House prices to keep falling for years

[Mc Gusto]

In my opinion there is no way investors are going to pick up where first home buyers have left off. The reason for this is that they are investors and won't be buying at current market prices because they are not stupid!

Wait and see...numbers are coming off weekly

 

[Beej]

In my opinion there is no way investors are going to pick up where first home buyers have left off. The reason for this is that they are investors and won't be buying at current market prices because they are not stupid!

Wait and see...numbers are coming off weekly

Well you may be right but the Aug figures (only one month though) are suggesting otherwise so far. We shall see! As most on this thread have found out over the past 18 months, the property market often does completely different things than what some expect.

I still think the investor wild card are the SMSFs where the holders are near or at retirement and are looking for nice steady cash flow in the years to come without the risk/volatility of shares etc. There are still some half decent investment opportunities around; I saw a 1 bed flat on the lower north shore last week that sold for $265k with a gross rental yield of 6.5% and a net yield after body corporate, rates etc of 5.5% - that's not too bad at all? Location was excellent and such that you would never have a problem finding/keeping tenants at market rent rates. I'm personally not increasing property holdings right now because I have been increasing my equity weighting since late last year after selling an IP and my old PPOR and upgrading, however a property like the one I saw last week could be very attractive for a SMSF?

Cheers,

Beej

 

[MrBurns]

From Crikey -

The real estate spinners who are artificially inflating prices
Adam Schwab writes:


Despite its ubiquity, residential property remains one of the least transparent asset classes in Australia. With the exception of a small minority of sophisticated property investors, most buyers spend hundreds of thousands of dollars on an asset which they know very little about. In many cases, the information buyers possess is even misleading, most notably in Melbourne, the auction capital of Australia.

No better example is the listed "clearance rate" published by the major newspapers. Clearance rate information is calculated by the Real Estate Institute of Victoria and also by Australian Property Monitors (which is owned by Fairfax), while RP Data is also understood to be publishing clearance rate data.

While Australia is in the midst of a property bubble with prices across many suburbs at record levels, it could be the case that part of that reason for the boom is the hysteria whipped up by self-interested parties, especially real estate agents (although artificially low interest rates and misguided government stimulus are the prime culprits).

The fear that (often young) home buyers need to buy now to “get in the market” is underpinned by what appears to be extraordinarily high "clearance rates" -- that is, the percentage of house auctions which result in a sale.

The auction "clearance rate" is published weekly by the major papers, including The Age, Sydney Morning Herald and the Australian Financial Review. The Age receives its data from the Real Estate Institute of Victoria.

The REIV, as Crikey pointed out last year, has a somewhat chequered history with accuracy. Some even claim that the Institute intentionally ignores certain data to make to make the property sector appear more buoyant than it actually is. The conspiracy theory is not completely without foundation. Remember, real estate agents make money by selling properties. During slumps less people sell properties which means less commission for agents.

But it isn’t only the Real Estate Institute which appears to be providing inaccurate clearance rate data.

SQM Research, a leading independent property advisory group noted on Sunday that:

The number of unreported results has risen dramatically from last year. In every city, based on the APM results at least 10% of listings are not being reported. In Melbourne, the situation is very alarming with over 60% of listings not being reported to APM on the day. It is understood that APM (and RP DATA) make up for this deficit in Melbourne by monitoring the published REIV results over subsequent days.

For all cities, the clearance rates reported by the reporting bodies and subsequently published by the major papers assume the unreported results NEVER EXISTED. They are left out of the clearance rate.

This situation was noticed in Melbourne by Crikey last year when it conducted a comparison between the listed auctions in Saturday’s Age and the results the following day. It was observed that there was serious discrepancy between the data. In many instances, the REIV would simply not report houses which ‘passed in’ (although in the REIV’s defence, it is also possible that agents simply did not report the poor result). This created the impression of a far higher clearance rate than what really was the case. Agents and the media will then claim that the high clearance rate is a leading indicator of a property boom.

Not only is the clearance rate data somewhat suspicious but Real Estate bodies have a tendency to be somewhat flippant with the truth regarding vacancy rates.

