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House prices to keep falling for years

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sinner said:
Err what? Noooo. That 205k is now tied up into the house, it's not like homeowner get's that money cash in hand. You want to realise your 10k discount there, you need to sell the house and be in the same position as the renter while assuming the cost of selling is $0.
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I understand this, but the article is picking and choosing where it wants to make assumptions based on PCM and perfectly rational investors/savers and when it wants to make assumptions based on 'real world' empirical evidence.

Like sure, it is realistic to assume that there will be transaction costs on liquidation of the asset, 10% of asset value is fair? on a 205k house that only puts the homeowner a touch over 10k behind the renter after 30years based on this guys calcs but this is all the while assuming ZERO capital growth over 30years. Is this realistic aswell?

need to compare apples with apples
 
hello,

and at the moment you probably get "selling" fees of about 2.5-3.2%

some have fixed selling rates of 5-6k, paradise

thankyou
robots
 
Robots,

Picking the few suburbs (those will high FHB - government assisted) does not strengthen your arguement that house prices are not falling.

I reviewed the Sunday Sun list of property prices per suburb. Interesting some suburbs did Ok and some did not so well, the last qtr being more telling to the slide into recession that is now facing us.

Even our beloved PM sees we cannot swim against the tide any more. Given this statement, is property the only thing that is going against the current trend for assets - I hardly think so.

Like Steven Keens bet, how about we have a fun wavier to keep everything in good spirits. I will bet you that house and apartment prices in Victoria based on median will be negative after the 2nd qty results are released. This would be deemed a fall, how much, as long as it is negative. If I loose I will buy you a case of your favourite beer and vise visa. To finalise the deal, we meet in a pub in sunny St Kilda (a great place to live i agree), have a few beers and a meal and leave with our bounty.

On the issue of renter over mortgage, please factor in a value for if property prices fall, even 5%. I would rather be the renter - times are a changing.

Cheers

Benjamin
 
Largesse said:
I understand this, but the article is picking and choosing where it wants to make assumptions based on PCM and perfectly rational investors/savers and when it wants to make assumptions based on 'real world' empirical evidence.

Like sure, it is realistic to assume that there will be transaction costs on liquidation of the asset, 10% of asset value is fair? on a 205k house that only puts the homeowner a touch over 10k behind the renter after 30years based on this guys calcs but this is all the while assuming ZERO capital growth over 30years. Is this realistic aswell?

need to compare apples with apples
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Isn't it more (or at least, just as) silly to assume that the homeowner will be able to hold the whole thirty years if there is a large chunk of capital contraction through price destruction? More likely at this point they will be forced to sell at a loss if they want to retain mobility or have other equity issues or whatever.

I mean ok sure, it is probably safe to assume some capital growth on RE between buy 0y and sell 30y but what about the inbetween when homeowner has 3rd kid on the way and is still paying bubble prices on a deflated home waiting for inflation to take his pain away?

Meanwhile the renter can just up to the cheaper suburb no worries no loss.
 
hello,

no worries Satan, Windsor FHB's? look at Sunshine broke the highest price for the suburb the other weekend

i picked up a slab of ruskies last week so another in a few months time will be fantastic

thats right we all walk out as friends brother its only debate and discussion

thankyou
robots
 
sinner said:
Isn't it more (or at least, just as) silly to assume that the homeowner will be able to hold the whole thirty years if there is a large chunk of capital contraction through price destruction? More likely at this point they will be forced to sell at a loss if they want to retain mobility or have other equity issues or whatever.

I mean ok sure, it is probably safe to assume some capital growth on RE between buy 0y and sell 30y but what about the inbetween when homeowner has 3rd kid on the way and is still paying bubble prices on a deflated home waiting for inflation to take his pain away?

Meanwhile the renter can just up to the cheaper suburb no worries no loss.
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hello,

thats right the suitcase brigade, probably the old sub-prime NINJA phrase sums most up well:

NO INCOME NO JOB OR ASSETS

thankyou
robots
 
Not many home owners stay in the same house for 30 yrs I think it is about 5 to 7 so you have the extra cost buying, selling, Legal's etc. each shift.
 
Dont you guys get tired of talking around in circles all the time.

I think Robots has said one useful thing ever, and i cant remember what it was so it cant have been that poignant
 
prawn_86 said:
Dont you guys get tired of talking around in circles all the time.

