Great time to invest in Aus

[67910241]

powerbroker

From a cash flow point of view we should and I am investing in America. You can buy good property and recieve a return of 14% plus

Which US state and metro area is the 14+% stat from? Probably not the coasts and I also can't see main inland areas being able to offer that type of return yet (their prices haven't collapsed the way the coastal ones have). Are we talking lower socio-economic areas inland here?

[powerbroker50]

As one example Indianapolis. You can buy a small apartment complex in a blue collar area for around $80,000us that will return 14%. I can give examples of larger complexes with larger returns.
Texas is also great, returns not quite as high but easier to get capital growth.

[emmajane6]

yes agree but its very hard to get into the market here with such high start up costs. in saying that i do wish i'd bought in perth 20 years ago!

[Orkibi]

Hi Nigel, I have a brother in Tucson,Arizona and will be heading there later this year.

do you ming sharing you thought with regard to Investing there ?

[Dean@Massiveaction]

The good news just keeps on coming!!

Home prices set to rocket again
By Jenny Rogers

GOLD Coast house prices are tipped to rise by a nation leading 22 per cent over the next three years as Australia's fastest population growth in two decades fuels a ferocious demand for housing.

The city, along with Brisbane, the Sunshine Coast and Darwin, is expected to have the strongest price growth in the country through to 2011 according to leading independent economic forecaster BIS Shrapnel.

The Residential Property Prospects 200S-2011 report also predicts another interest rate hike in the September quarter this year. But this would do little to slow the need for housing on the Coast thanks to continued interstate and overseas migration, 'significant' pent-up demand and strong employment and wages growth.

In a separate study, the Midwood Report has highlighted a lack of hotel stock on the Gold Coast and said the most obvious site was in Broadbeach close to the convention centre.

The Gold Coast's median house price is expected to rise from $475,000 to $580,000 by 2011, according to BIS Shrapnel senior project manager and study author. Angie Zigomanis.

"The shortage of new properties being built, the strong demand from population growth, both interstate and overseas, and the very low rental vacancy rates on the Gold Coast are all the factors bubbling away beneath the surface and fuelling housing demand," said Mr Zigomanis.
He said housing price growth would be slower in the 2008·09 financial year as the market recovered from a series of interest rate hikes and the global credit crunch and should then pick up pace towards 2011..

Mr Zigomanis said that despite a further predicted rate hike, the average cost of renting was set to rise much more than the cost of buying in 2008-09 and 20 I0-11.

The national population is expected to grow by 1.5 percent through 2008·09, the highest since the late 1980’s.
"Australia is experiencing record net overseas migration inflows, which is underpinning what is already strong underlying demand for housing," he said.

"With construction of new dwellings below previous peak levels, a rising deficiency of dwellings is also evident in the extremely low vacancy rates which will drive strong rental growth in most cities."

The Midwood Report called for more hotels to be built on the Gold Coast and said the Broadbeach area dose to the convention centre was the most obvious site.

"The Gold Coast has not seen a new Hotel constructed since Palazzo Versace in 2000," it said.

"The Hilton and Azzura Pacific Resort are the only two projects proposed since then and are both unlikely to be completed before 2011."

The report said average hotel occupancy rates on the Gold Coast had risen from 61.6 per cent in 2000 10 72.9 per cent in 2007 and average room rates had risen from $117.11 per night to $165.72 per night over the same period.


If only we had a decent government in NZ we could have headlines like this too :-)

[Mark_B]

The good news just keeps on coming!!

It is good news for people (like myself) who own something over that way.

The [Gold Coast], along with Brisbane, the Sunshine Coast and Darwin, is expected to have the strongest price growth in the country through to 2011 according to leading independent economic forecaster BIS Shrapnel.

Now for the bad news.....

BIS are renowned for being wrong. They're a bit of a laughing stock on Somersoft in Australia.

Still, if they are right I won't be complaining.

If only we had a decent government in NZ we could have headlines like this too.

I'd settle for some decent journalism in NZ (non sensationalist) for now.

M

[Dean@Massiveaction]

I'd settle for some decent journalism in NZ (non sensationalist) for now.

I second that :-)

[67910241]

Sounds a lot like Miami/Ft Laud

And the rest of S Florida the Gold Coast is a rather mediocre copy of.

The Dade County, where Miami Beach and the REAL Versace Palace are located, has seen the nominal median house prices are now 32% below their 2006 peak.

The Broward County prices are not faring much better.

