House prices to keep falling for years

[chops_a_must]

And if I dont have an equity loan?

Who mentioned equity loan anyway, why are you intent on changing the goalposts?

What the hell are you on about?

It was just a response to a statement about falling home prices not having an impact on serviceability.

A lot of investment properties are financed against a PPOR, and thus these equity loans that we're talking about. Not all, but I imagine a fair percentage are.

I suspect it is the reason why there is monumental volume in Perth in the specuvestor belts as people try and get out before their own homes are at risk, which is what has been reported as happening in a number of cases in the media...

 

[Lancelot]

Are you really that short sighted?

Your personal situation is only a reflection of the market as a whole. All those who do have equity loans, interest only loans, 105% loans, etc are the ones who have inflated the price beyond sustainability.

Are you that short sighted as to think that if "some" idiots are overleveraged and crash and burn that this means "all" get taken down?

Try checking out delinquency rate % on loans as a comparison Aust to US and you will see we are looking pretty good

you might own your home and IP outright but if you lose your job or your tenant loses theirs then we will see what happens.

Yawn, you sound bitter

Well if I lose my job its no biggy is it, if my tenant loses there job, hardly the end of the world, two are long term dollies now and great tenants thanks, guaranteed income from K Rudd.

If others lose theirs, so what, there are plenty in the wings to take up the slack in 1 week max and the repayments are now negligable anyway

 

[Lancelot]

What the hell are you on about?

It was just a response to a statement about falling home prices not having an impact on serviceability.

A lot of investment properties are financed against a PPOR, and thus these equity loans that we're talking about. Not all, but I imagine a fair percentage are.

I suspect it is the reason why there is monumental volume in Perth in the specuvestor belts as people try and get out before their own homes are at risk, which is what has been reported as happening in a number of cases in the media...

What the hell are you talking about, a lot aren't, a lot are owned outright

Yes, I saw your word, IMAGINE

Try facts, not wet dreams

 

[knocker]

hello,

well that looks as though you found the reason Sinner, its all Supply and Demand,

just not enough houses for sale in St Kilda to satisfy demand (less than 30 sales), tight rental market its all adding up

merry xmas to you and your family as well

thankyou
robots

Warning will robinson lol:

 

[sinner]

hello,

well that looks as though you found the reason Sinner, its all Supply and Demand,

just not enough houses for sale in St Kilda to satisfy demand (less than 30 sales), tight rental market its all adding up

merry xmas to you and your family as well

thankyou
robots

Sorry robots,

This explanation you provide is simplistic and plain incorrect.

The correct explanation is given as a caption in the image: low house sales will increase house price volatility readings, thereby reducing its utility as an indicator of growth.

Even if we take the number at face value being correct and accurate, you should still be pretty worried. A 50% decline in YoY median house price growth is a south facing forward looking indicator.

 

[Aussiejeff]

A sad Xmas present from Santa Unca Sam to our dear Yankee friends -

[size=+1]U.S. Economy: Housing Prices Collapse at Near-Depression Pace[/size]

By Bob Willis and Shobhana Chandra

Dec. 23 (Bloomberg) -- Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing hopes that the market was close to a bottom.

Purchases of both new and existing houses dropped 7.6 percent, the biggest decline since January 1989, to an annual rate of 4.43 million, government and industry figures showed today. A 13 percent drop in the median resale price was the most since records began in 1968 and was likely the largest since the 1930s, the National Association of Realtors said.

“Housing is still in a freefall,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.

The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down. Sliding property values mean more Americans will be under water on their mortgages, destroying household wealth and undermining consumers’ purchasing power.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ7HBEgYCzUE&refer=home

Of course, this will never happen here. Phew!

Merry Xmas for all in St Kilda! :santa:

 

[robots]

hello,

yes sinner we all finished here in St Kilda man, gone all washed up on debt

i like your "opinion" on the data, awesome

would like to thank CBA for dropping the interest rates on my loans a FULL 1% point, might drop of a bottle of plonk to the Prahran office today

the good times just keep rolling on for the Money Renters, nirvana

enjoy the day

thankyou
robots

 

[knocker]

hello,

yes sinner we all finished here in St Kilda man, gone all washed up on debt

i like your "opinion" on the data, awesome

would like to thank CBA for dropping the interest rates on my loans a FULL 1% point, might drop of a bottle of plonk to the Prahran office today

the good times just keep rolling on for the Money Renters, nirvana

enjoy the day

thankyou
robots

Yes but maybe next time they will not be so generous.

 

[xoa]

Plummeting prices are great news for ordinary families looking for a home in Australia, New Zealand, UK, and the United States!

