House prices to keep falling for years

kincella · 28 June 2009

I think they now say 1 in 3 suffers some form of mental illness....probably brought about by all that dope they smoked for years......I never did...and no dementia history in my family...but I took up the grog after being a tee totaller most of my first 40 years....
back on topic.....see all those fools paying a million more for a property here in Melbourne above the listed price.....
property has been skyrocketing in Melb....have to be blind not to see that

robots · 28 June 2009

hello,

looks like the credit crunch is over in the UK,

the internet is back up and running, credit flowing

fabulous, now for that 50% drop in St Kilda units

thankyou
associate professor robots

wayneL · 28 June 2009

robots said:
hello,

looks like the credit crunch is over in the UK,

There has been some increased buying of property and the media is crowing about green shoots and and end the recession.

The signals are mixed however, unemployment is still rising and many businesses are suffering, the high street looks like bar-room brawler with missing teeth everywhere (empty shops), but the pubs (in my area at least) are full and there are heaps of people out seemingly shopping. 10% of mortgage holders are in negative equity.

There are still poisons in the mud however that still may hatch.

Catastrophe has been averted by hocking up future British generations, but credit is still tight. Government will have to curtail spending and taxes will increase.

This is not a recipe for a strong recovery or a return to "abnormal".

I'm holding my opinion, I'm not convinced.

robots · 28 June 2009

hello,

no worries WayneL,

some shopping strips are as you mentioned, in particular a couple of sections of Toorak Rd, Sth Yarra are struggling

we just plodding along here man, Kevin, ministers and the community doing a great job

paradise

thankyou
associate professor robots

kincella · 28 June 2009

Toorak rd, struggles due to the lack of parking and freeway timetables, and other reasons., like it is so overpriced in what it offers, living off the name location, reliant on tourists only ...its never been strong.....I would never buy there
look at chapel st...its fine,
always will be...its youthfull, vibrant and not over priced...
if you can find a bargain priced shop in Chapel St ...go for it....
there is a huge difference...do the research and know the location...it makes all the difference in making money or struggling....

wayneL · 29 June 2009

wayneL said:
There has been some increased buying of property and the media is crowing about green shoots and and end the recession.

The signals are mixed however, unemployment is still rising and many businesses are suffering, the high street looks like bar-room brawler with missing teeth everywhere (empty shops), but the pubs (in my area at least) are full and there are heaps of people out seemingly shopping. 10% of mortgage holders are in negative equity.

There are still poisons in the mud however that still may hatch.

Catastrophe has been averted by hocking up future British generations, but credit is still tight. Government will have to curtail spending and taxes will increase.

This is not a recipe for a strong recovery or a return to "abnormal".

I'm holding my opinion, I'm not convinced.

Update:

http://business.timesonline.co.uk/t.../construction_and_property/article6600881.ece

Weak mortgage lending hits UK housing recovery
Elizabeth Judge
Hopes of a recovery in Britain's battered housing market were dealt a setback today when new data for May revealed a weaker than expected number of mortgage approvals and the lowest rise in lending on record.

A total 43,414 mortgages were approved in May, just up from 43,191 in April, the Bank of England said. Analysts had expected a figure closer to 46,000.

In a further illustration of the continued fragility of the market net mortgage lending during May rose by just £324 million, a third of the level in April and a tenth of the amount loaned at the same time a year ago. The increase was the weakest since records began in April 1993.

This is all part of the conflicting signals. Scarcely anyone can get a mortgage based on the new criteria (actually, it's the old criteria, before bubblicious bubble blowing).

Estate agents have unquestionable been busier over the late spring (the traditional buying season), must all be cash buyers I guess. The acid test is what happens as autumn sets in IMO.

Trevor_S · 30 June 2009

http://seekingalpha.com/article/145883-time-to-start-worrying-about-australian-banks

The inevitable question that results from this observation has to do with whether or not New Zealand (hereinafter NZ) and Australia (hereinafter AU) are in for a similar decline in prices but are just a few years behind the US in the process.

If that is the case, then the resulting shock to the local banks that serve this region could be just as dramatic as the impact that the ongoing housing price spiral has had on the US banking system. Specifically, the reason it is especially important to focus on housing in these countries is that, on average, among the seven banks I analyzed, 60% of their loan books consist of residential mortgages (and securitizations).

