House prices to keep falling for years

[CamKawa]

Here's a chart from tonight's ABC news. Things aren't looking good.

 

[robots]

hi,

are gidday robots, tonite on abc news Alan Kohler said building approvals down again and this wont be good for rents

does this mean rents will rise?

cheers
peter from Preston

Hello Peter,

great question, most definitely rents will rise and thanks to Camkawa with the graph just posted further indicates things arent looking good for renters

thats okay many of them have plenty of cash so increases can easily be accomodated, paradise

can people please rate this reply so I can get an indication on performance

thankyou
robots

 

[Beej]

DOZENS

Yep. Don't see why I should be doing all the research for you bears, but check out for the first 12 I can find after 5 minutes:

* Hornsby, Asquith, Berowra, Parramatta, Liverpool, Bankstown, Fairfield, Hurstville, Cronulla, Camden, Camperdown, Ashfield - all up from 2% -> 10%+ over the past 6 months (median price), from the following APM link: http://www.homepriceguide.com.au/snapshot/index.cfm?s_rid=APMHomePage:Demographics:Link

There ARE dozens more. I'm sorry if the facts don't support your conjecture! House prices to fall for years? Not if you buy in the right areas it would seem!

Cheers,

Beej

 

[UBIQUITOUS]

Yep. Don't see why I should be doing all the research for you bears, but check out for the first 12 I can find after 5 minutes:

* Hornsby, Asquith, Berowra, Parramatta, Liverpool, Bankstown, Fairfield, Hurstville, Cronulla, Camden, Camperdown, Ashfield - all up from 2% -> 10%+ over the past 6 months (median price), from the following APM link: http://www.homepriceguide.com.au/snapshot/index.cfm?s_rid=APMHomePage:Demographics:Link

There ARE dozens more. I'm sorry if the facts don't support your conjecture! House prices to fall for years? Not if you buy in the right areas it would seem!

Cheers,

Beej

'Dozens' isn't much considering that there are hundreds of suburbs in Sydney

 

[prawn_86]

Just to show the bulls that it works both ways this is from last weeks BRW:

Vic Houses - 10th worst suburb down 19% for 2008 worst down 30%
Vic Units - 10th worst suburb down 17% for 2008 worst down 31%

NSW Houses - 10th worst suburb down 25% for 2008 worst down 42%
NSW Units - 10th worst suburb down 43% for 2008 worst down 33%

QLD Houses - 10th worst suburb down 19% for 2008 worst down 43%
QLD Units - 10th worst suburb down 15% for 2008 worst down 41%

etc etc

So it shows that as with any asset class it depends what you buy

 

[singlefished]

Yep. Don't see why I should be doing all the research for you bears, but check out for the first 12 I can find after 5 minutes:

* Hornsby, Asquith, Berowra, Parramatta, Liverpool, Bankstown, Fairfield, Hurstville, Cronulla, Camden, Camperdown, Ashfield - all up from 2% -> 10%+ over the past 6 months (median price), from the following APM link: http://www.homepriceguide.com.au/snapshot/index.cfm?s_rid=APMHomePage:Demographics:Link

There ARE dozens more. I'm sorry if the facts don't support your conjecture! House prices to fall for years? Not if you buy in the right areas it would seem!

Cheers,

Beej

Sorry Beej, but just got to laugh... notice I typed it in large letters trying to make it a bit more impressive for you (I should have double spaced it as well...) D O Z E N S. . . . . . Thank me later

As far as I know there are well over 15 thousand suburbs Australia wide ~ almost 700 alone in Sydders....

Underpinning your fundamentals and diatribe with "dozens of suburbs" out of at least fifteen thousand is a bit weak, even for a spin doctoring cunning linguist like yourself...

Good to see the median prices rising... doesn't really show us the discounting that is going on in the more expensive price brackets though, similarly, it doesn't really show any evidence of the frenzied buying at the cheaper end of the market...

More activity at the lower end would surely bring the median down no? and probably show as a more pronounced drop at that due to the significantly fewer sales that are going through when compared to historic volumes of recency...

 

[billv]

More activity at the lower end would surely bring the median down no? and probably show as a more pronounced drop at that due to the significantly fewer sales that are going through when compared to historic volumes of recency...

True, the city median will fall, but it will stop the media and everyone else from saying that Oz property is overpriced, because it's not.

Property is priced at the level a buyer is willing to pay.

 

[ROE]

True, the city median will fall, but it will stop the media and everyone else from saying that Oz property is overpriced, because it's not.

Property is priced at the level a buyer is willing to pay.

don't get confused with price and value
price is what you pay
value is what you get

you can pay 10,000 for a TV but do you get value for your money

 

[Dowdy]

True, the city median will fall, but it will stop the media and everyone else from saying that Oz property is overpriced, because it's not.

Property is priced at the level a buyer is willing to pay.

Property is way overpriced. It has increased faster then the rate of pay has increased, faster then GDP, CPI etc.

It's overpriced by about 30-40%

The only thing keeping the price up is the government grants which all it did was inflate the price well beyond what people can pay.

 

[billv]

Property is way overpriced. It has increased faster then the rate of pay has increased, faster then GDP, CPI etc.
It's overpriced by about 30-40%.

I disagree, I believe that some property markets have been priced upwards due to investor speculation but in general our property prices are about right.

Market forces will fix any overpricing anyway, just like they did to shares.

Ofcourse we could argue about this till the cows come home but the fact is that in Australia we have many individual property markets so blanket statements like the one you've just made are not accurate.

 

[gfresh]

I disagree, I believe that some property markets have been priced upwards due to investor speculation but in general our property prices are about right

That is fine with 5.x% interest rates.. a lot didn't seem to like 8.x% though, nor found it that affordable, and new entrants may not also if rates were to ever reach that level in the next 5 years.

