RBA warns on debt, falling house prices

Post to Facebook on 15/4/19 at 11:25 AM
Commenting on “RBA warns on debt, falling house prices”
https://www.smh.com.au/business/the-economy/australia-s-housing-slump-fuels-slowdown-concerns-20190412-p51djt.html

Posted to The Age (12/4/2019) on 12/4/2019
Commenting on "RBA warns on debt, falling house prices"
https://www.smh.com.au/business/the-economy/australia-s-housing-slump-fuels-slowdown-concerns-20190412-p51djt.html

Go back to history in the mid-70’s, one specific 3 BR property in Nunawading, Victoria was 28k. When news of the 7km extenstion of Eastern freeway between Springvale to Doncaster was rumoured but not yet confirmed in the mid-90s, the value if same property jumped to $120k, it was then sold for $138k in 1999. At present, the property is value at $985k. There is hardly any improvement done to the house.

The mathematics shows even ignoring the negative gearing, the first 20 years since mid-70s, the property value jumped by 5 times, and the following 20 years, more 7 times. Comparing the current value and the value in the mid-70s, it is now worth 35 times.

Thank you for reading.

Unethical practices and law breaking foreign investors must be stopped

Post to Facebook on 14/4/2019 at 10:41 AM
https://www.facebook.com/groups/265025120814400/permalink/355838295066415/

It was 4 years ago. Rising star Kelly O’Dwyer gave a presentation of the forthcoming changes to the FIRB policies at REIV.

The room was about 3-quarter full. I could not identify any of the bosses or senior staff from Mount Waverley, Glen Waverley or Wheelers Hill in attendance, except a former student of mine.

Unfortunately, many agents and agents representative did not take note nor advised their former clients of the government amnesty given to foreign investors who had purchased properties without approval of FIRB. The amnesty was granted between May and November 2015.

In fact laws continued to be broken because those unethical representatives, who either ignore the laws or could not understand the laws. Money was still flowing in legally and by other means to invest in properties.

The frenzy and madness had already started and it was difficult to slow down or stop. It lasted for another year before governments on China and Australia slammed on the money brake.

In fact, the high end price properties and MacMansion were falling out of favour. I could not dissuade an acquaintance in spending over $3.2 million in purchasing a new house and $1.2 million for a slightly renovated 3-BR property, because they were just following their peers and thought that they knew market better than I.

It is always easy to say, “I knew it”, or sigh after the boat is gone, “I wish I bought it”.

Signs are generally there before the occurrence of an important event. Prophets know this, and in fact people have that precognition too. The question is, “what actions are you going to take?”

The doom and gloom continues on. Are you joining the band wagon, or are you ready to do something positive?

Property investment involves a lot of money, and must not rely on guts feeling. You need to go out to look, feel and touch before placing your bet. If in doubt, ASK, ASK and ASK until you understand.

Thank you for reading.

Owning a house is the Australian dream, but I miss my apartment

Post to Facebook on 8/4/2019 at 7:18 PM
Commenting on "Owning a house is the Australian dream, but I miss my apartment"
https://www.domain.com.au/living/why-i-miss-my-apartment-816316/

Why do apartment owners keep thinking that owning a house means more work in maintaining the garden, or more chances of burglary?

Instead of paying the owners corporation to look after the common area compound, including the garden, lawn, paths, stairs and lifts, foyer, passageway, heating and cooling and may be gym, swimming pool, sauna, etc., most of these the owners do not use or enjoy personally, but spend on maintaining a garden and security monitoring service of a house, won’t the latter come out better?

The following is included in short blog in Facebook

Selling apartments was not my strength, because I could not and still cannot convince myself in owning or living in an apartment long term. I have stayed in several apartments when I used to work in Hong Kong for short assignments, and when I visited friends in SE Asia, China and Canada. In fact staying in hotels is no different from experiencing apartment living.

A friend of mine lived in an apartment in Vancouver, Canada. Her next door neighbour's apartment was broken in, and precious items were stolen. It was not known how the burglar managed to get to the 20th floor. My friend sold that apartment and moved somewhere else.

On several occasions, I could gain entry to apartment buildings by following the residents. I was never questioned whether I stayed in the building. In fact many apartments are tenanted, and the tenants do not take security seriously.

New buildings are likely to use electronic gadget or swipe card / token to activate the lift to get to the appropriate floor. There are likely to have CCTVs monitoring the movement of people entering and leaving the building.

What if the apartment is used to run some quickie business, or Airbnb? What guarantee is there the visitors are of good character? It is very difficult to legislate and monitor the usage of the apartments, or even by the owner's corporation.

So, it is important not to assume living in an apartment is safer than in a house.