Problem is - alot of these rentals are shit boxes that haven't been maintained. In the good old days, people could do that as there was little choice for the renter. Now there is, these places can't be let. But the owners didn't sign up for maintenance though. That wasn't part of the equation. So a -ve gearing venture now starts taking on real losses, so they dump it on the market. It's the mum and dad investors like this who ill start dumping on the market now. You start to see 'needs a lick of paint' in many ads now.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Foxbat did try to tell you guys over 12 months ago. He told me to sell Perth buy in Marges. Now the numbers are out. But there is more to come. But how does Foxbat Know??? Peter
Problem is - alot of these rentals are shit boxes that haven't been maintained. In the good old days, people could do that as there was little choice for the renter. Now there is, these places can't be let. But the owners didn't sign up for maintenance though. That wasn't part of the equation. So a -ve gearing venture now starts taking on real losses, so they dump it on the market. It's the mum and dad investors like this who ill start dumping on the market now. You start to see 'needs a lick of paint' in many ads now.
My guess is that it is a buy gone wrong. It is a nice house with a pool and good interior features but it is in a shit part of town. It has security bars on the windows!
This is the classic buy the cheapest land and build the most expensive house scenario. I am guessing, but it looks like it was built to live in and the owners couldn't sell it to recover cost so rented it out. I went round for a look when it was on at $450 a week because a 4x2 with a pool at $450 is good value. The pictures looked great but I turned into the street, took one look, chucked a quick uey and got the hell out of there.
Regardless, it was being rented out at $450 a week until June and the owners or RE were being very optimistic re-listing it at $450pw considering what else is around for the same or less money.
There is a lot of competition for renters in this area and there are some big reductions in asking rents.
I would guess that the main driver of this is lower immigration. Port Kennedy and Warnbro are magnets for Kiwis and Islanders attracted to the FIFO lifestyle and they aren't coming here anymore. Also, there is a lot of new build in Baldivis, Golden Bay and Madora Bay and many of the people building in those places will be renting in the area. When they move into their new homes, they make a giant sucking sound in the local rental market.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
'serious' investors are in the minority. The majority of investors will only ever have one, maybe, two properties. The majority of investors have no idea.
This is just an arrogant assumption. The opposite is in fact true. Investors mostly sacrifice spending on PPOR to invest in better long term financial outcomes. They are not idiots, there are significant advantages to investing in property. Young people who invest often live with their parents or very cheaply and get help with the mortgage for a few years to help them get a home. Older people invest longterm and have a lot of wealth to do this with.
You just made a assumption about other people for which you have no basis in fact.
Why do you do this? because the whole bear fantasy of a housing fire sale relies on the assumption that there are lots of people making poor financial decisions. The truth is that the majority of Australians are savers not spenders, they are not grandiouse spenders and they carefully invest.
It is also very common for a recovering housing market to have a lot of investors as investors provide the price floor.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Why do you do this? because the whole bear fantasy of a housing fire sale relies on the assumption that there are lots of people making poor financial decisions.
Unfortunately, my own personal experience is that WA does have more than its fair share of irrational investors.
When I lived in the UK, I never heard people discussing investment property. I don't remember knowing anyone who had an investment property.
Since moving back here, I have found the opposite. I can't think of many people who don't own an investment property.
Some have been sensible, but many simply applied blue sky thinking to their purchases. They would always be able to find a renter, they would always earn the big money in their jobs, prices would always go up.
I always maintain that any investment should be approached with the view that tomorrow may see a correction down or a change in your personal circumstances. If you can't ride say a 10% or 20% downturn in your investment income, then you should not invest.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
This is just an arrogant assumption. The opposite is in fact true. Investors mostly sacrifice spending on PPOR to invest in better long term financial outcomes. They are not idiots, there are significant advantages to investing in property. Young people who invest often live with their parents or very cheaply and get help with the mortgage for a few years to help them get a home. Older people invest longterm and have a lot of wealth to do this with.
You just made a assumption about other people for which you have no basis in fact.
Why do you do this? because the whole bear fantasy of a housing fire sale relies on the assumption that there are lots of people making poor financial decisions. The truth is that the majority of Australians are savers not spenders, they are not grandiouse spenders and they carefully invest.
