Showing posts with label property. Show all posts
Showing posts with label property. Show all posts

Sunday, October 19, 2014

Brisbane Still Behind


Chart from RP Data.  Brisbane market has under performed the combined capitals average since 2008.

Friday, October 17, 2014

Invest in Brisbane

This report suggests that Brisbane is the best place to invest in property at present.

"Overall, it’s a decent set of numbers with promising signs of strength in new home loans and construction – the desired “rebalancing” – but owner occupier activity has highlighted the possibility of softening almost everywhere except for Brisbane and Queensland."

Thursday, October 16, 2014

Index funds

There is often a debate whether it is best to buy shares or property.  My investment focus has been property.  When investing in shares, it seems that index funds (sometimes called exchange traded funds or EFTs) are the way to go.  See recent AFR article on this topic.

Wednesday, February 12, 2014

Brisbane Update

A video from RP Data regarding the Brisbane property market is here, presented by Tim Lawless.

Thursday, September 26, 2013

Off the Plan Valuations Not Holding Up

An article about Sydney off-the-plan apartments valuations coming in at settlement at 85% of the contract price.

See Property Observer

Sunday, August 25, 2013

Thursday, June 13, 2013

Capital City Home Values



Capital city home values are up or down, depending on which RP Data chart you look at.

Saturday, February 23, 2013

Bubble Trouble?

"In conclusion, the data presented should provide more than enough evidence to suggest that Australia’s residential property market (specifically land market) is vastly overvalued, driven by debt-financed speculation and the relative non-taxation of land rent. While land bubbles have been a continual feature of the Australian economy, what separates this cycle is the relative enormity of the boom in both land values and private debt. A smaller private debt to GDP ratio during the 1880s and 1920s was enough to produce two devastating depressions, including a number of recessions during the mid-1970s, early 1980s and early 1990s."

See The History of Australian Property Values

A response to this is on Property Observer, plus a debate here.

Tuesday, November 13, 2012

Brisbane Transaction Volumes Increase!


As shown in the above chart from RP Data, Brisbane transaction volumes for houses and apartments jumped recently.


But the Brisbane property market is still well below its peak.


There has been negative annual value growth over the past five years for Brisbane property.

And no growth over the past year in Brisbane.

Saturday, November 3, 2012

Property or Shares?

According to RP Data, on a capital appreciation measure over the past decade, the past half-decade, and over the past three years, residential property has well and truly outperformed shares.  Over the most recent twelve month period shares have outperformed the housing market.  Property has less volatility than shares, but less liquidity.

Friday, August 3, 2012

Barefoot Investors Advice re Property

"My opinion on traditional Aussie housing hasn't changed one iota: I still firmly believe that most investment properties bought today are a trap. Their prices are too high and their returns too low to justify the dangerous debt burden needed to 'get in the property game'. That fact is backed up by the Australian Tax Office's latest figures, which show that, despite collecting $28 billion in rents last year, Australia's landlords still reported a $4.8 billion loss. Less than four in ten property investors made any money last year." Source: Barefoot Investor

Monday, February 20, 2012

Brisbane Property Strategy

Here is a story, where two Metropole agents have a discussion about the Brisbane property markets.  Listen here for what it is worth.  "A lot of segments of Queensland have hurt over the past 12 months."  Interestingly, they compare the decline in property values with declines in share prices -- but there are three additional factors to take into account here -- firstly, the income received from shares by way of franked dividends are much higher than net returns from property (good shares return about 3 times as much income as good property on average); secondly, most people who buy shares are not as highly leveraged as people who buy property, so a 6% decrease in value in property often is actually a 50% capital loss for a leveraged investor; and thirdly, shares a more liquid and have significantly less transaction costs compared with property.

Wednesday, December 21, 2011

Cash or Property?


This story has been submitted by a reader:

"Read with interest your story “Property or Shares”. I know many people who are equally dismayed at the negative return and decimation of their super fund accounts. I know some people who were intending to retire in 2012 but now say they will have to work for years, but now are soon to be made redundant.  Where does a person of retirement age with a successful white collar job history get a job.  Impossible they say. Meanwhile, their super funds continue to get chewed up. I feel very sorry for them.  They were well off, nice, generous people, now they are bitter and angry and getting poorer and are looking at selling their house in a declining market and downsizing to a granny type flat and will have little money to live out their retirement years.    

To add to your  “Property or Shares” post,  I’ll give you a similar actual for “Cash or Property”.  I owned (no mortgage) a PPR property in a very good Brisbane West suburb bought in 2004 for $285,000 inc stamps.  I sold it in Jan 2010 just at the final ring of bell of the top end of the market for $1,100,000. For certain reasons, I also paid CGT of about $60,000 out of the proceeds leaving me with $1,040,000. At the time of sale, it was impossible to get a similar house in that street under $1,000.000, though those days were quickly coming to an end as the GFC MK-1 took hold and I took the risk to unload and rent.  I felt at the time those houses were way over valued. People would pay anything to live in that street.  I used to attend auctions as a spectator sport in that street and watch them go mad. They’d pay anything.  I told myself they were mad and decided to sell, the bell is about to ring.  Not by accident, I was right.

