This Will Not End Well !!!

This Will Not End Well !!!

# 7 The Haven

Woodvale

Link to Listing on Real Eeastate.com;

http://www.realestate.com.au/property-house-wa-woodvale-107221124

Up for Auction Saturday 26th March Price Unknown but I am guessing this group 

(That's Right Group) of Investors are going to be trying to get more than the 

$642,000 they paid for this house in July 2006?

There are many investors just like this in Perth so read on the story is interesting?

Remember If you agree & think that our property markets are crazy & innocent people are going to suffer. 
Do something circulate a link to this site & look at some of the other posts or topics I have put up. 
 
Spread the word on Facebook / Twitter or Just discuss around the Water cooler at work. 
The better people are informed the sooner we have a sensible property market for our friends & families!! 
   

(FYI: Don't think the high price was because it is 1091 Sq Mtr Block!! Look at the Shape of the Block!!)

Sales History

First Bought by Family "A" May 2003 for $337,000 

Family "A" then Sells this House Sept 2006 for $642,000 

to Families "B","C" & "D"

That's right bought by 3 Families all living in the same street as a investment

Firstly well done family "A"  Selling at the very Peak of the Market. 

Almost doubled your money in just 3 years.

But what was families B/C & D thinking? 

This house had sold just 3 years earlier for $337K they should have known this after all 

THEY LIVED IN THE SAME STREET

OK even if you believed in the MYTH that property doubles every 10 years, this property should have only gone up 33% in 3 years ??? so $337K + 33%= $448,000

NOT $642,000

It would have been such a easy exercise to apply this simple logic?

But Greed is Good!!

Now no doubt the 3 families that pooled their resources thought to themselves this house has just gone up 100% in Just 3 years so if it goes up the same amount again in 3-5 years we can make $330K perhaps even $650K in Capital growth?

What could go wrong?

A property like this in Woodvale would rent for no more than $450 PW or $25K PA ,

The holding costs on this property would be around $50,000 PA 

So every year for the last 4.5 years these investors have LOST $25,000 PA

Perhaps after tax deductions the loss could be reduced to $20,000 pa.

So after paying top Dollar in 2006 for what I would describe as a mundane rental property, what would  these canny investors will need to get to just BREAK EVEN?

$642,000 + Stamp Duty $25K + Selling Costs $20K +$80K Negative rental return, + $10K Patio & Paving , + Any unknown minor improvements. TOTAL=$777,000

Just to BREAK even not even make a single dollar they will need to get!!!

$777,000 

So what chance of this happening? 

ABSOLUTELY NONE WHAT SO EVER!!!

Just look at this property in Woodvale listed for $749,000

http://www.realestate.com.au/property-house-wa-woodvale-106951073

This house has been on the market since Oct 2010 & still cant attract a buyer @ $749K

Then there is this property @ 15 Richardson Court Woodvale listed for $610,000
http://www.realestate.com.au/property-house-wa-woodvale-107241052

Both these houses represents far better value @ $749K or $610K

Look for yourself & compare !!! That's why I dont like the chances of
#7 The Haven getting anything above $600,000

$600,000 am I being too harsh?.... Well look at the Laundry / Bathrooms last refurbishment was  in 1983 when the house was built, Then look at the VINYL WRAP Cheap Kitchen Reno? (That would have to go)
Then step back & look at the Evaporation Air Con on the Roof (How old is that)

But I could be wrong? 

If you asked me in 2006 would anyone be stupid enough to pay $642,000 for a less than average house I would have said no!

Every market need a Greater Fool.

Just don't be that fool in today's market unless you can afford to take a HAIRCUT that these three families will shortly take!!

I will not be wasting my time attending the Auction on the 26th March these owners are going to be looking for $750,000 plus for a under $600,000 house sorry life is too short to waste ones time.

But if anyone does go, please post the outcome in the comments section.Starting Bids the auctioneer was trying to draw & what it gets pass in for?

I hope for these 3 mum & dad investors I am wrong & they get their price.

But then again I would hate to see another family pay way way way too much?

Australian Home Loans to Fall Between 27% & 41%

 Australian Home Loans to Fall 27% & 41%

Story on ABC News {9/03/2011.. ..http://www.abc.net.au/news/stories/2011/03/09/3159177.htm}..

ABS Data shows home loans fell 4.5 per cent from Dec 2010 to Jan 2011.

ECONOMISTS FORECASTS WERE FOR 1% fall in Jan 2011.

