House prices to keep falling for years

[Lancelot]

See this , a little big to post here -

https://www.aussiestockforums.com/forums/showthread.php?t=13964

Who's Adam Schwab?

Sounds like some whiney little b*tch hoping for a crash so he can load up or a whiney little b*tch who failed to buy when they were cheap and is now upset at his failure

 

[MrBurns]

Who's Adam Schwab?

Sounds like some whiney little b*tch hoping for a crash so he can load up or a whiney little b*tch who failed to buy when they were cheap and is now upset at his failure

Dunno but he writes for Crilkey and you don't.

 

[Temjin]

I get the feeling you seem to be worried that people do not share your same perspective? and even bothered at the fact some wish to discuss these thoughts?

There are some that even believe that there is a general social good in having lower priced property for all.. not necessarily for our own individual benefit, but to ensure everybody in Australia has an enjoyable standard of living. I don't think some can understand that perspective.

And then we have a lot of people who fails to step back and look at the bigger picture and only solely focus on the supply and demand situation as being protrayed by the media and vested interest parties.

They say credit is NOT in a bear market and we will find it much easier to borrow money because short term interest rate has dropped (and may drop to 0%) and that their "personal" experiences tell them the banks are still lending like as if they were free. Very few people bothered to look at why people were able to purchase homes at such inflated prices in the first place and how the banks have managed to lend so much money and the cause and effect of this global financial crisis.

They simply extrapolate the future by assuming credit lending will remain intact and supply and demand will continue to worsen and ultimately leads to higher property prices or at the very least, stagnate. Of course, then you have those Keynesian inspired economists telling them (via the media) that according to their computer models, house prices will never crash and credit lending will go back to "equilibrim" and confidence shock will never occur because it is not explained in their book theories based on some guy called Keynes who had been wrong for the last 40 years.

Like I said again, this thread has become too emotional to make it worthwhile to make any more constructive opinions. hehe

 

[wayneL]

Who's Adam Schwab?

Sounds like some whiney little b*tch hoping for a crash so he can load up or a whiney little b*tch who failed to buy when they were cheap and is now upset at his failure

Nice attitude.

 

[noirua]

Who's Adam Schwab?

Sounds like some whiney little b*tch hoping for a crash so he can load up or a whiney little b*tch who failed to buy when they were cheap and is now upset at his failure

Buying property, seeing what is happening in the world, must be a most worrying pastime these days.

 

[Temjin]

We will have more of these kind of fellas soon.

http://money.cnn.com/2009/01/05/real_estate/Lereah.moneymag/index.htm

Confessions of a former real estate bull

As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he's abandoned what he calls the 'positive spin.'

(Money Magazine) --

Q. Were you wrong to be so bullish?

A. I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren't good. I never thought the whole national real estate market would burst.

Q. The NAR's latest forecast calls for a slight increase in home prices next year. Thoughts?

A. My views are quite different now. I'm pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we'll see a very modest recovery in sales activity in 2009. But we've still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It'll take a long time to get back to the peak prices we saw in many markets.

Q. Any regrets?

A. I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that.

Of course, Australia is different with its lack of supply and high demand regardless of the global credit situation.

 

[noirua]

We will have more of these kind of fellas soon.

http://money.cnn.com/2009/01/05/real_estate/Lereah.moneymag/index.htm



Of course, Australia is different with its lack of supply and high demand regardless of the global credit situation.

It's never different, it's, always the same.

 

[CamKawa]

The ABS released the building approval figures for November today. The charts maybe looking a little bit bearish I think.

http://www.abs.gov.au/ausstats/abs@.nsf/mf/8731.0?OpenDocument

 

[Aussiejeff]

The ABS released the building approval figures for November today. The charts maybe looking a little bit bearish I think.

http://www.abs.gov.au/ausstats/abs@.nsf/mf/8731.0?OpenDocument

Nice understatement.

The Private Sector Housing Approvals for the 12 months up to Nov 2008 look like they fell off a cliff.....

