Posted to my FB page Sin Fong Chan Real Estate on 13/1/2015 at 1:48 AM (The Age does not accept comment)
Commenting on "Aussie landlords swallow losses to bet on price gains"
http://www.theage.com.au/business/property/aussie-landlords-swallow-losses-to-bet-on-price-gains-20150112-12medj.html
It is a myth that property prices will bounce back in a ridiculous rate like before; not at least for another 10 years or longer. In some areas, the prices in real term actual go backward.
Buying property as a form of investment when interest rate is low can be a great risk. When the interest rate goes up, the return may not cover the loan interest payment. Indeed, many investors do not know how to calculate the risk-return over the long term. Most gain may be swallowed up interest repayment, management expenses, rates and charges, loss opportunities, etc. One must not forget the government taxes such as stamp duty, land tax, capital gains tax, etc.
There is no justification for apartments to be sold at such high prices, but it is all due to the ignorant and arrogant buyers who are so willing to line the pockets of developers and real estate agents with their hard earn money.
Many apartments are left vacant due to lack of tenants. Unfortunately, some are rented to a lead tenant who in turn sublets the property without the owner's permission to multiple tenants, treating the property as an illegal share accommodation.
Remember, scarcity of land results in rise of property value, which means landed property will always worth more by comparison.
Commenting on "Aussie landlords swallow losses to bet on price gains"
http://www.theage.com.au/business/property/aussie-landlords-swallow-losses-to-bet-on-price-gains-20150112-12medj.html
Buying property as a form of investment when interest rate is low can be a great risk. When the interest rate goes up, the return may not cover the loan interest payment. Indeed, many investors do not know how to calculate the risk-return over the long term. Most gain may be swallowed up interest repayment, management expenses, rates and charges, loss opportunities, etc. One must not forget the government taxes such as stamp duty, land tax, capital gains tax, etc.
There is no justification for apartments to be sold at such high prices, but it is all due to the ignorant and arrogant buyers who are so willing to line the pockets of developers and real estate agents with their hard earn money.
Many apartments are left vacant due to lack of tenants. Unfortunately, some are rented to a lead tenant who in turn sublets the property without the owner's permission to multiple tenants, treating the property as an illegal share accommodation.
Remember, scarcity of land results in rise of property value, which means landed property will always worth more by comparison.
