Q's about economic crisis

[taff]

i'm not very into/up on the current economic crisis at the moment so was hoping those that are could help me out.
our PR is almost through (took the payment from the bank last week) and we were hoping to then buy a house. (well, buy a plot and build but i don't think that matters)
my question is, is now a good time to be buying into the property market or would we be better off waiting a yr because as far as i can work out theres gonna be a big drop in prices.
i understand that generally you always make on a new build and more so for us because i'll be doing the majority of the work myself.
if we were to wait we'd have to spend 20k on rent so i'd be looking for more than 25k to fall off the value of a plot/block.
we want to stay in the area where in now which is a fair treck out of the city so i'd expect these areas to go first, we've already seen a big drop in asking prices in the year that we've been renting here but how much further will they go.

[wardy1]

Hi mate, what a question you ask. "How far will prices fall, and 'when is the best time to buy'. I'm a real estate agent in Victoria with about 18 years experience and really, the answer is, nobody knows exactly what is going to happen. What I can say is, the government handouts to first home buyers such as yourself have never been higher and probably never will be.
If prices fall a bit more over the next 12 months, so be it, the difference will be probably be small. There are a lot of so called experts out there trying to predict the 'bottom of the market' and so far, they've all been wrong, so the right time to buy is when you are ready to. Good luck and congrats on your PR.

[taff]

thanks butt, yeah i understand it's a bit of a how long is a piece of string, but as of yet i've been relatively unaffected by the "economic crisis". i watched the news yesterday probably for the first time in a yr and it was all doom and gloom about how bad things are going to get so i've now started to wonder - what the best thing to do is.
i just don't want to spend x amount of money only for it next year to be worth half of **** all,

[Chucaro]

I am monitoring the RE market in the wide Bay area and I can telling you that the hot properties are the ones below # 300.000
I some areas we have a drop of 8%. The majority of the houses that come down are the rent ones which are own by people that lost the job :(

Here is a better proposition to get a house already built and not building.

What happens in the future.....I do not know but if you can get a cheap loan go for it because keep the money in the bank is not much good

[V8Ian]

thanks butt, yeah i understand it's a bit of a how long is a piece of string, but as of yet i've been relatively unaffected by the "economic crisis". i watched the news yesterday probably for the first time in a yr and it was all doom and gloom about how bad things are going to get so i've now started to wonder - what the best thing to do is.
i just don't want to spend x amount of money only for it next year to be worth half of **** all,

In reality houses/land rarely or barely get cheaper, they just stop appreciating for a period of time.

[wardy1]

Highly on likely that properties will fall by that much mate. Here's the question you need to ask...... "If the market picks up, will I kick myself in a years time?"

[bully130]

I do a lot of work around you area were you are thinking of buying. If you look at the work that is going on down the road with the new livestock sale yards and the new highway and industrial centers I belive that the price may fall a bit but it will be harder to find another area as nice and as close to what you have. IMHO buy the land build a big shed live in that and build your new home. Cheers Ian

[billiardbrett1]

I am also an agent in Qld. The other thing you have to think about is that the housing grants will come to an end sooner or later. There is talk about this happening end of june this year. So then you will miss out on the extra $21K for new builders. This makes a total of $45k the market will have to drop for you to just break even if you keep renting for another year. Don't forget that by building rather than buying an existing property you won't have to pay stamp duty either. (not in QLD anyway, not sure about WA)

[Offender90]

Jason,

It would depend where you are buying and what the prices are like at the moment. The lower end of the market is likely to appreciate in the coming months, with first home owners flocking to buy property on the back of low interest rates and government incentives (FHOG and no stamp duty <$500k).

In the middle of the market, you are likely to pick up some bargains, which is it is generally out of reach for first home buyers and investors hurt by the falling share market are forced to sell. As an aside, those with more wealth
are generally more affected by the crisis, as many will have invested in shares on margin loans which are often backed by mortgages. As the sharemarket goes down in value, so does their "perceived net worth" and this is when banks get nervous and start calling in their margins. The financial strain results in "toys" being the first to go, followed by non-income generating property. Hobby farms, weekend / beach houses and the like.

Getting back to the topic, if you're going to build, I'd say build now rather than later. Its best to build when interest rates are low, as you're effectively doubling your outgoings during the building stage (with rent and mortgage to pay at the same time), which can place severe constraints on your cashflow.

When doing the majority of the work yourself, you should balance how much work you do yourself Vs how much longer it will take to do, because if it takes you longer to complete the house, it will cost you more in mortgage repayments.

The biggest cost saving in building a house you can make is managing the tradies yourself (least time for the most saving) followed by painting, laying down floors, tiling (if you're handy) and establishment of the yard. If going down this route, I would employ the services of a competent building consultant to inspect each stage of the work to identify any defects that can be covered up at finish.

Lastly, the 20k you'll "spend" on rent is a deceptive figure. If you pay more than $350k, you'll be "spending" more money on the interest then you would be renting, so that's also something to consider.

Nehow, gotta get back to work, even if it is a slow day today. I've built a house and have seen several others go through the same process, so let me know if you want to have a chat and I'll PM you my contact details.

