The future of Australian property prices

[drsmith]

I've seen a number of TV ads recently promoting housing finance on little or no deposit.

 

[young-gun]

from my personal opinion id wait for interest rates/cash rate to bottom and possibly have its first up tick, otherwise you could be catching a falling knife in terms of prices, the overhang of private debt burden and the balance of people willing to pay down debt compared to take up new debt means imo that potential cap growth will be restrained. Mortgage finance is predominantly refi market which doesnt put any upward pressure on prices, however with every central bank replicating helicopter Ben im assuming growth in asset prices.

You won't see growth here in aus as a result of the reserve bank action until there has been a solid correction though. They aren't going to deliberately inflate housing prices more than they currently are(in my opinion more than well into bubble status) for the hell of it. jmo of course. completely agree with you on the growth of capital

How benny boy thinks that fixing the biggest collapse of a debt and housing bubble ever seen, with a new housing bubble is a good idea I will never know.

So long as this dark cloud looms Ill sit on the side-lines. From what I've seen current yields aren't even going to allow you to break even once inflation, expenditures and potential vacancy etc is taken into account.

 

[young-gun]

I've seen a number of TV ads recently promoting housing finance on little or no deposit.

great....

 

[white_goodman]

You won't see growth here in aus as a result of the reserve bank action until there has been a solid correction though. They aren't going to deliberately inflate housing prices more than they currently are(in my opinion more than well into bubble status) for the hell of it. jmo of course. completely agree with you on the growth of capital

How benny boy thinks that fixing the biggest collapse of a debt and housing bubble ever seen, with a new housing bubble is a good idea I will never know.

So long as this dark cloud looms Ill sit on the side-lines. From what I've seen current yields aren't even going to allow you to break even once inflation, expenditures and potential vacancy etc is taken into account.

im the same boat, property is off my radar in Aus till I see something, when i refer to asset prices above, im more specifically talking about stocks where i think CB policy specifically heli Ben will be more present in our own market

 

[young-gun]

im the same boat, property is off my radar in Aus till I see something, when i refer to asset prices above, im more specifically talking about stocks where i think CB policy specifically heli Ben will be more present in our own market

Sorry, thought you were referring to housing and was getting confused as to how berwank was going to affect it.

I actually saw a for sale sign on a house not far from my place atm. It was actually advertising a rental yield of 5.5%p/a in huge letters like it was some huge selling point.

I'm going to start researching commercial RE alot more. But from what I have seen so far prices are quite inflated also, perhaps there is more opportunities hiding there though. Only issue is more capital required to enter.

 

[Julia]

You won't see growth here in aus as a result of the reserve bank action until there has been a solid correction though. They aren't going to deliberately inflate housing prices more than they currently are(in my opinion more than well into bubble status) for the hell of it. jmo of course. completely agree with you on the growth of capital

How benny boy thinks that fixing the biggest collapse of a debt and housing bubble ever seen, with a new housing bubble is a good idea I will never know.

So long as this dark cloud looms Ill sit on the side-lines. From what I've seen current yields aren't even going to allow you to break even once inflation, expenditures and potential vacancy etc is taken into account.

+1.

But from what I have seen so far prices are quite inflated also,

Depends where you are looking. As I've commented before, where I live prices have fallen by around 25%.
That's a significant contrast to the commonly quoted national forecast of well under 10%.

 

[CanOz]

So long as this dark cloud looms Ill sit on the side-lines. From what I've seen current yields aren't even going to allow you to break even once inflation, expenditures and potential vacancy etc is taken into account.

So what does one do? Sit on bank interest?

My wife is bored to death with bank interest...

CanOz

 

[Klogg]

So what does one do? Sit on bank interest?

My wife is bored to death with bank interest...

CanOz

From a pure investment standpoint, emotions shouldn't come into the equation.
If you ask me, hand-picked equities scream buy to me, but my financial position is different to yours...

 

[CanOz]

From a pure investment standpoint, emotions shouldn't come into the equation.
If you ask me, hand-picked equities scream buy to me, but my financial position is different to yours...

This is part of our funds we set aside for property eventually, just wondering of the timing...

CanOz

 

[Klogg]

This is part of our funds we set aside for property eventually, just wondering of the timing...

