House prices to keep falling for years

[robots]

hello,

surely you arent trusting what a couple of journo's and a paper print?

could you post the actual address so that sales history can be obtained otherwise it didnt occur

thankyou
robots

 

[wayneL]

Ruh Roh... bad news for BTL landlords.

Luckily mine aren't in the city (down in the SW) but this is a worry.

http://www.telegraph.co.uk/finance/...086987/Job-loss-headache-for-landlordspp.html

Job-loss headache for landlords

With unemployment rising, what should landlords do if a good tenant loses his job?


By Susan Emmett
Last Updated: 4:23PM BST 26 Sep 2008
Rising unemployments means that many landlords will lose their tenants
Landlords may have to advertise their properties with tenants losing their jobs Photo: GETTY

The credit crunch was supposed to be good news for experienced landlords, poised to take advantage of the growing demand for rental homes from those unwilling or unable to buy.

But more landlords will now be faced with unemployed tenants who cannot afford to pay their rent as the financial turmoil, which saw the collapse of Lehman Brothers and the proposed takeover of HBOS by Lloyds TSB, takes its toll in the City and beyond.

As the economy slows, the latest government figures show that there are more than 1.72 million people out of work in the UK following a rise of 81,000 jobless over the summer. The number will be even higher once the fallout from the latest banking upheaval is included in the statistics.... etc etc

 

[pepperoni]

Auction this week with 3.5m expectations ...now for sale 1.95+.

http://www.realestate.com.au/cgi-bi...r=&cc=&c=12906058&s=nsw&snf=rbs&tm=1222466427

A fair number of new listings in most areas hoping for the usual spring/summer push ... should get interesting.

 

[Glen48]

Swan the swine is giving taxpayers funds to Aussie and Wizard home loans to prop them up, the good part is they will only lend to quality home buyers who will then buy a house in a market which is loosing value...wait a minute didn't I read were some thing like that is happening already in some socialist country..

 

[gfresh]

Well unless the credit markets unfreeze, nobody will be getting a loan soon anyhow..

Here are some of the latest comments by RPdata on sales volumes.. Looks like number listed growing, and new listings shrinking = things aren't selling. As I said a few pages back, there will be the brief spring rush, and then realisation will set in. Need a few more weeks, but looks like this may be the case.

Even they seem confused..

TOTAL LISTINGS:
The number of new properties listed for sales last week dropped significantly following a significant increase during the previous week. Last week saw just over 8,500 new listings during the week which represents the fewest number of new listings across the nation since the last week of December 2007. This result is particularly surprising given the dramatic increase witnessed during the previous week and the fact that it is the middle of the spring selling season.

As a result of the drop in new listings, the total number of properties listed for sale has also declined during the week to just over 145,000 listings. With the likelihood of a further interest rate cut in October and consumer confidence rebuilding we would expect that market conditions will continue to improve and the number of total properties listed for sale will continue to fall as buyers re-enter the market...
...
During the 2008 financial year across the Australian mainland capital cities, sales volumes slumped by 10.9% when compared to sales volumes achieved during the 2007 financial year.

Confidence improving? since when?! Turn on the ABC and the first lead story nearly every night this week has been the collapse of the United States financial system.

Now even amongst work colleagues and friends, there is the growing talk that things are very bad right now. It's starting to seep into those that don't even follow the markets. Growing confidence? pft! people aren't stupid when they read things such as "America's Largest Ever Bank Collapse" in the papers today.

 

[Mofra]

Swan the swine is giving taxpayers funds to Aussie and Wizard home loans to prop them up, the good part is they will only lend to quality home buyers who will then buy a house in a market which is loosing value...wait a minute didn't I read were some thing like that is happening already in some socialist country..

No he isn't, he's creating an artificial market for collatoralised debt. Big difference. Hopefully the gummint will make a profit

NBLs have reduced their market share to only 4% so Rudd has to try something.

 

[Temjin]

Latest release

http://www.rba.gov.au/PublicationsA...008/Html/financial_stability_review_0908.html

Everybody check out GRAPH 15.



I'm actually surprised that Spain had a house bubble even larger than ours!

I haven't finished reading the review document yet, but seem to contain a lot of unbiased information on the status of our economy BASED on current data and assumptions. Of course, who knows what will happen in the future.

 

[Beej]

Well unless the credit markets unfreeze, nobody will be getting a loan soon anyhow..

I spoke to my bank this week re a potential loan, absolutely no problem getting a loan at all!

Confidence improving? since when?! Turn on the ABC and the first lead story nearly every night this week has been the collapse of the United States financial system.

Now even amongst work colleagues and friends, there is the growing talk that things are very bad right now. It's starting to seep into those that don't even follow the markets. Growing confidence? pft! people aren't stupid when they read things such as "America's Largest Ever Bank Collapse" in the papers today.

