Do House Prices Always Go Up? - Page 2

Resurrection · 02-01-2013, 11:05 PM

'doom and gloom brigade' tend to be realists and are vilified for telling that things aren't always as rosy as they seem.

flappist · 03-01-2013, 01:12 AM

Quote:

Originally Posted by Resurrection

'doom and gloom brigade' tend to be realists and are vilified for telling that things aren't always as rosy as they seem.

Over the last 50 years, in Australia, in how many years have house prices dropped?

usernametaken · 03-01-2013, 10:33 AM

rent, save the difference, pay half the value of the house as deposit then you can maintain a renting lifestyle should you wish.

all comes down to discipline.

Dash_XR · 03-01-2013, 11:01 AM

Quote:

Originally Posted by usernametaken

Land goes up.

Houses are just a bonus

This is the golden rule, location.

Most houses loose value as they age, the land holds all the value.

What amazes me in my area is people spending 200+k on 400m or smaller blocks in massive estates in the middle of nowhere blinded by the thought that all property is a great investment.

I honestly can't see them doing overly well in the long run as more and more newer estates pop up all around them.

Time will tell I guess.

something wrong · 03-01-2013, 11:03 AM

If you buy well you should always come out on top, I bought 5yrs ago this march spent $25k on renos and our house is valued at $189k more than we paid. Plus we have lived in it for 5yrs.

I bought when the banks all had that period when they restricted the amount they would lend, I had to have 20% deposit, this stopped a lot of people buying so I was able to neg a great deal. Once banks started lending 90+% our place went up overnight. Our area is also now going through the gentrification process with a lot of people knocking down and rebuilding some of the old war widow houses and fibro houses. We have excellent private schools close by and some goodish public schools.

I have a few friends who are buying / bought Reno houses and have done so for the last 4 or 5 yrs, they renovate (themselves) and then rent out, most are either almost positive geared or neutral. The plan is to have about 10 houses in a mixture of areas and minimize the holding cost, while waiting for the market to improve over the next 10 to 15 + yrs.
Unlike TV shows this is not as easy as it looks and you need to either know how to do a lot of the work correctly or have close friends/ family who do as paying lots of trades persons does not usually work as the cost makes it to far in the negative.

There is also insurance against poor tenants, and if you have a good relationship with the real estate you should be able to discard poor tenants via their references. The one to watch Now is housing commission renting the house under the persons name rather than the dept of public housing so it can be harder to vette the house commission people but a good agent will do a background check and be able to work it out.

290GTP · 03-01-2013, 11:23 AM

I don't care what anyone says, renting is dead money. Do your research, buy the right property (worst house in the best street is a good approach), don't over capitalize on reno's & sell it when times come good again. This approach allowed me to be mortgage free by the time I was 39, I'm now 41 & can pretty much live the lifestyle I want.

chevypower · 03-01-2013, 11:24 AM

Values are always based on supply and demand. If I remember correctly, Australian govt manipulates the rate at which land is released for residential (similarly to how OPEC manipulates the supply of oil to control prices). I believe it is this reason that property values in Australia tend to rise more consistently than in the US.

poppa smurf · 03-01-2013, 11:31 AM

the old saying I guess......location, location, location.......however even the best suburbs here have taken a fall......but we have just seen a massive increase a few years ago so this could be seen as a "levelling out"

given the proposed expansion that "may" happen "one day" we will possibly see huge gains again

what concerns me is the squeezing out of the first home buyers unless they buy in the worst areas and sell at a loss when they go to upgrade

xe351 · 03-01-2013, 11:33 AM

http://www.moneymorning.com.au/20121...eath-fart.html

http://www.moneymorning.com.au/20121...se-prices.html

some interesting reading

Yellow_Festiva · 03-01-2013, 11:42 AM

Quote:

Originally Posted by Jim Goose

Hot off the press... well ok its 7hr old

Miniscule drops in value over the very short term according to that article.

Start that data 5, 10, 15 or 20 years ago and it will read very differently.

Quote:

"The company's analysts are predicting home price growth this year as likely to be somewhere between consumer price inflation and wage growth, which would be somewhere around the 3 per cent level."