BUT THE ACTUAL FALL WAS 4.5% ... {4 x Forecast!!!}

Anybody hear warning Bells?... 

Loans for investment housing also slumped 6.8 per cent in January 2011....
Forecasts for this were a fall of 1.5% {4 x Forecast!!!}

So how would these numbers translate over a 12 month period? .....

It would be too simplistic  just to take a number & multiply it by 12 month, Jan 2011 could have been a one off or perhaps it was the "FLOODS" or "STORMS"

{ Nov 2010 it was the Grand Final Replay to Blame ??? You have to laugh!!}

Lets be more conservative & say it is only half as bad as the January 2011 numbers would indicate??? ... Lets use half the fall as a conservative benchmark to work with?

So we will use  2.25% fall in home loan rates for Jan 2011 for Owner Occupiers & a 3.4% fall in home loan rates for investor loans for jan 2011.

Well that would work out to Home loans for owner occupiers dropping a further 27%  in the next 12 months & for Investor Loans a fall  41% in the next 12 months ...

Now keep in mind the December 2010 numbers for both groups were already down by 30% for the year {Jan 2010 - Dec 2010} ...

So if you had a starting number of 100 in Jan 2010 less 30% fall = 70 by Dec 2010 & then they dropped a further 27% = 51 or a reduction of 49% in home loans for owner occupiers in a 2 year period (Jan 2010 - Dec 2011) & a reduction of investors loans in the same period of 59% ...

Remember this is CONSERVATIVE  taking into account only 50% of ACTUAL Jan 2011 trend!!

OUCH!!

So what would this do for property prices? ....

You would have to believe in the tooth fairy if you think somehow we are going to have a
"SOFT LANDING" or prices will "PLATEAU" for 2-3 years.

Property Speculators (They like to think they are investors) will do what they did in the USA dump property & put their money in safer areas.

True investors are not fools. They know what is ahead.

Property Speculators need you to catch a Falling Knife.

Just don't play the role of the "GREATER FOOL" they will be relying on to offload their overvalued properties onto!!

If you agree & think that our markets are crazy or innocent people are going to suffer. 
Do something circulate a link to this site & look at some of the other posts or topics I have put up. 
Spread the word on Facebook / Twitter or Just discuss around the Water cooler at work. 
The better people are informed the sooner we have a sensible property market for our friend & families!! 

Is Australia’s Housing Bubble Bigger Than America’s?

Is Australia’s Housing Bubble Bigger Than America’s?

From the August 2010 Trumpet Print Edition »By Robert Morley

http://www.thetrumpet.com/?q=7309.0.126.0

 

If you live in Australia, you’d better find some hearing protection: A massive popping noise could hit when a housing bubble of California dimensions explodes—and takes the whole economy with it. 

Australians don’t seem worried, but Californians used to feel the same way. Everyone from secretaries to engineers quit to become real-estate agents during California’s bubble years. For a while, they seemed like geniuses. Sell one house for $500,000, collect your 6 percent fee, and pocket a cool 30 grand. You don’t need to sell very many houses before you are sitting on a beach drinking mai tais at 3 in the afternoon. 

Now, the only ones sitting on a beach in California are those living in tents. With house prices down 40 percent from their peak in cities like Los Angeles—and with one of the highest jobless rates in the nation, record food stamp usage, and a budget that can’t be balanced even with massive federal handouts—California is dreaming of the good old days. Even the illegal immigrants are leaving.

Pay close attention, Australia. Los Angelification is coming to a city near you. Unaffordable Houses 

It is shocking how much Australia resembles bubbly, pre-bust California. 

The Australian Bureau of Statistics’ House Price Index shows that on average, house prices are up an astounding 20 percent in each of Australia’s capital cities compared to a year ago. Last year’s average $500,000 fixer-upper in Sydney now costs $600,000. In Melbourne, the median house price jumped by $116,917 to $549,980. Want to buy in Canberra? Get ready to fork over $495,000. 

Property prices in Australia are going berserk. Even remote Darwin saw house prices rise 17.5 percent. The slowest growth was in Brisbane—a sizzling 9.1 percent. 

These gains are compounded on top of last year’s average 13 percent rise. For comparison, for the 70 years leading up to 1995, house prices only increased by 3 percent per year on average. 

With prices so high, how can the average family in Australia afford to buy a home? 

