House prices to keep falling for years

[numbercruncher]

Some news from the haves for the have nots

Ahhh I see you desperados going hard sell more and more ....... the end is near ?

 

[Aussiejeff]

Figures indicate first home owner grant boost
http://www.abc.net.au/news/stories/2009/01/10/2463030.htm
Tanya Plibersek says new figures showing a boost in applications for the First Home Owner Grant are encouraging.

Why then is this "boost" having practically NO effect on reducing the mega-drop in TOTAL new private dwelling building approvals?

Maybe Tipsy Tanya hasn't seen (or would want to accept) that Bureau of Stats graph I attached a few posts back!

So, what IS the actual number of First Home Buyers being approved - as a percentage of total private dwelling approvals? It can't be significant. The graph doesn't lie (post #2969).

 

[kincella]

in November only...one month...fhb approvals were 5385.....and talk of extending the grant...see the link...
fhb ....approval given to buy a new home or old existing building......or to build a new home........maybe, just maybe, the fhb are happy to buy out there on the market....and not get tied up in building a new house....
I think over 5000 grants for the first month is a good start......have no figures regarding what % FHB would start from scratch and build a new home, but think it would be quite low.......once they start having a
babies is when they start looking at building the dream home.
I know more people middle aged, who do build the dream house....more money available, and investors.......but almost everyone in that category has stopped doing anything.....blinded by the lights of the WFC
.................................................................................................
quote from aussie jeff....Why then is this "boost" having practically NO effect on reducing the mega-drop in TOTAL new private dwelling building approvals?
So, what IS the actual number of First Home Buyers being approved - as a percentage of total private dwelling approvals? It can't be significant. The graph doesn't lie (post #2969).
.......................................................................................
http://www.theage.com.au/national/push-for-home-grant-extension-20090110-7e1t.html

 

[Aussiejeff]

in November only...one month...fhb approvals were 5385.....and talk of extending the grant...see the link...
fhb ....approval given to buy a new home or old existing building......or to build a new home........maybe, just maybe, the fhb are happy to buy out there on the market....and not get tied up in building a new house....
I think over 5000 grants for the first month is a good start......have no figures regarding what % FHB would start from scratch and build a new home, but think it would be quite low.......once they start having a
babies is when they start looking at building the dream home.
I know more people middle aged, who do build the dream house....more money available, and investors.......but almost everyone in that category has stopped doing anything.....blinded by the lights of the WFC
.................................................................................................
quote from aussie jeff....Why then is this "boost" having practically NO effect on reducing the mega-drop in TOTAL new private dwelling building approvals?
So, what IS the actual number of First Home Buyers being approved - as a percentage of total private dwelling approvals? It can't be significant. The graph doesn't lie (post #2969).
.......................................................................................
http://www.theage.com.au/national/push-for-home-grant-extension-20090110-7e1t.html

Thanks for the link.

According to the data in that article, FHB's would appear to make up about 20-25% (at best) of housing finance transactions. So, if the number of "minority" FHB's are up, say, 50% and the number of "majority" other transactions are down 50%, it explains why the big drop in overall housing approvals (and thus the overall health of the RE industry) appears to be extending and flying in the face of such FHB optimism.

It doesn't really surprise me that such unbridled optimism for FHB is being clung to by pollies. It is the only little flicker of light they can see at the end of the long, dark tunnel. They are hoping a puff of ill wind won't upset the dreamtime too soon!


aj

 

[kincella]

Aussiejeff, I do not believe the FHBG has anything to do with boosting the RE industry........it was brought in to address the problem of helping FHB into the market.....while the RE industry was raging over the past 5 or more years...it was the FHB that were complaining......

as for the govt...well they have had their heads in the sand regarding Aus going into recession or depression....they were still believing China and the resources industry would save us....even up until mid Dec ...Swan was saying we are fine....

the FHBG was introduced in Oct.....govt still unaware of the impending crisis,
it was only after the RBA began cutting interest rates (after raising them non stop for almost a year) that has boosted the FHB into taking up the grants.....

Interest rates were only ever used as an excuse to curb inflation, when they curbed retail spending, and business...the RBA reacted....and since the RBA had ignored calls the rates were hurting home owners.....I do not believe the RBA suddenly sat up and took notice of the home buyers

I do not believe the govt has done or intends to do anything regarding the building industry and housing.....a lot of people employed in that industry, but if you are in the car industry....the govt panicks to protect jobs...doubt that industry is as big as the building industry

 

[Glen48]

Imaging you drop $1 in a pokie machine and it gives you $XK's do you take take the money and walk or put it back in and try and win more?
Housing is the same do you sell now or hold on and hope it will go up more?
Pokies you know you can't win, housing there is now sign any where it will go up but a lot of signs it will go down.

 

[kincella]

glen, fancy comparing buying a house to a $1 gambler....

I do not have to hope house prices will go up.....I know they will !
its all there in the history charts.....who cares about picking a date in the future...1 year...or 2 or more..but eventually prices will go up again....I can wait it out

 

[numbercruncher]

glen, fancy comparing buying a house to a $1 gambler....