I think Robots has said one useful thing ever, and i cant remember what it was so it cant have been that poignant
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Hello,

I can think of at least one useful thing Robots has said. He has mentioned this quite a few times on various threads, and also in a PM to me.

"embrace your job because as life travels on you soon realise THIS is where you will make most of your money,

what comes along with property and shares is a bonus"

Even if you don't agree with his posts, I am sure the majority of the forum find him entertaining.
 
singlefished said:
other than furniture removal costs which are common to both scenarios, what else does a renter have to pay?

(might even cost you nothing to move if you get your mates on board!)
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Disconnection and reconnection costs for phone line, internet, gas, water, electricity. Doing this every 12 months is not cheap, and its getting more expensive each year. (not that I have to worry about that anymore :p:)
 
gav said:
Disconnection and reconnection costs for phone line, internet, gas, water, electricity. Doing this every 12 months is not cheap, and its getting more expensive each year. (not that I have to worry about that anymore :p:)
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Maybe I get paid to much but I can't really recall exhorbitant fees whilst either connecting or disconnecting... possibly depends on what state you reside in and the suppliers you've signed up with?

For the units we've lived in it's generally been a call to get the utilities assigned to my name on moving in (transfer from the previous occupier), and on departure they've told me to read the meters myself otherwise i'd have to pay for somebody to came and do it for me...

Phone/internet are about the only grudge payments you have to make on connection ~ never cost me anything to get them disconnected though.

Even just had my telecoms provider giving me a free upgrade to ADSL2+ since I refused to pay the $60 to upgrade from ADSL last year when they brought in their new plans - told them I didn't need the extra speed or extra 5Gig download the new plans provided and wasn't interested.... Guess they just couldn't be bothered waiting :D

Anyway, still waiting on Largess explaining the buying/selling/legals/etc a renter has to pay....;)
 
gav said:
Hello,

I can think of at least one useful thing Robots has said. He has mentioned this quite a few times on various threads, and also in a PM to me.

"embrace your job because as life travels on you soon realise THIS is where you will make most of your money,

what comes along with property and shares is a bonus"

Even if you don't agree with his posts, I am sure the majority of the forum find him entertaining.
Click to expand...

actually, i dont even agree with this.

my observation has been that people whom hold down a job are actually slaves to a bank or two. they work all week to pay bills, never really getting any further ahead. indeed, they get further into debt.

if they instead embraced learning about property and shares, with the same fervour they slave and stress, they would find a better outcome.

it is well explained in the penny dreadful, 'rich dad, poor dad'.


.
 
Robots,
thanks for the link today...truth is stranger than fiction hey....
basically sound like a huge con job....millions losing their homes in the US, the govt throwing trillions of dollars to the banks to save who ????? not the home owner but the banks....then today ..obama is throwing money to the service providors....???? well thats the banks again....and are the banks lending or fixing...well no they have tightened the screws....

years ago...heard the story about people move house every 5 years....group I knew, did some research in Melb and found none of the people they contacted had moved or intended to move...most were there 20 years or more...or intended to stay that long.....they loved their houses and their lifestyle...the research covered most suburbs in melb...

sure there were some who moved due to work, more high flyers for promotions, and others moved from their first home to upgrade to a bigger home for teenage children....
All the people I know...are in the 20 plus years set....
20 years in the first home, then have moved for the lifestyle change....and in the 2nd home for another 20 years...with no intention of moving again

of course thats very different to the younger ones...usually not married...the suitcase brigade....
 
metric said:
actually, i dont even agree with this.

my observation has been that people whom hold down a job are actually slaves to a bank or two. they work all week to pay bills, never really getting any further ahead. indeed, they get further into debt.

if they instead embraced learning about property and shares, with the same fervour they slave and stress, they would find a better outcome.

it is well explained in the penny dreadful, 'rich dad, poor dad'.
Click to expand...

If I wasn't so busy "working all week to pay bills" I'd gladly show you a brighter side of life :)

There is an often missed statement in one of the RDPD books where Kiyosaki says that unless you are gunning for an income of more than 200,000* USD a year, he recommends not taking the B quadrant path. He says it's not worth the cost.

Ponder that.

*That was circa 2002/3 so you can probably index that figure upwards
 
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