The future of Australian property prices

[Tink]

If you were looking for a good yield, there were cheap houses and good rents in certain areas in Ballarat - they sold pretty quickly

Alot of period homes too, I suppose it depends what you were looking for.

They have actually gone up the last few years.

 

[Aussiejeff]

56% auction clearance rate yesterday, according to the renowned & trustworthy REIV boffins.

http://www.reiv.com.au/~/link.aspx?_id=F86BFA7729DF4E22B9FB036CD6EFD36F&_z=z


Then there is this pretty grim RPData auction clearance rate report to mull on showing no state auction clearances achieved above 50.1% for the previous week.... Sydney 50.1%, Melbourne 48.8% & Brisbane an appalling 18.3%.

http://www.myrp.com.au/showNews.do?id=503

You be the judge.

 

[wayneL]

hello,

any data yet on todays auctions? MW might of been banned for posting up the results just like I was, oh well life goes on

In the interests of accurate historical records, you weren't banned for posting auction results and you know it.

Please note also that you can report personal abuse to the mods via the "report post" button present on each post.

 

[Wysiwyg]

This chart of Melbourne house affordability represented as percentage of income says it all really. Obviously pushed to excess at 85% of average wage. Renting is dead expensive and dead money while house prices are beyond the working class heroes.

Outer suburb block of dirt prices near me in Qld.

$305,000 -864m
$299,000 -783m
$290,000 -757m
$285,000 -697m
$299,000 -775m
$305,000 -891m
$299,000 -790m

Chart below of Melbourne house affordability 1965 to 2010.

 

[explod]

Clearance rate 47% down from 48% last week.

Calculated on past early figures against later in the week adjusted figures.

Plodalong from statistics Div.

 

[kincella]

hello property people, and all the other mushrooms...
I see ASF property thread is on its last legs....
I can see how boring it is, just patting each other bear on the back....whilst twiddling thumbs, and waiting for the '''great big property crash', that some have been on here predicting since ...well forever.....

just scroll down this page....to find the world wide house indexes.....
I must warn the bears....there are no...I reiterate NO evidence of price drops in the vicinty that all have been predicting....
some cities have risen in price....
god forbid...(that must be a huge lie, conspiracy )

how does about 1.9% or some similar insignificant figure sound as a drop in the Australian prices sound to you....
probably after rising over 20% in the prior 2 years...

currently the banks are having a price war on fixed rates...over 3 years..below 6.5%...
and non bank lending below 6%....they are ignoring the stupid RBA figures...
and the RBA pretence that everything is honky dory....

looking like a good buying op to me....lovely low rates....contrarian indicators in control...stock market crashing....superfunds providing zero returns for those nearing retirement...
all indicators that conservative investors are going back to bricks n mortar for the sanity...versus the bot trading activites...that take your money for zero return...

http://www.propertyobserver.com.au/...-house-price-index-knight-frank/2011090151383

 

[Dowdy]

hello property people, and all the other mushrooms...
I see ASF property thread is on its last legs....
I can see how boring it is, just patting each other bear on the back....whilst twiddling thumbs, and waiting for the '''great big property crash', that some have been on here predicting since ...well forever.....

just scroll down this page....to find the world wide house indexes.....
I must warn the bears....there are no...I reiterate NO evidence of price drops in the vicinty that all have been predicting....
some cities have risen in price....
god forbid...(that must be a huge lie, conspiracy )

how does about 1.9% or some similar insignificant figure sound as a drop in the Australian prices sound to you....
probably after rising over 20% in the prior 2 years...

Firstly, do you really have to make me remind you of all the comments between the property bulls ie.Great post etc etc


Lets put it into perspective....

REIV data released Friday shows Melbourne house prices have fallen 8.3 per cent from their peak in the December 2010 quarter.

The S&P/Case-Shiller US National Index peaked at 190.94 in first quarter 2006 and only retreated 1.01 per cent in the first year. By second quarter 2011 US prices had fallen to 129.19 – down 47.8 per cent over 21 quarters.

So is Australia still different???

http://www.prosper.org.au/2011/10/18/house-price-falls-steeper-that-the-us/

 

[FxTrader]

hello property people, and all the other mushrooms...
I see ASF property thread is on its last legs....
I can see how boring it is, just patting each other bear on the back....whilst twiddling thumbs, and waiting for the '''great big property crash', that some have been on here predicting since ...well forever.....

Why not take a trip down memory lane and read back 6 months ago or more and you will find plenty of back slapping, self congratulation and in your face boasting from the IP crowd here. If this thread is getting boring it's due to the almost wholesale retreat of the RE investment spruikers here, many of whom probably realize by now that the property golden goose stopped laying eggs months ago and looks to be barren for some time to come.

how does about 1.9% or some similar insignificant figure sound as a drop in the Australian prices sound to you....

Ahh, aggregate numbers again - how useless. Cold comfort in Perth for instance...

"Property values in central Perth, including the wealthy suburbs of Peppermint Grove, Cottesloe, Subiaco and the CBD, plummeted 12.3 per cent in the year to June, according to RP Data research."

My hope is that the various factors keeping the Aussie property price (debt) bubble inflated persist as I don't want to see the price of my house drop 12.3%.

 

[Julia]

I'm very out of touch with the property market so would appreciate comments from others on the question:

should I expect if having a house built in this soft market that it will be cheaper than in the better times, or does the cost of labour and materials remain fairly inflexible?

 

[trainspotter]

I'm very out of touch with the property market so would appreciate comments from others on the question:

should I expect if having a house built in this soft market that it will be cheaper than in the better times, or does the cost of labour and materials remain fairly inflexible?

NO NO NO NO NO Julia ....... this will not do !!!! A sensible quetion in this thread instead of the tirade of monkey poo flinging and hand waving gestures ?????

