Australian (ASX) Stock Market Forum

The future of Australian property prices

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LOL!

Fitch! And CommBank doing their own stress "test"...reminds me of the European bank stress tests "yep, it's all good...we are self regulating...don't peak under the hood...all good".

This is the same Fitch that was rating toxic CDOs as AAA in August of 2008, right?

Same Fitch that somehow still has Portugal bonds rated as investment grade, right now.
 
Yeppers ........ the same one that reckons Singapore banks are "stable"

http://www.reuters.com/article/2011/03/30/markets-ratings-singaporebanks-idUSWNA488920110330

Talk about leaving the fox in charge of the hen house.

You missed the post previously from me when I evidenced the ADI's also own the LMI's. Therefore they have insured against themselves ..... LOLOL. That is a house of cards as well.

Now that is funny. :D

The Australian Government Guarantee Scheme for Large Deposits and Wholesale Funding (the Guarantee Scheme) was announced by the Government on 12 October 2008 and formally commenced on 28 November 2008.

The arrangements were designed to promote financial system stability in Australia, by supporting confidence and assisting eligible authorised deposit-taking institutions (ADIs) to continue to access funding at a time of considerable turbulence.

http://www.guaranteescheme.gov.au/
 
another 2 cents worth.... re Terri Irwin.....her husband was the face of the australian zoo....it was all about him and his fearless crocodile wrestling.....
add in the GFC, less tourists, and lack of business sense.....she was reported to have done some questionable business etc....
she has spent 26 million on realestate......the qld govnut gave her 6 million etc...
backers have gone, family disputes etc, people unhappy with how she runs the zoo...and all that promotion of her daughter....
so she gets into strife and sells one property.....and some here get excited that is proof of the property downward spiral
more like mismanagement to me....
wonder how the poor animals are faring ??
http://www.sunshinecoastdaily.com.au/story/2008/03/01/terri-irwins-private-property-fortune/
 
kincella said:
another 2 cents worth.... re Terri Irwin.....her husband was the face of the australian zoo....it was all about him and his fearless crocodile wrestling.....
add in the GFC, less tourists, and lack of business sense.....she was reported to have done some questionable business etc....
Click to expand...

Yep, classic hubris.

But you forgot to add: strong AUD, when Steve was around punters from the UK/US/JPY/etc could hop on a plane and check out the whole east coast of Aus for less than the cost of a night out in London ;)
 
Perth median house prices fell another 0.2 per cent in February, as further signs emerge that the housing construction sector is stalling.

RP Data-Rismark's monthly measure of the housing market, released today, showed the median house price in Perth was now $480,000, down four per cent over the past 12 months.

It is the second worst performed market in the country, with only flood-soaked Brisbane going backward at a faster rate.

The news is just as bad for those with a unit, with median prices dropping 1.4 per cent through February to be 4.5 per cent lower over the past year.

Only a collapse in the Darwin market, where median unit prices dropped 12.6 per cent over the past quarter, stopped Perth being the worst performed unit market in the country.
Click to expand...

http://au.news.yahoo.com/thewest/a/-/wa/9108428/perth-house-prices-fall-again/

All good bro.......i read on the internet that if you buy now you can double ya cash in 5 years.

and them bonepicking vultures grin and make a cup of tea.
 
Reasons said:
More on the proposed buyers' strike...the trigger?

http://www.theage.com.au/business/beware-a-buyers-strike-in-property-20110331-1cgwh.html
Click to expand...

Highly doubt it. Look at the posts on both ASF or any property article on the news sites - for every one bullish post there are about 50 bearish posts. The news articles are spammed with heathing masses of bearish people. Having a website promoting a strike will just attract those same bears there - theyre the ones not buying anyway so it will make little difference.

What you need for a crash is a situation where lots of people are forced to sell their property. People withholding a purchase does not force a lot of people to sell - perhaps only those investors who just purchased and are heavily negatively geared or are property flippers. Someone who is positively geared or has positive cashflow wont care. Same with PPOR holders as they need somewhere to live - if they sell, they must rent. If too many PPORs are sold we get an increase in renters and hence rent. This in turn boosts the returns on property until positive cash flow investors step in and prop up the market.

