Australia Property

[specuvestor]

The fallout is weighing on weak inflation and consumer spending in an economy that’s already slowed enough to warrant a likely interest-rate cut next month. While last weekend’s election result and looser lending criteria may offer some support for buyers, the Reserve Bank this week warned the slump would likely soften the impact of any rate cut.

Nationwide house values are down an average 8% since their 2017 peak and more than 14% in Sydney. The hangover is hitting the economy, with signs a multi-year jobs boom is running out of steam as tepid wages and the downer from falling home prices curb consumption.

https://www.bloomberg.com/news/articles/...to-rebound

[blackclock]

Does Australia property fall because of Tradewar with China? less mineral export, less students, less tourist, less property investors

[specuvestor]

Does Australia property fall because of Tradewar with China? less mineral export, less students, less tourist, less property investors

Yes commodity export to China and Chinese property investors makes Australia a possible 2nd order impact by Sino-US tradewar

But if you read the thread, Australia has implemented macro-prudential measures as well so that contributes to the decline

[blackclock]

Thanks Specuvestor. Anyone here has knowledge about property investment in Australia?
The net rental yield in Singapore is close to zero. Hope to look for other countries to invest.

[soros]

According to Australian Financial Review, the gross rental yield is around 3.6 % and the nett yield is down to 0 - 1%. This is not much different to your yield for Singapore property.

"CoreLogic reports the average gross rental yield for residential houses in Melbourne and Sydney is 3.6 per cent. But to work out if that’s a good investment, you have to deduct all your expenses (including income tax, agent commission, land tax, body corporate fees, insurance, maintenance) to arrive at a net yield. When we work out a client’s net yield, it’s typically between zero and 1 per cent."

https://www.afr.com/personal-finance/bud...603-p51ttn

If you are looking for "rental income" , s-reits can still deliver 5% + .

[BlueKelah]

Thanks Specuvestor. Anyone here has knowledge about property investment in Australia?
The net rental yield in Singapore is close to zero. Hope to look for other countries to invest.

Yield in Syd. Melbourne. Are both bad due to price rise and rent stagnant.1_2% Yields in Brisbane still okish net 4 to 5%. Really depends on property type and how much more yield u can manufacture to push yields up like making a granny flat or subdividing for more bedrooms,etc

There are reits and property counter there u can buy for exposure to property if u keen but the property cycle there is almost at its end Liao. Next five to ten years doesn't look good given changes to residential lending criteria.

[blackclock]

Reit is indeed good with yield of around 5%. The problem is that the management keep diluting existing shareholders, by issuing new shares to pay for management fees. And if the property price is good, I can't sell the property for capital gain.

Maybe there are honest Reits out there. Please share which counter has good reputation. thank you

[BlueKelah]

Reit is indeed good with yield of around 5%. The problem is that the management keep diluting existing shareholders, by issuing new shares to pay for management fees. And if the property price is good, I can't sell the property for capital gain.

Maybe there are honest Reits out there. Please share which counter has good reputation. thank you

most reits are the same same lah. Like any stock, the trick is to buy them during dips or when the sector crashes. For Reits that would be when interest rates go up or when economy of the country where they are operating goes down affecting occupancy/renewals, then you can buy even below NAV with very very nice yield. Once you lock in at low entry price and things recover you will end up with a very nice cash flow high yielding dividend stock. But you gotta make sure they dont go belly up during crisis times.

[soros]

Better to stay with Singapore or Hong Kong listed Reits .

The reits in other foreign jurisdictions may be subject to dividend withholding tax and capital gains tax.

https://www.pwc.com/gx/en/asset-manageme...s-2017.pdf

[blackclock]

Soros thanks for sharing. I would very much want to buy Singapore reits, because there's no currency risk and no need to pay all those custody fees for foreign holdings.

But I'm very worried about the current real estate vacancy rate
From my personal experience, the vacancy rate of grade A office at Tanjong pagar is way higher than reported figure. I guess it's at least 20%. If you walk around the area, you will see many buildings pasting large "For Rent" signs on the walls. Many MNC shifted their back-end operations to cheaper emerging markets. Many industrial buildings in Jurong area are sitting empty as well.

The number of expats are falling as well. If you see the rental situation of landed properties & sentosa cove, you will notice the sharp drop in demand. Coupled with the closure of Joel Robouchen restaurant. I see high end market diminishing. That's why I may think twice before buying S-reit. Please correct me if I make any wrong observations. thank you