House prices to keep falling for years
- Thread starter Pommiegranite
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Property declines take 18 or so months, not instantaneous like shares.
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still no spring bounce. Tick....tick...tick...
hello,
you may be spot on there Mr Burns, the infamous "property to stagnate thread" has just passed its 3yr anniversary,
and in those years many have picked up some beautiful gains, 30-40% alone in 2007 in some suburbs,
ring that bell for us can you when it comes (like at wall street)
word out to token multimillionaire
thankyou
robots
you may be spot on there Mr Burns, the infamous "property to stagnate thread" has just passed its 3yr anniversary,
and in those years many have picked up some beautiful gains, 30-40% alone in 2007 in some suburbs,
ring that bell for us can you when it comes (like at wall street)
word out to token multimillionaire
thankyou
robots
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You must be the last of the property bulls robots, I hope you're not geared because the day of reckoning in nigh.
hello,
up to the eyeballs like every property owner is (aren't they), will just keep bumping up the rent and with DEBT cost coming down, yes thats right interest rates dropping it will be easier to hold on brother
infact, the money renters are laughing all the way when we get another drop next month if not earlier judging by ANZ's move,
and we also helping out the Government as those properties get closer to neutral gearing, we doing our bit for society taking a bit less from the government and providing accommodation for the community
thankyou
robots
up to the eyeballs like every property owner is (aren't they), will just keep bumping up the rent and with DEBT cost coming down, yes thats right interest rates dropping it will be easier to hold on brother
infact, the money renters are laughing all the way when we get another drop next month if not earlier judging by ANZ's move,
and we also helping out the Government as those properties get closer to neutral gearing, we doing our bit for society taking a bit less from the government and providing accommodation for the community
thankyou
robots
Knobby22
Mmmmmm 2nd breakfast
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Last time, 1987, this happened money from the stockmarket went into property and the property market didn't fall till two years later,1989.
Property might be good for a bit longer yet.
Property might be good for a bit longer yet.
chops_a_must
Printing My Own Money
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Not if the papers are any indication.
Every second ad seems to be for some property in Melbourne, or somewhere else.
God damn, it's getting incredibly annoying. They must be desperate.
Looks to be a big oversupply in Perth's south as it is.
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As I said, 18 months before the big fall but it may be different this time we've seen nothing like this before.
numbercruncher
Beware of Dropbears
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Pretty cool Robi @!
Those of us that are fiscally responsible get to cop high inflation and low interest on our savings to (attempt to) bail out your guys pyramid scheme !!
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Hi Robots,
A question if I may.
So if you were cashed up right now, would you buy now, or wait, say, 12 months ( or more) to buy?
The news today said that 'buyers are rushing back to the market' with the extra home grant on offer. This is outright bull. I went to 4 Opens and one Auction in 3 (widely) different Melbourne suburbs today. We were the only ones at most of them. The auction was passed in 30,000 below the range.
In addition, after a relative quiet period, the market is being bombarded with new properties as people who are worried about the crash, and not being able to get the 'value' of their property back rush to sell, and properties that havent sold continue to sit there.
I know the drops have occurred in many states before now, but Melbourne has been relatively immune. Not anymore.
The panic selling has began, and the correction will follow.
In addition, after a relative quiet period, the market is being bombarded with new properties as people who are worried about the crash, and not being able to get the 'value' of their property back rush to sell, and properties that havent sold continue to sit there.
I know the drops have occurred in many states before now, but Melbourne has been relatively immune. Not anymore.
The panic selling has began, and the correction will follow.
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Hi all,
I have noted some misunderstandings regarding evaluation of the property market which is causing a lot of people to make fundamental errors regarding property performance.
Firstly, median house price can never be used for evaluating property as it leads to hugely inaccurate indications of performance.
The reason why median house price is an irrelevant indicator (especially for medium or long term assessments - it is a somewhat useful for short term IE month to month / quarter to quarter) is due to urban growth and densification.
I suppose densification is similar to stock splits, and medium house price does not any of this into account. What does this mean? If you bought the "median house" in any Melbourne suburb within 10kms of the CBD 20 years ago, your return would be some 200% higher than any attempted return calculation using median house price. You will find this true of any city, time since the 30's.
Everyone looks at their own personal and family experiences and think they did better than the "median house price" because "grandma's house was bought for $200k for 1500m2 in Brighton and we sold it for $2.2m to a developer" - well not to rain on your parade, but you didn't. The very fact the developer put 10 townhouses on the site and sold them for $900k each lowered the median house price even though it may have increased the value of surrounding 1500m2 lots.
