Join our investing community

Is Australian property really the world's most overpriced?

Discussion in 'Real Estate' started by Tropo, 29th Jul, 2010.

  1. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    What I want to know is; what outcome will there be on Australia when we have a property crash?

    How can I protect myself and what are good buys?





    Johny.
     
  3. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Don't buy an asset at the top of the cycle...
     
  4. tomsmalljnr

    tomsmalljnr New Member

    Joined:
    28th Jul, 2010
    Posts:
    2
    Location:
    Melbourne
    I'm not sure that we are over priced or that there will be a drop in values over time.
    There's a stack of data to support either position - bear or bull - on the property market.

    IMO unless there's a upturn in unemployment there'll be no property crash.
    The other factor is if the government changes rules on negative gearing so that it's not an attractive option for investors.

    Economic data counts for so much in property. What can't be measured easily are aspirations and ego.

    Protecting yourself involves preparation before buying and planning for worse case scenarios so that you are not a distressed seller.
     
  5. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    A very deep recession as billions of dollars worth of bad debts at all levels of society need to be realised.

    International exposure would probably be the best hedge, given that if we have a property crash like everywhere else around the world then we are likely to see a deep recession, interest rates fall to 0, quantitative easing and the beginning of competitive devaluations of our currency.

    International developing markets on the other hand with their low levels of debt will be well positioned to continue their buyouts (just like China has been doing with a lot of Australian businesses) and their economies are generally in a much better position to continue to grow along with their currencies being likely to continue to appreciate in value reflecting their increasing competitiveness.

    Basically it would seem that economic convergence - Convergence (economics) - Wikipedia, the free encyclopedia - of a number of very large developing marketing seems likely, and as such it makes sense to continue to see higher levels of growth in the converging markets while the developed markets continue to see low growth given the comparatively better returns on capital in the developing markets.
     
  6. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Unemployment will hit the roof

    By staying away from property


    Right now? Probably Sydney units yielding over 7%
     
  7. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Tropo

    Don't be concerned, our prices are no more expensive than those of comparable properties overseas.

    I just came back from Europe and I did investigate city property prices there because I'm looking for a holiday place but I could not find any bargains.

    Prices were as expected, i.e they seemed expensive as they do here and the yields weren't any better than here
     
  8. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    Bill,

    It seems to me that in relation to average wage, properties in Europe are more expensive than in OZ.
    Like you I am also considering buying a property in Europe, but at the moment I have not decided what to do.
     
  9. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Tropo
    Its a difficult decision.
    Unless something serious happens to the Euro to make properties cheaper we'll leave it for a few more years.
    I figured that property prices there aren't going anywhere in a hurry and I'm a bit away from retirement so we have time.
    We also haven't decided on a location.
    I love the south but my wife thinks its too hot.
    I've got to convince her otherwise or I'll be holidaying alone...:eek:
     
  10. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    Bill,

    Prices may not go up in the hurry but you can get low interest loan fixed for 20 or 30 years (France).
    Political situation in UE is not clear, so I'm sitting on the fence right now.
    There are few places I would consider such as South of France (it is not that hot as your wife thinks).

    Holidaying alone is not fun, but a good news is that you can always find a good looking companion over there...:D:p;)
     
  11. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Do you have to be a French national or is this option open to all EU citizens?

    Personally I loved the French Riviera, Northern Italy (bordering switzerland) & the Greek Islands but there are numerous other places in southern Europe I'd consider. (Spain is quite nice as well).
    Maybe one day one of them will default on their loans and their properties will be on sale...:D

    Now that's an idea...:D
     
  12. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    "Do you have to be a French national or is this option open to all EU citizens?

    This option is open to Aussie citizens as well.
    From what I know one can get a loan from French banks for 2% - 3% (+ -) fixed for 20 or 30 years.

    "Personally I loved the French Riviera, Northern Italy (bordering Switzerland) & the Greek Islands but there are numerous other places in southern Europe I'd consider. (Spain is quite nice as well).
    Maybe one day one of them will default on their loans and their properties will be on sale...
    "


    I prefer Paris or French Riviera, but there is nothing wrong with Italy, Switzerland, Andorra etc...
    In Europe there are too many amazing places to choose from...
    There is a real possibility that some UE members may default, so time may be on your side if you are prepared to wait.
    As always....time will tell... ;)