House prices to keep falling for years

[MACCA350]

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

Let me see:
Lowest interest rates in 50 years
Largest government incentive ever
LVR rates still at subprime levels
Belief that if you don't get in ASAP you'll be locked out of the housing market forever as they'll get even more unaffordable.

Who's buying..........looks like every man, woman and child. Why........because they believe if they don't now they never will be able to.

I have friends who had resigned themselves to renting forever........that was until the above conditions occurred.........now they can't get in quick enough. They are aware they may be in trouble if things change, but they're too scared of missing out that they're willing to risk it.

cheers

 

[kincella]

here is an article that should make you all happy...vindicated

Port Douglas investors are rushing to offload units

Bridget Carter | July 16, 2009
Article from: The Australian
UP to a third of the 3000 holiday apartments in Port Douglas are for sale, with one unit recently fetching about $177,000 after selling for $366,000 six years ago, according to local agents.

Villas at the Juniper Sea Temple in Port Douglas are down by 20-30 per cent.
Newly built units are flooding the market, with more than half of the apartments in the town's Lagoons@port development owned by failed property developer and pub baron Tom Hedley to be offered for sale by receiver Ernst & Young in coming weeks.
Phil Holloway, principal licensee of the Port Douglas Century 21 office, said he would put in a submission to receivers to market Mr Hedley's units.

"The last price received for one of the apartments was $345,000 and Hedley wasn't able to go below that because it wasn't economical," he said.

http://www.theaustralian.news.com.au/business/story/0,28124,25787721-25658,00.html

 

[matty2.0]

Let me see:
Lowest interest rates in 50 years
Largest government incentive ever
LVR rates still at subprime levels
Belief that if you don't get in ASAP you'll be locked out of the housing market forever as they'll get even more unaffordable.

Who's buying..........looks like every man, woman and child. Why........because they believe if they don't now they never will be able to.

I have friends who had resigned themselves to renting forever........that was until the above conditions occurred.........now they can't get in quick enough. They are aware they may be in trouble if things change, but they're too scared of missing out that they're willing to risk it.

cheers

Nothing wrong with renting forever. So long as you're a good investor and can get high returns on your capital.

Long term fixed rates by the banks for home loans are in the 7-9% range. Not exactly a great time to buy is it? There is no doubt that interest rates will rise in the next 5-10 years. Variable or fixed, you're still looking at about 8%+ rates long term.
The banks will take you to the cleaners if you give them a chance. We've got a stable big 4, but with that comes a price.

 

[MrBurns]

here is an article that should make you all happy...vindicated

Port Douglas investors are rushing to offload units

Bridget Carter | July 16, 2009
Article from: The Australian
UP to a third of the 3000 holiday apartments in Port Douglas are for sale, with one unit recently fetching about $177,000 after selling for $366,000 six years ago, according to local agents.

Villas at the Juniper Sea Temple in Port Douglas are down by 20-30 per cent.
Newly built units are flooding the market, with more than half of the apartments in the town's Lagoons@port development owned by failed property developer and pub baron Tom Hedley to be offered for sale by receiver Ernst & Young in coming weeks.
Phil Holloway, principal licensee of the Port Douglas Century 21 office, said he would put in a submission to receivers to market Mr Hedley's units.

"The last price received for one of the apartments was $345,000 and Hedley wasn't able to go below that because it wasn't economical," he said.

http://www.theaustralian.news.com.au/business/story/0,28124,25787721-25658,00.html

Thats what I was waiting for, I'll be on a plane soon, wait another month or 2, wonder how the rental market is ?

 

[cutz]

Nothing wrong with renting forever.

And be at the mercy of some tightarse incompetent landlord / property investment guru. Forget about it, owning over renting anyday.

 

[MACCA350]

Thats what I was waiting for, I'll be on a plane soon, wait another month or 2, wonder how the rental market is ?

Careful..........I smell a trap........Kincella wouldn't post bearish info without something up his sleeve:

cheers

 

[johnnyg]

Some good posts in here. And hopefully I can add to them. Today I went with a friend to look at some housing. Below is a chart (reasonably rough) of the # of people that attended each open house (went to 4) and the price of each house.

