How To lose Money Buying Property In Perth

Want to change Perth property prices then do something to bring about change!!! 


Don't just sit there waiting for change to happen. 

Post a link to this page on other sites & spread the Truth Behind the MYTH!!!

http://nfbpsh.blogspot.com/2011/03/how-to-lose-money-buying-property-in.html

I am Looking for more examples around Perth to list? If you know of any please list them in the comments section at the bottom & I will feature them.

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#7 Maghony Court
Woodvale

Listed For Sale Mid -High $500K (Code for $575,000)

Sales History
Sold Dec 2003 $324,000
Sold April 2006 $530,000 (Peak of the market)
Sold Feb 2009 $530,000 (GFC LOW interest rates ??)

Splash of paint decorative touch & these owners have their fingers crossed that they can get $575,000 to recover their stamp duty & selling costs?

Feb 2009 GFC causes interest rates to plunge to 5% & now that they are up to 7.5% (UP 50%)





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#5 Lolium Court
Woodvale

First Listed 19-11-10 Advertised as Mid to High $800K's (Tossers)

Stuck on the market for 4 months no takers!!!

The agent advertises it as " NEW PRICE" 6-03-11

But the price is still $849,000 Plus 

(Who are they kidding? Themselves!!) 


But look closely at the advert . I don't know if the agent makes this statement with tongue in cheek ? Iknow what she really has in here cheet but in the interest of good taste I will keep that to myself!!!

No wonder people have a low opinion of agents when they say...

" For Collectors of Fine Homes " 

WTF is that supposed to mean? 

This agent clarifies it by saying 

" One of the finest homes in Woodvale is now available to become a part of your collection " 

Clearly this woman thinks the property market is just a GAME to be played?

 

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# 7 Risdon Court
Woodvale


Bought 22nd April 2009 for $625,000


Now listed for sale 2 years later for $695,000


Another property bought by a pool of investors combining their resources to buy a investment property when interest rates were around 5% now they are up 50% to around 7.5% this property is for sale. $695K so many optimistic investors in Woodvale {Sucker born every minute} Firstly will be very lucky in this market to get this price & if they do they will just scrape in covering Stamp Duts / Selling Costs & negative returns for the last 2 years. 

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#127 Ellen Brook Drv

The Vines 

First Advert by original Vendor October 2006 for $860,000

Purchased by Current Vendor 3 rd Feb 2007 for $795,000 

{No Doubt thought they were pretty Smart getting $65,000 or 7.5% discount off the asking price at the Peak of Perth property market? ... Well done you!!} 

Then Listed for sale 1 year later Feb 2008 for $1,075,000 

{Up 35% in One Year GREED IS GOOD!!! property player no sympathy here!!!

Withdrawn from sale 10-05-2008 after 3 months with no takers  $3-$5K Wasted}

 Then Re Listed 19th April 2010 as Express Sale Price???

{Agents hint at over $1 mil Price tag when asked in April 2010 No takers after 3 months}

Advertised again 10th July 2010  @ $999,000 + 

(Wishful Thinking but Greed is always good)

Price Reduced again 11th September 2010 to $960,000 

(You never know there just might be a sucker at this price point?) 

Price reduced again 29 Jan 2011 to $890,000 

(Still no takers but they have to recover stamp duty & selling costs???) 

Listed as up for Auction 13-02-2011 bids starting from $650,000  

Finally Sold prior to Auction Feb 2011 for $730,000

 So after 4 years exactly these canny SPECULATORS in Perth property  sell for $65,000 less than they paid + Stamp Duty $30K + Agent Fees $20K + Advertising / Marketing costs for 3 campaigns $15K ... 

Estimated total loss over 4 years $130,000

This is a good example that property can turn around & bite you. I have no doubt when these people looked at buying this property in Feb 2007 they thought  "We could hang on to this house for 12 months live in it & then sell it for a packet making a healthy tax free capital gain?"  After all property had just gone up in the previous 3 years by close to 100% & they were getting this property  off the previous owners at a 7.5% discount what could go wrong???

This is our market in Perth TODAY some properties appear to be cheap 
@ 5% / 10% / 14% off but they are not!!!! 

It also is a timely reminder to Vendors in today's market.... 

DON'T BE TOO GREEDY

Just imagine if they advertised this property for $895,000 in 2008 instead of being greedy & trying to get $1,075,000 they would still have made $100K & they would be $165,000 better off than they are today????

Learn for these peoples mistake!!

