The future of Australian property prices

[IFocus]

hello,

rubbish, the mining boom and these companies/infrastructure are infact costing people in the states of SA, VIC, NSW and Tasmania

the only benefit most get is via there super and with diversification the benefit is very very low

get on board the truth brother, yeah i own property in Qld and NSW

thankyou
professor robots

Bot so glad you are still around have seriously enjoyed your presence here for a long while long may it continue

Cheers IF

 

[banco]

If I was the Government I'd very nervous as to how the Reserve Bank would react to an attempt to reinflate the bubble.

 

[satanoperca]

I hope house prices plummet, I shall be the first at the auctions.

I fail to understand this comment. At what price reduction would you start buying and do you wish to buy an IP or PPOR?

I believe we are in a credit induced bubble that is counter productive for our economy in the long run as it diverts funds aways from other productive ventures and other non productive activities, just having fun (eating out, going to the movies, taking holidays etc) but do not want to live with the consequences of a house price crash. Unemployment goes up, overall standard of living plummets, no one really benefits. I would just like to see every Australian be able to afford a roof over their head without having to be indebted for the rest of their lives and be able to experience the sunshine and taste the lolipops.

Cheers

 

[Glen48]

House prices only rise due to inflation the reason house prices have risen is the same as the Tulip Bulb scheme many year ago. Even if you did buy at the bottom in 10 yrs time you will never live long enough to get a good return.
Collect bill boards from house sale so you can show your grand kids how easy credit can wreck your life.

If you are renting a house off the banks sell and buy Gold or Silver and rent some thing cheap.
the is no such thing as an Investment property unless you dud the figures

 

[nukz]

Unless China/US collapses and there is some significant financial shock then i don't see a collapse rather a long slow slide in house values.

But is it out of the question to suggest a possible collapse in the US again? i suspect the answer looking at economic data is that its not out of the question right now.

Talk about the RBA re-inflating the bubble is imo out of the question as if the RBA lowered rates with inflation soaring people may be paying less for their mortgage but we would all be paying allot more for food/petrol ect and our dollar would weaken.

Not to mention the massive budget gap in Victoria and huge budget deficit for the country, new housing grants? yea right.

 

[Mr Z]

That is just it... generally property investment is a leveraged bet that inflation will continue. That is over and above any local factors driving demand. It is one of the few assets that anyone can really lever up on in relative safety. Most of the time that is a good bet... when credit gets very extended it becomes a risky bet but, for the most part it is a 'no brainer'. Just not now... IMO.



Lollipops!

 

[banco]

Unless China/US collapses and there is some significant financial shock then i don't see a collapse rather a long slow slide in house values.

But is it out of the question to suggest a possible collapse in the US again? i suspect the answer looking at economic data is that its not out of the question right now.

Talk about the RBA re-inflating the bubble is imo out of the question as if the RBA lowered rates with inflation soaring people may be paying less for their mortgage but we would all be paying allot more for food/petrol ect and our dollar would weaken.

Not to mention the massive budget gap in Victoria and huge budget deficit for the country, new housing grants? yea right.

Don't asset bubbles tend to fall relatively quickly when they pop? If it's going to happen I don't think it will be in the form of a long slow, slide.

I think the RBA wouldn't be entirely unhappy with housing prices falling "the fall we had to have". You won't have to worry about the RBA trying to reinflate the bubble. The Government will be the one to watch but I suspect the RBA may be willing to counter attempts to reinflate the bubble with rate rises.

 

[nukz]

The whole Asian region is a bubble thats slowly starting to deflate in parts now. The most affluent parts of China (Shanghai, Hangzhou & Beijing) are now experiencing significant price declines.

I was in Shanghai and Hangzhou a few months back and things were already starting to look bad with oversupply and these are the most affluent citys in the country not those new citys built primarily for GDP growth by the government.

There are also signs that things may be cooling off in Hong Kong with China raising rates so many times.

I had a look at Philippines around the same time which has a mass of cranes and huge projects going up. It's quite incredible for a place like Philippines and these places are dirt cheap (i saw as low as 25,000USD for a new apartment).

There was a recent article in The Age which explained that in Melbourne CBD something like 40% of all new projects had been put on hold due to financial problems. If anybody has a link to the article that would be good its a interesting one

I'm not really a doom & gloomer but there are better asset classes right now.

 

[nukz]

I think the RBA wouldn't be entirely unhappy with housing prices falling "the fall we had to have". You won't have to worry about the RBA trying to reinflate the bubble. The Government will be the one to watch but I suspect the RBA may be willing to counter attempts to reinflate the bubble with rate rises.

Great point. Time for some Glenn Stevens Quotes:

“These (house) prices are getting quite high,” Mr Stevens said. “I’ve got kids that within not too many years are going to want somewhere of their own to live and you wonder how is that going to be afforded.”


"It's a mistake to assume a riskless, easy, and guaranteed way to prosperity is just to leverage to property,"

 

[Glen48]

You are right about the Philippines the feds are trying to get suckers in to buy Condo's with cheap money.

