RE sales other than FHB - where is it happening?

[GIDDO]

Feedback from trusted REAs on current market conditions and outlook.

Rolf L posted this on another thread.

Doesnt matter whole lot if the bonsu will be extended.

With the lenders and insurers sensibly running chicken because of concentration risk, the extra 7 k wont do much to make up for the lack of money at 90 % plus LVR.

Nor wil it fix the "back to the future" genuine savings requirements which looklike they will soon be mainsstream again. These were first knocked on the head back in late 2005.

My REA mates tell me that the flow through to the second tier market isnt really happening sd they expected, and I am seeing some anecdotal evidence that a lot of the vendors selling to FHBs are investors getting out, rather than OO people upgrading.

Be interesting to see some stats in 3 to 6mths as to the growth in new construction if any.

I dont see any +ve price pressue in my local turf on new land developments that are mid way between FHOG buyers and upgraders

I started this new thread because I would like to hear from Somersofters all around this wide brown land about their market conditions locally.

Is FHB sales activity cascading into 2nd tier OO house sales activity?
Are investors active? Are they buying or selling?

For Toowoomba, my local REA tells me that the hot FHB activity is about all that is currently happening. Not a lot of 2nd tier activity.

Anyone else?

 

[sash]

I am ready to flick one of my dogs to one of the "great unwashed"...errr...sorry FHB.

I think this mini boom might come to an end.....

 

[GIDDO]

I am a bear on this Sash as you have probably noticed. I have just sold my development unit and also another house.

I would love other's views and information.

 

[keithj]

Is FHB sales activity cascading into 2nd tier OO house sales activity?
Are investors active? Are they buying or selling?

For Toowoomba, my local REA tells me that the hot FHB activity is about all that is currently happening. Not a lot of 2nd tier activity.

Anyone else?

Did you ask the REAs where the occupants of the houses the FHBs are moving into are going ? Are they IPs with the renters going elsewhere ? Are they OOs ? Or previously vacant ?

 

[rugrat]

In canberra, land releases are so sparse that all the land is snatched up and developed on regardless of the increased FHB grant. I don't think it has really had any benefit in terms of creating new housing here in canberra for that reason - although I am not sure how the grant may have affected the proportion of these new developments being FHB's. In conjunction with canberra's 'affordable housing scheme' I would suggest the proportion of FHB building new home in the ACT has increased. But like I said the overall rate of development would be about the same because land is still only being released at the same rate. Not great for those wishing to enter the market, but good news for canberra home owners who don't wish to see demand fall and thus their property values.

 

[sparky23]

Yes flowing on here in Shellharbour at my little estate, I mentioned before that out of the last 8 sales only 2 are FHB and I have 1 purchased as an investment with the others to older couples and families so a nice mix going on. The breakdown of the previous 8 was 4 x FHB, 2 x investors and 2 families and no older people at all.

Just small statistics based on my own experiences.

 

[GIDDO]

Did you ask the REAs where the occupants of the houses the FHBs are moving into are going ? Are they IPs with the renters going elsewhere ? Are they OOs ? Or previously vacant ?

Keith, I didn't ask specifically, but will do so.
It seems most are rentals, so maybe IPs being sold. The renters would be churning I guess.
The OO's seem to be sitting tight up here right now. Waiting for the Press's tsunami to engulf us.

 

[MichaelW]

I am a bear on this Sash as you have probably noticed. I have just sold my development unit and also another house.

I would love other's views and information.

Hi Giddo,

Why? If you've already made your decision to sell some of your assets what does it matter what others think the market is going to do. You've obviously done your thorough due diligence and reached your own conclusion and acted accordingly.

My investment timeframe is a long one, so I'm less concerned about short term market directions. But, FWIW, my view on short term market direction is very positive regardless of whether the FHB grant is extended or not. Here's some insight in this thread.

There's a few bears out there at present, but I like several others are not in that camp and my personal investment decisions are aligned accordingly. i.e. I'm definately not selling any of my properties as none of them are dogs and all have good medium to long term capital appreciation and yield potential in my considered opinion.

Can't wait for the next 2-3 years to play out!

Cheers,
Michael

 

[sash]

Giddo,

I am taking this opportunity to get rid of one more non-performing criteria property. I bought it for 170k in 2004 and reckon I can get 200k!

