• 96 percent of homeowners are happy with their decision to own and even 84 percent who are “underwater,” or owe more on their mortgages than their home is worth, expressed the same sentiment.
• 79 percent of home owners would advise a family member or close friend just starting out to buy a home, and 69 percent of those who are underwater on their mortgage would offer the same advice.
• 74 percent said that despite the ups and downs in the housing market, owning a home is the best long-term investment they can make.
• Home ownership and a retirement savings program are considered to be their best long-term investments.
• 78 percent of respondents said that owning their own home is very important to them.
• Nearly seven out of 10 who are not currently home owners (68 percent) said it was a goal of theirs to buy a home.
• Job uncertainty and saving for a downpayment and closing costs are the biggest barriers to buying a home

You might be thinking there’s no great surprise in that. Generally Australian home prices have slipped a little over the past year but are overall fairly solid. We should still be feeling good about owning a home.

But what if we told you this the survey was conducted this month in the USA? In a market where home prices have reportedly dropped by a third (down 33% since their 2006 peak) – more than their prices fell during the Great Depression. In that context it’s a remarkable survey.

American or Australian, we love to own our own home.

In the early 1990’s one Brisbane property investor and author jolted plenty of us into investing in real estate. Jan Somers, a former Cleveland school-teacher, wrote a best-seller called “Building Wealth Through Investment Property”. Her message? You can’t do nothing and expect to retire on anything more than chicken feed. Compulsory super won’t be enough so invest then be patient. It’s become unfashionable to buy books like that… but the message remains sound.

So as we kick off 2012 will investors return to Brisbane real estate? We’ve seen self-managed super funds nibbling at the offerings and the ATO reports that of the $418 billion held through SMSF’s less than $15 billion of it is currently invested in residential real estate. And $114 billion is sitting in cash deposits. It’s a huge market waiting for the ‘right time’.

What would tempt you to invest in real estate right now? Higher rents? Scrapping capital gains tax? Reduced stamp duties? Or is just not the right time to buy Brisbane real estate?

We’d love you to share your thoughts in a quick survey (5 questions only). Please click through.

It seems like a simple way to do things: divide the sale price by the size of the apartment, then apply it to the next one. For example if it’s a 2 bed, ensuited place for $500,000 place that’s 100m2 we’ll take that $5000/m2 and use it on the 1 bedder that’s 70m2. But there’s a number of problems with the theory and they all come back to what it is that we place a value on when we buy. Views and elevation. Standard of finish and condition of the home. Numbers of bedrooms and bathrooms. And the list goes on.

So as much as it would be an easy way for home buyers to determine value, rate per m2 is rarely accurate unless the apartments are very, very similar. Two apartments in the same building have the same “base value” regardless of their bedroom numbers, because they both offer a place to sleep in that location. You’ll fit more people into a larger one of course, but if you double the size you’ll rarely double the price. This is why property developers often make great margins on small apartments and have bigger designs in their mix often for little more purpose than to help broaden the market appeal and ensure the project’s not perceived as ‘low-end’.

That couple upped their offer by more than $60,000 once they stepped back to think about other apartments that were truly similar. And of course an offer from another interested buyer helped prompt their decision too!

1. Home prices in inner-Brisbane can drop when the experts least expect. After a mini-recovery in 2010 median prices  dipped further this year (“officially” around 6-7% but with plenty of variation between suburbs and price brackets).

2. Home owners will choose to stay put. During 2011 sales volumes in most inner-Brisbane suburbs dropped to their lowest in over a decade, with many not willing to sell for less. Just 12 months ago it seemed likely we’d have a busier market, with good job security giving buyers confidence to upgrade and move. Few predicted the economic uncertainties of 2011 (or the daily in-your-face negativity of that bloke on the Today Show amongst others).

3. A tight supply of rental homes has not led to strong rises in rents (yet). Rents grew 4% in the June quarter but have otherwise been fairly flat in Brisbane’s inner-suburbs this year. Remember the post-floods hysteria with predictions of rent blow-outs? This subdued market hasn’t surprised us – most landlords are not wealthy and become very cautious with rent increases and potential vacancies when there’s economic uncertainty.

4. We can use our money wisely. Many of us are taking advantage of interest rate cuts to pay down debt, building equity without price growth.

So bring it on 2012, we’re ready for you. Inner-Brisbane’s home-owners have had a tough year but we’re in good shape for anything you can throw at us!

PropertyObserver.com.au reports one southern group is aiming to take advantage of the opportunity, launching a $30milion unit trust to buy up prestige residences. Properties will be in Sydney, Melbourne, Perth, Adelaide and Brisbane – possibly Noosa and the Barossa – and worth between $3 million and $6 million each.

Allure Properties recently launched their Diamond Fund, which aims to buy at least six luxury properties in London, the south of France, Colorado, Queenstown and Phuket while the dollar is high and real estate prices are low. Allure Properties’ Jo Perrott says “The residences that we have targeted are about 50% discounted on their prices several years ago. We have all the right indicators in place for this to work well.”