Any speculative mass-tourism and perpetuum mobile development/construction based area will experience far more pronounced slump than some more established place like Sydney for instance.

Paying 500k aussie dollars for a house on a smallish section with a nearly infinite supply of land inland as well as further up and down the coast would scare me. Gold Coast not being a major IT, financial or industrial centre and not being likely to become one anytime soon would scare me some more.

Sounds less fundamentally constrained than Auckland land-supply wise.

Poomba, don't you reckon the houses over there are already overpriced and it's just a major correction waiting to happen? Who will keep moving in if their alternative jobs in Sydney and Mel are better paid?

[Dean@Massiveaction]

Poomba, don't you reckon the houses over there are already overpriced and it's just a major correction waiting to happen? Who will keep moving in if their alternative jobs in Sydney and Mel are better paid?

Well you won't stop the sea changers moving to the coast, and considering you can buy new brick and tile lowset for under 400K within a few minutes drive I can't see it doing anything but go up. I'd rather live a 15 minute drive from Main Beach than anywhere in New Zealand when I can pay less for a house and have 300 plus days of sunshine a year. That's why their immigration is so good. And for kiwis you can get more money in your hand on the Coast that Auckland in many industries. Only the Aussies bag the coast these days. The rest of the world thinks it rocks :-)
And the apartment market is also now selling well below replacement on the back of ever increasing occupancy.

I can't think of anywhere better to invest currently.

Now Spain there's a scary market!!

The Spanish economy seems destined for a horrendous fall. Their push for growth over the past decade is about to backfire. One million homes stand empty after years of overbuilding. More homes were financed and built than Germany, the UK and Italy combined. A million people are expected to lose their jobs and home lenders are in trouble. Spain's current account deficit is second only to the US. They have over borrowed for growth and the ECB is threatening to raise rates.

[tanmedia]

The good news just keeps on coming!!

Home prices set to rocket again
By Jenny Rogers

GOLD Coast house prices are tipped to rise by a nation leading 22 per cent over the next three years as Australia's fastest population growth in two decades fuels a ferocious demand for housing.

The city, along with Brisbane, the Sunshine Coast and Darwin, is expected to have the strongest price growth in the country through to 2011 according to leading independent economic forecaster BIS Shrapnel.

The Residential Property Prospects 200S-2011 report also predicts another interest rate hike in the September quarter this year. But this would do little to slow the need for housing on the Coast thanks to continued interstate and overseas migration, 'significant' pent-up demand and strong employment and wages growth.

In a separate study, the Midwood Report has highlighted a lack of hotel stock on the Gold Coast and said the most obvious site was in Broadbeach close to the convention centre.

The Gold Coast's median house price is expected to rise from $475,000 to $580,000 by 2011, according to BIS Shrapnel senior project manager and study author. Angie Zigomanis.

"The shortage of new properties being built, the strong demand from population growth, both interstate and overseas, and the very low rental vacancy rates on the Gold Coast are all the factors bubbling away beneath the surface and fuelling housing demand," said Mr Zigomanis.
He said housing price growth would be slower in the 2008·09 financial year as the market recovered from a series of interest rate hikes and the global credit crunch and should then pick up pace towards 2011..

Mr Zigomanis said that despite a further predicted rate hike, the average cost of renting was set to rise much more than the cost of buying in 2008-09 and 20 I0-11.

The national population is expected to grow by 1.5 percent through 2008·09, the highest since the late 1980’s.
"Australia is experiencing record net overseas migration inflows, which is underpinning what is already strong underlying demand for housing," he said.

"With construction of new dwellings below previous peak levels, a rising deficiency of dwellings is also evident in the extremely low vacancy rates which will drive strong rental growth in most cities."

The Midwood Report called for more hotels to be built on the Gold Coast and said the Broadbeach area dose to the convention centre was the most obvious site.

"The Gold Coast has not seen a new Hotel constructed since Palazzo Versace in 2000," it said.

"The Hilton and Azzura Pacific Resort are the only two projects proposed since then and are both unlikely to be completed before 2011."

The report said average hotel occupancy rates on the Gold Coast had risen from 61.6 per cent in 2000 10 72.9 per cent in 2007 and average room rates had risen from $117.11 per night to $165.72 per night over the same period.


If only we had a decent government in NZ we could have headlines like this too :-)

A nice commenatry related to this from The Daily Reckoning Australia.

--Speaking of unsustainable myths, what about the Aussie housing market? It's been a while since we visited the subject. But the housing Pollyannas are coming out of the woodwork again. And they've brought two friends with them this time.