Now this is only a tiny example. However I feel its valid and expresses whats happening with house prices. Entry level homes ~ 150-200K attract extreme amounts of interest (# of people per open house) where as the more expensive homes 250K+ attract very few.

There is a clear divergence between # of people per open house and the price of the house.

 

[matty2.0]

And be at the mercy of some tightarse incompetent landlord / property investment guru. Forget about it, owning over renting anyday.

If you're not a good investor/trader then residential is for you I guess. But I stand by my firm belief that if you're a good investor/trader and can get 10-20% returns on capital then there is no reason why you should be purchasing real estate, which is after all ... just another investment. All depends how good you are with capital and where you want to put it.

 

[cutz]

If you're not a good investor/trader then residential is for you I guess. But I stand by my firm belief that if you're a good investor/trader and can get 10-20% returns on capital then there is no reason why you should be purchasing real estate, which is after all ... just another investment. All depends how good you are with capital and where you want to put it.

Hi Matty2.0,

I wouldn't consider owning your own home an investment, it's a lifestyle choice, a choice not to be done over by some clown. Also acts as a hedge against hyper inflation which is a bonus.

Each to their own i guess, i would never consider buying a second house because i consider it a waste of resources, I'm also sure that many here own homes and also pull 10-20% return on capital.

BTW, releasing equity from a home for investment strategies is an option, ( obviously within reasonable limits), best of both worlds are possible.

 

[knocker]

Interest rates on 2.79% here. Australian rates are too high. And property over valued. Buy overseas.

 

[tehnoob]

Interest rates on 2.79% here. Australian rates are too high. And property over valued. Buy overseas.

I fail to see how you can claim interest rates in Australia are too high just because Bernanke and Greenspan cut the rates in the US, thus inflating asset prices. And then go on to say that prices are too high here... Hrmm, would lower interest rates not send prices higher?

 

[MrBurns]

Careful..........I smell a trap........Kincella wouldn't post bearish info without something up his sleeve:

cheers

Ok now I'm paranoid

 

[kincella]

well spotted.......hahahahaha....question now is ...what does kincella have up his sleeve......

 

[MrBurns]

I think I'm going all Ned Flanders, buy or sell diddly diddly diddly diddly....

 

[MACCA350]

I think I'm going all Ned Flanders, buy or sell diddly diddly diddly diddly....

<In best Elmer Fudd voice>

Be vewy vewy quiet, Kincella's hunting pwoperty bwears!, He-e-e-e-e!

cheers

 

[satanoperca]

Prestige home prices tumble 40pc

http://www.theaustralian.news.com.au/story/0,25197,25799089-601,00.html

Top 100 discounted properties

http://www.theaustralian.news.com.au/files/house_prices.pdf

One piece of the puzzle is coming together for prof. Steve Keen.

Interesting to see over the coming year if decreasing demand at the top end trickles down to other segments of the market.

Cheers

 

[kincella]

this is last weeks news from Morrell and Koren..buyers advocates in Melb

20 Ross Street, Kew Land value – always the litmus test – sold last year for $1,901,000, sold last weekend for $2,335,000. 20%+ profit for doing … absolutely nothing.
4 Cross Street, Toorak a modern spec house on 620 sq metres sold via an expression of interest campaign for $5,250,000. Not a big block, yet there were several disappointed punters.
Alexandra Avenue, South Yarra. New apartment, very busy location, also sold through an expression of interest campaign: $3.8 million.
The next few weeks? At the top end, the truffle-hunt continues. At the lower end, investors are flocking back in droves. Where were they six months ago when the real estate market was on its knees?

David Morrell

Something to say? Your comments are welcome. Click on “Comments” below.


Bayside: Auction clean-sweep pales before private sales
Melbourne’s top five auction sales for the week were all in Bayside. That’s a clean sweep which indicates the strength of the resurgence in the beachside suburbs.

