a) A house in the LNS area was only bought in late 07. Now it is back on the market and the vendor is asking for around 10% more than what s/he paid for the house. Makes you wonder why do people flip their houses ?
b) Saw 3 houses that were sold late last year and they are all available for rent today. Either the expats bought them or their owners deem it sensible to negative gear houses worth $2M or so.
c) There is this apartment block for sale. One of the units is currently available for rent. Working backward, that unit is yielding only around 4%. It reminds me of how the property market is different from anything else we know. Typically, when you buy in bulk, you get a discount. In the Sydney property market, you pay a premium for buying in bulk.
Whichever way you look at it, prices are still holding up. The vendors are not budging.
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House flipping is probably not a good idea in the current climate. Transaction costs (agent, advertising, stamp duty, conveyancing) on both the buy and sell side is enough erode +5% from the purchase price. This does not include holding and any capital/renovation costs. The vendors are lucky to be in the money - that is if they can find someone foolish enough to sell to.
ReplyDeleteVendors and selling agents can put any price they what - if the market and buyers are willing to meet those prices is another story.