Realistically, they can’t. Yet, like sheep to the slaughter, buy them they do. 

The Sixth Annual Demographia International Housing Affordability Survey: 2010 ranked 272 housing markets in Australia, New Zealand, Ireland, Canada, the United Kingdom and the United States according to affordability. Of the top 20 most unaffordable markets, 12 were in Australia—including three in the top five. 

Twenty-two out of 23 major urban markets in Australia were considered “severely unaffordable,” with the remaining one considered “seriously unaffordable.” Moreover, all but one of Australia’s smaller markets were considered “severely unaffordable” too. 

In Sydney and Melbourne, house prices have risen so high that it would take more than half of the average median household income to make just the mortgage payments of a median-priced home—and that doesn’t include upkeep or taxes. 

A typical house in Australia now costs 6.8 times the typical annual household earnings. 

Homes in Newcastle, Mandurah and Darwin cost around 7.1 times. Wollongong and Adelaide cost around 7.5 times annual household earnings. The most expensive areas are Sydney and the Sunshine Coast, where homes cost an astounding 9 times average household salaries. 

How bloated have home prices become? Historically, houses cost around 3 times household salaries (and for much of Australia’s history, there was only one salary earner in the household). Financial planners advise not paying more than 20 to 30 percent of your salary on all housing-related costs—around half of what Australians are paying now. 

Australian homes are so unaffordable that banks are now promoting loans in which borrowers never pay off the principle. Borrowers make payments, but will never—as in never, ever—pay back the borrowed money. ing Direct, Australia’s fifth-largest lender, is marketing these loans with the idea of creating a “mortgage partner for life.” In reality, unless house prices keep going up ad infinitum, these borrowers will be debt slaves for life.

 

Politicians are making the housing bubble worse too. Giving thousands of dollars to first-home buyers and reducing stamp-duty costs only encourages people who cannot afford a home to go into debt to purchase one. This artificial increase in demand has pushed prices even higher. 

Economic analyst Mike Shedlock says Australia’s housing bubble “exceeds the height of the bubble that long ago burst in the U.S.” (Market Oracle, February 3).

 

So why do people continue buying homes when they are so obviously overvalued and unaffordable? 

Greed !!!

It is all about the “greater fool,” says Shedlock. Just like the stock market, people are buying houses now because they think they’ll sell them for more later—hopefully a lot more. 

But inevitably, “the pool of greater fools runs out.” 

There is no one left willing to pay an even higher price in the speculation that prices will keep rising. 

What happens next? 

The bubble bursts. And the next thing you know, you look a lot like California: 

A landscape of broken banks, taxpayer bailouts, tent cities, rows of vacant homes and people living in their cars. 

Australia’s housing market has the hallmarks of a national bubble. 

The only question is, how long can it last? •

 

An Australian Housing Bubble? -- Are People Wrong ?

Are they really Wrong About A Bubble Down Under?

 

Australians risk their financial futures on exorbitantly priced houses.

March 8, 2011 | From theTrumpet.com By Robert Morley

http://www.thetrumpet.com/?q=8052.6677.0.0

 

Australia is in the midst of one of the greatest property booms in history. Eventually, it may be spoken of in the same breath as the South Sea Adventure and Tulip Mania of centuries past. 

How so many people could be blind to the bubble—especially after so many other housing bubbles spectacularly exploded in Spain, Ireland, America and elsewhere—will be an enigma that will puzzle historians. 

Last year, when the Trumpet wrote about Australia’s looming housing collapse, it invoked mirth and merriment from enthused Aussie investors. Take Dave, who advised: “You keep writing whilst I go buy some property,” or Trumpet reader Stewart, who said the idea of property prices falling was “bordering on the ridiculous.” 

“One big point I’d like to make is that Australia is not America,” said Dave. “Our mindsets and philosophies differ greatly and common sense usually prevails and intervenes, hence why nothing suggested by the article will occur—I guarantee it.” 

But are Australians really that different than Americans? Are they not subject to the same pulls: The desire for a bigger bank account, a shinier car, a night out on the town? Do Australians not gaze at their smiley-faced neighbors and long for a bigger barbecue? Are they immune to the “keeping up with the Joneses” syndrome? 

“I would put my own money on the line” that Australians are different, said Dave. And so he did. “I am a first home buyer (built one) and received the $21,000 boost grant from the government,” he related. The grant is “even more if you built in the country.” I could never have done it without the government money because my “income was too low,” he said.And so far it is working out great, he says. I “already have $100k plus equity in past 18 months!” 