Also, the primarily focus should be on AU, as 85%+ of the banks’ loan portfolios are made up of AU-located loans.

CamKawa · 9 July 2009

It'll be interesting to see what happens won't it?

Low-end house prices 'to fall 10pc'

Aussiejeff · 9 July 2009

CamKawa said:
It'll be interesting to see what happens won't it?

Low-end house prices 'to fall 10pc'

Naaah.

IMO KRudd'nCo will counter by extending their beloved FHBG "boost" indefinitely.

After all, they promised "whatever it takes".

RE Nirvana for years to come.

CamKawa · 9 July 2009

Aussiejeff said:
Naaah.

IMO KRudd'nCo will counter by extending their beloved FHBG "boost" indefinitely.

After all, they promised "whatever it takes".

RE Nirvana for years to come.

I wouldn't be surprised if Kevin got the credit card out just one last time Johnny Farnham style. I just hope that Turnbull has got the tyres on the debt truck pumpted up to about 50psi to handle all the weight.

explod · 9 July 2009

Where's that Professor, what's is name, Robo..... no.. Rouge oh, ......oh.. I remember now, the self styled associate Professor Robots. Missing for a number of days now. Damn'ed tenant problem I suspect.

This thread has gone very sad on low volume, are we finally realising the world financial system has a problem.

tech/a · 9 July 2009

Havent been here for a while.

Still waiting for the bottom I see.
Meanwhile my portfolio has increased in value 13% since the start of this thread.

Will finish building my own Ponderosa in August and now actively looking for a developement property.

robots · 9 July 2009

hello,

good evening and welcome back Professor Robots

apologies to all, have been in sunny Mt Martha for some commitments in the area

took a drive thru the Tanti Estate for a bit of humour Explod

i am actually surprised to see this thread hasnt been closed considering the current situation

well done Tech

thankyou
professor robots

kincella · 9 July 2009

well the prices keep going up...just goes to show how wrong some people are
been having the same argument on another forum....its become tiresome...
but here is my reply to the naysayers...doomsters today....

first lesson for you....when you want to look forward....first you have to look back to history...since 1986 and houses were oh was it 80,000 or 86,000....20 years later they were about 400,000...
there were quite a few crisis in that 20 year period, high unemployment, high interest rates...
and still houses gained 5 times..the 86 price...

the next 20 years to 2026 they could be 2,000,000 or more
based on the past history....

what is the aust wide median house price now is it 479,000 or there abouts....thats almost another 20% above the 2006 figure...yes 7% pa over the last 3 years sounds about right
...and whoa this was in the middle of the GFC which commenced to hit aus about june 2007...
hehehehehe
I have been very conservative with my forecasts and expectations over the last 20 years...and keep hitting the nail on the head...
but hey to each their own, oh and I dont really care if my figures are wrong, I cannot be bothered sifting through pages and pages of stuff on the net...just to be exact...the prices keep going upwards....and will do for the next 50 or more years...thats all I care...miss a couple of years, no worries...its the long term outlook that interests me....
cheers

--------------------------------------------------------------------------------
.
The owner of McDonalds once asked Harvard students if anyone knew how he made his money.
They answered easy, making hamburgers.
No he replied. I own the best real estate in every capital city in the world>*** The best way to become a millionaire is to borrow a million dollars and have your renters pay it off.
Jack Miller

**** My posts are for experienced property investors only. They are not for the inexperienced or first home buyer..

wayneL · 9 July 2009

UK update:

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=348556

House prices were on the decline again in June, reverting back to their downward trend after a one-off rise in May.
The Halifax House Price Index said prices dipped by 0.5% in June, to leave the average cost of a property at £157,713, 15% down on last year's figure.
May's reading had indicated that house prices had climbed by 2.6%, but the figure was greeted with scepticism and was widely labelled nothing more than a one-month anomaly, rather than an indication that the market had bottomed out.

House prices are down 18 or 20% from the peak, yet still overvalued by traditional vectors. Much hinges on now on the inflation/deflation argument. I'm leaning slightly towards inflation atm, but I think it may take a year or three to start showing up... plenty of time for more tankage.

Only cashed up/low LTV property investors are surviving in comfort. The geared up ones are dieing by a thousand cuts. These are going broke in their thousands.

