House prices to keep falling for years

hello,

yeah man, low inflation (and low interest rates) is going to get us, yeah right

it was no accident on your parents part, it is being in there, being part of it all, no fluke, it was hard work and reaping the benefits

thankyou
associate professor robots

Lets face it house prices go up and down but over the long term it's all up, you just have to be careful you dont gear yourself up in a high phase.
Right now we're due for a large correction down made worse by KRudd.

robots said:

hello,

yeah man, low inflation (and low interest rates) is going to get us, yeah right

it was no accident on your parents part, it is being in there, being part of it all, no fluke, it was hard work and reaping the benefits

thankyou
associate professor robots

Click to expand...

1/ robots, stop being disingenuous and consider what I actually am saying. Overvaluation + deflation + overgearing = financial fatality.

It's happening in accelerating numbers over here. Consider also what I have said that those with more conservative gearing are very comfortable, many of those are adding to their PF if they can get attractive yields.

2/ You know my parents better then me? They hated property as investment (wrongly, for the time). They bought houses to live in. The investment value was irrelevant to them. It was only after they retired did they realize...

I tried to get them in property in the mid-late 90s... nup, still can't get my mum to consider property investment even now even though there are some brilliant yields available in selected areas.

An interesting article on Domain of all places, I think Enzo will have to pick the phone and have a little chat to the editor about this one.

Oz house prices: a Ponzi scheme waiting to collapse?

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

Click to expand...

Solution is pretty simple.
Dont be overly geared and in the property market.
Increase your property portfolio based on short term gearing longterm reduction of gearing. If your not currently in the position to do this then dont wade into the market.

If you are then build and sell your brains out!

Its really not that hard.

tech/a said:

Solution is pretty simple.
Dont be overly geared and in the property market.
Increase your property portfolio based on short term gearing longterm reduction of gearing. If your not currently in the position to do this then dont wade into the market.

If you are then build and sell your brains out!

Its really not that hard.

Click to expand...

That's not what VIs and gurus teach and you know it.

Warning quote following.....blogs following the article on the ponzi scheme....
.................................
"Not if money supply keeps increasing and that's the real Ponzi !! Unless there is an over supply of houses or major calamity where existing owners dump houses large scale I doubt prices will go down.


Posted by: Jake at July 7, 2009 11:58 AM
Unlike any other "investment", housing is driven primarily by necessity. Absolutely none of us is forced to buy shares, or gold, or antiques, or tree plantations. But we are forced to buy or rent the place we live in. The reference to Glen Stephens , "Even Glen Stephens (Reserve Bank) has suggested Australians need to moderate their expectation that we can all become wealthy by paying ever-increasing prices for each others homes", is true. We are possibly entering a new phase where, as in a lot of other major cities in the world, some people NEVER buy a property. They rent !!! Why ??? Not because they can't afford a property. But because they can't afford a property in the area they want to live in"

lets talk about divorce and property....and its impact on housing....

reminded by an associate....who was divorced many years ago, he walked out of the home, spouse bought him out....15 years later he is still renting...he earns 100k pa....he just cannot move on, and get back into property ....he cannot believe the prices....he refuses to pay more for a house than the one he lost...all those years ago...in the meantime, he has paid over 300,000 in rent...has nothing to show for it......
I get the same vibe from those bloggers who admit they are divorced.....they are wishing for a house crash crisis to restore them back into a house....

I was thinking about why so many are narky on property...and yes, all those divorcees out there, losing their homes....
I am divorced.....feel lucky I escaped from the marriage as early as I did...and have had a wonderful post marriage life....love my single life

on a another note....not sure how many divorces pa in Au....but it means instead of 2 persons per house...suddenly one needs 2 houses to house the separated adults.....that puts pressure on the market....

MrBurns said:

Lets face it house prices go up and down but over the long term it's all up, you just have to be careful you dont gear yourself up in a high phase.
Right now we're due for a large correction down made worse by KRudd.

