PROPERTY CRASH - YES/NO

[srotherh]

Oopps
http://www.smh.com.au/news/Business/...826797663.html

[Pennywise]

Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/...334735688.html

[duncan macgregor]

quote:Originally posted by Pennywise

Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/...334735688.html

Absolutely sensational Pennywise. We can always find in any business transaction dummies that get succered in. Examples on the share market for instance[ FELTEX. Some of the happy punters bought at $1-50 sold at 10 cents which is a far worse situation to be in. macdunk

[rmbbrave]

quote:Originally posted by Pennywise

Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/...334735688.html

The article says the unit should return $130 a week in rent. At $95,000 the yield is 7%.

$95,000 is about right if you ask me.

[Pennywise]

it is cetainly getting bad over there.

even at $95,000, based on suggested rent for a 1 bedder, the gross yeild is still only 7%

at $262,500[xx(]...2.5%!!!

Sydney first...
Auckland apartments in 18months-2years.

[Pennywise]

RMB

[George]

The response to my initial question has been sufficient to confirm my caution about buying at present. Also from Newland "What happens in Australia happens in NZ in 6-12 months".
George

[Dean Letfus]

Th efundamentals of the property cycle never change. Booms are followed by slumps and then they boom again. Inside that are micro cycles affected by minor economic data and even the weather. But there is NEVER a bad time to buy a great deal.
The last 3 months in Auckland have been amazingly good buying because the weather has been so bad. I've bought 7 properties in August and September all 20% below valuation. Now that summer is on it's way sales will be higher and bargains harder to find. Next winter though we will be into a slump in the main cycle and the bad weather will help turn up some real bargains.
And as much as I respect Olly's investing ability his predictions are consistently wrong. In fact do teh opposite of his crystal ball gazing and you'll do well. Everybody who baled last time he told them to missed out on the biggest boom in NZ's history.

[minimoke]

quote:Originally posted by Dean Letfus

I've bought 7 properties in August and September all 20% below valuation.

I wonder if activity such as this will lead to a “crash” – certainly a distortion in local markets.

It’s interesting to note that if you get something at a 20% discount off the paper valuation you then have to achieve 25% growth on the actual purchase price to get back to the original valuation. This is way in excess of Duncan McGregor’s 10% growth a year which attracts so much discussion.

[patsy]

quote:Originally posted by broke

Property Crash? No.

Inflation? Perhaps.

As long as there is rampant inflation and excess liquidity like in NZ currently, there won't be a proeprty crash.