“We have had so much interest, particularly from Melbourne, WA and Sydney as well as from management companies, in this approach to shared investment in luxury real estate. Many clients talked about wanting domestic property with a shorter time span. We expect that by March next year we could be ready to close the international fund,”

Brisbane-based property commentator Michael Matusik  adds some valuable insight into why we’re not witnessing banks stepping in to sell up property: “Our higher saving rate is well documented, but exactly how it is being achieved doesn’t get much commentary.  It is not just a simple case of saving more money.  For the most part, Australians are saving more by repaying more than the minimum on their housing loans.”

Matusik never shirks from offering an opinion. “The fact that we are paying off our mortgages faster is often ignored by the doom and gloom merchants who predict a repeat here of what occurred overseas, and continue to preach about the pending mother of all property crashes.  Yet, according to AFG, the average new loan-to-value ratio is a comfortable 67% and the latest ABS figures show that house prices fell just 2.2% across the Australian capitals over the last twelve months.  Yawn.  And yet we keep on reading about mortgage stress and impending doom.”

Bargain hunters might get tired of waiting…

So it’s no surprise we’re seeing more and more fact-searching before buyers submit an offer. Online resources have expanded remarkably over recent years and one site’s now released “Guesstimates”, providing an instant “value” of any house in Australia. Even they call it a “guess” and it follows a model similar to an American tool called a Zestimate. We first wrote about them almost 5 years ago and they’ve since caused plenty of confusion in the Land of the Free (data). Guesstimates do use some science to come up with a price range. But it’s pretty rough – in both directions. One home we sold recently (so it’s not yet recorded in official data) sold for 20% or $100,000 less than the website tells us it’s worth. Must be a lousy agent! Inner-city buyers won’t get much from the tool because apartments don’t seem to appear in their data and nor do houses on community title.

And a tip for apartment buyers relying on online sales data: watch out for lot numbers versus apartment numbers. They’re often different and the official stats report lot numbers only. Announcing the Guesstimate launch their product manager said “To meaningfully price a property for sale, more in-depth information and local knowledge is required – this is where real estate agents and professionals, as local experts, have skill sets that are invaluable.”

So consider this: would a good agent spend their Saturday afternoons standing out the front of a home that’s 20% over the market? Home buyers do need to do their homework and be comfortable with their offered price. But as a wise person once told us, “Don’t let someone else buy the home for a price you were prepared to pay”.

Share that one with your friends.

Brisbane real estate agents ready to call a start to the next boom might do well to take a close look at the numbers. The September gain in our median dwelling price followed a 0.4% drop in August so year on year we’re still down 6.1%.

No matter how you spin it though you’d have to say this is a good time to buy.

Last year a Perth property owner contacted an agent, listed a house for sale, signed an offer and received the proceeds on the subsequent $485,000 sale. Only one small hitch – it wasn’t their house. And this month a $1million Sydney apartment was listed for auction in the same style of scam, this time identified before its sale. Needless to say the legal gurus around Australia have been grappling with how this can happen. Could someone pretend to be you? While you’re on holidays or for your investment property? How much info would they need to give an agent to convince them they were the owner? The scary truth is it’s dead easy.

Many of our seller clients are interstate (Brisbane’s inner city has lot of NSW investors for example) and we never meet them. They give us their name and if it matches the title search we proceed. Their contact details are no guarantee as an email address can be set up in anyone’s name, no check needed. We don’t have anything to verify their signature against on a listing authority or contract of sale. So you’ll understand why identity confirmation is becoming more important in our process.

The lawyers who handle conveyancing have a few more challenges as that’s where the money changes hands and they’re the last gatekeepers. Especially if there’s no mortgage and no bank checking the transaction. It’ll be interesting to see what changes we see as a result of the scam.

In the meantime maybe Isabella will share some of her inheritance with that unlucky Perth property owner.

RP Data say Brisbane’s dwelling prices went down 0.4% in July (or $1,700) for a total 6.6% dip over the past 12 months. Brisbane unit owners can punch the air – your median price apparently rose 0.4% in July, while house-owners lost 0.6%.  Their Tim Lawless says the upper end of the capital city markets is being hardest hit and times on market have increased across the board.  “If these soft trends persist, the Spring Selling Season is likely to open up some attractive investment opportunities for prospective buyers. In contrast, the selling environment is likely to be challenging for vendors, particularly if they have unrealistic price expectations,” Mr Lawless said.

Analyst Michael Matusik says the data suggests the worst may be behind us, with the monthly and quarterly results starting to trend upwards. “Even Brisbane, with the impact of the recent flood weighing down its property market, has fallen just 2.6% or by $11,600 since January.  The Australian sharemarket can fall more than this in a single day.” Matusik says most property owners are still ahead. “Just one in 14 resales across Australia over the last decade made a loss. Importantly, close to half of the sellers since early 2000 made an annual gain of over 10% per annum.  Keep in mind that capital growth can be deceptive as most measures exclude inflation, costs, taxes and charges.  But still, such a positive result is encouraging.”

And first home buyer may be back in the market and taking advantage of good buying. Home loan approvals from first-home buyers jumped to 35% in June, compared with an average of 27%, according to mortgage broker Mortgage Choice. Mortgage Choice says a drop in first-home buyers during the last financial year made it hard for existing home owners to sell before moving onto their next property. Mortgage Choice CEO Michael Russell attributed the fall in numbers to the ending of the boosted first-home owners’ grant, which he says brought forward purchases in 2009 and 2010.