Thursday, May 14, 2009 at 09:56
HI Lynnie,
If you search this
forum for this topic you will see I have, in the past, been an avid advocate of keeping the family
home at all costs whilst travelling. I have always held the view that real estate is a solid investment and allows one to travel and come
home to a
home to live in.
However we currently live in unprecedented financial times and the waters ahead are unchartered. Some of the most knowledeable real estate researchers are saying house prices will most likely fall further in the short term (next 2 years or so). here is just 2 quotes from recent newspaper articles:
"FIRST
home buyers are leaping aboard a sinking ship, with house prices set to fall about 20 per cent in the next two years, an Australian National University economist says.
Professor Quentin
Grafton said house prices could not continue to grow at a faster rate than incomes and consumer prices.
» Property bubble ’set to burst’ - The Age, 1st May 2009"
AND.
"The
Sydney Morning Herald reports :
THE Australian housing market is facing the prospect of a “perfect storm” of financial pressures - including high mortgage debt, overvalued homes and rising unemployment - in which prices could eventually fall by as much as 30 per cent, investors have been warned."
» First-
home buyers in the eye of a storm - The
Sydney Morning Herald, 18th March 2009
In SEQ the first
home buyers grant has artificially propped up prices for homes less than about $400,000. Above that there has already been a fall of 10 to 15% with most likely more to come.( I have a friend on
Gold Coast who has taken a $600,000 loss on a multimillion dollar
home - a fall of over 20% in the last 18 months). My point is that once the demand for lower price homes dries up when the FHOG drops back to only $7000 at the end of this year - prices in this category will most likely drop. As the newspaper article above articulates it is sad to see
young people rushing in to buy a
home at current inflated prices only to see their purchase most likely fall in value in the short term.
If you take the
views of the many professional real estate advisors (ignore real estate agents as they can only ever see real estate prices going up), that prices could fall across the board by another 20 to 30 % in the next 2 years, it makes sense to sell now, invest the money wisely and it maybe that in two years time after your trip you can buy a far better
home than you have now.
Of course there are risks in all of this - as stated we are in unchartered waters but two years ago many were saying house prices would not fall much either - in some states they have fallen a staggering 50 to 60% in the past 2 years. Unbelievable.
But the notion that real estate prices never fall is a phurphy - they do and they are falling and probably about to fall a lot further. It is true, however, that in the long term real estate generally will rise in value.
Just another aspect for your consideration.
Good luck in whatever you decide,
Cheers
GPM
AnswerID:
364786
Follow Up By: Saharaman (aka Geepeem) - Thursday, May 14, 2009 at 10:01
Thursday, May 14, 2009 at 10:01
Correction - in my last paragraph it should read
"saying USA house prices" ,not "saying house prices"
and
"some USA states", not "some states"
FollowupID:
632419
Follow Up By: Rod W - Friday, May 15, 2009 at 09:02
Friday, May 15, 2009 at 09:02
Hey Saharaman, in your profile the pictures of the excavator and the overpass
bridge is that for real and where did it happen. it must have been bleep e concrete or the low loader must of been moving.
Cheers Rod W
FollowupID:
632620
Follow Up By: Saharaman (aka Geepeem) - Friday, May 15, 2009 at 10:35
Friday, May 15, 2009 at 10:35
Rod,
As far as I know its real - but it happened in USA I believe, as the traffic seems to be travelling on the RHS of roadway.
I found it hard to believe it could slice into the concrete like that as
well.
An excavator hit an overpass on the Bruce Highway near us some years ago and all it did was shift the concrete girder a few cms and a bit of concrete rubble from edge.
But the photos do not appear to be fabricated - but I will stand corrected if that can be established.
Cheers
GPM
FollowupID:
632633