It is also very common for a recovering housing market to have a lot of investors as investors provide the price floor.
Man, property investment is basically the national sport in this country. Look at the numbers! Are you telling me these guys are all George Soros'
Not a chance.
When you've got the village idiot telling you how you cant lose on property ( and that's the case here) alarm bells should ring in your head.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
I think the unserious investors outnumber the serious ones by a considerable margin.
Quite true. You'll note, though, that serious investors do understand the cycle, and aren't concerned about it. We have our risks managed and contingencies built in.
Unfortunately, my own personal experience is that WA does have more than its fair share of irrational investors.
When I lived in the UK, I never heard people discussing investment property. I don't remember knowing anyone who had an investment property.
Since moving back here, I have found the opposite. I can't think of many people who don't own an investment property.
Some have been sensible, but many simply applied blue sky thinking to their purchases. They would always be able to find a renter, they would always earn the big money in their jobs, prices would always go up.
I always maintain that any investment should be approached with the view that tomorrow may see a correction down or a change in your personal circumstances. If you can't ride say a 10% or 20% downturn in your investment income, then you should not invest.
Australia is much more egalitarian than the UK, and the middle class is richer. Property investment is a rich man's game in the UK.
What do you define as irrational?
I know of no-one who would claim that prices always go up. I knew a good few people who might have said that in 2003 but today everyone is still fearful and hesitant coming out from the GFC.
I cannot imagine that those playing hide and seek for 3 grand a week seriously think this will last for ever
My daughter and her friends work in FIFO and although they let of steam and travel more than most, they are very aware that this is not long term (they hate it apart from anything else) so they are all pretty sensible with savings and paying down mortgages etc. A certain proportion of people will always be silly with money. Aggregate statistics on Australian saving and spending show a nation of sensible savers, that is just the facts of the matter. I can get you graphs from the ABS if you wish.
You will always find a renter in a market like Perth, it just varies how much rent you get and how much disrepair you get away with.
Veritas
19 Aug 2014, 07:05 PM
Man, property investment is basically the national sport in this country. Look at the numbers! Are you telling me these guys are all George Soros'
Not a chance.
When you've got the village idiot telling you how you cant lose on property ( and that's the case here) alarm bells should ring in your head.
20% of Australians own rental properties and 30% of Australians rent properties where is the supposed problem?
Are you a right winger that wants 1% of the population to own all the rental properties? Veritas you lessen your ability to win friends and influence people when you think it is ok to call people names in a adult discussion.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
20% of Australians own rental properties and 30% of Australians rent properties where is the supposed problem?
Are you a right winger that wants 1% of the population to own all the rental properties?
If you think I'm a right winger than I guess you think Shadow and Strindberg are commies?
So you reckon this 20% are all sophisticated knowledgeable investors?
My bollox.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
If you think I'm a right winger than I guess you think Shadow and Strindberg are commies?
So you reckon this 20% are all sophisticated knowledgeable investors?
My bollox.
Not all, but the majority of people do carefully consider when they buy property. What on earth makes you think so lowly of other people? To buy an investment property you need a good amount of equity and people who can pull this together are not fools in my experience.
You have some idea in your head about people not caring about what they do with their hard earned savings that is just a bit of an arrogant judgmental fantasy.
People invest for lots of reasons with lots of different goals, the overwhelming motivation is to get help paying down a property to eventually live in or to earn an income from.
Do you think it is more sensible to keep your money in cash or gold with low yields waiting for an extremely unusual downturn event or is it more sensible to follow in the tried and tested manner of wealth generation of investing in property?
If you are not a right winger what is your problem with the property investment figures you showed? If you are saying they are too high you are advocating that less people own the 30% of homes that are available for rent. That is not very leftie IMHO.
I favour home ownership and property investment being available to the working man and woman, it is a tried and tested route outta poverty. I think it is great that investment property is not the domain of the elite.
How far will you follow the beliefs of the likes of Timo and/or BeN in search of a housing firesale?
Underneath this bear story of foolish investors is quite a nasty elitism that assumes just because a person is not from the elite they must be a fool.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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