House prices to keep falling for years

[Beej]

I'm sorry, but this statement is laughable. The stats clearly show that housing affordability in Australia is at all time lows due to aggressive credit expansion over the past 10-20 years. Rising unemployment and tighter lending standards will accelarate the correction/crash in housing prices...it's simply a matter of will prices drop by 20% or 60%?

What I find laughable is how all you guys state a speculative view as if it is a FACT!

EDIT: Oh and PS, affordability has actually improved dramatically in the last 6-12 months due to lower interest rates and median house price falls in the order of 5-10% depending on the area, so it is not true to say affordability is at an "all time low" - that was last years news.

Beej

 

[aleckara]

Like I said - it's an EXPECTATION crisis, not an affordability one...... that's why prices will never fall as low as you are hoping. Do you really think people who live in St Mary's, Penrith, Liverpool, Camden etc etc are all unhappy? You may be surprised to find large numbers of extremely happy people living in area's like that! I bet there are more unhappy people in Mosman right now.....

People in your situation have 4 choices, 3 of them practical ones:

1) Make or earn more money until you can afford to buy where you want to live

2) Buy where you can afford now, pay off, and then upgrade later

3) Keep renting (and saving) and try and keep ahead (a flat market will enable this, but who knows for how long?)

4) Wait for prices to crash until you (and of course EVERYONE else) can get what you want for the price YOU think is fair.

Of course the problem with 4) is the pent up demand will never actually allow this to happen, so option 4) is for dreamers IMO

Cheers,

Beej

While I don't necessarily agree that housing will not tank I do think Beej is right about expectations of people for their first property, especially people that are young and just moving into the housing market.

Sure close to the city is great if you are a university student or are a professional working in the city but most of the people who I know who do not fit into either category would rather not raise their family in one of those really small terraces in the city. They see the pollution, the concrete, the traffic, etc. as a bad thing. Tradies, developers, etc a lot of them do live in quite nice places either in the west, or on the outskirts of Sydney (north, south and west) due to the amount of land there.

Living in Sydney these terraces (particularly inner west ones) are the last thing I would buy but its all personal preference. I love the outdoor air, the wide open spaces, and the green that is where I live.

Part of the Sydney affordability problem is that the cities are the centre of everything. If jobs were a lot more spread out it wouldn't be as big of a deal.

 

[Temjin]

What I find laughable is how all you guys state a speculative view as if it is a FACT!

EDIT: Oh and PS, affordability has actually improved dramatically in the last 6-12 months due to lower interest rates and median house price falls in the order of 5-10% depending on the area, so it is not true to say affordability is at an "all time low" - that was last years news.

Beej

Isn't it ironic that everyone else are making predictions here regardless of their view.

You are essentially doing the same thing by predicting that house prices WILL NOT CRASH and will CONTINUE to rise over the next few years. Both "possible" scenarios has not happened yet and cannot be completed ruled out.

As for affordability, no one is going to argue that it has lowered since the global credit crisis on an average median price to average income earned basis. But at the same time, no one can argue that houses have become more unaffordable (using the same criteria) over the past 10-20 years due to the massive credit expansions that had been mentioned so many times.

 

[robots]

hello,

hey hey, check this man:

http://www.news.com.au/heraldsun/story/0,21985,24732514-664,00.html

look at that the humble building worker still kickin it in the top ten sensational,

nirvana, rates droppin like flippers at the club, $ hitting the pocket all day long in the building scene

hope everyone having a great day

thankyou
robots

 

[robots]

hello,

and for all the trippers out there, this tonite:

http://www.theage.com.au/national/smiley-face-will-appear-in-tonights-sky-20081130-6np2.html

thankyou
robots

 

[Mofra]

Isn't it ironic that everyone else are making predictions here regardless of their view.

You are essentially doing the same thing by predicting that house prices WILL NOT CRASH and will CONTINUE to rise over the next few years. Both "possible" scenarios has not happened yet and cannot be completed ruled out.

In fairness Temjin, could you point out where anybody on this thread has predicted a rise and given the % rise (or even a range) expected?

 

[numbercruncher]

Look how home ownership for the bogans across the Tasman is going .....

The great New Zealand dream of owning a home, particularly in Auckland, had been taking a hammering for years before the mayhem that erupted on US financial markets.
Home ownership figures increased from 61.4 per cent to 73.8 per cent between 1951 and 1991 but the march has been relentlessly downward since.
The 2006 census showed that 54.5 per cent of houses nationally were owned by their occupants; in Auckland, the figure had dropped to below 51 per cent.

