House prices to keep falling for years

[gfresh]

Ahhh, things are starting to become unravelled... NSW expects a $1bn shortfall in it's budget chiefly due to reduced expected income from property stamp duty, taxes, etc.

http://www.abc.net.au/news/stories/2008/09/09/2359847.htm

Looks like some state governments have been relying on ever increasing property values as well

The new Premier of New South Wales, Nathan Rees, has pointedly refused to rule out raising taxes to help deal with a $1 billion budget shortfall, but his new Treasurer has not backed him up.

The Government's June Budget Estimates forecast a small surplus of $268 million for this financial year but Treasury officials informed Mr Rees of the $1 billion shortfall during his Cabinet's first meeting this morning.

Mr Rees has told Fairfax Radio his new Government has "a number of very serious challenges ahead".

"The magnitude of those has become more apparent in recent days, as I've been briefed by Treasury officials, but we will get on top of it, it will be a robust response to these challenges, we will re-establish our economic platform," he said.

"A couple of weeks ago, treasury officials and former treasurer [Michael] Costa had discussions with the rest of the Cabinet around a $90 million-a-month reduction in revenue estimates and that was a bit of a bombshell to all of us.

...

reasury officials say the property market is down everywhere in New South Wales, and that means falling stamp duty from house and unit sales.

Making a difficult situation even worse is that previously resilient parts of the top end of the market are no longer immune from the downturn.

A director at Ray White Real Estate Agents in Sydney, Kingsley Yates, says a fall-off in sales is costing the State Government.

"They're paying around $200,000 plus per transaction, some of these transactions last year, they were paying close to $1 million in stamp duty," he said.

Mr Yates believes it is time the State Government weaned itself from its dependence on property taxes.

"Stamp duty has always been an issue in real estate, and now that there is a rental crisis in Sydney and the investors have been keen with stamp duty, with land tax, and the Government, they want to encourage investors to buy real estate but they make it so difficult.

"So now we've got this Catch 22 where the housing affordability in Sydney is at a crisis point, the rental situation is at a crisis point, but they admit now that they rely so heavily on stamp duty.

"So I just don't know what they are going to do, I mean, they really rely so heavily on it, there must be other avenues that they should be looking at."

 

[pepperoni]

Ahhh, things are starting to become unravelled... NSW expects a $1bn shortfall in it's budget chiefly due to reduced expected income from property stamp duty, taxes, etc.

http://www.abc.net.au/news/stories/2008/09/09/2359847.htm

Looks like some state governments have been relying on ever increasing property values as well




...

I saw this too ... shows how much of a vested interest they have in increasingly unaffordable prices.

 

[robots]

hello,

Re: Insight on SBS

thanks for giving the HIA guy a few seconds otherwise the violin crew had the usual extreme representation,

thankyou
robots

 

[robots]

hello,

how's the first lady selling, been in house for 23yrs, dug up some masterpieces,

no discussion on all the affordable places on re.com.au

thankyou
robots

 

[robots]

hello,

bloody hell carry on as the world is going to end, we all doomed

anybody got any real issues to discuss

thankyou
robots

 

[professor_frink]

hello,

Re: Insight on SBS

thanks for giving the HIA guy a few seconds otherwise the violin crew had the usual extreme representation,

thankyou
robots

if they had of let him speak any longer the whole room would have burst out laughing

 

[Temjin]

hello,

bloody hell carry on as the world is going to end, we all doomed

anybody got any real issues to discuss

thankyou
robots

We already have discussed the REAL ISSUES. The insight was excellent and one of the most unbiased I've ever seen.

The evidences are obvious, you just don't choose the believe them. I feel bad for the assistant treasurer though, he had a duty to "talk up" the economy regardless of contrary evidences. (or else he would get blamed again haha)

Love Steven Keen, and glad he was there to show those people how private debt has reached extraordinary level. And then the fact that house affordability in Australia has reached unsustainable level. I was quite surprised to hear when it was mentioned that an average size home in Australia is worth 7 times more than the average "combined household income" compared to 5 in the UK, 4 in Ireland (after massive crash) and just went back to 3 in the US.

