Saturday, January 28, 2012

House Hunting

The last couple of weekends we have been to open houses in neighborhoods we might like to live in. I think the nicest house we've seen is this one. We're not really serious about this at this stage, just trying to get a feel for the market. Definitely it seems that houses recently put on the market are asking for ridiculous prices and dropping them over time. This one was $990k-$1,040k. Given the market here the price is reasonable. The garden is really beautiful with several mature trees.

We saw one earlier in the day that wanted $1.22m for what I thought wasn't as nice (though Snork Maiden disagrees). That house has only just been put on the market. We were the only people at the showing and the owner is trying to sell without an agent.

With one exception all the agents we have encountered were driving luxury cars - Mercedes, Audi, Porsche Cayenne etc.


Financial Independence said...

I am struggling to understand - sometimes people are over eat, bu the same with the houses.
If you do not count on the ever lasting house price rise - what is the point to pump in $1.2 into it + fees and taxes?

On top of it pay the mortgage as well. Would it be better to buy what you can afford and re-invest the rest of the money?

On a slightly separate topic - I have tried to calculate whether it is worth to invest in the property as rental asset and the answer is yes, it bring about 1-2% a year after all the fees and taxes.

Did you do something similar from your area - is it worth investing in the real estate?

mOOm said...

It's not a good idea to invest in real estate here in order to make money. You'll lose money unless there was a lot of price appreciation in the future, which seems unlikely given the high prices of houses. In the context of the market here, $1.2 million is not an extremely high price. A totally normal house in the better neighborhoods which are nearer the centre in Canberra is $700-$800k. There are houses in the $400k's far from the city centre. Apartments (2 bedrooms) near the centre are in the $400k's at least. There are apartments for almost $2 million. It's hard to understand the market for that in this city, but it's there. Even though I don't think prices will go up a lot in the future, I don't think they will come down a lot either.