“Now I will be buying an investment property shortly,” which because he is an investor will be, of course, an interest-only loan, he said. 

Yet the fact is that Dave, Stewart, and thousands of other Australians will soon be wishing they had never ever met a realtor. 

According to the Economist, Australian house prices are the most overvalued in the world.

 

To give you an idea of just how big the bubble is, “entry-level property” typically costs us$400,000 to $500,000. That’s a starter. Or, in Melbourne, a “fixer-upper” with termites. 

In Sydney, the average house costs $600,000. But the average salary in Australia is only $65,000. That means that homes sell for more than nine times yearly salaries.  

Typically financial planners say you should spend no more than two to three times your household salary on a house. Even if both spouses worked, it means Australians are spending 4½ times household salary. 

Compared to what you would pay to rent a similar house, the Economist says prices are overvalued by 56 percent—making them even more expensive than property in Hong Kong. And Hong Kong is a banking center with geographical constraints (a true land shortage). Australia, in contrast, is one of the least densely populated countries in the world. 

Since 1986, Australian house prices have increased a whopping 600 percent, according to prominent house price critic Steve Keen. During that same time period to its peak in 2006, U.S. national house prices rose 350 percent. We know what happened next. 

It is a debt-fueled binge of historic proportions, says Keen, who is an associate professor at the University of Western Sydney. “We’ve had a debt-driven housing bubble, just as has the U.S.”

Over the past 40 years, the ratio of how much debt is owed on a dwelling compared to what it can be sold for has increased 400 percent. And the ratio of how much debt borrowers are taking on compared to their disposable income has increased 800 percent. 

These are two numbers that should shock people, says Keen. It’s a “Ponzi scheme.” 

And the government has made things worse. Government grants encourage people who cannot afford a house to enter the market. But giving such grants to people who have not proven that they can financially handle a house (by saving up a down payment) has consequences. It artificially increases demand, making prices more expensive for all people—the exact opposite of what well-intentioned government bureaucrats are trying to accomplish.

It is a simple equation: Massive debt binge plus government meddling equals an “Australian housing bubble [that] is categorically larger than the U.S.,” warns Keen. Or as famed investor Jeremy Grantham calls it, a “time bomb.” 

Ponzi schemes and bubbles of every kind always eventually collapse. They are dependent on an ever increasing supply of buyers to pay more money for the next house. But the supply of greater and greater suckers eventually runs out. Eventually prices get so high that even the biggest patsy is priced out of the market. 

The result is always the same: Greed turns to panic, and dramatic collapse ensues. The herd stampedes in the other direction. Homes become ball and chains. Mortgages are debtors’ prisons. People just want out. 

All of a sudden, it is cool to rent. 

When this Down Under Ponzi scheme does collapse, it will be catastrophically expensive. 

By the time that $450,000 “starter home” is finally paid off in 30 years, it will have cost over $1 million. If house prices fall by just 25 percent (they have fallen by 40 percent in California and elsewhere), many people will spend the rest of their lives paying hundreds of thousands of dollars on property that is worth only a fraction of what was paid for it. “It is only a matter of time,” says Keen

.

A bank crisis will be likely as well. When the foreclosures mount, Australia’s prized banks, which today appear to be money trees, will become raging money forest fires. Australia’s big banks are borrowing money just as furiously as Australian home buyers. But, more dangerously, much of their money comes from foreign sources. When it all pops, the foreign cash will dry up, yet the debts will remain. 

Either taxpayers will bail out the banks, or foreigners will foreclose.And the pin might have just pricked the bubble. 

In January, Australian city house prices dropped 1.6 percent. It was the second month in three that prices fell, and it was the largest decline since 2005. Prices in Brisbane have plummeted 2.3 percent since November. Canberra is down 3.8 percent; Sydney is lower by 1.4 percent. In Adelaide and Perth, house costs retreated 1.3 and 2.6 percent respectively. Of the major centers, only Hobart squeaked out a gain. 

“We have had no value growth at all since May 2010 across the combined capitals and since January 2010 in the regions outside the capital cities,” said RP Data’s research director Tim Lawless.

Meanwhile, affordability at the end of last year was 10 percent worse than in 2009, according to the Housing Industry Association. 

“There has simply never been an asset bubble that has burst and gone sideways,” says Keen. “Never.” 