I do, however, agree with future solutions in decentralising the cities in order to make infrastructure a lot easier to maintain. Though it's too late now, the market will soon revert back to its true fundamental.

And oh, something new I learnt today. I wasn't aware of the fact that a lot of small business debt were secured by the owner's house. Now it made things double worse when the global economy continue to deteriorates. Can't change the sentiment because...it is the sentiment.

 

[pepperoni]

Love Steven Keen, and glad he was there to show those people how private debt has reached extraordinary level. And then the fact that house affordability in Australia has reached unsustainable level.

That was the best bit ... one of the fundamentals people conveniently ignore!

And oh, something new I learnt today. I wasn't aware of the fact that a lot of small business debt were secured by the owner's house. Now it made things double worse when the global economy continue to deteriorates. Can't change the sentiment because...it is the sentiment.

These are the sorts of people I know that are already in trouble ... from full ownership to negative equity due to business borrowing in a few years.


I really liked the stories of people taking a loss on places bought 4 years ago ... thats roughly where I see the market

 

[wayneL]

http://www.bloomberg.com/apps/news?pid=206...Jo&refer=uk

Redrow Posts Loss Following Writedowns of Land, Work (Update1)

By Tim "Timothy" Barwell

Sept. 9 (Bloomberg) -- Redrow Plc, the U.K. homebuilder with the lowest average selling price, had a second-half loss of 163.2 million pounds ($286.5 million) after writing down the value of its land and work in progress.

Writedowns totaled 259.4 million pounds, St. David's Park, Wales-based Redrow said today in a statement. That's around 32 percent of the company's gross asset value, compared with rival Taylor Wimpey Plc, which wrote down 11 percent, according to Panmure Gordon analyst Mark Hughes.

``It looks pretty big,'' said Hughes, who has a ``sell'' rating on the stock. ``It's either very, very conservative and the company is getting as much bad news out as it can, or the market is significantly worse than we had imagined.''

Redrow closed two offices, slashed 500 jobs, or 40 percent of the workforce, and scrapped the second-half dividend as it reels from the country's most widespread housing slump in 30 years. The group said it secured new conditions on its debt, which stood at 223.3 million pounds at the end of the period.

 

[CamKawa]

The insight was excellent and one of the most unbiased I've ever seen.

The value of independent media is priceless. Long live SBS and the ABC.

 

[gfresh]

anybody got any real issues to discuss

Well as this topic is about falling house prices, and well thought out arguments for and against said topic, maybe you had better skidaddle if it's all too much for you

I thought it was fairly well done with coverage of a few issues in a short space of time. As usual, often the people you wish to hear more from you didn't hear much of, such as Steven Keen. He has a blog with some futher data and audio commentary here http://www.debtdeflation.com/blogs/ (probably posted somewhere here, but here it is again)

Bit of a bias towards putting one of the worst housing areas in the country out there as being a-typical of all of Australia, but I guess it showed that things aren't going to well for some areas.

Then again, ANZ has announced pontially quite a few job cuts to middle management, and I doubt any of them live in Western Sydney.

Some of those recent buyers didn't look so confident however... especially that bloke who had been trying to sell for 4 months to realise his "$70k" profit. Well it ain't profit until it's in the bank unfortunately.

Decentralisation would be wonderful, if only our Governments were not so thick and looking only 4 years in front of them.. although I was speaking to a QLD Government worker the other week, who said the "grand plan" is to move much of government jobs out towards Ipswich in the coming decade. With any luck, some private business will follow the lead in setting offices outside of the CBD.

 

[wayneL]

http://www.estateagencynews.co.uk/goodman_articles/mgood0908.asp

Now tell me some good news...
LSL results ‘satisfactory’, while Connells’ estate agency operation just breaks even...

