The future of Australian property prices

[kincella]

thinking outside the square....
I say a change of federal govnut will turn everything around....it was looking promising, for a while, that we may have got rid of her....but we will have to wait till after xmas....
to see if thomson is charged....and watching slippery pete, fall off his new throne....or get tossed out

wonder what stopped the slide...in WA, VIC, NSW......yes, labor govnuts were turfed out and the liberals arrived...that explains the low drops of less than 2%.....when the bears were claiming it would be 50% plus

only QLD is lagging and on the nose....but it could have been worse...except for the lingering committment, that the bligh govnut will be gone by March 2012.....

then we just have to oust gillard.....and all will return to normal...with good governance....and happy people

we will get a rate cut in december....whether glenn stevens can handle it or not....
the banks will cut rates, regardless of what the rba says...

enjoy

 

[young-gun]

thinking outside the square....
I say a change of federal govnut will turn everything around....it was looking promising, for a while, that we may have got rid of her....but we will have to wait till after xmas....
to see if thomson is charged....and watching slippery pete, fall off his new throne....or get tossed out

wonder what stopped the slide...in WA, VIC, NSW......yes, labor govnuts were turfed out and the liberals arrived...that explains the low drops of less than 2%.....when the bears were claiming it would be 50% plus

only QLD is lagging and on the nose....but it could have been worse...except for the lingering committment, that the bligh govnut will be gone by March 2012.....

then we just have to oust gillard.....and all will return to normal...with good governance....and happy people

we will get a rate cut in december....whether glenn stevens can handle it or not....
the banks will cut rates, regardless of what the rba says...

enjoy

i find your posts very hard to decipher, and am not sure if you are serious in the above post, however

prices are in no way affected by who is in power the only way they affect the market is by introducing stupid ideas like first home owners grants and new home grants. this isnt to help out first home owners by the way. this was to help keep the bubble inflated and prevent prices from falling.

the reserve bank obviously also has a very small contribution to prices through altering interest rates.

this is where alot of people fall into the trap. federal banks and governments DO NOT control economies. they absolutely believe that they can and that they do. ultimately it is US the people that drive economies and prices. demographic trends are what cause cycles. resulting affects of interference by reserve banks and governments ultimately will be rendered useless.

 

[satanoperca]

out and the liberals arrived...that explains the low drops of less than 2%.....when the bears were claiming it would be 50% plus

Please get your figures a little more correct instead of the ramblings.

Nationally -4.0%
Oh dear Melbourne -5.4%

And bears claiming %50+ falls, who on this forum that is still around is claiming or has claimed 50%. You are just as extreme as your so called bears.

Cheers

 

[young-gun]

Please get your figures a little more correct instead of the ramblings.

Nationally -4.0%
Oh dear Melbourne -5.4%

And bears claiming %50+ falls, who on this forum that is still around is claiming or has claimed 50%. You are just as extreme as your so called bears.

Cheers

quite happy to admit i a 30% minimum bear(down), but from where im sitting that would be a very positive thing for me.

 

[greebly24]

Kincella, don't think any bears were predicting 50%+ price drops. Steve Keen only predicted a 40% drop and he's the most radical I've heard of.

Guess those FHBs in QLD who lost 9% this year are laughing at those imaginary 50%+ price drop predictions too, hey.

 

[young-gun]

Kincella, don't think any bears were predicting 50%+ price drops. Steve Keen only predicted a 40% drop and he's the most radical I've heard of.

Guess those FHBs in QLD who lost 9% this year are laughing at those imaginary 50%+ price drop predictions too, hey.

if i still had my place i wouldnt be finding a 9% loss very funny. and who said its stopped falling?

 

[demiser]

If and when prices do fall, how does everyone think it will affect the economy in general ?

Even with the stagnation / drop so far, a few chippy mates tell me a lot of the people that were looking at buying up, are now just renovating instead, but if prices keep dropping, would you throw money at something that's lost that much value ?

I'm also interested in the labour market, as even if houses drop by 30%, I'm not sure how any one could build a house cheaper than they could buy an existing, and if people aren't building, what happens to all the people the industry employs ?

 

[young-gun]

If and when prices do fall, how does everyone think it will affect the economy in general ?

Even with the stagnation / drop so far, a few chippy mates tell me a lot of the people that were looking at buying up, are now just renovating instead, but if prices keep dropping, would you throw money at something that's lost that much value ?

I'm also interested in the labour market, as even if houses drop by 30%, I'm not sure how any one could build a house cheaper than they could buy an existing, and if people aren't building, what happens to all the people the industry employs ?

it depends on individual situations.

they will have to weigh up the cost of renovating against the new house prices, given this is common sense everyone already does that. if you can buy a 4 bedroom house for less than its gonna cost you to upgrade your 3 bedroom house then theres really no question what people will do. in saying that selling and buying in the same market is the same whether its high or low - so renovating would probably still be a viable option for someone looking to upsize.

people often argue that house prices wont ever fall below the cost to build a new one im not sure why

the residential workforce will naturally become unemployed, or find work elsewhere(commercial, or something different all together). causing higher unemployment, which in turn will drive house prices lower again.

builders will have to lower prices, and also hope that land depreciates in line if not more so than houses.

 

[ROE]

the same market is the same whether its high or low - so renovating would probably still be a viable option for someone looking to upsize.

Buying in the down market WINS every time ... example...

your house bought 300K rising to 400K
bigger house bought 500K rising 670K

sold your for $400K paying extra 270K for an upgrade

Same scenario
300K now worth 200K
500K now worth 330K
sold your for 200K buying 330K, you pay an extra 130K for the upgrade

how is it the same?

 

[sptrawler]

If and when prices do fall, how does everyone think it will affect the economy in general ?

