Australian (ASX) Stock Market Forum

The future of Australian property prices

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Beej said:
the ability to use dual incomes *initially* to pay down a mortgage so that you can then afford to live on one income comfortably a few years down the track. That's what most people do.
Click to expand...

Thats a really good point, It definatly makes it easy to live on one income if you own your own home with a decent chunk paid off,
 
medicowallet said:
Because one of the reasons $60k seems low is that other jobs have crept over the top.

The reason why we have low unemployment (if you disregard the tripe the media vomits up about how the mining industry cut X% of jobs over the GFC) is because of the flow on $$$ from the mining boom.
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Maybe,

But $60,000 at 25years old is pretty low for some one that has had to go to uni for years to get that rate.

I joined the army staight out of high school and was earning $75K per year and that was in 2001 dollars, Now I own my own business and make several times that, As I said I am glad I didn't go to UNI.

( In reference to soldiers pay - Some of you my Google it and say "I checked the army website and it says soldiers only earn $40,000. But when you add all the other stuff it adds up.

eg, Base pay for soldier $40,000 + service allowance + Rental assistance + Bush Pay + Higher pay groups for completeing further training + separation allowance + a whole heap of other allowances. And all medical and dental etc if free, man I miss that bit)
 
OK.

I am going to weigh in here with a few points. I am an outsider looking in. I am looking at this from an Irish perspective because that is where I am from.


Firstly, Australia is expensive. It has one of the highest cost of living in the world. It also has one of the highest wages in the world. Min wage is what $16 per hour?? Seriously? Does anyone think that is sustainable in an ever increasinly global competive economy?
Secondly, Wages are high to fuel high property prices. The same thing happened in Ireland. The higher the wage the more someone can afford to get a loan from abank for a house. However again this is not sustainable.
Thirdly. Not one economic think tank or study says that Australian House prices are under valued, many think they are over valued by anything from 10%-50% (the economist with the latter figure)
Fourth. Never in history has a property boom/bubble NOT ended in some sort of crash/correction.

Now spare me the, Australia is different crap because it holds no water and is a strawman argument. The only reason Australia is doing well now is because of record commodity prices that we ship to China, Japan, India, etc.. Are these prices sustainable once china et al slow down growth. Will China be growing at 8%+ for the next 20 years. No way in Hell it will. We shall see a change in that by the end of the decade as well as internal poltical pressures but that is a discussion for another day.

So the future of Australian property prices? Well they will in best case scenario stagnate for the next 5 years. Worst case will be a crash. Too many idiots out there thinking they can make money but just buying and holding property. The house of cards will fall soon.

Me, well happy out renting and saving the rest into a savings account and buying shares. Rent is NOT dead money at the moment. In fact I would challenge anyone to prove otherwise in today's market. Yields are very low.
 
So the future of Australian property prices? Well they will in best case scenario stagnate for the next 5 years. Worst case will be a crash. Too many idiots out there thinking they can make money but just buying and holding property. The house of cards will fall soon.

Me, well happy out renting and saving the rest into a savings account and buying shares. Rent is NOT dead money at the moment. In fact I would challenge anyone to prove otherwise in today's market. Yields are very low.
Click to expand...

Well summed up Jank and welcome to the forums, great to see more reality arrive in this space.

I sold my investment properties and home a few years back now. Called it a bit early but who can always call the top.

Very happy with a few shares and my silver, up 300% since then. And will go up more soon

http://www.safehaven.com/article/23240/price-irregularities-in-the-silver-market

when the manipuation stops, but heck this should be on another thread.

And then it may be time to get back into property.
 
Cheers mate. I was expecting barrage of insults telling me go home or something....
Silver though? The devils metal is risky, money to be made. When are you going to sell?
 
Tysonboss1 said:
( In reference to soldiers pay - Some of you my Google it and say "I checked the army website and it says soldiers only earn $40,000. But when you add all the other stuff it adds up.

eg, Base pay for soldier $40,000 + service allowance + Rental assistance + Bush Pay + Higher pay groups for completeing further training + separation allowance + a whole heap of other allowances. And all medical and dental etc if free, man I miss that bit)
Click to expand...
Whacko! Just don't worry about the little detail that you can be killed.:(
 
jank said:
OK.

I am going to weigh in here with a few points. I am an outsider looking in. I am looking at this from an Irish perspective because that is where I am from.


Firstly, Australia is expensive. It has one of the highest cost of living in the world. It also has one of the highest wages in the world. Min wage is what $16 per hour?? Seriously? Does anyone think that is sustainable in an ever increasinly global competive economy?
Secondly, Wages are high to fuel high property prices. The same thing happened in Ireland. The higher the wage the more someone can afford to get a loan from abank for a house. However again this is not sustainable.
Thirdly. Not one economic think tank or study says that Australian House prices are under valued, many think they are over valued by anything from 10%-50% (the economist with the latter figure)
Fourth. Never in history has a property boom/bubble NOT ended in some sort of crash/correction.

Now spare me the, Australia is different crap because it holds no water and is a strawman argument. The only reason Australia is doing well now is because of record commodity prices that we ship to China, Japan, India, etc.. Are these prices sustainable once china et al slow down growth. Will China be growing at 8%+ for the next 20 years. No way in Hell it will. We shall see a change in that by the end of the decade as well as internal poltical pressures but that is a discussion for another day.

So the future of Australian property prices? Well they will in best case scenario stagnate for the next 5 years. Worst case will be a crash. Too many idiots out there thinking they can make money but just buying and holding property. The house of cards will fall soon.