I do agree with the last line however... not really going up or down, just stagnent...

XBROO · 03-01-2013, 11:46 AM

Anyone thinking of buying then renting, should look into RAAF houses as you don't have to worry about finding good tenants. And they repaint and freashing the house up every 4 years for you.

Yellow_Festiva · 03-01-2013, 12:00 PM

Quote:

Originally Posted by xe351

http://www.moneymorning.com.au/20121...eath-fart.html

http://www.moneymorning.com.au/20121...se-prices.html

some interesting reading

While I won't say if I agree or disagree with those articles, it seems to always come down to a financial gain / loss.

What about the emotional satisfaction of knowing you are the master of your own domain? I would never rent. It isn't in my nature to be given rules and regulations for what I do within the walls of my house. I have a lot of friends who rent, and with some of the crap landlords put then through I would last all of 2 weeks.

If I were to buy with the knowledge the value would never go anywhere I still would. As long as I can maintain the repayments then I will know that I have a place to call my own eventually.

And I know I would not be worried about rent increases, agent inspections, repairs that never get done, asking permission to decorate / paint and getting turfed out with X months notice etc etc etc.

castellan · 03-01-2013, 02:10 PM

Quote:

Originally Posted by homegrown

I feel sorry for our kids or the next generation of kids that have to buy houses. Its so hard at the moment. I would hate to think how much harder it will be for them afford houses in years to come.

Yes i do to.
A builder mate of mine, a extremely greed driven beyond belief liberal fella, was ranting and raving in the boom that he wanted the housing market to double and then double again, like $100,000 to 200,000 then 400,000 to $800,000 and i said it can't do that you stupid idiot, what about the next generations kids and people who can't afford to by a house. he got so angry and started swearing and ranting and raving like a mad man, saying he did not care at all about them and that they can rent of him. i said they could not afford to rent at all. seeing what they would have to pay rent. and that people would have to live in tents on the side of the road, ya fool.

I think you can only inflate a market to what people can afford and when you go above that she has to come down to reality .
People were that stupid in the boom, it was like they were at a casino placing bets like damned fools. it was moronic.

BENT_8 · 03-01-2013, 05:09 PM

Quote:

Originally Posted by Yellow_Festiva

What about the emotional satisfaction of knowing you are the master of your own domain?

What emotional factor are you talking about, i bought a property in 01, rented it for 2 years prior to that, when i came home from the brokers with my mortgage folder the house was the same, only difference was that all the renovations it needed were now my problem.

Quote:

Originally Posted by Yellow_Festiva

I would never rent. It isn't in my nature to be given rules and regulations for what I do within the walls of my house. I have a lot of friends who rent, and with some of the crap landlords put then through I would last all of 2 weeks.

Rules and regulations??, i sold 7 years ago and the only rule i've been asked to adhere to whilst renting since then, is the removal of a kids wading pool as it wasnt fenced.
Wether i owned or rented, this rule would apply.
My landlords (3 of them) have been wonderful. I've had a ducted system fitted in two of the rentals without hesitation, get regular positive feedback and my current landlord even sends me Chrissy cards and a big box of favourites as we're 'exceptional tennants'.
No horror stories here.

Quote:

Originally Posted by Yellow_Festiva

If I were to buy with the knowledge the value would never go anywhere I still would. As long as I can maintain the repayments then I will know that I have a place to call my own eventually.

Agreed.

Quote:

Originally Posted by Yellow_Festiva

And I know I would not be worried about rent increases, agent inspections, repairs that never get done, asking permission to decorate / paint and getting turfed out with X months notice etc etc etc.

I've never worried about these things either, never had a rent increase forced on me, i rent a new property all covered by warranty's so maintenance isnt an issue, never been asked to move on, infact the current landlord requested a 2yr lease as he wants to keep us as long as possible.
Real Estate co. wouldnt be in that though, they think they'll push for a rent increase this year to up their cut...dont like there chances to be honest, atleast thats what the landlord said during our correspondence.
I will admit, however, that i actually increased my own rent this last year by $10pw, as a gesture of goodwill to the landlord for installing the new ducted system of my choice and within 2 weeks of requesting.
Cuts both ways.

