House prices to keep falling for years

[9Dragons]

i agree with steve keen, perception that house price will never go down is just insane.

 

[ROE]

i agree with steve keen, perception that house price will never go down is just insane.

Well Steve got 100 years of data to back him up and event unfolding for the last 100 years...the others just got popular quotes and scare tactics

Let rephrase some jingles
House can only goes up don't know why but it just goes up

House price double every 7 to 10 years clearly they don't understand compounding formula

Lack of supply keep price stable clearly they don't understand the instrument of debt and money supply...

it's different here or it's different this time but as history show it does differentiate when it comes to recession or people out of money.
people dont spend, company start sacking people, people don't have money, banks tighten lending so less money flow around, down comes the price.

Buy now or be price out forever.. how can you be price out forever when house price average 3-4 times earning through out history and it likely to be the case well into the future...if it far exceed the 3-4 time earning the market will soon correct to that level.

 

[Indie]

One thing people haven't factor in is that housing index derivatives are going to start trading on the ASX in the next 2 years.

That going to make housing hell more volatile and people can now short on housing bubble

I be joining the shorter on this one if the price currently sit at this level...and if price start the decline it set the trend for shorter to come in and bell the hell out of it.

As a renter I am shorting the market. My landlord is losing money every day and subsidizing my lifestyle in the process. My cash in the bank earning interest and my investments are out-performing the RE market. As Robots said: "so much for tough times"

I'm heading down to the Stokehouse for a latte with a beer chaser. Another day in paradise.....

 

[MR.]

http://www.theage.com.au/national/h...y-from-the-top-end-of-town-20081128-6n0y.html

"More than four times the number of properties are listed for sale in towns such as Lorne and Torquay than at this time last year."

I wonder what prices are being put on these properties? I bet at this stage its at the upper end.

If one house in the street sells for a good sum when property is scarce. Automatically everyone thinks their property is worth the same in that street. But it was only one buyer which parted with the sum. The rest of the twenty odd properties did not change hands in that street but now everyone has got a figure in their head. Should be very familiar!

It took one buyer to pay $150- for a share of Rio Tinto and everyone was happy because now all shares are worth $150- each.
What is it now... $46-.

 

[MR.]

Down with doomsayers

http://www.goldcoast.com.au/article/2008/11/15/22941_gold-coast-real-estate.html

"People need to remember we are suffering from a financial crisis, not a property crisis," she said.


So the two arn't linked ??????????

 

[singlefished]

hello,

ring the bell can you when it happens in Aus, seems still plenty of money to waste on gambling,

so much for tough times, fairytale?

thankyou
robots

http://au.biz.yahoo.com/081129/2/22e0q.html

Victoria's real estate market slumps

"People are so scared to bid and they (the buyers) are like vultures, hanging around out the front trying to carve $200,000 or $300,000 off the asking price," group director Barry Plant said.

Adding to homeowners' pain will be Real Estate Institute of Victoria figures showing Victorians have spent almost $14 million on failed auctions in less than four months.


Ding, Ding....

 

[jeflin]

Down with doomsayers

http://www.goldcoast.com.au/article/2008/11/15/22941_gold-coast-real-estate.html

"People need to remember we are suffering from a financial crisis, not a property crisis," she said.


So the two arn't linked ??????????

A lot of toxic assets on the balance sheets of financial institutions arise out of the subprime mortgages. So if they aren't linked, that is an interesting perspective for me.

 

[Glen48]

Anything connected with money other than Gold is doomed and will go down there is no other answer, sadly until every thing collapses and re-sets at a lower price only then we can start again.
Strange how people will sit in a house dropping $20-50K PA and think they are doing the right thing yet if their supper or Caravan does the same its a disaster.
This is like some one how comes home early after getting the sack and collects the mail and find there has been no mortgage payment made for 18 mths, the house car is not insured, the supper has not been paid, bankcard has been extended to 3 times the old limit, the house re financed for 3 times the original amount, and his wife is a addicted gambler and your bank account is over drawn by many K... what do you do?... you sell what you can but there are no buyers...so you join the rest and wait years....
This will be the longest post on record and a good why to track history when the next bubble comes around.

 

[Beej]

Anything connected with money other than Gold is doomed and will go down there is no other answer, sadly until every thing collapses and re-sets at a lower price only then we can start again.
Strange how people will sit in a house dropping $20-50K PA and think they are doing the right thing yet if their supper or Caravan does the same its a disaster.
This is like some one how comes home early after getting the sack and collects the mail and find there has been no mortgage payment made for 18 mths, the house car is not insured, the supper has not been paid, bankcard has been extended to 3 times the old limit, the house re financed for 3 times the original amount, and his wife is a addicted gambler and your bank account is over drawn by many K... what do you do?... you sell what you can but there are no buyers...so you join the rest and wait years....
This will be the longest post on record and a good why to track history when the next bubble comes around.

