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Investors Beware: Property and Rental Prices Are Falling; The lipstick is coming off the pig.
Topic Started: 16 Sep 2015, 10:45 AM (2,503 Views)
The Whole Truth
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Last week, we saw early signs Australia’s property market was starting to cool. Dwelling price growth in July plunged to a modest 0.3%. Now we’re seeing pressure coming from the other side too. According to new CoreLogic RP data, rental yields are growing at the slowest rate in 20 years. Rents fell again in August on the back of rising housing supply and slow population growth. The only city where rents remained untouched was Sydney. Every other major capital saw falls in rental growth.

The monthly average fall rose to 0.4%, up from 0.3% in July.Year on year (YOY), rental growth dropped to 0.7% in August. That was down from YOY growth of 0.9% in July. Two factors were at fault for falling rental growth. CoreLogic explains: The reasons behind this lacklustre result for the rental market can be attributed to the extent of the current construction boom across the capital cities and slowing population growth’. This housing boom was led by new building approvals, which rose 4.2% in July. But there was pressure on rents coming from another familiar source too. Rising investor participation was a further drag on rental yields. ‘Added to this is the surge in investor participation in the housing market, which is contributing to weaker rental growth by adding to the rental stock’.

It all adds up to a depressed rental market. Rents have been falling in most capitals for several months. The only exceptions to this rule were Sydney and Melbourne. Now Melbourne has also joined the ranks of those seeing rental growth decline. Only Sydney still sees stable YOY yield growth. That might not last long though.
http://www.dailyreckoning.com.au/investors-beware-property-and-rental-prices-are-falling-cw/2015/09/11/




Edited by The Whole Truth, 16 Sep 2015, 10:46 AM.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Ex BP Golly
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While my rental increases over the last four years have been very reasonable, this year.....no increase.
We've never haggled because we are only paying 2.6% of property value anyway, but agent suggested we not pay extra this year.

Not sure how this compares with rest of Syd CBD.

WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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createdby
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Decade long housing boom and all we got to show for are more than 85% shoddily built units and apartments.

Thank you China!

Thank you greedy building and real estate industry!

Thank you banks! Keep my deposits safe ok?

Thank you local governments for easing supplies! They're crap supply, but supply is supply right?
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The Whole Truth
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Don't forget all the shoddy new houses. Pine frame with particle board floors. Modern caravans have better construction.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Will
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Whilst I'm not a property perma bear by any means, the idea that most people can have an investment property and have that property make them rich is false.

When you do a lifetimes work, the general idea, is you have some of your productivity skimmed off, but when you retire you have roughly what you put in.

The idea that you can purhase several lifetimes worth of productivity (ie Porsches, 40 ft boats, world travel) when you retire is possible, but it is simply impossible for EVERONE to do this. The real estate profession has successfully convinced much of the public that this is possible.
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Will
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The Whole Truth
16 Sep 2015, 12:56 PM
Don't forget all the shoddy new houses. Pine frame with particle board floors. Modern caravans have better construction.
As someone who is renovating at the moment, I'm noticing that much of the Chinese products (fasteners, metal angles, flashing) is not made to the highest quality.

Not to mention plumbing products or taps, shower screens. We are going to pay for this is a couple of decades time.
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Blondie girl
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Will
16 Sep 2015, 01:10 PM
Whilst I'm not a property perma bear by any means, the idea that most people can have an investment property and have that property make them rich is false.

When you do a lifetimes work, the general idea, is you have some of your productivity skimmed off, but when you retire you have roughly what you put in.

The idea that you can purhase several lifetimes worth of productivity (ie Porsches, 40 ft boats, world travel) when you retire is possible, but it is simply impossible for EVERONE to do this. The real estate profession has successfully convinced much of the public that this is possible.
Did you know that the new Riviera 515 SUV has been available in Perth , oh since last summer for immediate delivery?

Seems it's really tough for one of my Brothers.... Whizzing on the ocean.. Conveniently forgetting who initially helped fund setting up his IP portfolios... His parents not him.
Yes I don't luv him very much.

Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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Matthew
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Will
16 Sep 2015, 01:10 PM
Whilst I'm not a property perma bear by any means, the idea that most people can have an investment property and have that property make them rich is false.

When you do a lifetimes work, the general idea, is you have some of your productivity skimmed off, but when you retire you have roughly what you put in.

The idea that you can purhase several lifetimes worth of productivity (ie Porsches, 40 ft boats, world travel) when you retire is possible, but it is simply impossible for EVERONE to do this. The real estate profession has successfully convinced much of the public that this is possible.
What any investment does is provide you an income stream. If you purchased property just prior to retirement then that is a poor investment choice (in my opinion) because you will have a period of negative gearing and never pay the loan off in your lifetime.

If you buy investment property before the age of, say 45 then property is a sound investment choice (in my opinion). This is because you will see capital growth and rental growth over time that will allow you to have an asset with increased value and rents rising at a pace, over time, equal to or faster than inflation. If you own your own house outright you can divert some or all of your prior repayments to the IP and set a solid income addition for your retirement.

Investing in property is no different to investing in shares - it is incredibly difficult to make a guaranteed short term gain, however if you hold long term then you will see gains and that is the point of investing. People who say property investors are only in it for negative gearing are morons of the highest order.

You are correct, it is simply impossible for EVERYONE to do this. However that does not mean people should attack those who can.
My only hope for my three boys is that they turn out nothing at all like Chris.
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Frank Castle
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Business As Usual

Matthew
16 Sep 2015, 03:06 PM
You are correct, it is simply impossible for EVERYONE to do this. However that does not mean people should attack those who can.
Those that can do.
Those that cant pay us rent, gamble on metals and cry like little girls on property forums
Ignore posts by The Whole Truth · View Post · End Ignoring
The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
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Will
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Blondie girl
16 Sep 2015, 02:28 PM
Did you know that the new Riviera 515 SUV has been available in Perth , oh since last summer for immediate delivery?

Seems it's really tough for one of my Brothers.... Whizzing on the ocean.. Conveniently forgetting who initially helped fund setting up his IP portfolios... His parents not him.
Yes I don't luv him very much.
I agree 100 percent, what I'm saying is that only a small fraction of the population can do this at any one time. It's basic productivity. If we had shitloads a robots doing our work for us and the earth could meet the resource needs, then yes we can all achieve this.
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