Its easy to paint a grim picture of renting, yes rent money is dead, yes i'll have nothing to show for it in 30yrs, but i can move when i want to without paying agents fee's or stamp duty or pay interest to a bank already posting record takings.

I can do as i please, within reason.
If i was to buy, i wouldnt suddenly start punching holes in walls and burning the floor boards just because i own it and can do as i like, so life for me wouldnt change, except for the expectation to pay off the mortgage.

290GTP · 03-01-2013, 05:17 PM

Quote:

Originally Posted by BENT_8

...yes rent money is dead, yes i'll have nothing to show for it in 30yrs... .

And that pretty much sums it up quite well. Some of my relo's are life long renters, they are in their 70's now, with nothing to show for it, just some crappy pension & the prospect of having to move yet again when the lease is up.
Each to their own but I couldn't stand to live my life that way.

BENT_8 · 03-01-2013, 05:47 PM

Quote:

Originally Posted by 290GTP

And that pretty much sums it up quite well. Some of my relo's are life long renters, they are in their 70's now, with nothing to show for it, just some crappy pension & the prospect of having to move yet again when the lease is up.
Each to their own but I couldn't stand to live my life that way.

And you are quite right, for many this is reality, however, just because you dont own a house doesnt mean you cant retire comfortably.

My father has owned for the last 50yrs, retired 30yrs ago, he's still on a crappy pension, with plenty in the bank...

Dont confuse home ownership with financial management.

290GTP · 03-01-2013, 06:12 PM

Trust me, I don't confuse the two. House's can be money pits. Anyone would admit to that. The point I was trying to make is who really wants to be moving house all the time when your retired & trying to enjoy life?

mr smith · 03-01-2013, 06:53 PM

Quote:

Originally Posted by Yellow_Festiva

Start that data 5, 10, 15 or 20 years ago and it will read very differently.

...

Check the 100 year data and the graph just about goes vertical in the 2000's. It will go back to trend and this may involve dipping under for a few years (how long - who knows?), which just as the boom made some fortunes the bust will take some.

xisled · 03-01-2013, 06:57 PM

In Australia we are all condition to save and buy a house, we basically work to live most people get them into so much debt they can barely live.

1 thing with renting, I can get a rental house $450 a week this includes all my bills paid, live 25 minutes away from work. Live 25 minutes away from the city of Melbourne. Have my FPV; buy the things that I love. Yes I do not own the house and paying someone else mortgage but I am around a $1500 off a month better off.

If I was to buy a house in the same area, I would be looking at $625 just for the repayments of the house a week, Plus rates, and bills on top of that. Also I would still be living the same distance away from the city and be living off noodles.

I am happy at the moment renting; it is more financially viable for me. Not everyone is the same. But not owing a house is not the end of the world.

But in saying that in around 6 months’ time I will be buying, because I will be better financial position.

mr smith · 03-01-2013, 07:07 PM

Spot on xisled, I own my own house now but have also rented and enjoyed it. I may go back to renting some time soon, but unlike many Australians I do not view renting as being a losers game, (gee most of these smarties are the ones with rentals - nice view of your customers).
Ive said many times OZ housing pricing is built on fear ,manipulation and govt policy and just like the Vic taxi licences it can evaporate with a few signatures during a late night parliament sitting.

usernametaken · 03-01-2013, 07:53 PM

Quote:

Originally Posted by xisled

In Australia we are all condition to save and buy a house, we basically work to live most people get them into so much debt they can barely live.

1 thing with renting, I can get a rental house $450 a week this includes all my bills paid, live 25 minutes away from work. Live 25 minutes away from the city of Melbourne. Have my FPV; buy the things that I love. Yes I do not own the house and paying someone else mortgage but I am around a $1500 off a month better off.

If I was to buy a house in the same area, I would be looking at $625 just for the repayments of the house a week, Plus rates, and bills on top of that. Also I would still be living the same distance away from the city and be living off noodles.

I am happy at the moment renting; it is more financially viable for me. Not everyone is the same. But not owing a house is not the end of the world.

But in saying that in around 6 months’ time I will be buying, because I will be better financial position.