I can better utilise my money in other areas...I am starting to move up the food chain in terms of property because the FHB market is crowded and the deals are not as attractive any more....particularly in Sydney.

I am a bear on this Sash as you have probably noticed. I have just sold my development unit and also another house.

I would love other's views and information.

 

[GIDDO]

Hi Giddo,

Why? If you've already made your decision to sell some of your assets what does it matter what others think the market is going to do. You've obviously done your thorough due diligence and reached your own conclusion and acted accordingly....

Here's some insight in this thread.

Well my reason is that i am wishing to upgrade my PPOR sometime over the next 12 months and am looking to buy in the segment that is just "up" from where the FHB's are. So my plan since late last year has been to sell to FHBs while the prices are good (done that), and then wait for a PPOR bargain.

 

[MichaelW]

Well my reason is that i am wishing to upgrade my PPOR sometime over the next 12 months and am looking to buy in the segment that is just "up" from where the FHB's are. So my plan since late last year has been to sell to FHBs while the prices are good (done that), and then wait for a PPOR bargain.

Fair enough.

And please forgive me if my tone was a bit rough in that last post. It wasn't intended as such. But, my opinion would be: don't wait too long. I expect prices are currently finding their bottom and should start their next leg up through the recovery phase over the next 6 months as the bad news dries up and everyone realises its not the end of the world.

I suspect there's a little bit more bad news out there and the odd sensationalist headline about Eastern European banks being insolvent and such, but these will progressively lose their impact as people tire of the doom and gloom and en masse think beyond the current headlines and start perceiving the ensuing upturn in the global economy. It will only take a few decent wins such as Geithner's killing the zombie elements on the banks' balance sheets and people will start looking beyond the GFC.

Domestically, we're in great shape and will probably be at the vanguard of the global recovery. 2009 might be miserable for a few unfortunate souls but 2010 is looking pretty good from where I'm sitting.

Cheers,
Michael

 

[GIDDO]

Fair enough.

And please forgive me if my tone was a bit rough in that last post. It wasn't intended as such. But, my opinion would be: don't wait too long. I expect prices are currently finding their bottom and should start their next leg up through the recovery phase over the next 6 months as the bad news dries up and everyone realises its not the end of the world.

I suspect there's a little bit more bad news out there and the odd sensationalist headline about Eastern European banks being insolvent and such, but these will progressively lose their impact as people tire of the doom and gloom and en masse think beyond the current headlines and start perceiving the ensuing upturn in the global economy. It will only take a few decent wins such as Geithner's killing the zombie elements on the banks' balance sheets and people will start looking beyond the GFC.

Domestically, we're in great shape and will probably be at the vanguard of the global recovery. 2009 might be miserable for a few unfortunate souls but 2010 is looking pretty good from where I'm sitting.

Cheers,
Michael

No worries Michael,
I love your posts cos your a man of your convictions, and goodness me, we all need some positive influences!
Good point I think you made about Oz being one of the first to recover, and probably in 2010. I hope you are right. I hope to buy my new PPOR in late 09 and then stock up on IPs straight after that. But of course, it all depends on other stuff . You know "stuff happens".

 

[sparky23]

Domestically, we're in great shape and will probably be at the vanguard of the global recovery. 2009 might be miserable for a few unfortunate souls but 2010 is looking pretty good from where I'm sitting.

Cheers,
Michael

I was busy being an unfortunate soul last year - I always was ahead of the crowd! LOL

 

[LynnH]

LOL, sparky - you're obviously a born leader!

Cheers
LynnH

 

[wylie]

Interesting comments about now being a good time to upgrade. I have only kept a very faint finger on my own suburb because if we upgraded now we would stay in the same area due to proximity to school bus routes, express bus to town for hubby and friends living nearby.

However, it seems that even though there are a number of very nice places on the market in our suburb, they are ultra nice and considerably over $2M seems to be what is expected. Mind you, they are sitting and sitting, so perhaps the vendors will have to lower their expectations.

We have seen one place that was nice for just a whisker over $1M and could probably get it for less, but it has some aspects that we were not happy with, so it was a compromise really. Our place that was probably valued in the $800s a year ago I reckon we would be looking at mid $700s now, so upgrading is still tricky.