Page # 2 of The Sunday Times Property Liftout had this Story about a property investment gone wrong in Ellenbrook / The Vines

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#28 Sandgate St
South Perth

First Sold 17th Feb 2008 for $1,390,000
Then Listed for sale 3 years later
 4th Dec 2010 for $1,450,000 (Some luck required here?)
Reduced 29th Jan 2011 down to $1,325,000 
(Now Under offer Feb 2011 what price?)

SOLD 11th Feb $1,340,000 


The speculators / fools on this Gem will be lucky to get away with a loss of $150,000 after stamp duty / selling costs etc.
Just think South Perth is a Gem in Perth Property?

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# 2 Gullima Court
HUNTINGDALE

Bought 2-11-2009 for $350,000

Listed for Sale almost exactly 1 Year Later 

14-11-2010 for $499,000 (Dreamers)

March 2011 reduced to $479,000 (Good Luck )

 My guess they were are FHB buying with a $21K FHBG GOVT Gift. ?

Who AFTER 12 MONTHS OF RISING INTEREST RATES  are unable to keep up?

 These owners will be luck to get their price in this market. But remember these are the people that either kept prices up or pushed prices up during the GFC (2008 / 2009 / 2010 ) Now this market segment is starting to crumble as these new owners come to the realization that home ownership is far more expensive than the rents they were paying before?
(Home ownership Interest /rates/ maint etc= $500 PW Min or Rent the same for $350 PW).
Now the rush is on to get out before they are trapped, increasing stock on the market & driving prices down after all they have $21K of Kevin Rudds dollars to just discount away!!

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# 9 DRESSAGE GRN, 

BALDIVIS

Bought 23 Dec 2009 for $350,000

Put up for sale just 4 months later 

April 2010 for $399,000 ??(Dreamers)

On the Market 12 months 

March 2011 reduced to $365,000 (Good Luck)

My guess they are FHB buying with a $21K FHBG GOVT Gift. Who Panicked in Dec 2009 to get in the market before FHBG reduces & it is too late. 

Then 4 months later rising interest rate start CRUSHING THEM? 

These owners will be luck to get their price in this market. But remember these are the people that either kept prices up or pushed prices up during the GFC (2008 / 2009 / 2010 ) Now this market segment is starting to crumble as these new owners come to the realization that home ownership is far more expensive than the rents they were paying before?

(Home ownership Interest /rates/ maint etc= $500 PW Min or Rent the same for $350 PW).

Now the rush is on to get out before they are trapped, increasing stock on the market & driving prices down after all they have $21K of Kevin Rudds dollars to just discount away!!  

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#45 Castlegate Rd 

Woodvale

Bought June 2007 ------ $815,000

Listed for sale November 2010  ----- $875,000  

New Price March 2011 ---- $799,000 - $849,000

Owners Paid too much in 2007 when they paid $815,000 its true value in 2007 was closer to $600,000  but at the time property prices had just jumped 50% in the previous 3 years so it did not matter what price they paid,{Or Did It?}  because no doubt the owners thought they would be able to sell it for what ? $815K + 50% = $1.2Million? ... Well in 2011 they are struggling to attract any interest at $799,000 

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# 8 Ragamuffin Point 

Halls Head

Bought Sept 2007 for $1,800,000

Listed for sale by Tender May 2010(No Offers)

Prices then REDUCED  monthly to 

1st Jan 2011 Seeking a price of $1,350,000

Currently listed March 2011 $1,050,000

(What The _ _ _ _ !!! OUCH! $300K in Just 2 months what do they know is going to happen)

Dont forget with Stamp Duty & Selling costs these people will be lucky if they only lose only 50% OR $900,000k 

WHO CAN AFFORD TO LOSE THIS KIND OF MONEY?

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#38 Phillips Fox Tce
Woodvale

Sales History

First Sold Feb 2006 ---- for $1,240,000
Sold Again Dec 2007 ---- for $1,800,000
Then Sold March 2009 ---- for $1,500,000

So In Dec 2007 some  IDIOT pays 50% more for the property  than what it sold for previously just 2 years earlier? This Idiot went on to spend a further $200,000 up grading it to their liking & by the time the property is listed  for sale in early 2009 the property owed them $2,0000,000  + Cost of Stamp Duty & Selling costs of $100K


In March 2009 they sell the property for $1,500,000 
A loss of $600K!!!
That's a LOSS of $40,000 a month!!!
{Think about that? $40K a Month Loss}


Have the new owners have picked up a bargain?....
In my opinion this property is still not worth more than $1,000,000 
but time will tell who is right?