As long as you save the extra towards a house purchase, you'll be fine

BENT_8 · 03-01-2013, 08:39 PM

Quote:

Originally Posted by xisled

In Australia we are all condition to save and buy a house, we basically work to live most people get them into so much debt they can barely live.

1 thing with renting, I can get a rental house $450 a week this includes all my bills paid, live 25 minutes away from work. Live 25 minutes away from the city of Melbourne. Have my FPV; buy the things that I love. Yes I do not own the house and paying someone else mortgage but I am around a $1500 off a month better off.

If I was to buy a house in the same area, I would be looking at $625 just for the repayments of the house a week, Plus rates, and bills on top of that. Also I would still be living the same distance away from the city and be living off noodles.

I am happy at the moment renting; it is more financially viable for me. Not everyone is the same. But not owing a house is not the end of the world.

But in saying that in around 6 months’ time I will be buying, because I will be better financial position.

Precisely, i remember when little Johnny Howard said home ownership would create a devide between the haves and the have not's.
Well, when i owned property i lived comfortably, when i sold and entered the rental market i live comfortably.
Who cares what i'll die with, i'll be dead

People have had the 'great Aussie dream' ideal drummed into their heads and now believe that it is a symbol of status in society.
If you have a mortgage or portfolio you have made it, if not, your a money wasting bottom feeder.

All that scare mongering did was create a 10yr boom, establishing the get rich quick expectations that went with it.
The market would have always seen growth, albeit at a more gradual pace if trends had continued pre boom times.
Anyone who bought pre boom will tell you property is the goose that laid the golden egg and anyone who bought post GFC will tell you its far from it.

xisled · 03-01-2013, 08:55 PM

Quote:

Originally Posted by usernametaken

As long as you save the extra towards a house purchase, you'll be fine

I do save some, but a fair chunk of the money goes to my life style. I am nearly 30 and do not regret not buying a house. I have a heap of friends who purchased a house when they were 22, 23, 24 and such and they are still stuck in the same situation as they were 5 years ago.

I have seen a few relationships go bad because of money.

I have done what, I wanted and when I wanted to. I have never had to worry about where my next repayment will come from. The funny thing is when I do eventually buy a house I am going to be more in front than most of my friends who purchased a house 5 years before me. One thing is I am going to have a smaller loan because I have been saving. I haven’t really been saving for a house, just putting a few hundred a week away for a few years now.

Yellow_Festiva · 03-01-2013, 11:19 PM

Quote:

Originally Posted by BENT_8

What emotional factor are you talking about, i bought a property in 01, rented it for 2 years prior to that, when i came home from the brokers with my mortgage folder the house was the same, only difference was that all the renovations it needed were now my problem.

What I mean is that buying a place is not always about financial gain. It's about what you the buyer require. Investors require a return, people who don't like the idea of renting would probably like more control of their living situation. Notice that at no time did I bag renters out. I currently own / have owned several investment properties and understand fully that buying isn't every ones cup of tea.

Quote:

Originally Posted by BENT_8

Rules and regulations??, i sold 7 years ago and the only rule i've been asked to adhere to whilst renting since then, is the removal of a kids wading pool as it wasnt fenced. Wether i owned or rented, this rule would apply.

I will put it to you that your experience is the exception, not the norm. You are lucky to have a landlord that seems fair and reasonable. I have lost count of the bad interactions I have been told of between tenants and owners. There are some real greedy scumbags out there - I assure you.

Quote:

Originally Posted by BENT_8

My landlords (3 of them) have been wonderful. I've had a ducted system fitted in two of the rentals without hesitation, get regular positive feedback and my current landlord even sends me Chrissy cards and a big box of favourites as we're 'exceptional tennants'.
No horror stories here.

Exactly, you have it good. By the sounds of things you are also an ideal tenant. I also go out of my way to look after tenants.