Well consumer confidence in Australia bottomed in July and has risen considerably for August (see http://business.smh.com.au/business/surprise-rebound-in-consumer-confidence-20080813-3uf1.html) - So that statement in the article is based on actual statistics rather than just conjecture as yours is. Of course due to recent events the CC index may well tick down for Sept, but it may not - we don't know yet. Historically the CC index tends to stick with an up or down trend and doesn't reverse direction suddenly or easily. Also aussie consumers seem to be much more effected by interest rates and petrol prices than fears of financial crisis in far away lands.....

Auction this week with 3.5m expectations ...now for sale 1.95+.

http://www.realestate.com.au/cgi-bin...&tm=1222466427

$3.5M for a vacant block followed by all the cost of holding it and funding the building of what needs to be a very expensive house?? Even there in a GREAT location on the Balmoral slopes, tell him he's dreaming son! ~$2M sounds much more realistic for that - a good opportunity though if you have the ability to finance that and the stomach to deal with all the invetible development risks/hassles....

Cheers,

Beej

 

[pepperoni]

$3.5M for a vacant block followed by all the cost of holding it and funding the building of what needs to be a very expensive house?? Even there in a GREAT location on the Balmoral slopes, tell him he's dreaming son! ~$2M sounds much more realistic for that - a good opportunity though if you have the ability to finance that and the stomach to deal with all the invetible development risks/hassles....

Cheers,

Beej

This is some of the most expensive real estate anywhere in the country remember. The place Im renting was on the market this year for 4.5m as a knockdown.

2m with a da and demolished is a huge drop ... the markham close harbour trust places were 2.2m plus 2 years back!

And whilst it seems like there MAY be money to be made, I saw this place today ... from 3.5m to "will take 2.5m" and "make a low ball offer if you want".

Newish double brick all built for you with HUGE views. Makes you re assess your ideas of good value a bit.

http://www.realestate.com.au/cgi-bi...r=&cc=&c=37159991&s=nsw&snf=rbs&tm=1222495022

Most importantly though, I was the only person through both open houses I went to! Its lonely out there again for the first time since I started in the late 90s

 

[pepperoni]

Swan the swine is giving taxpayers funds to Aussie and Wizard home loans to prop them up, the good part is they will only lend to quality home buyers who will then buy a house in a market which is loosing value...wait a minute didn't I read were some thing like that is happening already in some socialist country..

The $4b is less than 10% of the funds these lenders used to have access to in the market ... unlikely to be the difference between them living or dieing ... not much point really IMO.

 

[robots]

hello,

probably only an attempt by swan747 to make sure banks (big 5) pass on 0.5% reduction coming up

thankyou
robots

 

[Beej]

Well, well - Sydney auction clearance rate for the weekend was a robust 60%, with volume up quite signifanctly (184 properties sold at auction). See http://www.homepriceguide.com.au/saturday_auction_results/sydney_domain.pdf.

So we are STILL waiting for the great property crash it seems Sales of bankers row type places in the $2.5M+ mark seem to be thin on the ground (last weeks record $47M sale in the East not with-standing!), so I'm guessing your Macquarie and Babcock executive types probably still have their heads pulled in a bit, however there is plenty of activity in the sub $2.5M price brackets by the looks. It can only be a matter of time before that flows through.

Here's one in Mosman - nice character house, beautiful renovation, good land and location, but no water views etc etc, sold for $2.19M: http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007350308

This also mirrors my own house-hunting experience over the weekend (I'm looking to move up a couple of rungs), where 2 places I was very interested in (but not quite ready to put in offers) sold this weekend either at, or prior to auction, for very solid prices. Also a place in my area sold for what is a very good price for the house and street, to back up the record sale on the same street in my area 2 weeks earlier.

It looks to me like things are actually picking up a bit. The trick when selling your PPOR is to ensure you sell into and buy from the same (or better for buyers) market. If you sold 6 months ago and buy now you would have achieved that for sure, but if you sell now and buy in 6 months I'm not so certain that will the case.....

PS: I you are looking for a starter with good access to public transport and within commuting distance of Parammatta, CBD etc - this could have been had for $183k, which is around the level of DEPOSIT I'm looking at for my next place http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007348430

Cheers,

Beej

 

[aleckara]

PS: I you are looking for a starter with good access to public transport and within commuting distance of Parammatta, CBD etc - this could have been had for $183k, which is around the level of DEPOSIT I'm looking at for my next place http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007348430

Cheers,

Beej

I severly hope you don't think this is a "great" starter for the first home buyer. Even 10 years ago you could at least bought a place for a decent price comparative to wages that wasn't a flat, and definitely had better tenants than the average in those units. They are cheap for a reason in that area; the crime, the people, etc. I definitely wouldn't want to raise a family there. If that's all first home buyers have to aspire to in these times I wish that they were born earlier to when they were more affordable. Suburbs behind Mt Druitt are known for their crime, and hence they are priced similar to something from Macquarie Fields or the like - there is no bargains, you get what you pay for. People are too wise about property these days to get any sort of bargain unless their is a foreclosure sale.