Renting or buying, you're getting a better deal.

thankyou
xoa

 

[knocker]

Plummeting prices are great news for ordinary families looking for a home in Australia, New Zealand, UK, and the United States!

Renting or buying, you're getting a better deal.

thankyou
xoa

OMG robots twin lol

 

[IFocus]

What the hell are you talking about, a lot aren't, a lot are owned outright

Yes, I saw your word, IMAGINE

Try facts, not wet dreams

My own experience is that the vast majority are not owned out right as the property investment gurus pushed the using of home equity to buy investment properties by doing this you can have a larger exposure.

I do not know any one who owns out right an investment property

 

[Lancelot]

My own experience is that the vast majority are not owned out right as the property investment gurus pushed the using of home equity to buy investment properties by doing this you can have a larger exposure.

Yes you are probably correct, the majority of mine are not owned outright either but they arent far from it, though, believe it or not, at one stage I owed a lot on them, but OVER TIME, the rent increased and the principle decreased

I do not know any one who owns out right an investment property

Well today's you're lucky day, now you do.

Just because you personally don't know anyone else who owns doesn't mean they don't exist

 

[awg]

It all depends on just how bad it gets.

If house values fall then it affects the banks capitalization

Two things can occur from this one the banks call in loans, I suspect many equity loans holders don't realize this or two banks stop lending.

Either way it gets heavy as the waves smash from financial to the economy and then back again.

Will it happen, I don't know just know the risk bias is south

It is almost inconceivable that the banks would call in any conforming loan, (except perhaps in isolated cases where cross-collaterisation or other unusual factors are involved)

it is against their own interests for several reasons.

1) They would have to sell the property in a falling market,(as almost no-one could re-finance), this sort of action would cause a freefall in property prices, thereby further damaging their capitalisation.

2) The political and reputational heat would be almost unendurable

 

[IFocus]

It is almost inconceivable that the banks would call in any conforming loan, (except perhaps in isolated cases where cross-collaterisation or other unusual factors are involved)

it is against their own interests for several reasons.

1) They would have to sell the property in a falling market,(as almost no-one could re-finance), this sort of action would cause a freefall in property prices, thereby further damaging their capitalisation.

2) The political and reputational heat would be almost unendurable

I agree AWG the gov has already signal that it will try to under pin house prices just thinking about worst case, in the end the housing market is much bigger than the Gov as the US is finding out.

This is all uncharted from here in on so we have to consider all possibilities such as has unfolded in the stock market, tell me who guessed today's position mid way through last year.

The housing market is a bigger elephant which is seeing softening look to see if momentum increases if so then we will see over shoot then we have a problem.

My hope is it will not happen but I know the risk bias is south.....

 

[Lancelot]

in the end the housing market is much bigger than the Gov as the US is finding out.

.

If you are going to compare AUS to the US maybe you need to think about the overbuilding in the US the excessively high vacancy rates in the US and the default rates in the US compared to Australia.

 

[chops_a_must]

Yep... those dozens of cranes building apartments in the middle of Perth don't exist either...

 

[robots]

hello,

you getting a run on hpc these days Sir Lancelot?

keep up the good work man

thankyou
robots

 

[IFocus]

If you are going to compare AUS to the US maybe you need to think about the overbuilding in the US the excessively high vacancy rates in the US and the default rates in the US compared to Australia.

Yes I agree Lancelot that's the situation now and 2009 will unfold differently in Oz to the US as the economies are quite different but we will still take a hit its how big and what the consequences are remains the question.

In the mean time Rio has closed the Hi Smelt plant here on the strip for 3 months not likely to restart, Tiwest's sister plants in the US one closed other at 50% production rate's Tiwest likely to reduce production March, April 2009.

Like I keep saying the risk bias is south

 

[Lancelot]

Yes I agree Lancelot that's the situation now and 2009 will unfold differently in Oz to the US as the economies are quite different but we will still take a hit its how big and what the consequences are remains the question.

In the mean time Rio has closed the Hi Smelt plant here on the strip for 3 months not likely to restart, Tiwest's sister plants in the US one closed other at 50% production rate's Tiwest likely to reduce production March, April 2009.

Like I keep saying the risk bias is south

Don't believe everything you see in the paper, as an example I have an involvement with this mine

http://www.abc.net.au/news/stories/2008/12/23/2453473.htm?section=business

At the hearing on Thursday it came out that it is actually getting maintenance done in that section, the staff have positions in other nearby mines and maybe 20 contractors will not have contracts renewed, big difference to the report.

Also of interes was that the ABC reporter was not allowed to sit in on the hearing.

 

[sinner]

US mortgage defaults hit an all time high in Q1 2007.

VIC mortgage defaults hit an all time high in Q1 2007.

Are we different where it counts?