Just look at my previous post about 
#8 Ragamuffin  Mandurah $1.8mil down to $1 mil ??    
I don't think I am that far off the Money do you ?

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#1 Ullinger Loop Marangaroo

Bought Jan 2007 $360,000 --- Sold Dec 2010 $335,000

#1 Ullinger Loop Marangaroo Bought Jan 2007 for $360K rented out for almost 3 years Sold Nov 2010 for $335K a loss of $25K + Stamp Duty $15 + Agent Fees $10K + Negative rental return {Even after Tax Deductions}(3 years $5K pa) $15K = Total loss this Canny investor incurred ? = $65,000 Brilliant !!... Now dont forget the Tax Office says that the average investor claiming deductions for Residential property has a reportable taxable income of U*N*D*E*R $70,000 . No doubt in 2007 this investor thought he could not go wrong property had just doubled in price in the previous 5 years so he could sell & make a M*O*T*Z*A* even if he lost $5K pa after Tax! .... No doubt they were just trying to get ahead, with what they thought was a sure thing learn from their mistake ..... So what if Today you take $30K less for your property now than you could have got 6 months ago? In another 6 months with investors flooding the market to escape you may have to take a loss far greater than $30K. Unless of course you think this is a one off example & that your property is unique & you will find a GREATER FOOL in 2011 to Buy?

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#9 Donabate Rd Ridgewood

Bought March 2007 for $510,000

Sold January 2011 for $420,000

You can never go wrong buying property in Perth? ... or can you? ....  Bought by a Fool in March 2007 for $510,000 + Stamp Duty & selling costs it would owe them about $550,000 to break even??? .... 

This just house sold 21 / 01 /2011 for just $420,000 ..... 4 years paying twice as much as what it would cost to rent & the purchaser of this property sells it for $130,000 less than what it owed him!!! ..... MIND BLOWING? .... 2007 was a peak in the market & we are back at that Peak again today ....

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 # 20 Tuam Street VICTORIA PARK

Sales History 

Bought 15th October 2009 $950,000

First Listed for sale 24th April 2010 @ $1,079,000 {Good luck with that}

Price reduced down 13th Feb 2011  $949,000

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# 86 RICHMOND ST, LEEDERVILLE 

Sales History :

Sold : 

8th Jan 1990 $196,000, (Median Wages=$31,000)

7th Feb 2002 $367,500,  {up 86%} (Median Wages=$48,277 up 55%)

2nd Oct 2003 $480,000, {up 31%} (Median Wages=$51,298 up 6%)

19th April 2006 $710,000, {up 48%}  (Median Wages=$57,496 up 12%)

3rd Feb 2008 $1,025,000, {up 44%} (Median Wages=$63,154 up 10%)

Currently For sale Feb 2011 $1,095,000 {up 7%} (Median Wages = $69,085 up 9%) 

Currently this property is on the market for $1,095,000 . The owners will be extremely lucky to get this price in the current market. After paying $1,025,000 3 years earlier.  But lets say they do? After 3 years they will be Lucky to break even in fact after stamp Duty & Selling Cost they are likely to lose approx $50,000 & 3 Years!! .... Mortgage Payments & cost of ownership (Rates/Maintenance Insurance etc) would have been close to $90,000 PA yet they could have rented this property for under $40,000 pa. Had these owners rented instead of buying in Leederville they would have saved $150,000 (3 Years Rent Vs Mortgage Payments) & $50,000 (Cost of Stamp Duty & selling costs not recovered in selling price) ........ So these CANNY buyers have clearly paid too much in 2008 getting sucked in by the HYPE that property prices always goes up so you will be better off buying than renting? .... Well here is their $200,000 mistake to learn from !!!! .... Learn form these peoples mistake how many of you can afford to lose $200,000 . .................... Now also look closely at how prices & wage growth diverge from each other?.... In 1990 this house was 6.3 times wages (still very high & probably at the very extreme limit of affordability) yet in 2008 this idiot was willing to pay 16 times median wages or 26 times rental return!!.... { I Call them IDIOTS!! because people like this force everyone to pay higher prices competing with their stupidity } Property has always been priced at 3-4 times wages or 11 times rental returns. Think things through & examine all your options, what harm could it do to wait & see just what is going to happen in this market before making your own $200,000 mistake?