NON !

Materials and labour remain roughly the same (some labour costs may come down as the subbies try to undercut to obtain work) it is the PROFIT MARGIN of the builders that is flexible as to whether or not they want to keep cash flow or they induce you with things like FREE whitegoods/carpets/airconditioning/landscaping/fencing blah blah blah or they just build you a bare bone house at a sensible price. Gouging I think they call it.

 

[Whiskers]

I'm thinking about building a new house again while the $10,000 gift is still available, till end of Jan... but since Qld is almost at the bottom of the heap... three speed economy... it may get an extension.

But, for me I think the way to go is as an owner builder again, since I've had experience doing it before.

There is plenty of cheap building materials, especially timber, around if you are patient and know where to look to find the stock clearance and liquidation sales.

The only snag may be getting tradies when you want them, since a lot are being drawn away into the mines. But for me, I could do all except the electrical myself, but for the regulations being a bit stiffer now than last time I did it.

In any case if you can do a bit of site preperation, give the tradies a hand as a (free) labourer, and do things like lay your own plaster board, build or assemble your own kitchen, lay tiles, painting etc... I'm thinking you probably couldn't go too far wrong building new in the near future.

 

[Tysonboss1]

Anyone remember the conversation we had a couple of months back in relation to pensioners sitting on home equity.

Well it appears someone from the government aggrees that the home equity should be tapped to fund the cost of looking after their aged care.

http://news.smh.com.au/breaking-news-national/old-aussies-to-lose-their-homes-20111025-1mh3r.html

 

[FxTrader]

Anyone remember the conversation we had a couple of months back in relation to pensioners sitting on home equity.

I believe the issue was pensioners living in million dollar plus homes while collecting pension checks since...

"Assets which are not assessed under the assets test - exempt assets - include:

your principal family home and any permanent fixtures such as wall-to-wall carpet and wall heaters, and either:
up to 2 hectares of privately used surrounding land on the same title document as the home, or
all land greater than 2 hectares on the same title document as the home if you are eligible for the new rules for farmers and rural homeowners."

So you can live in a 10 million dollar home (or whatever) on up to 2 hectares (~ 5 acres) and still collect a pension check. Is this equitible or reasonable? Probably not.

As for aged care, compelling property millionaires to fully or partially fund their aged care seems reasonable to me.

 

[prawn_86]

So if the gov ends up owning the house then what will they do with it?

Will they sell it at maret price? Or look to hold it? Or offload it as quick as possible?

Any of those 3 scenarios could have an effect on the market

 

[Tysonboss1]

So if the gov ends up owning the house then what will they do with it?

Will they sell it at maret price? Or look to hold it? Or offload it as quick as possible?

Any of those 3 scenarios could have an effect on the market

3 options that the government suggests,

1, Sell the home on the free market and use funds to pay for aged care.

2, Use a reverse mortgage from a private insto eg. a bank or other lender.

3, Fund your aged care from a government loan, Which will give the government first claim against the home upon your death or sale of the property.

 

[Tysonboss1]

As for aged care, compelling property millionaires to fully or partially fund their aged care seems reasonable to me.

I agree,

At the end of the day you can't take the assets with you when you die, and it's a bit much to ask the tax payers to fund your needs just so you can pass on a larger amount to your kids.

And if you take the government loan option, you can carry on as normal until the day you die with out making a payment.

 

[Junior]

I believe the issue was pensioners living in million dollar plus homes while collecting pension checks since...

"Assets which are not assessed under the assets test - exempt assets - include:

your principal family home and any permanent fixtures such as wall-to-wall carpet and wall heaters, and either:
up to 2 hectares of privately used surrounding land on the same title document as the home, or
all land greater than 2 hectares on the same title document as the home if you are eligible for the new rules for farmers and rural homeowners."

So you can live in a 10 million dollar home (or whatever) on up to 2 hectares (~ 5 acres) and still collect a pension check. Is this equitible or reasonable? Probably not.

As for aged care, compelling property millionaires to fully or partially fund their aged care seems reasonable to me.

This is correct.

However, the reality is that someone who resides in a large home worth millions, would have significant ongoing costs relating to their property and would not be able rely on the Age Pension to fund their retirement. So I don't think too many retirees would be in this situation.

 

[prawn_86]

3 options that the government suggests,

1, Sell the home on the free market and use funds to pay for aged care.

2, Use a reverse mortgage from a private insto eg. a bank or other lender.

3, Fund your aged care from a government loan, Which will give the government first claim against the home upon your death or sale of the property.

But what effect (if any) will this have on the property market? Governments are notorious for poor use of capital, so if they are selling the houses it could effect the market

 

[Tysonboss1]

This is correct.

However, the reality is that someone who resides in a large home worth millions, would have significant ongoing costs relating to their property and would not be able rely on the Age Pension to fund their retirement. So I don't think too many retirees would be in this situation.

Not true,

There are plenty of people living in what would have been an average family home 50years ago within 20km's of sydney that is now worth over $2M mostly land value.

The are heaps in my area, as the oldies die off the houses are sold enriching the kids and multi level apartments are constructed.

When thinking of "Multimillion dollar home" don't think of luxary homes on the gold coast. These pensioners are living in their family home in the suburbs, But they are sitting on massive land value that could be tapped to help fund their living expenses in their later years,

 

[Tysonboss1]

But what effect (if any) will this have on the property market? Governments are notorious for poor use of capital, so if they are selling the houses it could effect the market

The house will be sold when they die anyway,

The way I see it should happen, is that the cost of the aged care is loaned each year to the elderly person ( rather than simply be provided free ), each year the annual cost is just added to the account and maybe 3% interest, then when they die the house gets sold, funds are used to clear the loan, excess funds go to the estate for distribution in the will.