--Immigration and easier credit. This the dynamic duo that will lead Australian house prices as much as 22% higher by 2011 according to a new report from BIS Shrapnel. "House prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates, an economic forecaster said."

--The big surge in immigration will drive houses prices up everywhere in the next three years. BIS tips 22% gains on the Gold Coast and Sunshine Coast, 21% in Darwin, 18% in Sydney, 16% in Adelaide and Melbourne, 15% in Canberra, 14% in Hobart, and just 9% in lowly Perth.

--Granted, we haven't seen the detailed research that supports these conclusions. But doesn't it depend on what kind of immigrants you get? High-wage skilled immigrants might buy. Lower-skilled immigrants (like your editor) will probably rent because it's all they can afford to do. Housing is still a financial question, not a demographic trend.

-- It's true that everyone needs a place to live. But not everyone can afford to buy a house-especially when the median house price in all the land is $458,888. Imagine getting off the boat and finding out that's what it will cost you to get your new life started in the Lucky Country.

--By all conventional historical measures, house prices are already well-ahead of where they should be in Australia. In the 1970s, median Aussie house prices were about three times median household income. If you made around $10,000 a year, you could expect to pay about $30,000 for your first Australian dream.

--According to the Australian Bureau of Statistics, the median household weekly income in Australia is $1,027 per week, or $53,404 per year. The median house price is $650,000 in Sydney, $500,000 in Perth, $515,000 in Darwin, $432,000 in Melbourne, and $365,000 in Hobart.

--That means that at the high end, home buyers will pay as much as ten times their income to get a house in most parts of the country. If you live in Tasmania or South Australia, house prices will be lower, but incomes might be lower too.

--Do you see the problem here? The only way to make up the difference between income and asking price is with debt. The big D. The Devil's favourite word. That's what's driven house prices up so much already…people gearing up to get into the market with the belief that house prices will keep rising. Yet historically-when it's not a bubble-house prices go up at about the same rate as inflation.

--The demographic argument for higher house prices is also a stupid and misleading one. We heard it for years in the States as a way to justify stupid financial decisions. Everyone needs to eat, too. But if you don't have a lot of money, you don't eat in fancy restaurants. You shop at Woolworth's and cook at home.

--What you put in your body and where you lay your body down to sleep at night are always financial decisions. And that come down to interest rates and how big a monthly mortgage payment you can afford. Demographics don't change affordability (if anything, you'd expect immigrants to be in lower income brackets and further away from home ownership). Just because there are more people doesn't mean they can all afford a house or get credit to buy one they can't afford.

--That's really the big revelation/claim/fantasy in the BIS report. "As credit conditions recover over the course of 2009, we expect banks will gradually pass on lower borrowing rates to customers," the report's author concludes. Yes. Because banks are generous like that, especially when they're trying to rebuild their profit margins and recover from losses and write offs.

--Will credit conditions recover in 2009? We reckon they will never be as good again in our lifetimes. The bull market in credit was the greatest the world has ever seen. It's a bear market now, and it's still pretty early in that bear market. Be ready for a long few months.

[younginvestor]

"GOLD Coast house prices are tipped to rise by a nation leading 22 per cent over the next three years as Australia's fastest population growth in two decades fuels a ferocious demand for housing."

This isn't a dig at anybody but growth projections of 22 percent over three years?

Is this 22 percent each year for 3 years? Because how I read it , the article is saying that property will increase by 22 percent over 3 years, which is 7 percent per year.

I am sure that you will all agree that a 7 percent per year increase in property prices nothing amazing (for a property to double in 10 years it must increase by 7.2% pa on average).

So my question is- Why is 22% growth in 3 years singled out as being special.

Last year (2007) in a Brisbane inner city suburb that I have been selling real estate in both median house and unit prices went up by more then 22% in only 12months.

From the start of 2008 we have seen a buyers market with a lot more properties on the market and less people(buyers) willing to pay late last years prices.

Due to a number of factors prices have started to fall in the last few months.

[tanmedia]

I agree 7% p.a. aint so special if nflation's up arond 4%. You're only trading water with that kind of return.

[Tucker]

7% is still alright considering leverage

[Dean@Massiveaction]

Exactly, 7% is an actual cash on cash ROI of 35%, beats working :-)

[tanmedia]

Exactly, 7% is an actual cash on cash ROI of 35%, beats working :-)

Ahh... you lost me.