Last year, Media Watch exposed data published by the Real Estate Institute of NSW as being utterly false. The Institute had claimed that in all of Sydney there were only 739 vacant properties. The Institute’s own figures suggested that the number would be around 5,000, while leading property experts noted that the actual figure was probably around 20,000 -- almost 30 times the number claimed by the Real Estate Institute.

Any asset bubble, be it shares, property or tulips, is only able to inflate if investors are naïve enough to ignore fundamentals and believe spin.

So far, if property prices are any guide -- the spinners are winning.

 

[Knobby22]

Speaking of spin, an agent has put a big add on a giant billboard near where I live proclaiming Real Estate has got hot, with the word "hot" spelled with chillies.

Says it all really.

 

[satanoperca]

I couldn't agree more with the above actually.

Last week I noticed the REIV missed reporting on one property I attend the auction and was passed in with a vendor bid only and another property in the same suburb was sold privately and never up for auction was listed in the auction results.

REIV reported approx 600 auctions last week, the domain RE liftout showed approx 250 auctions for the same week. A little sus.

I then looked into REIV report and found properties that had been sold the previous weekend been included in last weekend results.

This week I have selected six suburbs and noted down number of auctions in each suburb and will check them against REIV figures on Sunday. Somehow I feel I will see a lot lower clearance rate than what is being reported.

Cheers

 

[satanoperca]

Knobby,

where is it, a little bit of word changing might be required at night.

Cheers

 

[Knobby22]

Good idea.

Corner of Mt Alexander and I think Princes Street, Flemington, in Melbourne.

 

[robots]

hello,

i will meet you down there if you need a hand

thankyou
Doctor Robots

 

[satanoperca]

hello,

i will meet you down there if you need a hand

thankyou
Doctor Robots

Robots you really make me laugh, diversity is the spice of life and you certaintly added some spice.

Not to be out done by Dr Steven Keen, I see you have been studying hard, day and night and in a very short space of time have received the honour of using the title of Doctor. Congratulations.

On the above, can always use the hands of a trusty tradie. Will have the site scoped and a plan of action within a couple of days. Will be intouch.

 

[trainspotter]

I am thinking an "S" at the front of the word HOT and the "O" changed to an "I" perhaps? This would work.

 

[satanoperca]

Trainspotter,

A plan is starting to come together and thank-you for this creative and spirited idea.

Are the characters to be in the form of poo as well? Maybe to far.

Will keep those interested posted on progress.

Cheers

 

[robots]

hello,

anyway we could tweak it to read SPECIAL

thankyou
Doctor Robots

 

[trainspotter]

Trainspotter,

A plan is starting to come together and thank-you for this creative and spirited idea.

Are the characters to be in the form of poo as well? Maybe to far.

Will keep those interested posted on progress.

Cheers

Ummmmmmmm .... had not really thought about having the lettering to be symbiotic with excreta by nature? But now that you mention it ... not a bad idea !! Keep ASFers informed of the headway. Pictures even would be good.

 

[satanoperca]

Yes, some mock ups will be required before action can proceed.

Cheers

 

[trainspotter]

hello,

anyway we could tweak it to read SPECIAL

thankyou
Doctor Robots

And have the lettering in the form of cereberally challenged troglodytes? This way you caould really get the full effect of what you are trying to achieve ! HAHA AH ah ha h he eh he eh eh heh ......... *plop*

 

[CamKawa]

This thread has gone a bit quiet. Am I the only bear left?

 

[MrBurns]

This thread has gone a bit quiet. Am I the only bear left?

As so as you think it's all go, it just isn't.

Correction not far away.

 

[explod]

This thread has gone a bit quiet. Am I the only bear left?

No you are not, suporters in the wind. And they will increase in the next month or two, FHBG fading and the Real Estate Industry ramping so hard there is little left now.

cheers explod

 

[CamKawa]

Thanks for the responses. I was feeling like I was the lone bear in the woods...

 

[Gordon Gekko]

Thanks for the responses. I was feeling like I was the lone bear in the woods...

It's not easy being a bear. But we will have our day in the sun. reality is starting to set in finally!

G