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What's your favourite Somersoft thread?; Somersoft Property Investment Forums mass delusions
Topic Started: 18 Mar 2011, 10:48 AM (30,726 Views)
Shadow
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Evil Mouzealot Specufestor

MMM
1 Aug 2014, 09:27 AM
So rents fall a bit in Canberra with a population of 350K, but rise in Sydney and Melbourne with a combined population of 9 million, and you claim victory?

Rents fall in individual cities fairly regularly, just part of the cycle, but across Australia as a whole rents are rising.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Eternal Sunshine
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That's right Shadow - who cares, property is only ever on the way up (in one state or another) shouldn't matter that the rot from Canberra spreads out - just that they feel it first....
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zaph
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stinkbug
1 Aug 2014, 10:34 AM


Don't worry Teddy, I'm still strongly cashflow positive, and paying down my PPOR at a rate of about $50k principle per year.

;)

EDIT: How's the yield on all your gold going?
Quote:
 
Ha - are you seriously so stupid as to think an isolated case like that applies uniformly across the board?


Of course it doesn't, but the linked thread provides pretty strong anecdotal evidence that rents are generally dropping in Canberra.

Quote:
 
And as I told you recently, my last 5 rent reviews of Canberra properties have had 2 increases, 2 unchanged and 1 down (by 40 bucks a week, but it was over market anyway).


Were these all re-lets? For me the real signal of market rents is when it's a new lease and the market decides the price. Most people would be prepared to pay slightly/moderately more than market to not have to move I would have thought - they may also be unaware that market rents have dropped and just expect/accept an increase.

What's the deal with the $40 down tenant? Was it a new lease, I can't imagine you conducted a review and informed that the rent would reduce by $40 pw. So if release, did the tenant ask for a reduction? How much? How did that go?
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Shadow
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Evil Mouzealot Specufestor

Eternal Sunshine
1 Aug 2014, 11:54 AM
That's right Shadow - who cares, property is only ever on the way up (in one state or another) shouldn't matter that the rot from Canberra spreads out - just that they feel it first....
Why should what happens in tiny Canberra spread out? I haven't heard of Canberra driving the national housing market before.

The more likely outcome is for the booms in Sydney and Melbourne to spread. That's usually what happens, as people become priced out of their preferred suburbs in the biggest cities they move to more affordable suburbs in smaller cities and drive up prices there.

I expect Brisbane will be next to boom, followed by Adelaide and Canberra.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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stinkbug
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zaph
1 Aug 2014, 12:26 PM




What's the deal with the $40 down tenant? Was it a new lease, I can't imagine you conducted a review and informed that the rent would reduce by $40 pw. So if release, did the tenant ask for a reduction? How much? How did that go?
The 4 that increased or didn't change were existing tenants, the 1 that dropped was re-leased. I took a decision to reduce the price right from the start rather than leave it empty, so reduced perhaps more than was required, but had a good tenant in less than a week later. At the new price it's still cashflow positive anyway.

If a tenant asks for a rent reduction, I'll negotiate it through. It's happened once before (several years ago), and I engaged with them and suggested we meet in the middle, and the tenant agreed. So that was a $10/wk drop back then.

Bottom line, there are lots of new luxury units in Canberra, and these are performing badly in terms of rent, because there are too many and they are expensive anyway. I don't own anything in that market segment so I'm not particularly concerned.
Shadow
1 Aug 2014, 02:51 PM
Why should what happens in tiny Canberra spread out? I haven't heard of Canberra driving the national housing market before.

The more likely outcome is for the booms in Sydney and Melbourne to spread. That's usually what happens, as people become priced out of their preferred suburbs in the biggest cities they move to more affordable suburbs in smaller cities and drive up prices there.

I expect Brisbane will be next to boom, followed by Adelaide and Canberra.
Canberra will be flat for a while yet. There are some very large companies hiring in Canberra, but this is tempered with public service job losses. Public servants tend to be a risk averse bunch, so property will almost certainly stagnate for another 3 or 4 years. During the 2020s I expect it to at least double, though, in both price (nominally) and rents.
Edited by stinkbug, 1 Aug 2014, 02:53 PM.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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roberto
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MMM
1 Aug 2014, 10:15 AM


Tennants are now dictacting rental decreases or threatening to walk out. See how investors go when their rental returns decrease tenfold on their rental increase expectaions. ;)

And things are only just warming up, plenty more falls to come, for years :bye:
The future trend is the key. We're seeing markets all across Oz going backwards in real terms, even syndey's gains are just a belated attempt at a catchup with inflation after nearly a decade in the dog house. But what is all this we are seeing but a portent of things to come.

Property fans across the nation once assured us that houses only ever go up, now they assure us things are just going to be flat for a decade or so. A decade? Why pick that? Because it's obvious that the economy is going down for the count and their hope is the fallout will miss property. I can't see that happening. Property is about to get hit hard, the collapse of the building industry was the leading indicator and it has not recovered. It's almost as if everyone has forgotten the endless cleared hillsides bristling with activity.

