The future of Australian property prices

[matty77]

Sunday Mail in Adelaide says Brighton in SA has gone up 30% in the past 12 months...

I just don't see how that is possible.

 

[young-gun]

Sunday Mail in Adelaide says Brighton in SA has gone up 30% in the past 12 months...

I just don't see how that is possible.

The odds of Pulling actual facts from the Sunday or courier mail would be equivalent to watching an unbiased report on today tonight - it just can't happen

 

[matty77]

The odds of Pulling actual facts from the Sunday or courier mail would be equivalent to watching an unbiased report on today tonight - it just can't happen

I would 100% agree with you.

Today Tonight had the JFK conspiracy solved apparently, except I missed it.

 

[cutz]

I would 100% agree with you.

Today Tonight had the JFK conspiracy solved apparently, except I missed it.

matty77,

You need to look at hard stats from the RBS and ABS, the fin review has got good property reporting and things don't sound too good.

On the topic of auctions one thing that erks me are knockout vendor bids, these days with no genuine bidders at auctions vendors come in with knockout bids that reflect boom times, how does this assist with price discovery ? Potential buyers just walk away. How do you deal with a knockout vendor bid ? Properties just sit there with for sale signs, not a good look for the street.

 

[sptrawler]

Sounds like the banks are trying to deflate prices in a controlled manner. Forclose on one sector at a time to minimise write downs.

http://www.smh.com.au/business/1-billion-in-distressed-property-on-the-block-20111122-1nscp.html

 

[young-gun]

Sounds like the banks are trying to deflate prices in a controlledmanner.

is this the same controlled as chinas soft landing?

 

[trainspotter]

Sounds like the banks are trying to deflate prices in a controlled manner. Forclose on one sector at a time to minimise write downs.

http://www.smh.com.au/business/1-billion-in-distressed-property-on-the-block-20111122-1nscp.html

Whilst they still make record profits !!

http://www.abc.net.au/worldtoday/content/2011/s3349141.htm

 

[sptrawler]

Whilst they still make record profits !!

http://www.abc.net.au/worldtoday/content/2011/s3349141.htm

Well trainspotter, they either deflate the property prices or FWA will be chock a block with pay claims.
If house prices don't come down, wage claims will kick in to compensate for lack money to buy a house.
If that happens everything resets to the new norm and we can get rid of all the coins under $1.

 

[trainspotter]

Well trainspotter, they either deflate the property prices or FWA will be chock a block with pay claims.
If house prices don't come down, wage claims will kick in to compensate for lack money to buy a house.
If that happens everything resets to the new norm and we can get rid of all the coins under $1.

There is more to wage claims than mere house prices. Many factors force the Unions hands to bring pay disputes to council chambers. Have a closer look at who is flexing their muscles and it sure as **** aint the banks. Banks don't want prices to fall as their loan books would have slightly higher default ratings which in turn will effect the shareholders confidence thusly watching their propfits going down the gurgler.

Banks require happy little vegemites in boxes diligently toiling away to pay the mortgage. Good governance requires this also so that people are employed to pay the taxes which feed the great party machines.

Pay claims are coming in vogue RIGHT NOW !! Look at QANTAS. Nothing to do with house prices as they already have come down over 3% (according to the ABS figures) in the past 12 months. Look at CPI and the price of living/petrol/bananas/state taxes on electricty/gas/water yadda yadda yadda.

What does this guvmint do to afford all of this? Why .... introduce more taxes of course ! Wait until we have full blown wealth distribution when the Feds take the mineral states to the cleaners. Then you will see house prices plummet as everyone has been prediciting as unemployment goes through the roof.

Anyhooooooo ...... back to topic please.

 

[explod]

My Brother-in-law purchased a new property at Ocean Grove (Vic) last year. I mentioned my concern to him and suggested renting for awhile. However you cannot step in the way of a property bull I have found. Paid $450,000 in full, no debt. A nearly identical new property on the market up the street has a price tage reduced to $365,000. Arr well.

The following from Morgan Stanley is in line with what a lot of us bears have been pointing out for some time. Arr well.

http://www.morganstanley.com/views/gef/archive/2010/20100817-Tue.html

 

[trainspotter]

My Brother-in-law purchased a new property at Ocean Grove (Vic) last year. I mentioned my concern to him and suggested renting for awhile. However you cannot step in the way of a property bull I have found. Paid $450,000 in full, no debt. A nearly identical new property on the market up the street has a price tage reduced to $365,000. Arr well.

The following from Morgan Stanley is in line with what a lot of us bears have been pointing out for some time. Arr well.

http://www.morganstanley.com/views/gef/archive/2010/20100817-Tue.html

Amazing what a difference 12 months can make isn't it??

It also shows how you can make money out of RE. Let's say you purchased aforementioned "new house" for $365,000 and it sells to someone like explods brother in law for $450,000 !!!!!!!!!! Arrr well ....... another one born every minute I reckon.

 

[explod]

Amazing what a difference 12 months can make isn't it??

It also shows how you can make money out of RE. Let's say you purchased aforementioned "new house" for $365,000 and it sells to someone like explods brother in law for $450,000 !!!!!!!!!! Arrr well ....... another one born every minute I reckon.

Was a bit out, on questioning my Wife her Brother brought the place in March of this year.

And I am sure the building company who did the job up the road on the March price levels would be a pit peeved. More than a 20% drop in eight months.

So maybe the one in every minute could change a bit soon.

 

[sptrawler]

There is more to wage claims than mere house prices. Many factors force the Unions hands to bring pay disputes to council chambers. Have a closer look at who is flexing their muscles and it sure as **** aint the banks. Banks don't want prices to fall as their loan books would have slightly higher default ratings which in turn will effect the shareholders confidence thusly watching their propfits going down the gurgler.

