organisation(s) and are paid commissions. If you have a friend that has had a good experience with an advisor, then thats a good start.

However I would say don't be to impressed with them being honest with you, they are requried to by law and would lose their Australian Financial Services licence if they didn't.
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Re: Buying Property.

Post by ghetto kitty »

heh, im finding more armchair experts than ever before on any topic - EVER in the history of the universe!

okay so they have to tell me where their commisions come from.
One of the guys i got free advice from flew down from sydney, asked me a few questions, drew a pie chart diagram, and got me onside by talking the 'language' of a creative who is good with money really. (i talk the same language for a living so while i may have initially got caught up in the hype, as soon as he left me i was like - hrmmm)
then i got this 'plan' from him that was no more innovative or interesting than anything i could do on my own. put 80% of my cash in a term account - UM - DERRRRR. invest the rest in a broad range of portfolios not including the states but including china which is gonna boom soon - DERRR. and then he said - we only take 1% of your profits but upon further investigation that totes did not make sense on the paper.
hence why i am starting to think that paying for advice might be a better option.

anyways, i was just posting here to see if anyone actually has paid for advice, and if they have then used it.

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Re: Buying Property.

Post by witty_pseudonym »

Try my mate Alex. He's a dude and advises on financials. Will send his number. First consult free as far as i know. Just thought of him.
...

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Re: Buying Property.

Post by quiet roar »

ghetto kitty wrote:
It will give you which areas to buy in, what to look for in a property and on my side what is the best super fund and what insurances you need to protect your wealth.
It's this kind of stuff that bothers me: picking areas for property purchase is not difficult once you know how much you have to spend and what you want the property for (investment vs home); Industry super funds are the way to go; and as for "insurances you need to protect your wealth", I would dump them just for that line alone.

I will admit I am more cynical than most when it comes to consultants and advisors, but it's not without reason. Everyone looks good when the economy is cruising along....

Having said that, you need to comfortable with your decision, so if you're happy with the person and the cost, go for it. I'm only giving my opinion because you asked.
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Re: Buying Property.

Post by ghetto kitty »

tashma - thanks for number lady, will give him a call.
quiet roar wrote:
ghetto kitty wrote:
It will give you which areas to buy in, what to look for in a property and on my side what is the best super fund and what insurances you need to protect your wealth.
It's this kind of stuff that bothers me: picking areas for property purchase is not difficult once you know how much you have to spend and what you want the property for (investment vs home); Industry super funds are the way to go; and as for "insurances you need to protect your wealth", I would dump them just for that line alone.
1 - it IS difficult becasue who can really say what is the best growth area apart from those who do this all day, every day, even when it is still speculative? and even when you know you wish to invest first, what is a wise way to do so, is positively geared possible etc etc
2 - industry super funds - i have like 5. none of them have ever contacted me asking me/helping me with anything. perhaps thats cos im in hack industries? i dunno, my dad is an academic and he said hes happy with his doing everything for him...mine im not so sure!
3 - do you have income protection insurance rob? why would you dump them for boraching the topic? I pay $600 per year to insure my car worth $11k but I dont pay the same amount to insure my income which if something happens to me, is then covered by insurance till im 65!!!!! seems like a worthy thing to check out to me in comparison...

i want your opinion, im trying to collect as much intel as possible on all this grown up crap. hahah

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mrj
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Re: Buying Property.

Post by mrj »

quiet roar wrote:"insurances you need to protect your wealth"
so you dont think that income protection insurance is a good idea? or life insurance?

I imagine there are plenty of seriously or terminally ill people that would disagree there.
He's climbing in your windows, he's snatching your people up.

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shepherd
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Re: Buying Property.

Post by shepherd »

GK what are you wanting to achieve from the advisor. Personally, any investment is worthwhile if it can make you what you paid + compensation for your time. So if the FA can make you $1500 and you pay him/her $1000 then the return is pretty good.

So it all comes down to what you want to do. If you want investment direction that is independent then they can technically offer that. How much do you want to invest? Or do you moreso want guidance.

Finance and the world around it is pretty intricate and the losses can be hard if you go in blind. Trying to learn it personally is time consuming and again dicey ... so spending a bit to get sound advice isn't a bad idea. When I set up our trust we went through an advisor and it cost about $1500 but it was small considering we wanted the trust to be the vessel for all of our investments and also understanding the tax benefits of a trust etc etc. If I had tried it myself I'm sure I would have either a/ mucked it up or b/ taken forever or c/ both.

Good luck!

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quiet roar
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Re: Buying Property.

Post by quiet roar »

ghetto kitty wrote:1 - it IS difficult becasue who can really say what is the best growth area apart from those who do this all day, every day
Nobody can tell you the best growth area, kitty. Not even the so-called experts. However, they can provide peace of mind, which is not a bad thing, I guess.

I do take your (and josh's) point about income protection insurance, I'm just very cynical about the whole insurance industry, and I figure we're lucky enough to live some place that has safety nets for folk that fall on very hard times.
The only normal people are the ones you don't know very well

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

shepherd wrote:GK what are you wanting to achieve from the advisor. Personally, any investment is worthwhile if it can make you what you paid + compensation for your time. So if the FA can make you $1500 and you pay him/her $1000 then the return is pretty good.

So it all comes down to what you want to do. If you want investment direction that is independent then they can technically offer that. How much do you want to invest? Or do you moreso want guidance.

Finance and the world around it is pretty intricate and the losses can be hard if you go in blind. Trying to learn it personally is time consuming and again dicey ... so spending a bit to get sound advice isn't a bad idea. When I set up our trust we went through an advisor and it cost about $1500 but it was small considering we wanted the trust to be the vessel for all of our investments and also understanding the tax benefits of a trust etc etc. If I had tried it myself I'm sure I would have either a/ mucked it up or b/ taken forever or c/ both.

Good luck!
I hear all that, and yes, I have been looking at a few2 options and have some idea of what i want to do in the semi long term, they have actually said that if they do the assessment and I think their advice is not relevant, they will give me my cash back, so there isnt much to lose really!

and rob - yup i know there isnt any certains, but there is educated guesses and I'm not edumacated enough to make them right now heheh

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

sent off my client analysis statement today so I can has advice n stuffs.
i have now chosen from 4 parties and so far these guys (the only ones i havent met it person)
are the only ones I actually like/think i can respect. so face2face doesnt count for much im finding! :lol:

thanks to all here for the advice about advice. lol.

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