在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
We bought a property when the financial crises started as I didn't believe it was as bad as everyone thought it would be in Australia and I thought it was a good time to buy. However I didn't expect the capital growth that we have had to date since buying the property. I was expecting it to stay around the same, however I'll take 40% growth.
Now I'm starting to think people are negative on property because of the interest rate rises. I expect property to fall quite a bit (at least in Melbourne), however I don't trust my judgement as I never pick a boom. Booms seem to occur over night. Oneday property is steady and the next, they are rising like crazy. I've learnt never try to predict a boom. However I've heard of property crashes, however never experinced one (2008 was not a crash in my opinion).
I'm leading towards holding off buying property for 6-12 months, let the prices fall, then buy and expect no growth for a few years. Maybe I'll be lucky and another boom will come without warning.
Surely with the rental returns of Melbourne property, there can't be another boom in 6 months. However I could be wrong.
Probably a good time to start researching in areas you are interested in if you haven't already. But I would not be buying now, I would wait a few months, maybe in January when the interest rate hikes will have started to really rattle some home owners and at that time they would have spent all their money on Christmas and holidays etc so should be some good bargains around then. But you might find a bargain in the next few weeks too as some people give in now to interest rates and rapidly rising costs to live in Australia.
To quote a line from Lance-Corporal Jack Jones of Dad's Army: "Don't panic, don't panic."
We are still no-where near the interest rate levels of just a few short years ago (see the graph attached, from the RBA)....and there was no blood in the streets then.
It is easy to get the jitters about rising interest rates until you zoom out to get the bigger picture. We still have some of the lowest interest rates in 20 years! (excluding those of the ‘emergency setting’ in the depths of the Global Financial Crisis).
Those waiting for prices to crash or severe mortgage stress to become commonplace will be waiting a very long time IMO. You'd be better advised to spend your time looking for good deals in any market (which there always are), rather than trying to 'time' a price fall.
Just my 2c. Alan
Cash rate is low for sure, but banks for the past three years have passed on greater than RBA cash rate increases and whilst IR's were coming down, banks didn't pass on 100% of the reductions.
Mortgage rates in the low to mid 7's are probably still around more normal levels.
News Impacting Buyer Sentiment
I always think that anytime you see a property with potential, that meets your criteria then jump in.
Timing to enter & exit the market at the trough or peak is tricky business. On top of this even within a city different parts of the property market can be at different stages of the property cycle.
I’ve certainly seen some great value properties over the past 12 months. Most have been snapped up real quick.
Have also seen properties with potential to go well above what I believed they were worth.
There are always great property opportunities out there.
Changes like interest rate hikes can certainly spook people. Negative news can be great for increasing the opportunities.
At the moment there appears to be a large inflow of more positive sentiment & outlook reported in the press.
Interest rate fear may fade as people once again get use to the high rates of interest that Australians pay.
With super profits, banking is certainly an attractive business. What other business can you make a motza, charge your customers more that anywhere else in the world & retain your customers???
cash rate might be low, SVRs aren't.
our mortgage was awful at 8.5%, currently at 7.11% after yesterday's grab.
i'm operating in the orange zone now (above 7%) and now i'm re-assessing the worth of staying or going.
i think it might be better to release all my equity and go play.
You should always be looking for a good buy eg. well located property with potential and negotiate your price.
Aaron Sice said: ↑
our mortgage was awful at 8.5%, currently at 7.11% after yesterday's grab.I guess we have different levels of tolerance and perhaps even gearing.
i'm operating in the orange zone now (above 7%) ....Click to expand...
My personal orange zone is above 9% and my red zone at 10+%.
I'm surprised that you're in orange at 7% which is a long term, general trend.
i'm in orange at 7% because i have a lot on unrealised investments yet to come to fruition.
otherwise my orange would start at 8.5%.
Have not heard of the IR 'orange zone' & 'red zone' but it's a very handy metaphor, and got me thinking about mine. Orange for me is when my rate is >8%. Red i guess would be 9.5%.
Sorry to the OP for the segue. I agree with what others have said. Keep watching the are you're intereted in closely and you will see good buys come up. There are many areas with a lot of stock & unhurried buyers. This is an opportunity because there are ALWAYS motivated vendors. With a lot of seller competition you can negotiate a cheap price with someone who needs a quick sale.
Propertunity said: ↑
We are still no-where near the interest rate levels of just a few short years ago (see the graph attached, from the RBA)....and there was no blood in the streets then.Click to expand...Today a 7.85% home loan interest rates in 2010 is equal to over 24% interest rate in 1990. ...when comparative incomes / payments etc are applied.
Give me 1990 interest rates, housing prices and salaries any day.