Click to expand...

absolutely agree it is simply a matter of time and how far it corrects...will be interesting when it does. we should see the start of it near the end of this year in my opinion

house prices affordable in australia?

http://www.demographia.com/dhi-ix2005q3.pdf

might be some interesting reading for some..


thanks

gusto

kincella said:

Warning quote following.....blogs following the article on the ponzi scheme....
.................................
"Not if money supply keeps increasing and that's the real Ponzi !! Unless there is an over supply of houses or major calamity where existing owners dump houses large scale I doubt prices will go down.


Posted by: Jake at July 7, 2009 11:58 AM
Unlike any other "investment", housing is driven primarily by necessity. Absolutely none of us is forced to buy shares, or gold, or antiques, or tree plantations. But we are forced to buy or rent the place we live in. The reference to Glen Stephens , "Even Glen Stephens (Reserve Bank) has suggested Australians need to moderate their expectation that we can all become wealthy by paying ever-increasing prices for each others homes", is true. We are possibly entering a new phase where, as in a lot of other major cities in the world, some people NEVER buy a property. They rent !!! Why ??? Not because they can't afford a property. But because they can't afford a property in the area they want to live in"

Click to expand...

pretty selective quoting there Kincella.

the idea of ever increasing wealth especially in the current economic times is beyond belief. Companies are not only freezing pays they are cutting them. therefore an evert increasing housing market in current conditions is just not sustainable.


thanks

gusto

Mc Gusto said:

house prices affordable in australia?

http://www.demographia.com/dhi-ix2005q3.pdf

might be some interesting reading for some..


thanks

gusto

Click to expand...

Your joking aren't you........look at table 5...........we have the highest median unaffordable rating in all the nations with 3 in seriously unaffordable and 24 in severely unaffordable.

Australia: The Median Multiple in Australia is 6.0, double the 3.0 historic maximum norm and well above levels of just a decade ago (Figure 1).12 Among the larger metropolitan markets, Sydney remained the worst, at 8.3 (down from 8.6). Median house prices dropped in Sydney and Perth. Perth’s Median Multiple dropped from 7.6 to 6.4, reflecting not only the price decline, but strong income growth. At the same time, Adelaide’s already serious housing unaffordability worsened, with
its Median Multiple rising from 6.5 to 7.1. The Sunshine Coast (Queensland) replaced Mandurah as the nation’s most unaffordable surveyed market, with a Median Multiple of 9.3. All markets in Australia were rated as “severely unaffordable” except Wagga Wagga (New South Wales), Bendigo and Ballarat (Victoria), which were rated “seriously unaffordable” (Median Multiple between 4.1 and 5.0).
Unlike the other national markets in the Survey ¸ Australia has thus far been able to avoid material house price declines. It seems likely that, sooner or later, the inherent instability and unsustainability that characterizes bubbles will lead to house price declines in Australia. However, were it possible for Australia to retain its highly over-valued house prices, there would still be a significant cost. Future generations would pay far more for housing than in the past, and Australia’s relative standard
of living would decline.

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And why are you referencing that article anyhow..........last time it was brought up we were berated for doing so, saying it was a worthless methodology using phrases like "anyone who reads that rubbish" and "complete load of rubbish"

cheers

MACCA350 said:

Your joking aren't you........look at table 5...........we have the highest median unaffordable rating in all the nations with 3 in seriously unaffordable and 24 in severely unaffordable.



And why are you referencing that article anyhow..........last time it was brought up we were berated for doing so, saying it was a worthless methodology using phrases like "anyone who reads that rubbish" and "complete load of rubbish"

cheers

Click to expand...

mate i was pointing to the fact that it states we are off the scale unaffordable..that is why i questioned in my post 'house prices affordable?' however i didnt realise it had already been debated.

thanks

gusto

Interesting articles.
Kincella - You are incorrect in that people must invest in housing but not stocks. As you say someone can rent their whole life to provide for housing, likewise everyone needs banks, resource companies etc. You may never buy a bank share but you need to realise that as their customer (and the big 4 rip you off pretty good in Aus) you are helping their shareholders in exactly the same way as the renter/owner scenario.