Especially when unemployment is around 8% in 2012 which I expect it to be at and stay that way for a while. These cycles take a decade to play out properly in their full form.

Read a lovely article in the paper today about a 19 y/o couple buying in VIC with a whole $5000 they had saved up since they left school, the rest in government grants. I'm sure that's a great stable position to be buying a property

GM on an absolute knife-point right now. If they go, there goes Holden, one of our most iconic brand names.. no more Holden dealerships, no more Holden manufacturing, no more Commodore. Not so much relevance to housing, but shows how much of a changed place Australia could be in a few years time. Things won't just go back to the way they were in a couple of quick years as some seem to expect.

 

[kincella]

report out today...on average people are spending 32% of their income on housing compared to 39% last year....its the most affordable its been in 40 years....
and reported here last week...the income to house price ration has gone down to 5.1%.....
I think those waiting for another 40% crash will never buy a house....it will never get down that far....but in the meantime you can buy an affordable house anywhere...you just have to look.....
but maybe you have one of the 10 excuses Jan Sommers noted....as to why you cannot buy a house....
I am happy for all the renters out there....its your choice... nothing wrong with that.....
think a lot of information comes from the house price crash site....
just watch out soon....the US is having trouble with its deposit guarantee...thats only 250k.....ours is 1 million.....what if its reduced to 100k ??? people will not put the money under the bed....they will look for something like....bricks and mortar...deposit rates to drop further....so no incentive with low earnings and no guarantee ???

http://www.news.com.au/business/story/0,27753,25146492-31037,00.html

 

[drsmith]

One question that comes to my mind is the level of capital that is available for investment in housing. Clearly there will be less going forward but the extent will depend in the length/depth of recession and it's medium to long term imapct on investment markets, employment and credit availability. The level of goverment assistance (first home owner's grant) will also play a roll.

If we were to have a relatively short recession then the capital pool available for housing is more likely to sustain prices near present levels but a more sustained downturn is obviously much more likely to have a serious impact on real house prices.

This does not have to be in the form of a large fall over a 12 month period but rather a fall in real terms over a period of a few years.

 

[Glen48]

A friend in Gladstone tells me a lot of elderly have Margin loans could be from Storm and have to sell their houses he thinks about 50 were suppose to go on the market but never arrived....is it possible Bankers, legals, R E agents could snap them up before the public know?

 

[prawn_86]

Just to show the bulls that it works both ways this is from last weeks BRW:

Vic Houses - 10th worst suburb down 19% for 2008 worst down 30%
Vic Units - 10th worst suburb down 17% for 2008 worst down 31%

NSW Houses - 10th worst suburb down 25% for 2008 worst down 42%
NSW Units - 10th worst suburb down 43% for 2008 worst down 33%

QLD Houses - 10th worst suburb down 19% for 2008 worst down 43%
QLD Units - 10th worst suburb down 15% for 2008 worst down 41%

etc etc

So it shows that as with any asset class it depends what you buy

As with every other general thread which is only based on opinions, i noticed that people didnt comment on this where it didnt suit them...

 

[Trevor_S]

don't get confused with price and value
price is what you pay
value is what you get

Hey.. I use the same argument with goldbugs the stuff is worth no more then what it costs to dig it out of the ground... and this coming from an ex Au miner

I guess when it all comes tumbling down, they can fashion there horde of Gold into a club to beat other people off with.

 

[kincella]

prawn..wheres the link to read the article...and probably not interested because there are more awful suburbs out there then there are nice ones...the ones I follow are all doing nicely thanks
I know of posters who take out bits of an article to suit them....but the whole article tells the story

couple of weeks ago the media were screaming houses price crashing.... but overall australia wide it crashed less than 1%....
hahahahaha what a scream....

 

[Aussiejeff]

Projects cut as construction slows
Chris Zappone
March 6, 2009 - 9:31AM

Construction activity slowed again in February, hit by weak demand and cut backs on new projects.

[size=+1]The Australian Industry Group-Housing Industry Association performance of construction shrank to an all-time low of 29.5 index points in February, down from its 34.1 level in January.[/size] The gauge has been under the 50 point mark separating growth from contraction since March of last year.

"There was no let up in February for struggling construction firms as the relentless pressures of tight credit conditions and low market confidence continued to hit demand for building projects," Australian Industry Group (Ai Group) associate director Tony Pensabene said in a statement.

http://business.theage.com.au/business/projects-cut-as-construction-slows-20090306-8qcg.html

Somethings gotta give....

 

[Taltan]

Kincella
If the govt bank guarantee falls over than our banks will have to fight for every penny to surive because international funding will dry up. There will be no more credit creation and given Australian household debt levels you will be left praying property falls only 40%. I am not saying the above will happen but if you are going to put forward an argument at least follow it through to its logical conculsion

On a seperate issue does anyone know the current status on the govt extending the FHOG past June 30, will we find out on budget night?

 

[Beej]

On a seperate issue does anyone know the current status on the govt extending the FHOG past June 30, will we find out on budget night?

The issue is the FHOG boost. They are currently saying the boost will not be extended. We shall see. If it isn't extended, then the FHOG goes back to the original $7k/$14k as introduced by Howard when the GST first came in.

Hey.. I use the same argument with goldbugs the stuff is worth no more then what it costs to dig it out of the ground... and this coming from an ex Au miner

I guess when it all comes tumbling down, they can fashion there horde of Gold into a club to beat other people off with.

Nah - Gold is heavy but soft! Whilst it would hurt, the guy with the steel (or lead + gunpowder even!) will win the fight

Cheers,

Beej