Thankfully we dont have the same laws like in the us where you can walk away from ur loan or there would be carnage here given the general consensus.

Either way: be greedy where others are fearful and be a contrarian. You dont get ahead of everybody else by doing what the majority does. :2twocents
 
KurwaJegoMac said:
Highly doubt it.
Click to expand...

You could well be right; I will let you know in a few years. It is just a non-emotive strategic money management decision on my part.

KurwaJegoMac said:
Either way: be greedy where others are fearful and be a contrarian. You dont get ahead of everybody else by doing what the majority does.
Click to expand...

This saying usually applies to when an asset is of low value compared to the real value as the market is undervaluing it through fear. It is possible you are seeing something that some others cannot, and that is definitely when you can make money.

It is also possible that we have not actually seen anything even closely resembling fear yet.

My own simple risk/reward analysis says that the probability of property doubling or providing an acceptable return compared to other assets in the next 7-10 years as opposed to going sideways or down is more improbable than probable. I accept I could be wrong, but can risk-mitigate in other assets and not be disadvantaged.

There has been good money to be made out of property to date, and that opportunity will exist in the future. I have made the decision I don't want to get caught in a possible illiquidity trap when there are other highly liquid assets that I can be in that provide excellent returns.

If I possess highly liquid assets outside of property, that gives me easy and rapid access to capital should opportunities arise in property or elsewhere.

I do not have the same opportunity if my assets are in property and become illiquid or significantly reduced in their value to be used as collateral for leverage, should buying opportunities arise in the event of a negative property occurrence.

Only time will tell, in the meantime I have made a strategic decision that the odds are in my favor, compared to the alternative, by allocating my assets this way.
 
trainspotter said:
And yet for all the rhetoric the bumblebee continues to fly.

As you were ...... zzzzzzzzzzzzzzzzzzzzzzz.
Click to expand...

Of course bumblebees are simply using the laws of aerodynamics to fly, even if a few pointy heads couldn't initially figure out how. They could always fly.

Now the laws of economics are a wholly different matter.:confused:
 
wayneL said:
Of course bumblebees are simply using the laws of aerodynamics to fly, even if a few pointy heads couldn't initially figure out how. They could always fly.

Now the laws of economics are a wholly different matter.:confused:
Click to expand...

Depends on whose economic law you are using I guess.

1. The law of demand. When the price of a good falls, the quantity demanded does not fall. Usually, the quantity demanded rises with a fall in price. Strictly, the law of demand applies to the substitution of cheaper goods for more expensive goods due to a relative change in price. The law of demand also applies to the whole economy: when the whole price level falls, with the amount of money remaining constant, a greater amount of goods will be purchased.

2. The law of supply. When the price of a good rises, the quantity produced does not fall. Usually, a higher price for a produced good results in a greater quantity produced.

3. The law of diminishing returns (law of decreasing marginal productivity). Given a fixed amount of some input, when ever more amounts of the variable input are added, eventually, the marginal product (the last unit's contribution to output) declines.

4. The law of one price. In an efficient market, a financial asset will tend to have one equilibrium price, because of arbitrage.

5. Gresham's law. Bad money drives out good money when the bad money is legal tender.

6. The law of reflux. In competitive free-market banking, there cannot be a permanent over issue of banknotes, since any issued in excess of the quantity demanded will be redeemed.

7. Law of supply and demand. In a free market, the equilibrium price of a good is that at which the quantity supplied equals the quantity demanded.

8. The law of diminishing marginal utility. As one obtains more and more of a particular good, eventually the marginal utility (value from one more unit) declines.

9. The law of unintended consequences. Human actions, and especially governmental acts, have consequences which were not intended and not anticipated by the actors.

10. The law of iterated expectations. One cannot use the limited information at some previous time in order to predict the forecast error one would make if one had better information later.

