It's good to see that people are starting to tire of attacks and name-calling, it wastes everyone's time and helps no-one.
The comparisons with the USA have been done to death on these discussion threads but newcomers have not seen that data so it all has to be dug up again if one has the energy or the time to do so.
I have posted US vacancy rates and they were very high. The range was 9-12% depending on which city one was looking at whereas our vacancy rates are much lower. In some cities they are below 1% and in others they are between 2 and 3%.
I am so tired of explaining this but the number of vacant houses is what determines supply. People keep talking about how many houses are advertised for sale but that is false supply because each occupier will be looking for another house to occupy and each investor will be selling to either another investor (leaving tenants intact) or to an occupier.
The US has a large over supply of properties as is shown by their own published data, we do not.
Having said that, we do not have the enthused investors bidding against one another for investment purposes at the moment. Too much fear around for people to be taking those actions.
As such there is a period of uncertainty which we must go through, a period where fluctuations will be up and down all over the place. Some of those fluctuations will be accentuated by population movements.
For example, if there are mine closures and less work is available in Perth and to some extent, Adelaide, then some of the Easterners who went West for work will find themselves out of work.
Traditionally, those people tend to gravitate back home. If their departure means a rented property is vacated and their departure is not replced with a new arrival then that has an effect.
Follow the work and you will follow the population movements and therefore the propety price rises.
My advice to all on this thread is stop arguing about "property", what does that mean after all? MY advice is start discussing where property WILL rise and WHY, because therein lies opportunity.
My own experience is that the middle and lower tiers of property ride out the hard times much better than the top tier.
My own experience tells me that low vacancies lead to higher rents (given time) and higher rents coupled with low interest rates equals lower holding costs. So from an investor's perspective, a time comes when the weekly holding cost of a property becomes trivial and it is only a few years before the property is revenue positive due to the normal effects of inflation on rents.
If you are able to buy at a time when there is less buying competition (such as 2009 will be) then you can pick up a bargain or two and lower the holding costs even more. There is potential to buy revenue neutral properties if you put in the effort.
Within 5 years I guarantee you people will be moaning why they did not take advantage of the doom and gloom times when there were so many bargains around.