It seems that there are houses out there for around $2M and over but not a lot for around $1M or just over. To replace our four bedroom, two bathroom (third toilet), air-con and pool, we need to jump up a fair bit higher, or we are just replacing what we already have. If we spend $50K on changing over I want to do better than just "bit better than we already have".

Anybody else found this?

PS. Have to admit that we are not "actively" looking so possibly missing other suitable houses out there. The ones I am drooling over are just too far for us to jump into unless we sell an IP, which is not going to happen (not now, at least).

I think we will stay where we are (which is very nice anyway) and when the boys are older, we will then move somewhere that suits that period of our lives better.

 

[Gee Cee]

Wylie i am quite with you on PPOR.
We have a home only 3 yrs old that is not huge but is in a great area. We have wonderful neighbours and in a quiet Street. New school close bye and everything else. Beaches, Shops, Etc. We have no debt on our home, new cars and are comfortable.
We would love to upgrade to the Quad garage, pool, alfressco, etc ,etc.
But I cannot see the value of pouring $200k + into a new home that at the end of the day will just be a bigger version of what we already have. (Though it would impress the friends that work 60 hour weeks each.

We are healthy and comfortable.
We can travel and do what we want. A extra loan of $200k + will slow this down.

We could do it and hold back on lifestyle. Sell the Mc Manshion house when nearly dead and live from that date.

But as a kidney transplant patient I would prefer to do something NOW.
I have faced death a number of times and it is always just around the corner

Just my NON egotistic opinion.

Gee Cee


Greg

Off to make Easter Eggs at school with my twin boys

 

[wylie]

My thoughts too. If we were living in a dump and could spend an extra $200K for a palace, perhaps we would do it, but we have considered upgrading several times, but always been to sensible to give up a rental income stream to do it.

And I agree with you too about lifestyle. We live in a very nice place now and don't really want to get into a big loan to fund a better house.

And you are on the right track if you are making easter eggs with your boys. If you had an extra $200K or more in debt for the flashy house, the boys would miss out. Plenty of men around who leave before the kids get up and see them for a "quality" half hour before they go to bed. That's okay if it is the only way to put a roof over their heads, but (my opinion anyway) not okay if it is a sacrifice made to get a better house, better car, bigger doodad, etc.

 

[grubar30]

Can only speak for Brisbane

Absolute, without doubt bubble created by FHG.....under $500K is within reach of the worst dual-income savers.....KRUDD money + no-stamp duty + pocket change savings....and PRESTO - they have a home....funny stuff...and the rubbish being sold....timber, 3 dbr houses on 600m2 blocks with work required going for $500-600K?!?!?!?!.....you get more value in Sydney....

Overall, the FHG has created a feeding frenzy…..the banks know it, the Gov’t knows it and KRUDD knows it


RE Agent mate (confirmed by others) tells me banks have tightened their lending in the last two months or so…..they don’t want to get caught short....they can see 1-2 years into down the track.....even a 0.1% whiff of a rate rise and this house of cards is in big trouble


now lets talk about the $600-$800K range...its DEAD....RE agents try to paint a rosey picture....but here are the FACTS ---> 3 agents called me back in the last 3 months - after the seller initially refusing to agree on my cheeky offer - asking if I’m still interested in the said property, at my previous price?......been in this game for many years - this mood and sense of desperation has never happened....


I – like others – am waiting for unemployment to rise further and the full effect of the GFC to hit our sunny shores....property prices are unsustainable (like a broken record right)....the entire world has (and still is) had a major property correction yet we're immune....yeh right.....we aren’t immune whatsoever…..we weren’t immune in the mid to late 90s were we.....you couldn’t pay someone to buy your house


blind freddy can see that throwing the kitchen sink at the property market (your TAX money!!!) cant work forever.....the keys to a huge correction are national unemployment and a deteriorating U.S. economy…..both have a while to go…..


George "patience is a virtue" Grubar

 

[Propertunity]

they can see 1-2 years into down the track.....even a 0.1% whiff of a rate rise and this house of cards is in big trouble

Oh please The lenders use a 2% IR increase over present IR to calculate serviceability.

 

[auror]

Feedback from trusted REAs on current market conditions and outlook.

Such a thing exists?