It’s in stark contrast to less than six months ago when Bayside (Brighton in particular) was consigned to basket-case status with allegedly financially stressed vendors and a complete absence of buyers.

180-182 The Esplanade, Brighton a mortgagee-instructed auction last sold in November 2008 for $3.55 million. It’s 840 sq m. and includes a tired pair of maisonettes which will be demolished, yet two keen bidders pushed the price to a very strong $4,105,000.

Nearby, in leafy Sandringham, 43 Victoria Street, set in park-like grounds of 2600 sq m, sold for a more than respectable $3,350,000. Soon after, 163 Beach Road, Sandringham (on a more modest 616 sq m) was knocked down for $1,800,000.

Even discreet and private Black Rock made a podium appearance: 52 Stanley Street, an 8 room rendered house on a 453 sq m, sold for $1,440,000.

1B Lucas Street, East Brighton, in a classic example of underquoting, made it into the top five results for the week. Touted as $950,000+, the property attracted four bidders before being knocked down for $1,260,000, a mere $310,000 over the “quote” or close to 33%! Arrogant? Disrespectful? Mismanagement? Agents guilty of being so wide of the mark have little to be proud of. Their regard for buyers is clearly wanting.

And then came a couple of private sales …

1 Bay Street, Brighton finally changed hands for a price understood to be in the vicinity of $12 million. It’s over 2,000 sq m, it’s on the foreshore, it overlooks the yacht club. The new owners plan to build six luxury apartments and a penthouse.

A few hundred metres away at 25-27 Glyndon Avenue, a local buyer has forked out $15.5 million for a Jon Friedrich house with court and pool on 1500 sq m. It has uninterrupted views to the city, across the bay and down to the Brighton yacht harbour. This shatters the previous record price for a beach front property in Brighton by over $3 million and makes a strong statement about the health of the local market.
Damian Taylor

http://www.morrellandkoren.com.au/topend/

 

[kincella]

and look at this....family's pooling together to buy propes up 300%
Enquiries for joint mortgages up 300% Australians are ignoring warnings about entering into joint property ownership with friends or family, a lender says.

Text size +
Text size -
Print
Email
19.07.2009 10:48 AM

Australians are ignoring warnings about entering into joint property ownership with friends or family, a lender says.

The warning follows the release of data by direct lender MyRate.com.au showing a 300 per cent rise in the share of properties brought by groups of friends or family over the past six months.

MyRate.com.au managing director Kevin Sherman said the increase in joint ownership had been spurred by the gradual phasing out of the boost to the first home owners grant from October 1.

Tighter criteria for lending had also played a part in the rise of joint buying.

http://www.thebull.com.au/articles_detail.php?id=4768

 

[johnnyg]

Interesting to see over the coming year if decreasing demand at the top end trickles down to other segments of the market.

Cheers

That's exactly what myself and my friend witnessed yesterday. Absolutely no demand for the higher prices houses.

Surely for these higher priced homes to sell their prices will have to come off, which in turn may take down the lower end of the market as well.

 

[CamKawa]

Grants fuel first-home buying frenzy

More than 5,000 Victorian first-home buyers entered the real estate market last month in a buying frenzy fuelled by the first-home owners grant.

A record 5,193 first home purchases were made in June, including 1,489 newly constructed dwellings, which attract higher government incentives.
The Federal first-home buyers grant boost has been extended until the end of September, while the state bonus will last until at least June next year.

All up, first-time buyers purchasing new homes in Melbourne are eligible for as much as $32,000, and $36,500 in regional areas.

Lesser amounts are available for existing homes.
Victorian Premier John Brumby said housing construction was the best way to stimulate jobs and boost the economy but refused to be drawn on whether the state bonus would be extended beyond mid-next year.

''I'm not going to make commentary now about the budget next year,'' he said. ''The appropriate time to do that will be closer to the budget, but certainly I think the plans that we've put in place, there's no doubt they're working and working spectacularly well.''

Mr Brumby said there was no evidence the grants were inflating house prices and competition was giving buyers value for money.
--------------------------------------------------------------------

Question is what planet is Brumby living on?