Even with the stagnation / drop so far, a few chippy mates tell me a lot of the people that were looking at buying up, are now just renovating instead, but if prices keep dropping, would you throw money at something that's lost that much value ?

I'm also interested in the labour market, as even if houses drop by 30%, I'm not sure how any one could build a house cheaper than they could buy an existing, and if people aren't building, what happens to all the people the industry employs ?

In my opinion the main player in all this is the BANKS. If they tighten up lending due to market forces, be that Euro problems or increase in unemployment from China`slowdown.
The end result is they lower the amount they will lend e.g 80% of valuation and also lower their valuation. They have to do this to meet their capital adequacy requirements.
This in turn reduces what someone can pay for your house and reduces what you can borrow for your next house.
It then puts downward pressure on established homes and makes older better located suburbs more attractive than newer houses further out.
Which inturn puts downward pressure on what developers will pay for outlying land and what builders can charge for a house. There is a huge knock on effect.
Again these are only my thoughts.

 

[young-gun]

Buying in the down market WINS every time ... example...

your house bought 300K rising to 400K
bigger house bought 500K rising 670K

sold your for $400K paying extra 270K for an upgrade

Same scenario
300K now worth 200K
500K now worth 330K
sold your for 200K buying 330K, you pay an extra 130K for the upgrade

how is it the same?

good point.

i missed the whole point of the upgrade bit, and instead referenced buying a similar house of a similar value in any given point of the market.

you could get a decent reno for 130k. more importantly you could build a new house for 270

 

[ROE]

Unless you have plenty of properties bought cheap, or use your home as an ATM higher price is good for you

but if you just got a PPOR without the ATM component you want the housing market to be cool or outright in a recession as buying, upgrading, moving cost you a lot less

I got a place and I dont mind if the whole market crash down 20-50%
cost me a lot less to upgrade to a bigger place.

 

[young-gun]

Unless you have plenty of properties bought cheap, or use your home as an ATM higher price is good for you

but if you just got a PPOR without the ATM component you want the housing market to be cool or outright in a recession as buying, upgrading, moving cost you a lot less

I got a place and I dont mind if the whole market crash down 20-50%
cost me a lot less to upgrade to a bigger place.

provided you own, or almost own your PPOR. for those that have 450k against a (once 500k) now 300k value house, no such luxury upgrading then costs 150k realised loss plus for examples sake 130k for the upgrade

 

[sptrawler]

provided you own, or almost own your PPOR. for those that have 450k against a (once 500k) now 300k value house, no such luxury upgrading then costs 150k realised loss plus for examples sake 130k for the upgrade

When the banks have finished with the appartment developers. My guess is they will be sending letters to the people with $450k loans against $300k properties, asking for more equity. Otherwise they will have to include the $150k loss in their annual results.IMO

 

[Julia]

people often argue that house prices wont ever fall below the cost to build a new one im not sure why

They already have where I live.
I recently went through considering building a new house, the plan for which essentially replicated the one in which I now live.
Taking what I'd get for my existing property in this soft market compared to what I'd have been paying for the land and new building, including pool, additional fencing, landscaping to a standard equating the present, I'd have had to find around
$250K to do it.

The locations re proximity to the beach are the same, i.e. 500metres, so position doesn't determine the higher cost. New house would have been twice as close to the CBD but in a town of 55,000 that's hardly a consideration.

 

[medicowallet]

When the banks have finished with the appartment developers. My guess is they will be sending letters to the people with $450k loans against $300k properties, asking for more equity. Otherwise they will have to include the $150k loss in their annual results.IMO

and may try to increase margins to recoup losses.

Interest rates may not go down... cause... we are different here.

MW
PS where is Robots?

 

[sptrawler]

Actualy it isn't much different to what happened in the late 80's with "Armstrong Jones".
They were getting their property portfolio revalued, in a rising market, then revaluing their units accordingly.
When it went pear shaped, the banks sent out letters to all unit holders to stump up more money.
The only difference this time is people have done it on a macro scale.
They have purchased investment properties and then gear up and purchased more on increased valuations, in a rising market.
Same **** different day. It's a bit like musical chairs, it's great fun untill the music stops and it always does.

 

[indeck]

thinking outside the square....

oh i'm sorry, i thought this was a housing debate not a labour bashing one. Shall I drop a few points about how the libs royally screwed up?

 

[ROE]

Your home is not an investment, it is something
you need, you either own your own home or rent

Over leverage and buy a PPOR is just plain crazy

Owning your own place give you the benefit of
paying it off some 20 years down the track provided
you buy them at a sensible price

Over commit to buy a place, most WILL never pay it off
and could be in a negative equity position during pro-long down turn.
very bad financial choice if that is the case.

Rent if it is too expensive ...the law of compounding will guarantee
that there will be a period of negative growth and zero growth.....

you cant time it because you don't know when but 100% guarantee that
the law of compounding will see to it that it is always the case....

Most people don't understanding how compounding works

The Most IMPORTANT Video You'll Ever See (part 1 of 8)
http://www.youtube.com/watch?v=F-QA2rkpBSY

 

[explod]

oh i'm sorry, i thought this was a housing debate not a labour bashing one. Shall I drop a few points about how the libs royally screwed up?

I also thought it was about "the future of australian properties"

All this off topic twos and froes are those trying to convince themselves that it is a good investment and will allways go up.

Good to see me ole mate Con$$esor back the udder day. Botty, start putting back sheds and old caravans in your Ballarat yards. We are all going to need the cheap rent and you will need every diminishing cent you can lay your hands on.

Did you start buying those silver 1966 rounds last year as I suggested.?

Not too late at the current price, if you can get them.