Urban growth has the same effect as it is continually adding stock at the bottom of the price range forcing median price down.
Conclusion - median house price is like trying to look at the stock market, but ignoring stock splits - IE when BHP does a 3 for 1 split - the All Ords collapses because they just lost 2/3rds of their share price. Compare apples with apples, not apples with 1/4 of an apple.
On another commonly stated incorrect fact, Melbourne prices have not fallen. Despite a 8 month press onslaught, doomsayers and unknown experts and researchers continually reporting "drops", all credible (IE BIS Shrapnel etc" sources of research have had Melbourne prices as flat and any drops have been within the margin of error. Ive seen research from trash sources after their 15 seconds of fame but its all crap and rubbish.
In the Melbourne market, supply outstrips demand by 7,900 dwellings currently, and if everything with a planning permit is built according to expectation, we will be 9,100 short next year and 10,400 by 1010. I would suggest that given the current credit squeeze, not everything planned will be built, so expect this to under-supply to balloon.
I don't pretend to know what effect all this stock market melt down will have on the property market, but I wish to pose a question. Given that Consumer Confidence in relation to Melbourne property is at an all time low due to the Press onslaughts, prices are holding within the margin of error, demand outstrips supply and this will increase, interest rates have been cut by 1% and look like being cut again, clearance rates have dropped by less than 9% despite the "worst" melt down of the financial world in history(clearance rate drops should be seen as volume of shares traded - and therefore have the loosest of association, if any, with values), a new first home buyers grant, tightest rental market in recorded history, the Little mentioned fact that our properties have just had there prices slashed by 1/3 to an enormous sector of the investment market (offshore SE Asia investors) and the Fed Government have injected a decent chunk of capital into the non bank mortgage brokers - What will happen when the Consumer Confidence swings and the stock market investors look to property to weather the storm?
You can find the information Ive mentioned above in the BIS Shrapnel 2008 Building in Australia report and associated updates. The report costs some $10,500, so if someone can tell me how to cut and paste the relevant pages, Ill be happy to do so. I cant seem to paste them and when I try to attach them, i got some URL:hppt thing that I don't understand.
Building in Australia, 2008 – 2023 Residential Property Values by Capital City
38 © BIS Shrapnel Pty Limited 2008
I have noted some misunderstandings regarding evaluation of the property market which is causing a lot of people to make fundamental errors regarding property performance.
Firstly, median house price can never be used for evaluating property as it leads to hugely inaccurate indications of performance.
The reason why median house price is an irrelevant indicator (especially for medium or long term assessments - it is a somewhat useful for short term IE month to month / quarter to quarter) is due to urban growth and densification.
I suppose densification is similar to stock splits, and medium house price does not any of this into account. What does this mean? If you bought the "median house" in any Melbourne suburb within 10kms of the CBD 20 years ago, your return would be some 200% higher than any attempted return calculation using median house price. You will find this true of any city, time since the 30's.
Everyone looks at their own personal and family experiences and think they did better than the "median house price" because "grandma's house was bought for $200k for 1500m2 in Brighton and we sold it for $2.2m to a developer" - well not to rain on your parade, but you didn't. The very fact the developer put 10 townhouses on the site and sold them for $900k each lowered the median house price even though it may have increased the value of surrounding 1500m2 lots.
Urban growth has the same effect as it is continually adding stock at the bottom of the price range forcing median price down.
Conclusion - median house price is like trying to look at the stock market, but ignoring stock splits - IE when BHP does a 3 for 1 split - the All Ords collapses because they just lost 2/3rds of their share price. Compare apples with apples, not apples with 1/4 of an apple.
On another commonly stated incorrect fact, Melbourne prices have not fallen. Despite a 8 month press onslaught, doomsayers and unknown experts and researchers continually reporting "drops", all credible (IE BIS Shrapnel etc" sources of research have had Melbourne prices as flat and any drops have been within the margin of error. Ive seen research from trash sources after their 15 seconds of fame but its all crap and rubbish.
In the Melbourne market, supply outstrips demand by 7,900 dwellings currently, and if everything with a planning permit is built according to expectation, we will be 9,100 short next year and 10,400 by 1010. I would suggest that given the current credit squeeze, not everything planned will be built, so expect this to under-supply to balloon.