11. Engel's law. The proportion of income spent on food in an economy is inversely proportional to the general welfare of the society in that economy.

12. Wagner's law. As an economy grows, government spending has increased by a greater proportion.

13. Foldvary's law of inequality. Inequality equals the concentration of a distribution times the number of units (I=CN).

14. Say's law of markets. The supply of goods will pay the factors of production such that the payments are equal to the value of the product, and therefore aggregate quantity supplied equals aggregate quantity demanded.

15. Law of time preference. People tend to prefer to obtain goods sooner rather than later, and will pay a premium (i.e. interest) to shift buying from the future to the present.

16. Law of the market. Statements made by market participants are assumed to be truthful, and products are presumed to be safe and effective unless stated otherwise.

17. Pareto's law of distribution. There is a general tendency for 80 percent of the consequences to result from 20 percent of the causes, which often applies to property, 80 percent of the wealth owned by 20 percent of the population.

18. Law of cost. All costs are opportunity costs, the true cost being what is given up to get something.

19. Law of comparative advantage. Trade takes place because parties specialize in the products which have a lower opportunity cost, rather than merely a lower physical cost.

20. The law of wages. The wage level of an economy, where labor is mobile and competitive, is determined by the marginal productivity of labor at the margin of production, i.e. the least productive land in use.

21. The law of rent. The economic rent of a plot of land equals the difference between its output and the output at the margin of production, i.e. the least productive land in use, using the same quality of labor and capital goods.

22. The law of capital goods. Investment in capital goods and human capital expand until the expected return on investment, adjusted for risk, equals that of the long-term real interest rate.

23. Walras' law. If there is an excess quantity supplied in one market, there must be a matching excess quantity demanded in another market.

24. The law of economizing. People tend to economize, maximizing gains for a given cost, and minimizing costs for a given gain.

25. The law of economic rationality. Human action is economically rational if one's preferences are consistent and if one economizes.

26. The Gaffney effect. The public collection of rent equalizes the discount rate for land usage, since otherwise people would have different credit costs for purchasing land.

And now for the bee - It is believed that the calculations which purported to show that bumblebees cannot fly are based upon a simplified linear treatment of oscillating aerofoils. The method assumes small amplitude oscillations without flow separation. This ignores the effect of dynamic stall, an airflow separation inducing a large vortex above the wing, which briefly produces several times the lift of the aerofoil in regular flight. More sophisticated aerodynamic analysis shows that the bumblebee can fly because its wings encounter dynamic stall in every oscillation cycle.

Dynamic stall - which is the exact position the Australian Property prices are at right now. Stalling but still somehow creating lift .......... hence the bumblebee analogy.
 
wayneL said:
Now the laws of economics are a wholly different matter.:confused:
Click to expand...

They work just like the rules of whoring, you get the result you pay for sweety. Mind you, look out for those Austrians, they have a real discipline kink, good for you in the long run but you may suffer buyers remorse.
 
Australian FHBs go on Strike!

This week we have some very big news in Australia that I thought you all might be interested in discussing.

More and more Australians are giving up on overpriced housing in their home country and buying overseas. It's no surprise Aussies are buying real estate overseas. In America, UK, Ireland, and Spain - house prices have fallen back to more sensible levels.

The level of public dissatisfaction with Australia's housing market became abundantly clear today, to myself and thousands of other Australians.

Recent campaigns by renowned advocate group "Get Up!" are championing a First Home Buyer's Strike and also calling for an end to the negative gearing tax break used by many property investors. The campaigns are gaining a huge amount of publicity in the media:

Online campaign targets high cost of housing

Real estate in Australia has exceeded all sensible valuation criteria and we now have some of the most unaffordable homes on the planet according to Demographia, The Economist, and many other respected organisations.

Also gaining much public attention recently is the Get Up campaign support thread and discussion on the Australian Property Forum with literally thousands of hits in a few days:

Get Up! Campaign Thread on AustralianPropertyForum.com

If these campaigns works as the organisers plan, property values may reduce to more sensible levels whereby decent hardworking Australian families can once again afford a reasonable home.

