The future of Australian property prices

[im sparticus]

So where are the positive signs going forward in any market ??? there are non.

smells like deflation??

 

[moXJO]

One of the Australian property permabulls in this thread was lipping on about how India's middle class is about to come online and send demand for resources through the roof along with His house price ...... aside from the BHP boss dissagreeing with the said thread contributor here is some more evidence to the contrary ....




http://www.reuters.com/article/2012/05/22/us-india-devaluation-idUSBRE84L0N920120522

I think some people just assume that Large populations equal large economy - but the opposite can be very much more the reality. Kind of like if your own Home had 10 dependant mouths to feed instead of four -

I'm sorry do you want to point out where I said just resources?

How about education, food etc we are a nation of what? 20 something million smack bang in the middle of opportunity. We don't need to do a whole lot to punch above our weight. All you do is look for the most pessimistic outlook possible and man it's draining.
And how the hell do you come to the conclusion I'm a permabull when I mostly point out the fact things are not as bad as what you whiners say and I doubt we will end up in depression.

BHP yep I'm sure they are doing it tough

 

[numbercruncher]

De'nile is a river in Egypt .....

I didnt say anything about BHP other than they dissagree with your India will save the day Idea ...

No Whining here infact I see your type as whiners - Im just pointing out the facts - I think its absolutely wonderful that your Mcmansion 5 mintutes drive from the Worlds best Iron ore deposit is gaining value - go you - you rock !

But for the rest of the nation it simply isnt that rosey - unless you have proof otherwise ?

 

[DB008]

Jut saw this on Reddit.
Seems like Australia isn't the only expensive place on the planet....

The above graphic exploded on Facebook this weekend. It shows how many minimum wage hours a worker needs to work in order to be able to afford a two-bedroom unit at “Fair Market Rent” in any given state. The FMR is a figure determined by the U.S. Department of Housing and Urban Development (HUD).

The numbers don’t show any discernible trend aside from perhaps 1) states with high cost of living/rent such as NY, NJ, DC, MD require the most man hours and 2) the minimum wage is too low. The latter, of course, is the point of this graphic.

http://tiny.cc/eo43ew

 

[numbercruncher]

I think thats rather misleading - perhaps its tipping jobs? They have lower minimum ...

But anyway - stacks of cities in US with houses under 100k and household incomes over 50 .... US has alot more potential than we do I feel .....


Plenty of examples thanks to google...

http://money.cnn.com/galleries/2011/real_estate/1105/gallery.cheapest_housing_markets/index.html

Makes us look like the hard lessons most the world is being or been taught have not yet arrived

 

[numbercruncher]

Heres a pretty good writeup about US prices etc-

Is it better to rent or buy? Ken Johnson of Florida International University and Eli Beracha of East Carolina University recently crunched the numbers in 23 cities.

Nationwide, they found prices have dropped enough, and rents have risen enough, to make buying the better deal. But results vary.

In Dallas, for example, you're likely still better off renting, despite reasonable home values of less than $140,000.

For one thing, rents are cheap too; nice, one-bedrooms go for as little as $500 a month. Prices are only about 18 times the annual rent of comparable homes.The big factor, however, is home price appreciation, which has been very slow historically here. There's a lot of land available for development and few regulatory barriers to discourage builders. That has kept home values from rising quickly. So even today's buyers can't expect their home equity to rise very much.

http://money.cnn.com/galleries/2011/real_estate/1105/gallery.rent_or_buy/index.html

Where would you rather invest folks ?

 

[DB008]

Here is one for SCM who has said that Australia should have its property bubble burst like Iceland did during the GFC...


Iceland Property Bubble Grows With Currency Controls: Mortgages

Iceland’s crisis-management policies are creating the island’s next property bubble less than four years after its banking meltdown threw the economy into its worst recession.
Prices for new homes touched a record last quarter, having surged 40.1 percent since the final three months of 2010, according to estimates by the National Registry of Iceland in Reykjavik. Average house prices have risen 11.3 percent since the market bottomed at the end of 2009, according to central bank data at the end of the first quarter.

http://www.bloomberg.com/news/2012-05-29/iceland-property-bubble-grows-with-currency-controls-mortgages.html

 

[Starcraftmazter]

I think thats rather misleading - perhaps its tipping jobs? They have lower minimum ...