I don't even understand what half this drivel is on about???? What are you trying to say? We should all go and love in caves and eat baked beans or something because "the end is nigh"????? You can go and do that - me I'm going for a spa and then a swim...... such a great day outside today!

 

[inenigma]

I've already been for my swim at the beach. The wife and I were looking last year for an investment property, just when the organic matter hit the oscillating device.... We decided not to continue. I'll keep an eye on the market for the next few years.....

 

[Temjin]

One thing people haven't factor in is that housing index derivatives are going to start trading on the ASX in the next 2 years.

That going to make housing hell more volatile and people can now short on housing bubble

I be joining the shorter on this one if the price currently sit at this level...and if price start the decline it set the trend for shorter to come in and bell the hell out of it.

Can't wait for the property derivatives either. Though the minimum size (for margin) per contract is probably out of range for a lot of people.

Housings aren't as volatile because of its valuation method and frequency. Just wait till we have a system that have everyone's home be VALUED for every minute by thousand of ppls with the "average" priced instantly transmitted to the owner's see. I bet he/she would say properties are just as volatile. It's all a perception.

 

[beerwm]

if you have a 300k loan on a house you bought at 300k.
you arent going to sell it for any less. [unless you have to]

in the US,

if you have a 300k loan and cant support it, you have to sell it for less.

its just a matter of 'forced supply',

is there a forced supply in Oz?

think about it.

 

[prawn_86]

if you have a 300k loan on a house you bought at 300k.
you arent going to sell it for any less. [unless you have to]

in the US,

if you have a 300k loan and cant support it, you have to sell it for less.

its just a matter of 'forced supply',

is there a forced supply in Oz?

think about it.

If you cant meet the repayments on a home here, ie cant support the loan, the bank will forclose on you, so its no difference.

I cant see what else you could have meant by that comment

 

[beerwm]

i was just refering to those ppl who think Au's housing market is heading in the direction of the US housing market.

and the fundamental difference between the 2

 

[prawn_86]

i was just refering to those ppl who think Au's housing market is heading in the direction of the US housing market.

and the fundamental difference between the 2

House prices have already dropped by about 10% here in Aus, even more in some places.

So if you had a 300k loan, as per your example, and cant afford to meet the payments the bank would foreclose and you would be forced to sell at less than what you paid. So your example is flawed, and it doesnt seem to have anything to do with fundamental differences between the 2 markets (which some members have already shown that there is not that much difference)

 

[Mofra]

beerwm,

Are you referring to the difference in cost pursual between the US & Australia?
The loans in the US are generally non-recourse, which means upon reposession, the lende rmust make up any shortfall between sale cosst & loan + fees. In Australia it works differently - you can't just hand the keys back and walk away from the property, as you are liable for costs in the event of a shortfall of funds after a forced sale.

You may also be referring to the demographic difference between Australia and the US, as the urban/rural demographic is close to perfectly inverse.

 

[beerwm]

my example was not that the 300k home in oz would not have to foreclose, because ofcourse it would.

i was just stating that due to the position of home loans in the US, the housing market has had an influx of houses, 'forced supply'

while in oz this isnt happening, [to the same degree atleast]

im stating that property decline is only a result of the current financial crisis/ global recession and is thus proportionate, not just a correction of a housing bubble

 

[numbercruncher]

http://au.biz.yahoo.com/081129/2/22e0q.html

Victoria's real estate market slumps

"People are so scared to bid and they (the buyers) are like vultures, hanging around out the front trying to carve $200,000 or $300,000 off the asking price," group director Barry Plant said.

Adding to homeowners' pain will be Real Estate Institute of Victoria figures showing Victorians have spent almost $14 million on failed auctions in less than four months.


Ding, Ding....

Hilarious ! Trying to get property down to fair value is vulture behaviour , but ignoring fundamentals and tricking the market up wasnt ??

 

[shaunQ]

beerwm, it is happening, but not as forced yet. Margin calls force investors to rethink all their holdings. Unemployment forces people out of over-leveraged properties. As house prices fall, a domino effect takes place with more selling. If a recession or bad sentiment is around, again, people save and aren't as keen to take on debt, reducing demand. The opposite of supply is demand. If supply increases and demand decreases at the same time, then it doubles in its effect. Its a spiral that will take years to play out completely.

I think the market is currently going through a bit of a reaction rally, because of lowering rates but will continue downwards more severely next year as the recession/unemployment sinks in.

I heard a statistic the other day that 1/3 of QLD is employed by the mining industry. Another third, I am just guessing, would probably be tourism/retail. QLD has been a major focus for speculative property investors, similar to the US style property speculation. Some regions will be hit harder than others - QLD and WA the worst.

Most other major stock-market crashes have caused a property crash within 3 years. The US and UK are both experiencing major drops. Australia has one of the highest personal debts in the world, higher than the US, and yet - you think we will be immune?

 

[robots]

hello,

check check brothers,

14.7% for St Kilda Sept Quarter 08,

I am with you Indie, another day in paradise

thankyou
robots