Meanwhile lenders haven't learnt their lesson:

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=348747

Nationwide has started offering 125% mortgages to customers in negative equity in order to allow them to move home if their circumstances require it.
In a move which will raise concerns about lending practices, Nationwide said it had been offering home loans worth up to 125% of the value of the new property to a select few of its customers who are in negative equity but need to move.
Under the deal, borrowers in negative equity can get a new mortgage worth 95% of the value of the new property. They have to fund the remaining 5% in the form of a deposit, but then they can also carry over negative equity in their original home. The 'value' of the negative equity they carry over can be worth up to 25% of the total cost of the new property.

Fracking insane IMO. A massive bet that we are at a housing bottom... in fact an economic bottom. Neither may be the case.

kincella · 9 July 2009

and they scoffed at that response...said prices cannot repeat as per the last 20 years...they have to crash some time....
so I followed it up with this post....................

well we could go back another 16 years to 1970....friends and I paid 12,000 for our houses....they climbed to was it 80k or 86k in 16 years...increased by 6.5 times then

the rise is partly caused by the devaluation of the dollar,it just keeps buying less and less over the years,
and with all the huge money being printed now....it can only get worse...not better

grace · 9 July 2009

CamKawa said:
I wouldn't be surprised if Kevin got the credit card out just one last time Johnny Farnham style. I just hope that Turnbull has got the tyres on the debt truck pumpted up to about 50psi to handle all the weight.

I thought your message was very funny even if you didn't know that truck tyres need at least 100psi (unless they are flat of course).

SBH · 11 July 2009

kincella said:
and they scoffed at that response...said prices cannot repeat as per the last 20 years...they have to crash some time....
so I followed it up with this post....................

well we could go back another 16 years to 1970....friends and I paid 12,000 for our houses....they climbed to was it 80k or 86k in 16 years...increased by 6.5 times then

the rise is partly caused by the devaluation of the dollar,it just keeps buying less and less over the years,
and with all the huge money being printed now....it can only get worse...not better

Its hilarious how bulls would rather quote ancient history australia than modern day UK or US. The fact UK housing has crashed and is crashing surely has some relevance! no no no they say, here in oz its business as usual... we just keep extrapolating the graph upwards.
Unfortunately for bulls we are clearly at the top now. Interest rates low, grants are out, everyone with grey hair and a pulse is a property investor, every idiot FHB couple who wants a mortgage now has one. It only has one way to go unless more structural interference is brought in by the government. Its so unbelievably obvious. Just look to UK to see what happens next. Ruddy did! Hence he got scared and gave handouts. The new trend (down) will be back soon enough!

Dowdy · 11 July 2009

our housing market is going to crash the opposite way the US did. In the US housing crashed, then commercial, then retail.

Our market will be the opposite to that:
First retail - which we are starting to see
Then commercial - had a look around the commercial/light industrial estates, alot of them have 'For Sale' or 'For Lease' signs on them
Then housing

The only reason it's going to be like that is because the housing market is heavily manipulated by the government so it takes longer but will ultimately be worst in the end.

wayneL · 11 July 2009

SBH said:
Its hilarious how bulls would rather quote ancient history

Agree in principle, but it's relatively recent history they prefer to quote, a period of very high inflation and the demographical influence of the post war baby boom. If they looked further back to "ancient history", they possibly could be more cautious.

The baby boom/high inflation/credit bubble conditions made it possible to just buy a house, gear it up and make money. My folks made buckets of money on property by accident, just by moving up the housing ladder... more money than they did in their very successful business in fact.

Simple extrapolation and basic mathematics... and a little help from MS excel shows this cannot continue ad infinitum.

Inflation may help things along in the future, inflation helps the geared property investor. So essentially from here forward, IMO, geared housing investment is a bet on inflation. But other hard assets may perform just as well... perhaps better.

Without inflation kicking in, there will be a world of pain for the overly geared.

House prices to keep falling for years

kincella

robots

hello

wayneL

VIVA LA LIBERTAD, CARAJO!

robots

hello

kincella

wayneL

VIVA LA LIBERTAD, CARAJO!

Trevor_S

CamKawa

Aussiejeff

CamKawa

explod

explod

tech/a

No Ordinary Duck

robots

hello

kincella

wayneL

VIVA LA LIBERTAD, CARAJO!

kincella

grace

SBH

Dowdy

wayneL

VIVA LA LIBERTAD, CARAJO!

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