Here is the point. Australians need to use this period of time to drastically reduce their standard of living. As Keen warns: The cliff is approaching. There will be no soft landing.

If you have a second house, consider selling. If you have a bigger house than you need, consider downsizing. If you have a job in the construction industry or housing-related fields, consider selling your house, taking what profit you may have and renting. If you stay with your house, and property values fall like they have in America (and Ireland, Spain, Greece, Iceland), realize, you may soon be stuck paying a $600,000 mortgage on a house that can only be sold for $300,000. 

Use what time is left of the boom to get out of debt and ramp up savings. Most people do not have any emergency savings, let alone the six months of expenses that experts recommend. Plus, many homeowners today rely on two incomes to keep up the mortgage. If even one earner loses his or her job, they will lose their house. 

Australia is a nation binged out on debt. It is a country at the height of good times. Now the debt bubble may be about to explode. And when it does, it will ultimately impoverish a nation. 

Ask Yourself Are we right about this? 

Because you are staking a lot on the answer to that question. !!!

Jan 2011 Perth Housing Starts Up 6.3% & Then also Down 4.67% at the same time?

On The 2nd March 2011  Perth Now Reported Perth Housing Starts were up 6.3% based on Data supplied by the Housing Industry Asoc .... The HIA put this garbage out to trick home buyers into thinking the market has turned around & now is a Perfect time to Build?

Unfortunately 24 Hours later the ABS put data out that said Housing Starts in Perth had fallen 4.67%!!!

You have to question & check information or data supplied from bodies with a vested interest in talking up the property market!!! ... Dont trust the HIA / MBA / Banks / Newspaper Property Reporters & others with vested interests!!

See Images Below:

 

Never Believe a Thing A Realtor Tells you!!

Never Believe a Thing A Realtor Tells you!! ...

 { Thanks to Tasmanian Real Estate Trouble for Highlighting the subject: ttp://tasmanianrealestatetrouble.blogspot.com/2011/03/heard-it-before.html}

Remember a Realtor has a vested interest in convincing you that everything is OK & now is the perfect time to buy. Because if they don't they Starve!! Just think about this or keep it in the back of your mind when you read stories from Banks / REIWA / RP DATA etc they all form part of what I call "PROPERTY INC" ......

The biggest players in "PROPERTY INC" are Newspapers & property Websites .....  

Property advertising revenue sways what they report & how they report it !!!
  
 In 2006 Sales in the American Real Estate Markets had slowed down & were STAGNATING.

The National Association of Realtors (They are the same as our REIWA or REIA) decided it was time for action. The Mainline Press were no longer reporting the Property Myth as the would like it to be reported. Facts were drowning out the RHETORIC put out by the NAR so they decided to pay millions to put out the MYTH that now was the perfect time to buy property? Really?

In 2006 USA  property was falling & 5 years later in 2011...  80% of commentators were expecting US property prices to fall a further 10-15% .... but this is the PAID ADVERTISING by the NAR  placed in all the major US Papers. ... Why pay? ... Because Newspapers could no longer credibly report the RHETORIC the NAR wanted them to report so the had to resort to PAID ADVERTS??

 

     



NAR Campaign Negates Bubble Hype, Encourages Buyers And Sellers
by Blanche Evans  Published: November 3, 2006
{ http://realtytimes.com/rtpages/20061103_campaignneg.htm}

"If you don't tell your story, someone else will," Joe Williams, co-founder of Keller Williams said recently about the media's disinclination to quote real estate brokers as sources for the myriad stories written recently about the so-called housing bubble. Imagine the frustration, ignored by journalists and unable to peddle nonsense to the gullible.

Instead they turn to anyone but people who buy and sell homes for a living -- stock analysts, economists, media pundits, authors, and so on. The effect on buyers has been paralyzing. Many brokers say buyers are concerned with more than rising home prices and interest rates -- they're scared of being the next greater fool. The media turns away from the vested interests to cover the story, balance emerges and the buyers, given a taste of actual analysis and break from relentless spruiking, begin to baulk.

With enormously improved conditions -- interest rates comparable to 40-year-lows and rising inventories that provide greater selection, pending sales are already beginning to rise. Even the former Federal Reserve chairman, Alan Greenspan said he thought the "worst of this may well be over." This could cause many buyers to miss a golden opportunity -- home prices and sales expected to rise again in the spring. Of course things can only get better in real estate land and falling knives don't cause cuts.