THE number of housing transactions will fall to only 500,000 this year and could fall even further in 2009.

Prices need to fall 25 per cent in cash terms this year, and fall even further in 2009, for transactions to return to near normal levels.

That’s the market view from Simon Embley, group chief executive of LSL Property Services, parent group of Your Move and Reeds Rains, after the recent announcement of their first half results.

“Only when lenders see the price falls have worked their way through the market, will they be confident again to lend 90 or 95 per cent,” said Mr Embley. “The house price correction during the early 1990s took six years ”” this time round it should take three.

 

[prawn_86]

On my street alone (which is in an expensive suburb) there are 7 houses or units for sale, excluding a 14 unit re-development.

When we first started living where we are now (2 years ago) there was usually zero or one for sale signs up at any one point in time.

 

[gfresh]

Noosa, the play domain of the hoity toity really getting smacked around, and these figures come from the REIQ. No sugar coating here..

Goldcoast down 2.4% in median values in June quarter according to the REIQ as well.

Falling house prices? they're happening...

http://www.abc.net.au/news/stories/2008/09/09/2359502.htm

Noosa house prices plunge

Posted Tue Sep 9, 2008 12:00pm AEST

There has been a massive drop in median house prices in Noosa. The average price at Noosa Heads has plunged almost 37 per cent in the last quarter.

The Real Estate Institute of Queensland report for the June quarter showed an average decrease of just 1.2 per cent in median house prices on the Sunshine Coast and 1.7 per cent in Gympie.

Some areas bucked the trend, with house prices at Peregian Springs jumping 13.4 per cent and Beerwah showed a 9.2 per cent increase in the quarter.

But properties in Noosa Heads recorded the biggest drop.

They plunged a whopping 36.9 per cent during the June quarter, while Noosaville dropped 22.5 per cent.

The next biggest drop was Parreara, which saw an 11 per cent drop in the median house price for the quarter.

 

[pepperoni]

The cremorne unit block I was interested in was passed in last night at a fizzer auction.

Then again all 8 properties were passed in without one sensible bid so they shouldnt feel bad.

I guess they all watched the SBS housing bust prog ... now that the all knowing idiot box has told us it must be true.

Might very well be the end of the denial stage for our *little* *young* and naive property market ... Passing the age of innocence and realising houses can be a bad investment, esp at 6-7 times earnings.

What next ... 30% year on year drop ... nahhh!

... oh wait noosa had that in a quarter???!!!!

 

[pepperoni]

Interesting ....

http://www.news.com.au/business/story/0,27753,24328717-5013953,00.html

"Mr Skilbeck said owing derivatives meant savings would effectively increase in line with house prices, providing a hedge against a future housing boom.

While the ASX declined to reveal details of the scheme -- including the cost to investors -- market players will be able to punt on falling house prices. "


Shorting on the ASX doesnt exactly help support overpriced shares does it ...

 

[pepperoni]

From home price guide ... close to city blue chip ... big falll in at least one area

Northbridge
Region: Lower North
Houses
6 mths to Jul 08

-29%

 

[xoa]

Good news from across the ditch: median house prices in NZ have fallen $20k over the past year, and are now down $35k from their peak. So much for their "housing shortage". Kiwi real estate agents and speculators are in a panic.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aMhPXMagcZUA&refer=australia

 

[dhukka]

For those interested, Our Finance Blogs will be hosting a debate on October 15th called “[URL="http://ourfinanceblogs.com/property-2009/]"Property 2009: Crash, Boom or Stagnate?!”[/URL] They claim that they will be inviting "various high-profile experts." Could be interesting.

 

[robots]

Good news from across the ditch: median house prices in NZ have fallen $20k over the past year, and are now down $35k from their peak. So much for their "housing shortage". Kiwi real estate agents and speculators are in a panic.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aMhPXMagcZUA&refer=australia

hello,

still having trouble finding something on australia the greatest country in the world,

thankyou
robots