Cheers

Bojan

[taff]

thanks guys all good points, guess i might be worrying over nothing - i knew i shouldn't have watched the news. :D
i forgot about the grant and your right it does end in june so i'll probably be better off buying as soon as we get our PR.
Ian thats the plan with the shed, to save us having to rent and pay the mortgage - plus at the end i'll have a huge shed that'll need filling.
Bojan thanks for the offer, i might look you up on the processes as obviously this'll be the first house we've built in oz and ian if you don't mind i might do the same with you as i know you've gone through these in this area also.
thanks all

[Chucaro]

thanks guys all good points, guess i might be worrying over nothing - i knew i shouldn't have watched the news. :D
i forgot about the grant and your right it does end in june so i'll probably be better off buying as soon as we get our PR.
Ian thats the plan with the shed, to save us having to rent and pay the mortgage - plus at the end i'll have a huge shed that'll need filling.
Bojan thanks for the offer, i might look you up on the processes as obviously this'll be the first house we've built in oz and ian if you don't mind i might do the same with you as i know you've gone through these in this area also.
thanks all

Taff when you get the plans for the "shed" remember to ask the builder to do the slab for a dwelling, in this way if it is coming to the crunch with fully insolated walls and roof, cooking, toilet and ldy facilities your shed can become a home;)

The slab here in Qld have to be 150 mm instead of 100 for a shed. Not a big investment to cover your future ;)

[taff]

chucaro that's kinda the plan - lot's of people do it that way up here and i've worked in some shed's that are nicer than many homes, plus we can use it as a holiday home for visiting rely's

[bully130]

Mate I know a few tradies in the area.From plumbers, sparkies,roof chipies, plasters etc. We like to help each other out


cheers Ian

[mike 90 RR]

.... and you know I do house plans & deal with shires ... so you can ask me for free advise


Mike

[Chucaro]

mike 90 rr and bully 130 both of you are champions.
It is great to see people like you how are ready to help a mate.
:twobeers::twobeers:

[taff]

thanks heaps guys. ian i keep meaning to pop down for a beer and a look aound your 130 will have to sort something out soon.
mike pm sent

[Heggs]

If you have a stable job some cash and are looking at staying in the house for several years then now seams like a very good time to buy. if it drops by another 10% this year but it goes up in the folowing years you are better off in the long term.

The stable job is the issue, not sure what industry you are in but construction is heading into a very quiet time,

[taff]

i am currently in the construction trade but am making plans for when it goes tits up. i did my apprenticeship many moons ago as an aircraft technician a/e & structures with the Air Force and am toying with the idea of a return to this industry and have a job offer on the table, i'm also thinking of the police force but have to wait till my PR completes
i own a property in the u.k. and am hoping to be able to hold onto it. the idea here is to mortgage the land and build the house for cash over the course of maybe 18 months - (hence the need for a pretty schmick shed) but i was a little worried if it all came crashing down then i'd have a house which i'd invested a fair amount of cash into being worthless

[spudboy]

This is going to be todays dumb question.

I've read all the posts in this thread and you mention PR several times, but I can't figure out what you mean.....

Does this mean I am very old or something?

[abaddonxi]

This is going to be todays dumb question.

I've read all the posts in this thread and you mention PR several times, but I can't figure out what you mean.....

Does this mean I am very old or something?

x2:D

[Captain_Rightfoot]

There is a massive amount of spruiking and mid information being put out there. I'd wait myself. We would like to Buy a bigger house but I firmly believe we are headed for a debt inspired depression... Just like the last one. :(. (apolgies for being so negative)

People I've been following said 40% from peak to trough. Cheaper properties won't be affected as much as the high end.

Do your sums really carefully. If we do have debtdeflation (likely) then while you will have low interest rates your debt will appreciate. Policy makers will fight this by trying to create inflation. Conventional economics says this is possible but another school of thought believes it's unlikely. I'm any case if they are successful you could see serious interest rates again.

[V8Ian]

Pemenant Residence, we're stuck with him now. ;)

[DirtyDawg]

i am currently in the construction trade but am making plans for when it goes tits up. i did my apprenticeship many moons ago as an aircraft technician a/e & structures with the Air Force and am toying with the idea of a return to this industry and have a job offer on the table, i'm also thinking of the police force but have to wait till my PR completes
i own a property in the u.k. and am hoping to be able to hold onto it. the idea here is to mortgage the land and build the house for cash over the course of maybe 18 months - (hence the need for a pretty schmick shed) but i was a little worried if it all came crashing down then i'd have a house which i'd invested a fair amount of cash into being worthless

Police force?? they have a saying in the job over here Taff "T.J.F" The Jobs Fu*&ed, a lot of my mates are coppers and they would be doing something else if they could.
But good luck with what ever you choose...

[taff]

Police force?? they have a saying in the job over here Taff "T.J.F" The Jobs Fu*&ed, a lot of my mates are coppers and they would be doing something else if they could.
But good luck with what ever you choose...

cheers nige, it's still something i want to do but wether or not i'm accepted is another matter