CanOz

If that's the case, then I'd suggest that if you can afford the place you want with those funds, go for it.

Investment decisions are one thing, but if you can afford a house you'll be happy with and it won't put you in a difficult financial position, why not do it?

Screw timing!

 

[CanOz]

If that's the case, then I'd suggest that if you can afford the place you want with those funds, go for it.

Investment decisions are one thing, but if you can afford a house you'll be happy with and it won't put you in a difficult financial position, why not do it?

Screw timing!

Yeah, I'm the one i guess that is a little afraid of buying too high....

I don't really want to leverage this much though.

thanks mate...

CanOz

 

[young-gun]

Yeah, I'm the one i guess that is a little afraid of buying too high....

I don't really want to leverage this much though.

thanks mate...

CanOz

The more you leverage the more you lose at the moment imo. If you did take the leap you would want to ensure you were paying as little interest as possible... We will most likely see small increases in property across the board as the rba cuts rates by at least another 25 points by year end, and probably even more early next year. Once interest rates bottom, and everyone comes back down to earth prices should start to fall. We are simply following the same steps that everyone other nation has previously, only with a bit of a lag.

After all, the only reason they cut interest rates is because they believe the economy is/will be struggling soon. Thats JMO though, it's no secret that I'm bearish

 

[wayneL]

News is reporting that 1/3 of mortgage written since 2008 are in negative equity.

http://www.news.com.au/realestate/n...an-loans-on-them/story-fncq3gat-1226497332060

 

[Uncle Festivus]

So what does one do? Sit on bank interest?

My wife is bored to death with bank interest...

CanOz

Yes, unless you know you are going to get the same return from a Sydney unit, which you would be buying at the top?

Sydney has been ranked the second most expensive place to live and do business in a survey that measured economic opportunity in 27 cities.

Sydney was ranked as the second most expensive city, behind Tokyo.

The Sydney Business Chamber's Patricia Forsythe says the harbour city has been let down by a lack of investment in infrastructure over the past decade.

"And it is clear that on issues around transport and cost of housing and cost of doing business in the CBD that we are slipping."

After all, the only reason they cut interest rates is because they believe the economy is/will be struggling soon. Thats JMO though, it's no secret that I'm bearish

These central bankers see info the rest of us don't, so they are telling us they are concerned with what's going to happen. We might finally get a recession after 22 years.....

First home buyers credit worthiness and baby boomer demographics -

http://www.abc.net.au/news/2012-10-16/house-view-gloomy/4317032

 

[moXJO]

Yeah, I'm the one i guess that is a little afraid of buying too high....

I don't really want to leverage this much though.

thanks mate...

CanOz

If you are just looking at a long term buy and hold then I would wait till the election for a better direction. I don't see that much growth just yet for the vanilla holders unless you have really really done your homework.

 

[CanOz]

Hmm, not a lot in great support of the idea...

During the financial crisis, prices is the big US cities like New York, etc., didn't get hit as bad as the burbs...

Personally i like Phuket, but that's another thread i guess.

Cheers,


CanOz

 

[satanoperca]

News is reporting that 1/3 of mortgage written since 2008 are in negative equity.

http://www.news.com.au/realestate/n...an-loans-on-them/story-fncq3gat-1226497332060

Interesting article, combine that with the low-doc problem and things could get fun.

Cheers

 

[Tysonboss1]

News is reporting that 1/3 of mortgage written since 2008 are in negative equity.

http://www.news.com.au/realestate/n...an-loans-on-them/story-fncq3gat-1226497332060

I am not sure about the accruracy of that report or the article.

the artical says the following

The report defines negative equity as any house that has seen its value grow by less than 10 per cent - below inflation - in the past four years.

This is not the criteria I would use to workout if a property is in negative equity.

 

[wayneL]

I am not sure about the accruracy of that report or the article.

the artical says the following



This is not the criteria I would use to workout if a property is in negative equity.

Indeed.

What's the feeling out in the mortgage belt I wonder?

 

[prawn_86]

Indeed.

What's the feeling out in the mortgage belt I wonder?

If you like i can go for a drive in the DB9 and venture forth and spend time with the populous in Frankston and see what general sentiment the masses are opining about...