Banks require happy little vegemites in boxes diligently toiling away to pay the mortgage. Good governance requires this also so that people are employed to pay the taxes which feed the great party machines.

Pay claims are coming in vogue RIGHT NOW !! Look at QANTAS. Nothing to do with house prices as they already have come down over 3% (according to the ABS figures) in the past 12 months. Look at CPI and the price of living/petrol/bananas/state taxes on electricty/gas/water yadda yadda yadda.

What does this guvmint do to afford all of this? Why .... introduce more taxes of course ! Wait until we have full blown wealth distribution when the Feds take the mineral states to the cleaners. Then you will see house prices plummet as everyone has been prediciting as unemployment goes through the roof.

Anyhooooooo ...... back to topic please.

Wage claims are usually brought about because wages are not covering peoples living costs. The single biggest cost to people is usualy the house payment, dropping interest rates relieves pressure.
But owing $400,000 when on $60,000 p/a brings on its own kind of pressure. The only way to get that under control is to either give pay rises or drop the amount people have to borrow.
I know which the government and RBA would prefer, one is inflationary the other hurts those that are over extended by choice.

 

[trainspotter]

Was a bit out, on questioning my Wife her Brother brought the place in March of this year.

And I am sure the building company who did the job up the road on the March price levels would be a pit peeved. More than a 20% drop in eight months.

So maybe the one in every minute could change a bit soon.

I reiterate ....... let's look at the maths of this transaction.

Let's say we borrow 80% of value of $365,000 principal at 7.5% = $292,000 and $21,900 per annum or $1,825 per month and $73,000 in deposit. $1,825 x 8 months = $14,600 interest component. $87,600 total outlay (insurance, rates stamp duty, etc) to be added in later.

Sell house for $450,000 = $85,000 gross profit in 8 months or $127,500 per annum. Minus sales commission and rates and taxes and stamp duties, solicitors fees etc. Let's say $20,000 = $65,000 nett profit.

Let's not get into capital gains tax as you should be better structured to be able to offset this kind of profit with carried forward losses.

So I just turned $87,600 into a nice little earner !!

Please feel free to post percentile basis return figures

 

[sptrawler]

I reiterate ....... let's look at the maths of this transaction.

Let's say we borrow 80% of value of $365,000 principal at 7.5% = $292,000 and $21,900 per annum or $1,825 per month and $73,000 in deposit. $1,825 x 8 months = $14,600 interest component. $87,600 total outlay (insurance, rates stamp duty, etc) to be added in later.

Sell house for $450,000 = $85,000 gross profit in 8 months or $127,500 per annum. Minus sales commission and rates and taxes and stamp duties, solicitors fees etc. Let's say $20,000 = $65,000 nett profit.

Let's not get into capital gains tax as you should be better structured to be able to offset this kind of profit with carried forward losses.

So I just turned $87,600 into a nice little earner !!

Please feel free to post percentile basis return figures

Thats a great idea, then I buy it from you for $450,000, put down 20% approx $90,000.
Keep it for 8months and then sell it for $550,000 (don't want to too greedy).
Another tidy profit, what an absolute stroke of genius, transpotter, where do I sign up.LOL

 

[prawn_86]

So I just turned $87,600 into a nice little earner !!

Please feel free to post percentile basis return figures

Quoting Return On Margin isn't entirely accurate though is it TS. Its how all the dodgy CFD/option operators etc say "how to make 5000% in a year". Simply leverage up $1000 at 500:1 with an FX provider and a positive one cent movement returns $5k. Where do i sign up...

 

[explod]

I reiterate ....... let's look at the maths of this transaction.

Let's say we borrow 80% of value of $365,000 principal at 7.5% = $292,000 and $21,900 per annum or $1,825 per month and $73,000 in deposit. $1,825 x 8 months = $14,600 interest component. $87,600 total outlay (insurance, rates stamp duty, etc) to be added in later.

Sell house for $450,000 = $85,000 gross profit in 8 months or $127,500 per annum. Minus sales commission and rates and taxes and stamp duties, solicitors fees etc. Let's say $20,000 = $65,000 nett profit.

Let's not get into capital gains tax as you should be better structured to be able to offset this kind of profit with carried forward losses.

So I just turned $87,600 into a nice little earner !!

Please feel free to post percentile basis return figures

Absolutely no argument with me there transpotter.

Just pointing out that my Brother-in-law purchased his new house in August this year and its value is down 20%.

We do enjoy the finer points from yourself et al., however the basis of this thread is the future of Australian property prices and for the rank and file things are looking down at the moment.

 

[young-gun]

Thats a great idea, then I buy it from you for $450,000, put down 20% approx $90,000.
Keep it for 8months and then sell it for $550,000 (don't want to too greedy).
Another tidy profit, what an absolute stroke of genius, transpotter, where do I sign up.LOL

do u mind if i buy it from u? i have a feeling if i sell it 2 years later i could pocket upto 250k.

- prices to fall

 

[Mr Z]

This way the entire country becomes investment geniuses and gets to feel MUCH better about themselves.

Just a suggestion guys, but shouldn't this story start with "once upon a time"?

 

[trainspotter]

This thread is also to learn how to make money out of RE if you know what you are doing.

Anyhoooooo ..... yes prices are trancing sideways and will continue on a slow deflation level controlled by the banks until unemployment hits hard.

The future of Australian propery prices is definitely on a downward trend. BUT .... there is still good opportunities out there .... like the one I have given an example of. Finding the right buyer is the key. IF ONLY the world was filled with explods brother in laws !!