I would have given property a hope 12 years ago but the last manic doubling of prices without a comensurate doubling of wages quashed that one. Add in the fact that instead of home owners paying off property they have used it like a credit card for consumption and you have a power keg waiting to blow.
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MMM
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Shadow
1 Aug 2014, 11:03 AM
So rents fall a bit in Canberra with a population of 350K, but rise in Sydney and Melbourne with a combined population of 9 million, and you claim victory?

Rents fall in individual cities fairly regularly, just part of the cycle, but across Australia as a whole rents are rising.
I'm not claiming victory, just letting you know what is happenning. ;)

You just don't seem to understand our jobs are heading overseas or dissapearing altogether thanks to having the highest wages in the world, wages that are simply no longer able to compete on a global scale and there results are shown in the job loss thread and highest unemployment rates in ten years and rising.

Lowest interest rates since the great depression and highest youth unemplyment since the great depression.

And here you say slight falls, they are massive falls in rents , ten years worth or rent rises wiped out in a matter of a couple of years, is that part of the cycle too shadow. I mentioned clearly what happens to rents in both our areas in that thread I linked, and you know that to be the case . Yes other areas or capitals have been more vunerable over the years, but have never seen drops like canberra or perth is seeing now.

So we can keep our eye on it and see how it goes. Canberra and Perth are just a more exagerated example of what will happen overall. Rates cant go much lower now and jobs are still dissapearing fast. :)
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MMM
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stinkbug
1 Aug 2014, 10:34 AM
Ha - are you seriously so stupid as to think an isolated case like that applies uniformly across the board?

And as I told you recently, my last 5 rent reviews of Canberra properties have had 2 increases, 2 unchanged and 1 down (by 40 bucks a week, but it was over market anyway).

Don't worry Teddy, I'm still strongly cashflow positive, and paying down my PPOR at a rate of about $50k principle per year.

;)

EDIT: How's the yield on all your gold going?
So you ask me if I am so stupid to think an isolated case applies uniformly across the board ? No stinky.

Now, let me ask you something stinky. :)

Are you so stupid to think that uniformly across the board declines reported everywhere for nearly two years means your properties are isolated cases ? :bye:

Why play the dope still, Zaph pointed out the obvious for you earlier.
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stinkbug
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MMM
1 Aug 2014, 08:15 PM
So you ask me if I am so stupid to think an isolated case applies uniformly across the board ? No stinky.

Now, let me ask you something stinky. :)

Are you so stupid to think that uniformly across the board declines reported everywhere for nearly two years means your properties are isolated cases ? :bye:

Why play the dope still, Zaph pointed out the obvious for you earlier.
Yeah, I do think you're that stupid. I think that because it's what you said, and you even tried to do the math.

Do I think my properties re isolated cases? Who cares? I've said here many times that properties are not created equal, and for the experienced investor it's frankly quite easy to pick properties that will outperform the market.

My overall portfolio rent has never once decreased, and even if it did I have 10s of percent buffer just to get the whole thing back to cashflow neutral.

I used to refuse to believe someone who can use a computer is so stupid they can't understand these basic tenets of property investing, but you're steadily convincing me otherwise.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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MMM
Unregistered

stinkbug
1 Aug 2014, 10:47 PM
Yeah, I do think you're that stupid. I think that because it's what you said, and you even tried to do the math.

Do I think my properties re isolated cases? Who cares? I've said here many times that properties are not created equal, and for the experienced investor it's frankly quite easy to pick properties that will outperform the market.

My overall portfolio rent has never once decreased, and even if it did I have 10s of percent buffer just to get the whole thing back to cashflow neutral.

I used to refuse to believe someone who can use a computer is so stupid they can't understand these basic tenets of property investing, but you're steadily convincing me otherwise.
Do the math. OK. I'll try again. 8 properties times by minus $150 a week equals minus $1200. And they might not be there yet by there headed there and behind.

As for your comment about better properties in better areas being more resilient and less prone to damage I and declines, I would totally agree with you stinky. But the extent of the declines that canberra is seeing is the largest drops they have ever seen before and its the result of an economy collapsimg from what it once was and can never be again. And when the extent of economic decline is as large as it is, it effects so many that others around suffer as a result. From the restaurant owner to the car dealer and everything aroumdnis effected.

When this extreme decline is being concentrated in such a small place like canberra, the overall as a whole is being effected. The rental decrease contagion on this level just spreads out. Thats why tennantz are now dictatimg terms to landlords ij canberra on a level also never seen before.

Wont be long before they want a decrease of $50 and new carpets too, what next year, another $50 decrease an new BBQ thrown in. They will want this done and that done, just like in that thread we saw yesterday.

Speaking of people and computers stinky. The evidence is all around you and has been for years, not it is right in your face and your still whistlimg dixie.

Like this bloke here below stinky. A real estate zpriuker who sounds so desperate he is clearly leveraged to the gonads in the Gladstone ponzi.



http://www.propertyobserver.com.au/finding/location/qld/33229-gladstone-in-a-downturn-but-could-be-a-great-opportunity-for-investors.html

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