Quote:

Originally Posted by BENT_8

I've never worried about these things either, never had a rent increase forced on me, i rent a new property all covered by warranty's so maintenance isnt an issue, never been asked to move on, infact the current landlord requested a 2yr lease as he wants to keep us as long as possible.
Real Estate co. wouldnt be in that though, they think they'll push for a rent increase this year to up their cut...dont like there chances to be honest, atleast thats what the landlord said during our correspondence.
I will admit, however, that i actually increased my own rent this last year by $10pw, as a gesture of goodwill to the landlord for installing the new ducted system of my choice and within 2 weeks of requesting.
Cuts both ways.

The problem is, in a market where rentals are at a premium it allows some owners to become right mongrels. If you have never experienced unfair rent increases, delays / refusal of repairs, unfair lease terms, ridiculous owner requests or being evicted for no reason than you are extremely lucky.

Quote:

Originally Posted by BENT_8

Its easy to paint a grim picture of renting, yes rent money is dead, yes i'll have nothing to show for it in 30yrs, but i can move when i want to without paying agents fee's or stamp duty or pay interest to a bank already posting record takings.

Each side will always find good arguments for their ways. The debate of renting vs owning has been around for decades. Much the same as marriage vs defacto, liberal vs labour, religion vs atheists, vegetarians vs the rest and Holden vs Ford. It takes all kinds to make the world function as long as we mutually respect each others decisions... even if we don't always agree.

Quote:

Originally Posted by BENT_8

I can do as i please, within reason.
If i was to buy, i wouldnt suddenly start punching holes in walls and burning the floor boards just because i own it and can do as i like, so life for me wouldnt change, except for the expectation to pay off the mortgage.

True, but you wouldn't need permission or need to answer to anyone to punch holes in your walls if you were the owner. ;)

AU101 · 04-01-2013, 02:18 PM

If rent money is dead money, what do you call interest repayments on a falling asset?

In Focus · 04-01-2013, 03:49 PM

Whilst I expect it in speed camera threads, I'm surprised at the conspiracy theorists appearing here as well.

If you can afford it, buy a house. I'm 42 and mine is paid off. Admittedly, I got in the market for my first home at the right time, and upsized at the right time, but now I can afford to "play" if I want to. Funnily enough, even though I can afford to buy an expensive car, I couldn't bring myself to do it when I went looking for a "faster" one last year.

If you can't afford it, then make sure you're at least putting something away in savings. It's not unusual in Europe, for instance, for people to rent and invest the difference (between renting and owning) in other areas.

Whether there are any other worthwhile investments is probably arguable - given term deposits are not much over 4% at present - and the share market being so volatile, but houses will, eventually, go up in value. The housing market may possibly go down in the short term, but rent money gives no return AT ALL.

**MercurySilver** · 04-01-2013, 03:54 PM

house prices might not always go up
but one thing that does always go up:

council rates

the bastards

b0son · 08-01-2013, 12:22 AM

Houses/land almost always go up over the long term - population growth and lack of available land fuels growth.

While the graph with the US/Japanese property price falls looks nice, is it relevant? Both those economies suffered huge crashes, we have not. Maybe if the chinese economy stops growing, but even amid all the doom and gloom, they're still set for growth. As a result, so are we.

Price plateau or modest falls in the short-term at the worst.

zilo · 08-01-2013, 12:39 AM

Quote:

Originally Posted by flappist

Over the last 50 years, in Australia, in how many years have house prices dropped?

Perhaps an answer to your question, and a bit of advice for the original thread starter is....

Always read the prospectus before diving into any investment.

They always print the disclaimer....unless they are a Real estate Agent...

"past performance isn't a guarantee of future earnings"

If it's a mandatory disclaimer for shares, gold, superfunds etc...

Then surely it also applies to property purchases as well?

302 XC · 09-01-2013, 11:04 AM

I love the term people use in property ,"Investment "
It aint an investment till ,
1 . You can sell for more than you pay,including all costs
2 . You own it ,finally,and after all costs,inflation,interest your ahead of the game
There a nightmare and a liabilty till you either sell,own outright

Some so called investors with good tenants parade how easy it is,wrong
For every 1 winner in real estate theres 10 losers ......

My 2nd house i sold within 3 years ,cleared 250,000 in the hand,not on paper,thats investment
Those who rent their investments, its only great while the money comes in, stop paying the mortgage and see how rosey itll be when you forclose ....