I’ve had that cash on deposit with the banks and have been getting between 7.75% and 6.05% distributed across several online savings accounts approximately averaging in rough figures $66,000 p.a. To date, approx $120,000 in interest, compounding,  with absolutely no risk, bank guaranteed, calculated daily, paid 1st of the following month every month with cash funds available in just seconds.

Meanwhile, that house and all houses in that street have depreciated in value and are now selling for $680,000 to $775,000. Just recently, a house of almost identical age, design, appearance , condition, size and land size directly across the road from my old house sold for $750,000. I’m awfully glad I sold out. I’m now renting at an absolute riverside location, a 2brm unit for $24,000 per year.  I reckon I’m  $350,000 ahead in CASH than if I’d held on in the property market and still owned that property today."   

Sunday, December 18, 2011

Property or Shares

I looked at my super account with BT tonight.  Invested all in Australian and international shares.  Over the past 11 months, I have added $24,000 to my super account.  However, despite this, the balance of my account is exactly the same as it was on 15 January 2011.  The losses on my super account are way worse than any losses on my property investments.

Maybe I should have followed the investment advice of the billionaire lawyer.

Tuesday, October 11, 2011

Brisbane Sellers Overpricing For Sale Listings

"Brisbane listings require the highest level of reduction, with a typical 9.6% discount needed against the original asking price, according to Australian Property Monitors."

See Property Observer
So if 9.6% is typical, it means that some buyers are getting a buy price of more than 10% less than the list price.  Thus, in this market, should buyers be offering 25% less than the list price for an offer?

Saturday, October 1, 2011

Invest in Brisbane

Shares or property?
  • The Standard & Poor’s 500-stock index was off more than 14 percent for the quarter — and more than 10 percent for the year so far.
  • The Dow ended the quarter down 12 percent and the Nasdaq lost 13 percent.
  • ASX index of shares fell 13% in the September quarter; down over 15% for the year to date.
"The market has fallen over 15 per cent so far in 2011, putting it on course for the second sharpest annual fall in 2 decades and the heightened volatility has led strategists to take a cautious view -- despite historic low valuations."

Real estate investments are far less volatile than shares.

According to RP Data, Brisbane apartment prices increased 3% in the quarter ending August 2011 and prices are flat year to date.  RP Data believes Brisbane real estate is at the bottom of the market.  There is a significant price difference between Brisbane and the Southern capitals.  Rent yields are increasing.  It would appear that now is a good time to buy in Brisbane.

Before buying an investment property in Brisbane, read Investing in Brisbane Apartments - A Guide for Successful Investing.  You can read this ebook using a free Kindle Reading App, or you can buy a Kindle reader for use in Australia.

Wednesday, September 21, 2011

Up or Down or Flat?

According to Chris Joye, Australian housing prices are unlikely to crash, but will more likely tread water.

"While the Aussie share market is still nearly 40% below its 2007 peaks, Australian house prices are about 10.3% above their pre-GFC highs. Notwithstanding this, we have had effectively no house price growth in nearly one and a half years while household disposable incomes have, according to the ABS, raced ahead at an 7% to 8% per annum rate.

The next major marker will be the August house price index data. This will be a crucial guide to whether Australia's housing market is experiencing an accelerating decline, as folks like the perennial doomsayer Steve Keen would have us believe."

See note by Chris Joye

Michael Yardney reckons property prices are likely to increase, in the next decade!

Saturday, August 27, 2011

House Price Crash

This is a good article on property investment, and points out some of the risks of off-the-plan purchases and dealing with developers.

Wall Street Journal Report on Australia Housing

"Locally, buyers have already started to wane. In the last year, there were 90,210 first-home buyers across Australia, 35% lower than the previous year and a seven-year low, according to BankWest, a Western Australia-based lender and unit of Commonwealth Bank.

Mr. Donnelly, whose firm has sold residential property in Australia worth more than A$1.2 billion to mostly overseas investors, says the market in Sydney and Brisbane could sidestep some of the weakness, largely because both fell behind in the recent development push.

Brisbane has also been weak, with prices off more than 6% this year, but much of the drop stems from the devastation to the capital of Queensland state earlier in the year from a series of floods."

Extract from WSJ report on decline in Australian property market

Friday, August 19, 2011

Housing Market Outperforms Shares

From Chris Joye:
"The chart suggests that a national portfolio of housing has comprehensively outperformed all other investment categories over this tumultuous period. What is also fascinating is that AAA-rated Australian government bonds have delivered almost the same returns as Australian shares (plus dividends) with vastly lower risk.

On the question of risk, the table below shows us that there have been five months over the last 11 years where Aussie shares have fallen in value by more than 5% (the worst being a stunning 14% loss). None of the other asset classes have had a single monthly loss of five per cent plus.

This just hammers home the point that if you get your market-timing wrong with shares, you could be underwater on your investment for many years. Think, for example, of all the poor folks who piled into Aussie shares around the market apogee in 2007 (see the peak of the red line in the chart above)."