But anyway - stacks of cities in US with houses under 100k and household incomes over 50 .... US has alot more potential than we do I feel .....

And even if they don't the rental yields in many places are double what they are in Australia. No true investor would ever touch Australia with a 10 foot pole, with our chronic oversupply of housing.

If you combine this with the fact that our currency is on the way down, clearly investing in US real-estate is by far the best way to go, if one must invest in real-estate at all.

 

[numbercruncher]

Clearly

 

[numbercruncher]

Australian residential building approvals fell 8.74 per cent to 10,330 units in April.
This compares to a downwardly revised 11,312 units in March, seasonally adjusted.
In the year to April, building approvals were down 24.1 per cent, the Australian Bureau of Statistics (ABS) said on Thursday.
Economists' forecasts had centred on a 0.5 per cent rise in approvals in April.

http://www.thebull.com.au/articles/a/28686-building-approvals-fell-8.74-in-april.html

Can only get worse in the near term surely .....

 

[Klogg]

And even if they don't the rental yields in many places are double what they are in Australia. No true investor would ever touch Australia with a 10 foot pole, with our chronic oversupply of housing.

If you combine this with the fact that our currency is on the way down, clearly investing in US real-estate is by far the best way to go, if one must invest in real-estate at all.

Not siding either way on Aus property, but your suggestion of investing in US property is probably not a great idea either...

You're taking on FX risk, which can be huge at times... that is, unless you buy some form of hedge/insurance against this, which would cost you a fair bit anyway.

 

[Starcraftmazter]

Not siding either way on Aus property, but your suggestion of investing in US property is probably not a great idea either...

You're taking on FX risk, which can be huge at times... that is, unless you buy some form of hedge/insurance against this, which would cost you a fair bit anyway.

I didn't suggest it - I clearly said if one must invest in real estate - then US is far better than Australia.

 

[jank]

http://www.thebull.com.au/articles/a/28686-building-approvals-fell-8.74-in-april.html

Can only get worse in the near term surely .....

Just one thing, if house builds are declining, would that not limit supply thus stabilising prices, if demand is constant?

 

[numbercruncher]

Just one thing, if house builds are declining, would that not limit supply thus stabilising prices, if demand is constant?

Would certainly help determine a floor in prices eventually I would summise -

 

[MrBurns]

Just one thing, if house builds are declining, would that not limit supply thus stabilising prices, if demand is constant?

Demand wil drop like a stone, just like it's doing now.

 

[Glen48]

Except for bullets, beans,and band aids the necessary things in life. Mr.B

 

[im sparticus]

Demand wil drop like a stone, just like it's doing now.

its very hard to really know what is happening right now most data is old and the action that created the data even older and the intent of the action ie, organising finance searching etc older still by the time you start to see positive signs the market could well have been running away for close to 12 months, people really need to start looking forward rather than back. all the data is good for is predicting the past.

 

[MrBurns]

its very hard to really know what is happening right now most data is old and the action that created the data even older and the intent of the action ie, organising finance searching etc older still by the time you start to see positive signs the market could well have been running away for close to 12 months, people really need to start looking forward rather than back. all the data is good for is predicting the past.

I can see it as plain as the agents can, people arent buying and/or aren't prepared to pay like this time last year.

 

[Ves]

I didn't suggest it - I clearly said if one must invest in real estate - then US is far better than Australia.

Isn't the system a bit different in that certain taxes and rates, if not paid, attach to the house and not it's owner? I remember hearing that this surprised people who were buying "cheap" houses and having to fork out a lot more money on top of this.

 

[numbercruncher]

Isn't the system a bit different in that certain taxes and rates, if not paid, attach to the house and not it's owner? I remember hearing that this surprised people who were buying "cheap" houses and having to fork out a lot more money on top of this.

Houses arnt Cheap in the US - they are fair market value - its just ours are still over the top expensive making theirs seem cheap.

I believe property tax in US varies considerably from state to state - im sure if what you suggest is true it would be easy to find out and one would take that into consideration with an offer - a couple extra k is chicken feed to in comparison to our market though hey ?