A good point however is whether Sydney & Melbourne can follow NY in that house prices keep rising until the average person rents. Do you not think we are there already? How many people under 35 own a detached house in Toorak, Sth Yarra, Brighton, Malvern, Camberwell etc. that they did not inherit?

am wondering about the implications of China on our resources stocks...since the Rio guy was detained.....?????
I guess some will scoff...no implications...
but look at all the silly ones buying the old GM shares last week...they thought it was the new GM shares...which are not listed....
property keeps looking safer all the time...resources to china .....there are problems in store...
safest investment atm.....housing.....
this thread is almost obsolete.....prices have not been falling the past year...but rising...
cheerio

Mc Gusto said:

mate i was pointing to the fact that it states we are off the scale unaffordable..that is why i questioned in my post 'house prices affordable?' however i didnt realise it had already been debated.

thanks

gusto

Click to expand...

Yeah I should apologise for the tone of my post, I originally thought Kincella wrote it and was giving him heaps for referencing an article that he had berated myself and others for bringing up.........only after I posted it did I realise he didn't write your post.........I edited it, but obviously not enough


.........btw I do agree with the jist of the article.........that's why I brought it up earlier

cheers

Spoke to someone at Simmons and they mentioned that if FHB don't sign in the next two weeks they probably won't have enough time to get the July-Sep boost, also mentioned their start build dates for Feb are filling up. Not sure if this is common to many of the larger building groups, but if it is we might start seeing the effects of the FHB boost in the new housing sector taper off soon.

cheers

MACCA350 said:

we might start seeing the effects of the FHB boost in the new housing sector taper off soon.
cheers

Click to expand...

Unless KRudd the wrecker is feeling insecure and extends it again

MACCA350 said:

Your joking aren't you........look at table 5...........we have the highest median unaffordable rating in all the nations with 3 in seriously unaffordable and 24 in severely unaffordable.

Click to expand...

BAH
Forget that, this shows housing prices in Australia are clearly affordable. If they weren't affordable who is buying?

baa baaa from me too....do some research on the group demographia....they have another agenda, which apparently is not clear to you....
and to say places like Bundaberg, Albury Wodonga and any other small regional city in australia is more unaffordable than Los Angeles etc is sooo ridiculous....(I cannot be bothered to check again...it may not be Los Angeles but a similar big town)
its all about city boundaries...demographia want them extended...check out todays news....Vic Govt report states it costs 4 billion more to build new suburbs, than to change rules to build in established suburbs....but taxpayers wear the cost...so who cares
of course Atlanta is now affordable....they dont make a zillion cars a year there now.....all the people unemployed....its a pretty ugly place actually, doubt many here would like to live there

traps for players ,and some of you guys fall into the trap every time....
of course it suits your attitude...to say housing is unaffordable....regardless if the real facts are ignored......
demographia is similar to Al Gore...and his inconvenient truth......
unfortunately, one day you will look again, only to find that house in the inner city that you wanted for a song, is so far out of your reach....
you will have to finally change your attitude....and do the right thing....go find a house further out...that you can afford...then live happily ever after...
*** I say there are affordable places available year round....but its not a huge house on a quarter acre block, in the inner suburbs in Melb or Sydney...
its half an hour away...or 30-50 klms....
ps you will find more sympathy over at the global house crash sites.....
oh, and when interest rates start to rise again in a few years time....house prices will slow again....just like they did last year...but the cost to you will be the same....now 400k @ 5% = 20,000 interest pa........or 300k @ 7% = 21,000 interest pa.........its 6 of one...or half a dozen of the other....
I am not saying for a moment that prices will drop 100k......its just a very simple example of the affects of interest rates....
cheers
oh and watch out for some of the old bulls.....they have been gored, gut wrenching stuff...the missus took it, bit like watching an old lion, after the young lions came in and gave them a hiding,....took over the pride, the old lion cast out...its a sorry sight.......