 

[kincella]

Ok, so the banks not lending to the builders and developers.....mum and dad not building a new home.....hello it compounds the shortage of houses....

but where are the builders with the deal with the fed govts plan for 50,000 new homes...the ones where the builder receives 6000 per year per house for 10 years....pretty certain news article in Dec said they were on track to completing some of the homes....???....and assumed since the govt only gave the go-ahead in Nov....that some of those new homes would show up in future houses stats ????....or could it be the developers had put in applications a year ago ...to start this year....and then applied for the govt deal....
its not all adding up....50,000 new homes should show up in the stats

 

[chops_a_must]

Kincella, talking to my developer contact early last year, he had stopped virtually all projects in Nov 07. Obviously he was not alone, as there was a 25% YOY drop in Perth.

His reasoning: speculators had driven up the price of land to the point where costs had crossed the line in which people could pay for the end product.

Demand means jack all when ability to pay is hampered, or not sufficient.

 

[Beej]

Kincella, talking to my developer contact early last year, he had stopped virtually all projects in Nov 07. Obviously he was not alone, as there was a 25% YOY drop in Perth.

His reasoning: speculators had driven up the price of land to the point where costs had crossed the line in which people could pay for the end product.

Demand means jack all when ability to pay is hampered, or not sufficient.

Yes but that is a situation the will produce a price plateau, rather than a crash due to the supply constraint that is being built into the market.... strangley exactly what is actually happening, especially in the lower end of the market!

Beej

 

[Aussiejeff]

Ok, so the banks not lending to the builders and developers.....mum and dad not building a new home.....hello it compounds the shortage of houses....

Maybe a shortage of NEW houses, BUT the sellers market for EXISTING homes has also tanked bigtime - so there is a glut of homes for sale by increasingly desperate existing homeowners who obviously need to downsize - they aren't selling so some are now being rented out short term to those new home buyers that might be missing out (and reflected in the massive drop in NEW HOME approvals).

I believe the demand for RENTAL homes has shot up at the same time, which figures.



aj

 

[chops_a_must]

Yes but that is a situation the will produce a price plateau, rather than a crash due to the supply constraint that is being built into the market.... strangley exactly what is actually happening, especially in the lower end of the market!

Beej

I wouldn't call what is happening in Perth a plateau.

For property, it is very significant.

 

[kincella]

aussiejeff, I keep a close on on albury properties..(not wodonga) and all the cheaper lower priced homes were sold Jun 08 to Oct....Nov produced a whole different price range.....the median value would have dropped up to Nov due to the excessive large number of properties at the lower end of them market,, screws the median figure downwards....a consistent monthly average of 30 houses per month selling since Mar 08..when I started the watch.....
I believe a lot of the average priced homes have been pulled from the market,,,those above the FHB range of 300,000.....
Those houses will come back on the market at a higher price as interest rates go down....and the fhb have filled up

pretty certain there are on average only 200 for sale in albury at any given time...and a similar number of rental props....
the drought breaking rain , if it continues will have a big impact on that area...ie farmers start spending again etc
I believe one needs to look at each area, and not use a one size fits all, australia wide policy to guage the markets.

 

[2BAD4U]

I wouldn't call what is happening in Perth a plateau.

I would.

 

[michael_t_f]

I was speaking to my elderly nieghboor today and he is selling up. He cant afford to survive on his stock investments anymore. He does have another property but he is selling the one he is in because of the market decline. I don't know the full details, just repeating what he said, he's probably not the only one in this situation.

 

[awg]

As a long time property investor, and in my late 40's

I am of the opinion changing demographics are likely to force down the price of the mid-to-high priced houses.

Many people in my age bracket have very large and fancy houses with only 2 people living in them.

When they want to cash them in, who will be able to afford to buy?

A lot of these premises are not well suited to rental investment.

I believe ABS figures show average household has shrunk to around 1.6 persons!

I personally dont like strata-title, previously owning various property types.

Now prefer lower price bracket, large, flat land area, with low maintenance properties. Very easy to rent out

I reckon we will see very different markets in different areas over the next couple of years.

Interested in other opinions re demographics

 

[smithy]

Recent report ....Melbourne Age.
40% of privately owned homes in exclusive seaside resort suburb Portsea ..... to be on the market following January (after letting contracts expire) !!! Hmmmm.... seems just a tad excessive ..... but who knows ? A lot of business owners ..... geared ??? We'll see in a cuppla weeks. Supply in most middle > up market zones certainly seems destined to overpower demand in Melbourne generally.

 

[noirua]

If Australia is 1 year behind then house prices will fall between 8% and 12% in 2009.
Australia is no Japan, we're not exactly running out of land you know.