Conditions are also improving for sellers. With the number of households expected to increase 15 percent nationwide in the next 10 years, demand will continue. In addition, 2006 has hardly been a failure for housing -- so far, it stands as the third-best year on record. Don't forget the ever-present demand.

Now the NAR is doing something about the negative hype -- running full-page newspaper advertisements in six of the nation's leading newspapers beginning yesterday. The ads are designed to urge home buyers who have been waiting to buy the home of their dreams to act now before the market changes. Not coincidentally, the newspapers chosen -- Wall Street Journal, USA Today, New York Times, Washington Post, Los Angeles Times and Chicago Tribune, are among those most guilty of hyping the housing bubble to the point of scaring buyers to death. The rent-a-quotes became so unreliable, so on the nose, they had to buy their own advertising to con the suckers. 

NAR's first-ever newspaper blitz features the headline, "It's a great time to buy or sell a home." The advertisement points out that interest rates have fallen seven months in a row and are near 40 year lows, inventories of existing homes are higher than they have been in decades and prices have stabilized. But the perfect conditions for buyers are likely to change as sales pick up, prices gain traction and conditions improve for sellers next year. Yep, sales are always likely to pick up, these conditions won't last because buyers will come to their senses (or we'll get our manipulative hooks into them) get used to hearing that one.

"Homeownership is a safe, secure way to build long term wealth. The national median price of homes bought ten years ago, has increased 88 percent," points out the NAR. With prices having risen 50 percent over the last five years, including a longer timeline circumvents criticism that the housing market traditionally only barely beats inflation by a point or two. It's done that and more in the last five years, but keep in mind, that previous to the boom the nation was recovering from a housing slump. Actually, home-ownership proved to be an assured wealth destruction tool with prices down over 50% in some markets since this campaign.

In addition to the newspaper ads, the NAR is blitzing network television and radio with ads directed at buyers and sellers. These begin airing in the second week of January -- the start of the spring selling season in the warmer parts of the country. Pity the fool who fell for this con job.

"The market is much better than you might hear or read," says Tom Stevens, NAR's president. "Consumers should take advantage of this perfect alignment of low rates and extraordinary inventory before market conditions change," Over 4 years later and time is still on the side of the buyer.

And NAR's 1.3 million members and state and local Realtor associations are being encouraged to adopt the message in their own advertising and communications to consumers, beginning with this news:

• Total housing inventory levels fell 2.4 percent at the end of September to 3.75 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace, according to NAR's existing home sales report.
• The national median existing-home price for all housing types was $220,000 in September, which is 2.2 percent below September 2005, when the median was $225,000.
• According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.40 percent in September, down from 6.52 percent in August.

The time to buy or sell is now. I bet those sellers were damn happy.

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?

How Tenants Can Outsmart Greedy Landlords

Many landlords pay high prices for rental properties with the expectation that demand  from a growing population base will drive rents up & sustain the higher prices.

But smart 20 something singles are outsmarting landlords & sharing greatly reducing demand for rental flats & houses. 

Landlords may think they can just put rents & people will pay, however tenants may have a few surprises up their sleeves? 

The story below is about flats in Sydney but equally Houses or Units in Perth can be affected in the same way. Read the story below & discover a smarter way to rent & save.

Modern Living: two couples, one flat

http://www.theaustralian.com.au/news/nation/modern-living-two-couples-one-flat/story-e6frg6nf-1226012258475

Johnathan Rutledge, left, and Ceira Mone, with Angela McDougall and Sam Edmond at the Sydney apartment the two couples share. Picture: Alan Pryke Source: The Australian

YOU'RE young, in love and eventually want to buy a house together. You need to save money but don't want to live in the sticks -- and you certainly don't want to live with the in-laws.

There is another option: shack up with another couple. Ceira Mone, 24, and her partner Jonathan Rutledge, 26, share a two-bedroom unit with another couple in Sydney's inner suburb of Waterloo. "We are all in our mid-20s," Mone says. "We know eventually that we want to buy, and if we were paying rent on a one-bedroom unit, we could never do that."
She says the two couples are paying about $630 a week, but a one-bedroom unit would cost her and Rutledge about $500 a week. Sharing, she says, "is the only way to have the same standard of living and save at the same time".
The trend is growing, according to Australia's biggest apartment developer, billionaire Harry Triguboff, who has seen a surge in two couples renting a single apartment as poor affordability also pushes families to compete in the home unit market.