I do not have to hope house prices will go up.....I know they will !
its all there in the history charts.....who cares about picking a date in the future...1 year...or 2 or more..but eventually prices will go up again....I can wait it out

They can stagnate for a decade pretty much as they did through the 90s ....

 

[MrBurns]

They can stagnate for a decade pretty much as they did through the 90s ....

Agree, been there experienced that, fall by 30% and stagnate for a decade.

And this boom makes the one we had then look like a blip on the radar, yes it will go up but not without a lot of pain first.

 

[grace]

Agree, been there experienced that, fall by 30% and stagnate for a decade.

And this boom makes the one we had then look like a blip on the radar, yes it will go up but not without a lot of pain first.

Yes, I bought at the top after the 80's, ten years later, sold for the same price and had reno'd quite a bit. Better house, same price, 10 years on.

I suspect we won't see that peak in Jan 08 reached for 10 years, but that's just my personal opinion.

 

[kincella]

usual for property to stagnate for 7 years...then rise in the last 3 years, so what is that property worth now...???? double what you sold for or triple ??

look at this report for housing from 1986.....it shows no reduction in the median prices.....so maybe the homes of the posters who agreed with the reduction....were in locations where the prices stayed low.......but other houses in those years obviously rose in price....so the affect was rises all those years....
I did some research on Melton in Vic some months ago.....180,000 to 230,000 in 5 years,,,growth of only 5% pa....that is like nothing compared to the inner suburbs....so compare apples with apples, not the one size fits all policy....ps I do not like Melton....but looked for unpopular suburbs to prove a point


http://www.aph.gov.au/library/pubs/RN/2006-07/07rn07.pdf

 

[CamKawa]

Housing Finance figures came out today. The long and short of it seems to be "Investment housing commitments decreased 6.1%, while owner occupied housing commitments increased 1.4%."
source: http://www.abs.gov.au/AUSSTATS/abs@...05DBCE56402EC566CA25723D000F2999?OpenDocument

Looks like:
1. The increasing of the FHOG has done fark all
2. Specuvestors are heading back into their caves

 

[robots]

hello,

going to be a major issue with real estate specuvestor's staying in the cave,

will be a fantastic time if the trend continue's

thankyou
robots

 

[explod]

hello,

going to be a major issue with real estate specuvestor's staying in the cave,

will be a fantastic time if the trend continue's

thankyou
robots

Of course, that is why I am waiting on the sidelines. Glad I do not have any invstment properties at the moment.

The money is going to be on the gold thread Robots, you should pop over, put that wobbly St Kilda stuff into something of real value.

 

[Glen48]

If we had some way of getting an accurate record regarding the true cost of buying a house including bank fee's, inspections etc and selling houses and how much had been spent during the term the owner had the property, we would have a more accurate price structure and therefore be able to compare R E against other " investments."
People should be given a disclosure statement before buying a house just like any other risk.

 

[prawn_86]

how much had been spent during the term the owner had the property

this is something i was thinking about the other day. I'll use easy figures just as an example, but if someone borrows 100% of 500k.

Say IR at 8% means 40k pa in interest. Even with neg gearing if they wanted to sell a couple yrs later, it means their returns have to be pretty much matching what the IR on the loan is (a bit less taking neg gearing into account) it means just to breakeven there has to be a hell of a lot of capital gains.

Does that make sense...

Its all well and good for people to buy a property at 5yrs later its worth 25% more, but how much interest have they paid in that time...?

 

[white_crane]

this is something i was thinking about the other day. I'll use easy figures just as an example, but if someone borrows 100% of 500k.

Say IR at 8% means 40k pa in interest. Even with neg gearing if they wanted to sell a couple yrs later, it means their returns have to be pretty much matching what the IR on the loan is (a bit less taking neg gearing into account) it means just to breakeven there has to be a hell of a lot of capital gains.

Does that make sense...

Its all well and good for people to buy a property at 5yrs later its worth 25% more, but how much interest have they paid in that time...?

Isn't the interest tax deductible?

 

[prawn_86]

Isn't the interest paid on money borrowed to buy the property tax deductible?

Yeh, but you will only get a certain amount back (depends on your tax bracket). Its not as though you get the interest for free.

 

[Glen48]

I was talking about Owner occupied were most people would not keep a record things like a new Hot water sys. Having to get a room painted, fitting a new patio or old one repaired even things like having the carpet or pest control done etc.
Claiming interest on rentals etc is ok as long as you are in a high income bracket and if you are paying child support it is added back in as income.
We have all spoken to people who will tell you how much they sold a place for and what they paid for it which still gives you no idea how much profit they made.

 

[numbercruncher]

The bears are cutting loose in Ireland .....

Warning that house prices may fall by 80%

http://www.irishtimes.com/newspaper/finance/2009/0113/1231738220759.html


Just as well we are in Oztraaaalia and have kangaroos n' stuff ....