The future of Australian property prices

[trainspotter]

Google is your friend!

Jeeeeeezzzz!

http://patricksperry.wordpress.com/2008/12/02/

http://www.manifestingamillion.com/bees.html

LOLOL ...... wrong on both accounts. You don't think I would type all that myself do you???

http://www.progress.org/2004/fold379.htm

http://en.wikipedia.org/wiki/Bumblebee

 

[kincella]

fhb's represent 10% of the population....not all of them are interested in the inner cities...so lets be generous and say 5%....wanting to buy a big house in the city....but dont want to pay those high prices.....
whilst the rest of them are obviously out there in the outer suburbs...

will 5% of the population dictate to the other 95%.....not in my world, and not while they are at the bottom of the supply chain

and in case some dont know....'Get UP' is a labor based political support group...
oh, and the labor govnuts stopped the national affordablity scheme recently..

do you really think they care.....when they all get soo much money in taxes from property, in order to waste it on all the other hair brained schemes they promote...

 

[moXJO]

Building costs are only going to go up more once this carbon tax comes in. And good luck finding any skilled tradies left in the game. Have to wonder about the future impact on costs.

 

[medicowallet]

Building costs are only going to go up more once this carbon tax comes in. And good luck finding any skilled tradies left in the game. Have to wonder about the future impact on costs.

True, how it would hurt them dearly to start charging pre-2000 hourly rates.

When your plumber is earning more per hour than many doctors, it sort of indicates to me that housing is in a bubble, government "assistance" does not work and people have a priority wrong.

 

[InstoMan]

True, how it would hurt them dearly to start charging pre-2000 hourly rates.

When your plumber is earning more per hour than many doctors, it sort of indicates to me that housing is in a bubble, government "assistance" does not work and people have a priority wrong.

The Carbon Tax is really a secondary issue. There is no specific need for it to be raised when discussing housing prices while so many other factors are in play.

Price movements will be chiefly dictated by the following:
1. Labour shortage - workers pulled into mining increasing costs of labour for construction;
2. Strong AUD - increasing cost of materials, specifically cement; and
3. General Govnmt risk - People seem to pass over this one, but the recent political climate is making S&Ps and Moodies second-guess the credit worthiness of the big 4 banks. Any downgrade in rating (which will come from Sovereign risk, and nothing more) will see a spike in the cost of funds for the banks, which in turn will be passed along to consumers.

Not certain exactly how this will affect housing prices - increased costs could see a slump in demand, allowing for a pricing correction. Conversely, growing population could reinforce demand and further increase prices on the back of heightened costs of production.

Either way, GTFO with the carbon tax influencing housing prices.

 

[medicowallet]

The Carbon Tax is really a secondary issue. There is no specific need for it to be raised when discussing housing prices while so many other factors are in play.

Price movements will be chiefly dictated by the following:
1. Labour shortage - workers pulled into mining increasing costs of labour for construction;
2. Strong AUD - increasing cost of materials, specifically cement; and
3. General Govnmt risk - People seem to pass over this one, but the recent political climate is making S&Ps and Moodies second-guess the credit worthiness of the big 4 banks. Any downgrade in rating (which will come from Sovereign risk, and nothing more) will see a spike in the cost of funds for the banks, which in turn will be passed along to consumers.

Not certain exactly how this will affect housing prices - increased costs could see a slump in demand, allowing for a pricing correction. Conversely, growing population could reinforce demand and further increase prices on the back of heightened costs of production.

Either way, GTFO with the carbon tax influencing housing prices.

Sorry champ,

Where did I mention the carbon tax?

I was inferring that builders/tradies might have to start returning to market fundamentals to maintain workload, something some of them must dread.

1. Agree
2. Makes imports cheaper, not dearer.
3. Agree, but what caused the risk? Government intervention, it has to be withdrawn carefully yes, but it needs to be withdrawn.

So, before getting all angry and building a strawman argument, please get your facts straight (or are you trolling)

 

[Mr Z]

LOLOL ...... wrong on both accounts. You don't think I would type all that myself do you???

http://www.progress.org/2004/fold379.htm

http://en.wikipedia.org/wiki/Bumblebee

LOL... What does that prove? Other than there is an echo in here!

TS, we need your original pearls of wisdom! I feel cheated!!!!!!

 

[Dowdy]

Does this sound familiar?

“The BLANK Association (CBIA) continues to express alarm over what it calls an ongoing housing crisis in BLANK. Alan Nevin, the association’s chief economist, projected in a 2006 CBIA Housing Forecast that only 185,000 to 205,000 building permits will be granted this year, far short of the 240,000 new homes needed each year.”

Sound familiar? The article continues:

“BLANK has been experiencing a massive population boom in recent years and it’s believed that 6 million new residents will be living in the region by 2020. The population increase, coupled with the housing shortage, has the CBIA worried that it will be increasingly difficult for first-time homebuyers to find a moderately priced unit.”

Now lets fill in the blanks - Californian Building Industry Association (CBIA) & Southern California

http://thedepression.org.au/?p=2557


Australia is different, right?

 

[medicowallet]

"This weekends clearance rate is 61 per cent, confirming that demand and sentiment has not changed since Melbourne Cup day in 2010 when the Reserve Bank last increased interest rates. At that time the clearance rate dropped from the high 60's to the mid to low 60's and that is where is has stayed. Whilst the number of auctions is still high a healthy number of homes are selling.

This weekend there has been 690 auctions reported of which a total of 422 sold and 268 were passed in, 176 of those on a vendors bid.

This weekend last year saw only 50 auctions so it is not a useful comparison, this weekend in 2009 saw a much lower 532 auctions with a clearance rate of 78 per cent.

On each weekend between now and Easter the REIV expects around 1000 auctions"


Still have no idea what this means, 61%.

