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More REIV propogander?

Discussion in 'Real Estate' started by crc_error, 25th Jan, 2008.

  1. crc_error

    crc_error The Rule of 72

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    Looks like the REIV and other real estate organizations are still trying to uptalk the real estate market

    headlines like Melbourne set to claim property crown | The Australian

    and Melbourne property catching up to Sydney | NEWS.com.au

    claiming 25% raise in prices are just not true. according to RPData, prices in Melbourne are up 7%, not 25% Australian House Prices Real Estate Valuation & Property Information - RP Data

    Why doesn't the ACCC crack down on these false claims? If a financial institution made such false claims, they would be shut down, yet 'realestate agents' put on the hat of been a 'financial adviser' can make any claims they want without any repercussions.

    What are peoples thoughts on the matter?
     
  2. Denis

    Denis Well-Known Member

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    Malvern Armadale Toorak properties are up by a minimum of 25% over the past twelve months.
    $1.2 million properties will fetch closer to $1.7 million and $3 million properties are selling for over $4 million.
    There is no exaggeration in these figures.
    Regards

    Denis
     
  3. crc_error

    crc_error The Rule of 72

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    pointing to specific suburbs doesn't mean whole melbourne is up 25%.. I can tell you where I live in the outer eastern suburbs, prices arn't up 25%.. so again, they are twisting stastics to try to push up house prices..
     
  4. Denis

    Denis Well-Known Member

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    Fair call.

    The article l read referred to those suburbs and l didn't have a problem with it.

    I accept that for whatever reason inner suburbs are flying it is not sustainable and it probably is not been replicated throughout Melbourne.

    Regards

    Denis
     
  5. Billv

    Billv Getting there

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    CRC,

    I don't pay much attention to such claims.

    I does feel good to know that our assets have gone up in value
    but at the same time we all know that in the long run such increases
    are Unsustainable.

    IMHO When we experience large price increases year after year
    we are simply bringing forward capital gains from the future
    so in subsequent years we are likely to see periods with low or zero capital gain.

    Finally, I don't think that being the most expensive city in the country is a good thing.
    I hope I am wrong but if our economy slows down and/or unemployment goes up we could be in for a big surprise.

    Cheers
     
  6. D&K

    D&K Well-Known Member

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    CRC_Error,

    Actually RP Data reported Melbourne making 18.39% in the year leading up to October, check the article on the website off your link! It also has a picture with only 7%; but obviously something has gone astray somewhere. Given that Melbournians seem to like their Spring-time auctions in November, the data isn't orders of magnitude apart (if the 18.39% was correct).

    RP Data also used hedonic indicies, I think the REIV is based on medians. Although hedonic should be a better indication, with the market the size of Melbourne, you would think the variation wouldn't be that drastic.

    The other trick is what do you call 'Melbourne'? Greater Melbourne, Melbourne city council area, etc. So when one person says 'Melbourne' it could be everything without open paddocks between, for other's it's municipal council. A bit like ASX200 <> All Ords.

    Glad to see you're taking more of an interest in property anyway, shares not looking as promising at the moment? :D

    Dave
     
  7. crc_error

    crc_error The Rule of 72

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    actually shares are looking really good at the moment, the all ords have gained 10% in the last two days.. I hardly think any property investment will make you 10% in 2 days.. we will see shares continue to rally next week before they stabalize.

    In saying that, direct property does have its place in a investment portfilio for certain people.
     
  8. Billv

    Billv Getting there

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    Or lose 10% in 2 days :eek:
     
  9. crc_error

    crc_error The Rule of 72

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    you only lose if you sell..

    You can lose more with property.. if it doesn't go up at least 8% PA, then your losing ten's of thousands per year covering interest.. and other costs.
     
    Last edited by a moderator: 28th Jan, 2008
  10. Billv

    Billv Getting there

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    Not me.
    It would have been silly of me to buy if the returns were not good.
    I also tend to buy and improve so that gives me higher returns.
    I also use depreciation and -ve gearing so my costs are minimal (if any).

    I like shares as well, in fact I would have bought a few days ago if I felt that it was the right time.
    The situation in the US is worrying me though and I don't believe that the problems have gone away so I am staying out of it for now.

    Cheers
     
  11. crc_error

    crc_error The Rule of 72

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    yes improving property will offer better returns..along with deprication.

    I think having a combination of both is a ideal situation.
     
  12. D&K

    D&K Well-Known Member

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    I can hardly disagree ... I was also buying shares at that time :eek:

    But in the longer run, property going up about 20% in a year when you only put in 20% deposit, that's hard to beat also.

    Back on topic. I think the real lesson is that you have to be wary of the information sources whether you're into property or shares or both. .. and then there's lies, damn lies, and misused statistics ;)

    Dave
     
  13. shake-the-disease

    shake-the-disease Well-Known Member

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    The figures for Melbourne houses 2007 are:
    Residex 23.5%
    REIV 24%
    APM 25%
    ABS: being released on 4 Feb
    Valuer General: no result yet
     
    Last edited by a moderator: 31st Jan, 2008
  14. shake-the-disease

    shake-the-disease Well-Known Member

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  15. crc_error

    crc_error The Rule of 72

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    so those are quater results!

    25% growth is insane!!
     
  16. shake-the-disease

    shake-the-disease Well-Known Member

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    Insane to you maybe, I'm not complaining myself :)
     
  17. crc_error

    crc_error The Rule of 72

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    how many properties do you have in melbourne?
     
  18. shake-the-disease

    shake-the-disease Well-Known Member

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    ABS figures are out today, Melbourne is reported as having risen 18.1% for 2007.