Here are the links to the original campaigns where thousands of people are casting their votes at an ever accelerating pace:

Get Up! Campaign to End Negative Gearing

Get Up! Campaign calling for First Home Buyer strike

If the bottom rung (FHBs) are taken out then the whole property ladder pyramid scheme may collapse. However, the GetUp Administrator has unfortunately suggested that it is very unlikely they will even accept these campaigns, as explained here:

Get Up Administrator suggests campaign may be shelved

Now, whether or not the public believe these campaigns are a good idea or a bad idea, there is no denying the huge level of public interest. The discussion has gone viral across the country on Twitter and other social media sites.

It is important that all property investors and owners consider the impact such a campaign could have on Australian property values.

The public have spoken, and if nothing else, these campaigns will surely be influencing future political decisions about the housing market in Australia.

This has been an important event in the history of the Australian housing bubble.

Thanks,

Zoran.
 
Could this Getup campaign lead to a significant increase in the FBHG as this seems to be the usual solution by the govnuts to overcome the housing affordability issue.

I hope it doesn't but it seems the last time, Steven Keen, there was mainstream publicity on the subject, the FHBG was given a boost and up went prices.

Cheers
 
who would have thought.....so they are not all focused on the expensive inner city....as if, like this forums mantra in the past 6 years.....as if the only place to live is in the ugly little expensive dog boxes...smack in the centre...
I have been suggesting the whole time, that there are plenty of affordable houses in the outer suburbs.....
its obvious that there are a huge number who think the same...

some huge numbers have fled to the outer suburbs..
its an interesting read...over 600,000 in the past 10 years, and figures of 79000 pa now, or 1500 pw...

an extract only.....read the full article, no other city has grown at the same rate, Melb overtaking Syd and Perth etc
..........................
MELBOURNE'S outer suburbs are growing faster than any other area in Australia, part of a record-breaking trend that has seen Melbourne's population closing the gap on Sydney.

The city's outer suburbs are leaving coastal Queensland and Western Australia's mining towns in their dust, as more than 1000 people a week pour into Melbourne's fringe.

New figures from the Bureau of Statistics show that while the boom in overseas immigration cooled off all over Australia in 2009-10, Melbourne was again the centre of Australia's population growth.

Advertisement: Story continues below
Illustration: Tandberg
?? In the year to June 2010, Melbourne is estimated to have grown by 79,000 people, or more than 1500 a week. For the ninth consecutive year, Melbourne had the biggest growth of any city in Australia.

?? Since 2001, Melbourne has gained 605,000 new residents, up 17 per cent, rapidly pushing out the urban boundary in every growth corridor. That is far ahead of growth of 447,000 in Sydney, 380,000 in Brisbane, and 303,000 in Perth.

?? For the first time in almost 30 years, Melbourne's population is within 500,000 of Sydney's, and gaining. If the growth rates of 2001-10 continued, Melbourne would overtake Sydney in 2028, when each city would have roughly 5.6 million people
http://www.theage.com.au/victoria/citys-population-explosion-20110331-1cng1.html
 
the sea changers, with no noise at all, all along the coast, regionals included...nice inexpensive life by the sea....
( I wonder how many tree changes are out there , doing similar, vacating the city, for the quiet life)
2 million people in 12 years, or 160,000 pa....thats a whopping figure....
I believe they are departing the capital cities, on retirement....as they have always done....just in bigger numbers now...
leaving the cities for the working class to live there....

it was not so long ago...it seems to me....that the cities accommodation on offer were the slums...
they then converted the boxes into offices....
all those little dog boxes....that the now generation dream of living in...except they dont want to pay the unbelievable prices...nor should they
the now generation are demanding to live there, but at half the cost...
I believe they will get their wish, when and if the mood shifts, and they decide to live in units, rather than the tiny houses with tiny backyards...
Bracks was going to accommodate them, with high rise boxes along the main transport routes....


http://www.abc.net.au/news/stories/2011/03/29/3176361.htm
 

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