Just keeping it real for the true believers

 

[singlefished]

http://www.reiv.com.au/news/details.asp?NewsID=1058

"The REIV expects around 845 auctions this weekend and then 1000 next weekend."

422 sold out of 845.... 49 point something percent clearance!

It's a pity that REIV aren't keeping it as real as yourself medico..... but hey, 61% sounds a lot healthier doesn't it

 

[Aussiejeff]

"This weekend there has been 690 auctions reported of which a total of 422 sold and 268 were passed in, 176 of those on a vendors bid."

The key word is "reported".

I expect most of the REIV's "expected" auctions that are NOT reported in their figures would be failed auctions that RE agents simply don't want to admit to. I presume there is no penalty for agents failing to report failed auctions?

So, the 61% is a totally contrived furphy under those conditions.....

Party on.

 

[satanoperca]

March RPdata figures

Sydney $500,000 0.6%
Melbourne $474,000 0.1%
Brisbane $434,000 -1.2%
Adelaide $390,000 -0.4%
Perth $465,000 -0.4%
Darwin $434,500 -6.7%
Canberra $507,500 1.9%
National $459,000 0.0%
Hobart* $330,000 -7.4%

It appears there has been a significant change in trend in the last few months. Wasn't it reported around Xmas how Melbourne property prices had risen around 15% yoy. Three months later and barely registering +ive growth. Be interesting to see were we sit, come end of June.

Cheers

 

[bellenuit]

The key word is "reported".

I expect most of the REIV's "expected" auctions that are NOT reported in their figures would be failed auctions that RE agents simply don't want to admit to. I presume there is no penalty for agents failing to report failed auctions?

So, the 61% is a totally contrived furphy under those conditions.....

Party on.

I'm not saying you are right or wrong, but many have suggested on this thread that many auctions are deliberately unreported to keep the figures looking good. Those unreported are assumed to be failed auctions.

Do we have any figures from the "good times" that indicate an unreported rate much lower than at present. If the unreported rate is consistent between good and bad times then there may be no sinister meaning behind the figures.

 

[Agentm]

auctions with no result = 116
total auctions = 690
TOTAL total auctions = total auctions + auctions with no result
TOTAL total auctions = 806

sold at auction = 341
sold before auction (private sale) = 78
sold after auction = 3
TOTAL sold because of auctions = 344

TOTAL sold because of auctions / TOTAL total auctions = true clearance rate

344/806 = true clearance rate

42.68% = true clearance rate



http://www.governmentmedia.com.au/index.php/blogs/25-economy-ponzi-scheme

Is the Australian economy the world?s largest Ponzi scheme?
Written by Oliver Yates
Wednesday, 04 August 2010 02:20
Is the Australian economy the worlds largest Ponzi scheme?

Oliver Yates asks why nobody seems to care that Australia is now one of the most indebted nations on earth.

Australia needs more than one billion dollars every day. thats one thousand million dollars each and every day - to avoid default on its foreign debt, yet we seem to be basking in the illusion that we are not a future Greece.

Australia is now in a worse foreign debt position than Hungary and ranks as the 11th most indebted nation on earth. With gross external debts (equity and debt) of over 2 trillion and a debt to GNP ratio exceeding 100%, Australia sits well within the field of European countries facing a bleak future.

Australians should be able to hear clearly the "tick..tick..tick" of our own debt bomb. But government and business refuse to talk about it. Why?


article continues.....

 

[moXJO]

Not certain exactly how this will affect housing prices - increased costs could see a slump in demand, allowing for a pricing correction. Conversely, growing population could reinforce demand and further increase prices on the back of heightened costs of production.

Either way, GTFO with the carbon tax influencing housing prices.

Ultimately the replacement cost of property puts a floor under property prices.

 

[wayneL]

Ultimately the replacement cost of property puts a floor under property prices.

There have been periods in the past when established properties have been selling for less than replacement cost. There must be certain conditions in place for this to happen, but there is no reason this cannot happen again at some point in the future.

 

[explod]

Ultimately the replacement cost of property puts a floor under property prices.

At a Master Builders Association seminar awhile back we were advised that more than 30% of homes were built by home builders and without home builders we could not cope with demand as there at not enough registered builders to go round. At times over the years this figure has been much higher.

People that really want thier own place will again resort to such methods as required. The killer now of course is building materials which will drive people back to recycled materials and for example home made mud bricks.

History has shown that in tough times when people are down and out they will revert back towards basics in order to fulfill Maslow's second rule, and that is "Shelter".

 

[kingcarmleo]

In Perth you would struggle to get a 3x2 for under 500k

 

[white_goodman]

Ultimately the replacement cost of property puts a floor under property prices.

vast majority of florida, vegas etc etc are all under replacement cost atm...

 

[moXJO]

There have been periods in the past when established properties have been selling for less than replacement cost. There must be certain conditions in place for this to happen, but there is no reason this cannot happen again at some point in the future.

Yeah don't take that as gospel was a bit of a throw away statement.

Ultimately the replacement cost of property helps put a floor under property prices.Probably only relevant to places that people want to live. But that is where these arguments seem to be centered.
I'm sure there are dirt cheap prices in plenty of rural towns; just not many people want to live there. The US situation maybe similar in that regard that houses were built in locations with no employment, services, etc. Added with being mass produced in factories on site. Couple this with rampant speculation and loans you can walk away from and no wonder they saw the drop. WA and mining areas no doubt see a bit of speculation and experiance more price movement.
Australia only has so many places close to major cities or employment and everyone seems to want to live the life. So unless Interest rates are pumped to pain, government tinkering, or there is some kind of employment shock event then I don't see too much of a drastic nationwide drop just yet.
I want cheaper house prices and have been waiting since 2004 must be about due.