Me, well happy out renting and saving the rest into a savings account and buying shares. Rent is NOT dead money at the moment. In fact I would challenge anyone to prove otherwise in today's market. Yields are very low.
Click to expand...

i hope there are some arguments as to why australia is different...would like to see some new ones.

stagnate for 5 years i think is ambitious, but possible i guess. you're on the money but MO shorter time frames need to be applied. by the end of the decade i would hope that the world will be well into it's detox(debt deleveraging) if not coming off the back of it ready for a new day. thats not to say house prices wont stay low for a long time.

people are of the opinion new buyers will hold the market as it starts to fall as they will see the cheap prices and dive in. and this will happen in some instances, but for the majority why would you buy a house when the market is clearly falling and hasnt shown any signs of bottoming? most will wait it out. just as alot have stopped trading equities long(largely due to volatility but also as the asx is down...alot).

its a shame you cant go short on property.
 
young-gun said:
i hope there are some arguments as to why australia is different...would like to see some new ones.


its a shame you cant go short on property.
Click to expand...

Australia is not different, there are people with two heads all over the world.

Home building is slowing down, see it where I live as this was a growth spot, its down to a trickle in the last few months and the builders I know tell me so too. In the last few months a new home outfitting company went to the wall, they had had the business for sale for 12 months and no takers.

Jobs are being lost in the car industry, car sales are down, then the spin off of the related industries and further staff.

Our rising dollar has seen a slaughter in the tourist industry, resorts are closing and the associated industries here are many.

Cheaper food is coming from off shore, except we find it is not really much cheaper, our canning industry closed in the last 12 months, more jobs, and related. Supermarkets are buying direct to package (milk to names one) from the source, middle processors gone, more jobs, but still prices seem not to drop.

And then there is retail, of course internet buying is claimed as the main culprit, but rising prices and less disposable income will be playing its part here too.

Fuel continues to rise, just recently we went over the $1.50 a litre in our area on the high cycle of the week.

We sure have the ion ore, coal and gas fields but due to the spike in prices a few years back, cheaper mines to operate are opening up in Africa and South America. BHP made a recent statement of concern on this development.

In my view these effects and any common knowledge of them has not yet filtered through to the mainstream yet. For that we can point to a ramping Government, (just watch Swanny go about how good we are, he would not have a clue) the Real Estate Industry and the daily press who feed off it.

By next March (when the fun of xmas passes) the full pain will hit and the realisation that property is not all it is cracked up to be and those then with high debt levels and lots of investment properties will be blocking each other at the gate to get out.

We have seen it in the US, the UK and Ireland and from my reading we have all the elements for the same.

We are just the same as everyone else, IMVHO.
 
jank said:
OK.

I am going to weigh in here with a few points. I am an outsider looking in. I am looking at this from an Irish perspective because that is where I am from.


Firstly, Australia is expensive. It has one of the highest cost of living in the world. It also has one of the highest wages in the world. Min wage is what $16 per hour?? Seriously? Does anyone think that is sustainable in an ever increasinly global competive economy?
Secondly, Wages are high to fuel high property prices. The same thing happened in Ireland. The higher the wage the more someone can afford to get a loan from abank for a house. However again this is not sustainable.
Thirdly. Not one economic think tank or study says that Australian House prices are under valued, many think they are over valued by anything from 10%-50% (the economist with the latter figure)
Fourth. Never in history has a property boom/bubble NOT ended in some sort of crash/correction.

Now spare me the, Australia is different crap because it holds no water and is a strawman argument. The only reason Australia is doing well now is because of record commodity prices that we ship to China, Japan, India, etc.. Are these prices sustainable once china et al slow down growth. Will China be growing at 8%+ for the next 20 years. No way in Hell it will. We shall see a change in that by the end of the decade as well as internal poltical pressures but that is a discussion for another day.

So the future of Australian property prices? Well they will in best case scenario stagnate for the next 5 years. Worst case will be a crash. Too many idiots out there thinking they can make money but just buying and holding property. The house of cards will fall soon.

Me, well happy out renting and saving the rest into a savings account and buying shares. Rent is NOT dead money at the moment. In fact I would challenge anyone to prove otherwise in today's market. Yields are very low.
Click to expand...

But we are different here - our property market hasn't crashed yet.

As we speak it is in a healthy correction, but will it crash?

Cheers

Cheers
 
Tysonboss1 said:
Maybe,

But $60,000 at 25years old is pretty low for some one that has had to go to uni for years to get that rate.

I joined the army staight out of high school and was earning $75K per year and that was in 2001 dollars, Now I own my own business and make several times that, As I said I am glad I didn't go to UNI.

( In reference to soldiers pay - Some of you my Google it and say "I checked the army website and it says soldiers only earn $40,000. But when you add all the other stuff it adds up.

eg, Base pay for soldier $40,000 + service allowance + Rental assistance + Bush Pay + Higher pay groups for completeing further training + separation allowance + a whole heap of other allowances. And all medical and dental etc if free, man I miss that bit)
Click to expand...

Really, I couldn't tell you were from the army, lol.

It still does not matter. Recent wage increases are very dependent upon the influence of mining.

The extra demand for blue collar workers is dependent on mining.

To think otherwise is ignoring the fundamentals of our poorly managed economy.
 
explod said:
And then there is retail, of course internet buying is claimed as the main culprit, but rising prices and less disposable income will be playing its part here too.
Click to expand...
Let's not forget the woeful lack of service in retail stores. They don't deserve to get the business in many cases.

In my view these effects and any common knowledge of them has not yet filtered through to the mainstream yet. For that we can point to a ramping Government, (just watch Swanny go about how good we are, he would not have a clue)
Click to expand...
Are you quite mad, explod? He's the world's greatest treasurer! As someone remarked at the time of this announcement, god help the competition.
 
If you buy property as an investment you must remember it is a gamble. Many invested in US condo's and the value of these fell apart. If you put your money in a throw them up quick investment for a speedy return on the Aussie property spike wear fire-proof-gloves.





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