You can't buy land here but you can get a condo as long as it is over 50K USD
China just keeps pumping money in to shopping centers as no mayor wants to tell the higher up he is not doing his part and their fond love of shoot the messager is still rule No 1.

 

[trainspotter]

Great point. Time for some Glenn Stevens Quotes:

“These (house) prices are getting quite high,” Mr Stevens said. “I’ve got kids that within not too many years are going to want somewhere of their own to live and you wonder how is that going to be afforded.”

Bwahahahahahah a ahaaaaaaaaaaa ........ Glenn Stevens is on over 1 million per annum. WTF would he know or care?

THE community would be legitimately concerned that Reserve Bank governor Glenn Stevens is paid more than $1 million, Treasurer Wayne Swan says.

Mr Swan said he would like to see such salary arrangements more in line with community expectations and the Government was considering the matter.

http://www.heraldsun.com.au/busines...lion-salary-swan/story-e6frfh4f-1226035879077

 

[Buckfont]

For a deeply religious man he`s obviously being well looked after, my son

 

[wayneL]

Bwahahahahahah a ahaaaaaaaaaaa ........ Glenn Stevens is on over 1 million per annum.

His children aren't though are they.

 

[Mr Z]

THE community would be legitimately concerned that Reserve Bank governor Glenn Stevens is paid more than $1 million, Treasurer Wayne Swan says.

Yeah... lets get Brian, he is a mate of Wayno and he will do it for 80K a year and guarantee to cut rates at every available opportunity.

Lord forbid that we pay for competent people.... eh? W. Swan is a not qualified for his job so why should anyone else be? Hey we get our pollies cheap and look at them... I mean they could all do a better job.... right?

 

[trainspotter]

His children aren't though are they.

Nope ....... but if you were a bank manager would you be knocking back their loan?

It's not what you know but WHO you know in this world.

I dare say Glenn Stevens would also be fairly well connected ensuring his kids get a magic carpet ride.

And I am pretty sure if he is showing signs of concern for his kids there is nothing stopping him from going the "Guarantor" element on their loan either.

 

[tothemax6]

I fail to understand this comment. At what price reduction would you start buying and do you wish to buy an IP or PPOR?

I believe we are in a credit induced bubble that is counter productive for our economy in the long run as it diverts funds aways from other productive ventures and other non productive activities

At a substantial price reduction, perhaps of the magnitude of the US housing price fall. Basically, it has to look attractive versus renting.
Regarding the credit induced bubble, maybe but unlikely. Australia is one of the few places in the world with tight monetary policy. Places like the US, Britain, China, Europe, India, all have negative real interest rates. Australia has positive real interest rates.

 

[wayneL]

Nope ....... but if you were a bank manager would you be knocking back their loan?

It's not what you know but WHO you know in this world.

I dare say Glenn Stevens would also be fairly well connected ensuring his kids get a magic carpet ride.

And I am pretty sure if he is showing signs of concern for his kids there is nothing stopping him from going the "Guarantor" element on their loan either.

Probably true, but doesn't negate the truth of his comments.

 

[trainspotter]

Probably true, but doesn't negate the truth of his comments.

Aaaaaaaaaah yes ...... you have me there. For the Reserve Bank Governor to express his concern that his children may have an affordability issue on house prices then you truly do have an eyebrow raising conundrum.

It leads one to think that is he concerned purely on prices alone or is he saying that his children are not going to be able to have a vocation as to whether or not they have the servicability for a mortgage? ie they have no job prospects?

It was not that long ago he said ''I worry about a lot of things at night,'' the governor confided before admitting that falling house prices were not among them.

Read more: http://www.theage.com.au/opinion/po...ice-phobias-20110322-1c559.html#ixzz1KoVhth8P

"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails." - William Arthur Ward

 

[wayneL]

Concern over here as well

Watchdog's first job: Find out why houses are so unaffordable

SNIP

Mr English said housing affordability was selected as an initial area of focus because New Zealand was "paying the price now for a housing boom that got out of control".

"We need to learn some lessons from that and to take the opportunity to lock in more affordable housing."

It was critical to efficient allocation of capital in the economy, he said.

"If we want to have more investment into the export part of the economy we need the right kind of rules that don't drag that capital back into housing."

 

[NewOrder]

Concern over here as well

Watchdog's first job: Find out why houses are so unaffordable

NZ views property markets the same as many here in Aust do, as one big picture when it is actually lots of little pictures. There is a massive difference between affordability in Akl compared to most of the Sth Isl, Akl is not NZ is a part of NZ. Housing is very affordable in other parts.

I hold property in both countries, the bigest bubble that worries me is what has happened to the property in Chch following the 2 earthquakes, it is forcast to bounce back though. The next biggest concern when holding IPs in NZ is the poorly managed rental industry. Holding IPs in Aust is a much better option with good capital gains and a tightly managed rental regulations.

The properties in Melbourne don't concern me at all, even if this so called bubble burst, property would have to drop by over 50% before I would lose money. I doubt that is going to happen.