We are possibly in the same league now with only 5 percent of Gen-Ys being tricked into the debt slavery/property bubble ?

 

[2BAD4U]

In fairness Temjin, could you point out where anybody on this thread has predicted a rise and given the % rise (or even a range) expected?

+100% by 2016.

This is provided we haven't all been killed by the sky falling on our heads.

 

[numbercruncher]

+100% by 2016.

This is provided we haven't all been killed by the sky falling on our heads.

In real terms or is that the Dose of Inflation CBss are about to lob on us ?

 

[2BAD4U]

That's with inflation. Governments (economies) need inflation, despite what they say to make people feel good. House prices WILL continue to rise. In 5 years time people will look back at 2008 as part of history, just like we do now with every other boom / bust cycle through out history.

 

[robots]

hello,

here we go real terms, real inflation, real % increases

its all irrelevant Number, its a zero game, a given

thankyou
robots

 

[ROE]

He pretty much say house price double every 7-8 years ... Only house will ever goes up. Quick buy now before you are price out FOREVER.

I like to see him buying too though because it's going to double in 2016 so you sure to make money, how can you possibility lose when you double your money 8 years from now.
come back here in 8 years to see if median price some where around 700K to 800K

 

[2BAD4U]

He pretty much say house price double every 7-8 years ... Only house will ever goes up. Quick buy now before you are price out FOREVER.

I like to see him buying too though because it's going to double in 2016 so you sure to make money, how can you possibility lose when you double your money 8 years from now

EXACTLY!!

You would like to see me buying? - well I am. (Number 4 for the record).

 

[numbercruncher]

He pretty much say house price double every 7-8 years ... Only house will ever goes up. Quick buy now before you are price out FOREVER.

I like to see him buying too though because it's going to double in 2016 so you sure to make money, how can you possibility lose when you double your money 8 years from now

Like those kIWIs - Down from 73pc to 51pc owner ocupied in 2 decades, only like 2 more generations and 1 person will own all the houses - awesome !

Maybe even a descendant of Robots will own them all ?he/she might even give free rent to the handout crew to save them hangin around 44 gallon drums to keep warm at night?

 

[ROE]

EXACTLY!!

You would like to see me buying? - well I am. (Number 4 for the record).

Great, you be millionaire soon it will double in 8 years time...
buy another 4, you make double what you would have make in 8 years..easy money

 

[2BAD4U]

Great, you be millionaire soon it will double in 8 years time...
buy another 4, you make double what you would have make in 8 years..easy money

Not quite, there are these little things called interest and capital gains tax that have to be paid. Throw in to the mix management fees and maintenance and what's left over is a tidy little nest egg. Cook in a superannuation found until dry and then through it away......oh hang on, that's already happened. Pffft, give me houses any day.

 

[ROE]

Not quite, there are these little things called interest and capital gains tax that have to be paid. Through in to the mix management fees and maintenance and what's left over is a tidy little nest egg. Cook in a superannuation found until dry and then through it away......oh hang on, that's already happened. Pffft, give me houses any day.

capital gain is cheap, you keep them for more than a year you get 50% discount
so if you buy a 400K house ..8 year times it's 800K you only pay capital gain on 200K so you make at least 300K profit ..cash in hand...why worry I mean for every house you buy you make 300K ... you be one of the richest people in Australia before long .. like I say house can only goes up and never down..
house price double every 7-8 years

 

[2BAD4U]

300k less interest of 224k (400k @ 7% over 8 years interest only loan) that only leaves 76k. Less selling fees / commission of 30k??? we're down to 46k.

 

[numbercruncher]

EXACTLY!!

You would like to see me buying? - well I am. (Number 4 for the record).

Interest rates are tumbling surely you should leverage up and get 4 more !!

You are destined for uber wealth ..... see your bank manager now !

 

[ROE]

300k less interest of 224k (400k @ 7% over 8 years interest only loan) that only leaves 76k. Less selling fees / commission of 30k??? we're down to 46k.

Interest rate are falling though, soon it hit 2% to 3% maybe even zero like Japan then you pay nothing at all for those properties.

See you bank manager tomorrow dont delay cos you may be price out forever in the next house you want to get