What's going to happen to the property market?

Replies to This Discussion

Permalink Reply by T Tokyo on June 2, 2008 at 4:29pm

Ah, Karen, it hurts me to talk about property...my biggest mistake is not getting into property 8 years ago... There was a terrace in Paddington, Sydney going for $430,000 and I thought the market was peaking!!! How wrong was I??? The property would have to be worth 3 times that now...

But can prices keep going up? Surely there must be a ceiling. Surely with rising rates it would only take a rise in unemployment/slowdown in economic growth for people to not be able to afford to pay more for property. Not that you should trust my judgement, if the past is anything to go by. But really, there must be a limit of some sort - a percentage of disposable income, or something like that.
Tokyo

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Permalink Reply by LS on June 3, 2008 at 5:25am

That hurts, Tokyo. I also didn't get into the property market, and now feel like I'm completely priced out! But I have never had a chance to get in really, because prices have always been out of my price range - unless of course I move out further. Now I'm stuck renting in my 30s, and rents are soaring!@!
Lindsay

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Permalink Reply by Manish Dev on June 3, 2008 at 3:47pm

And rents will probably keep going up, with the combined pressure of rising rates (there have to be a few more this year) and low levels of supply. Look to be paying more rent, or bite the bullet and get into the property market.

Manish

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Permalink Reply by T Tokyo on June 4, 2008 at 3:05am

Yes, I'm in a similar position...how could I get it so wrong????

Karen, that's interesting you say that everyone always thinks it's too late to get in. Maybe I just need to move my focus out of the Eastern Suburbs of Sydney!!!

Great posts from everyone. Will have to spend some time getting through them.

Tokyo

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Permalink Reply by Lisa on August 2, 2008 at 4:10pm

My advice is to try to get in now - yes, you will most likely have to move further out, but just think, in 5 years time you will probably be in the position to sell your place and buy somewhere closer to town (or wherever your ideal place is!)

I only hopped on the property cycle a 2 years ago (at the age of 33)... and until then I had exactly the same thoughts - I've missed the boom, I can't afford it, interest rates.

The best piece of advice I have to offer (often controversial!) is not to buy a home, but to buy an investment property. That way, you get to live in a decent area (which is someone else's negative gearing problem) and can buy in an area that may not otherwise be convenient to your circumstances - but is set to soar in capitla growth.

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Permalink Reply by Bandwidth on August 2, 2008 at 4:17pm

I little hint

If you buy a home and live in it for a while then move out and do not declare another primary residence then the capital gain is not applied for 6 years.

Please check this up with a financial person before doing anything

http://www.fatcat.com.au/news/home/Property+_+Home/5.html

There are other techniques to reducing the burden, with a little research you can find them

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Permalink Reply by Karen on June 3, 2008 at 4:35pm

If it's any consolation, you're not alone there Karen. I have stacks of friends who tell the same tale. But this doesn't mean that it's too late for you.

I remember a wise man told me five years ago that people have always thought that property "is too expensive right now" and that "it's too late to get in". They thought this 10 years ago, 20 years ago, and so on. Property has historically risen in Australia, with prices hitting new highs, and (he said) there's no reason this can't continue. He seems to be right so far.

Karen

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Permalink Reply by Matthew Reader on June 3, 2008 at 5:28am

I think that the apple cart is about to be overturned. It simply isn't sustainable for property prices to continue to rise along with interest rates going up. People just don't have any more disposable income to throw at higher property prices.
Matt

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Permalink Reply by Mary M on June 3, 2008 at 5:38am

I agree Matt, prices can't keep going up. Surely!! But that doesn't mean they're going to go down.

One question - if you live in the same house your whole life, does it really matter whether prices go up or down?

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Permalink Reply by jacquesk on June 3, 2008 at 11:15am

Good question. I own 1 property outright and my quote is that the only way I will be moving out is to move into a smaller wooden box. If I was a property investor I would be more interested. For mine I believe there will be a small dip in prices but at least for inner city housing properties other factors like high fuel prices and lack of a decent public transport infrastructure will keep property prices at a high level. There is no reason why prices cannot rise to a level where they will be impossible for the majority of Australians to purchase.

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Permalink Reply by Mary M on June 3, 2008 at 12:20pm

When you say "There is no reason why prices cannot rise to a level where they will be impossible for the majority of Australians to purchase", do you mean that foreigners will be buying? Or they will reach a point where the market will collapse...

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Permalink Reply by Tina on June 3, 2008 at 12:22pm

Collapsing sounds a bit far-fetched. It's hard for something to collapse when Australians have developed such a love affair for property, no matter how expensive it may be.
T

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