I don't pretend to know what effect all this stock market melt down will have on the property market, but I wish to pose a question. Given that Consumer Confidence in relation to Melbourne property is at an all time low due to the Press onslaughts, prices are holding within the margin of error, demand outstrips supply and this will increase, interest rates have been cut by 1% and look like being cut again, clearance rates have dropped by less than 9% despite the "worst" melt down of the financial world in history(clearance rate drops should be seen as volume of shares traded - and therefore have the loosest of association, if any, with values), a new first home buyers grant, tightest rental market in recorded history, the Little mentioned fact that our properties have just had there prices slashed by 1/3 to an enormous sector of the investment market (offshore SE Asia investors) and the Fed Government have injected a decent chunk of capital into the non bank mortgage brokers - What will happen when the Consumer Confidence swings and the stock market investors look to property to weather the storm?
You can find the information Ive mentioned above in the BIS Shrapnel 2008 Building in Australia report and associated updates. The report costs some $10,500, so if someone can tell me how to cut and paste the relevant pages, Ill be happy to do so. I cant seem to paste them and when I try to attach them, i got some URL:hppt thing that I don't understand
.Building in Australia, 2008 – 2023 Residential Property Values by Capital City
38 © BIS Shrapnel Pty Limited 2008
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As predicted by the Government, unemployment is beginning to rise and could rise significantly.... I imagine as things get worse the Government will focus on retraining and redeployment rather than maintaining their high levels of migration - this basically goes without saying. Expect immigration to drop as unemployment rises. On a side note, if the Australian Government can't do the math on the prospective worst case unemployment figures then PLEASE don't expect anybody on this forum to satisfy your urge to see numerical evidence....
What has also gone unsaid is the collapse of the Aussie $$$$. Many prospective immigrants on the lookout for positions here will firstly look at the exchange rate and recalculate their package to their own domestic currency to see how it stacks up.... Assuming salaries in Australia were commensurate with salaries in the rest of the Western World (prior to this latest dire turn in the credit crisis), they will be looking at a salary somewhat lower than they are currently receiving. When they check out house prices and see the headlines "... one of the highest in the Western world..." they will think twice..... I saw this back in Asia in the late nineties when the currencies all crashed overnight - not good if you were being paid in local currency! You cleaned up if you were being paid in US$ or GBP!
Unfortunately, a lot of the local employers were not sympathetic to their foreign employees financial predicaments so a lot of my good mates bailed out and went back home. I don't expect Aussie salaries to rise by the 20-25% that the currency has fallen over recent months and I don't expect employers of foreign workers to grant them a 20% rise to help out cover their mortgage payments or family costs back home...
The reverse is also currently in progress - a fair number of my colleague's who are planning to go overseas at the end of the year are now in discussions trying to renegociate their packages in US$. Their future beer money is on the line since they've now had a fairly substantial pay cut!
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No, actually I sell development sites - big ones. Im like a stock broker I suppose, the worst thing for me is a flat market. Give me boom or bust and I make $$
chops_a_must
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hello,
yes great question awg, and one many have pondered
if for your home get in soon as, its a great time to be buying, bit less competition,
rates on way down, the inflation hype was just crock put out by the brigade
i wouldnt have a clue what happens in the future, i am looking 20-30yrs down the line when I am cruising the streets of Melbourne
yes it costs more to buy than rent but this soon swings around and presto you living the life
anymore questions fire away i am here to help
thankyou
robots
chops_a_must
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Let me get this straight.
You argue the costs of debt are going down, yet are admitting to deflation?
Do you even understand the dynamics of debt and its relation to inflation and deflation?
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Sell, sell, sell: rich cut losses on property
Sunanda Creagh and Jonathan Dart | October 17, 2008
In a sign the sharemarket collapse is affecting the spending power of finance workers, real estate agents are shaving millions off their initial asking prices for homes in traditionally upmarket areas.
http://www.brisbanetimes.com.au/news/national/sell-sell-sell-rich-cut-losses-on-property/2008/10/17/1223750373494.html
Sunanda Creagh and Jonathan Dart | October 17, 2008
In a sign the sharemarket collapse is affecting the spending power of finance workers, real estate agents are shaving millions off their initial asking prices for homes in traditionally upmarket areas.
http://www.brisbanetimes.com.au/news/national/sell-sell-sell-rich-cut-losses-on-property/2008/10/17/1223750373494.html
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