 

[noirua]

They say that the slide will come as soon as everyone thinks they'll buy properties very much cheaper in a years time.

 

[Beej]

I severly hope you don't think this is a "great" starter for the first home buyer. Even 10 years ago you could at least bought a place for a decent price comparative to wages that wasn't a flat, and definitely had better tenants than the average in those units. They are cheap for a reason in that area; the crime, the people, etc. I definitely wouldn't want to raise a family there. If that's all first home buyers have to aspire to in these times I wish that they were born earlier to when they were more affordable. Suburbs behind Mt Druitt are known for their crime, and hence they are priced similar to something from Macquarie Fields or the like - there is no bargains, you get what you pay for. People are too wise about property these days to get any sort of bargain unless their is a foreclosure sale.

I knew I would get a rise out of someone for that one

No I was not completely serious, but at the same time just trying to demonstrate the range of prices/properties that are actually available in Sydney. There are decent houses in non "Macquarie Fields" type area's for less than $250k. It all goes back to first home buyer expectations rather than affordability IMO. FYI that place I posted, if you look at it, is actually quite decent.

And to be fair to Mt Druit, while it is certainly not the most salubrious area in Sydney, I went to uni with a mate who grew up in a housing commission flat there (single mum on the pension deserted early on by father and left with 3 kids to bring up), and although he has some colourful stories from his experiences there, it is probably actually not as bad as most people think.

Bottom line, first home buyers need to "aspire" to what they can afford - it's that simple. They can whinge about the cost of trendy inner west houses etc all they like, and "hope" for a price crash on the back of some sort of major financial crisis/collapse (which is of course still a possibility, IMO a very remote one for this country though). However, at the end of the day the people that already own the property are going to want as much for it as they can get (ie that someone richer than the next guy will pay) if they are selling.

PS: Did you know that in terms of average full-time wage multiples in Sydney median house price affordability has actually IMPROVED in the last 4 years from nearly 12x in 2004 to 9x right now? The only reason this hasn't been a major story is because as it happenned interest rates have gone up at the same time. As rates come down everyone is going to realise that houses have actually got cheaper and that the next couple of years is going to be one of the best times to buy for a decade - unless of course you wait too long, and miss out, again......

Cheers,

Beej

 

[gfresh]

...and that the next couple of years is going to be one of the best times to buy for a decade

Won't argue there.. in fact I don't think anybody will argue that in this thread there

I spoke to my bank this week re a potential loan, absolutely no problem getting a loan at all!

Of course.. and I doubt anybody else would have trouble either, at the moment. The important question is what will it be like in 6 or 12 months time. Will the finance situation be worse, or in fact better out there in the global space? Personally, I still think the former will be the case, and many will probably agree.

Australian banks get 77% of their long-term funding from overseas, and 44% of their short-term funding from overseas. The long term one is the one we should be concerned about, as it's used for our home loans greater than 12 months. This source comes essentially from the same place the US, and UK source their loans, which is the messy place right now, and may still be months down the track.

In the UK over the weekend, I read (http://www.timesonline.co.uk/tol/money/property_and_mortgages/article4827670.ece) that banks will in fact be passing increase on long-term rates due to the latest developments. It is also getting to the point, where unless you have a 25% deposit, you have little chance of getting a loan.

If we ever even get close to that situation here, of restricted loans, large deposits, this is going to really kill the borrowing market. And we are tapping the same source of funding our UK pals are, which will eventually roll-over to costs here.

While yes, you, me, others in this thread who have large wads of cash to put on deposits, or large equity in their property(s) will still probably not have too much trouble obtaining credit, for everybody else (new home buyers, those with less than impeccable records), they're not going to find it so easy. For them, it has been easy in the past few years.

For short term funding, the spread last week between the BBSW and Overnight index swap is the largest it's been for months, which is used to set variable rates. This is to levels seen when banks were raising rates above the cash rate, as they had to pass on this cost. In fact the situation is that banks will be raising rates, not lowering them, unless the RBA drops rates, so we can be guaranteed of the latter on the 7th. The RBA's hands are tied.

Deal or no deal? it's a very important question over in the US right now, and it will effect the rest of the world quite significantly.

 

[xoa]

PS: I you are looking for a starter with good access to public transport and within commuting distance of Parammatta, CBD etc - this could have been had for $183k, which is around the level of DEPOSIT I'm looking at for my next place http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007348430

Would you want your grandkids to grow up in that environment?

(Waiting for another permabull to mention all the "affordable" housing in other ghettos)

 

[Beej]

Would you want your grandkids to grow up in that environment?

(Waiting for another permabull to mention all the "affordable" housing in other ghettos)

I might not *like* them to grow up in that environment, and the reality is that is unlikely that they will have to, however, if they did, then I'm sure they would be fine, and what's more if it was really that bad then I'm sure that my kids would pay that starter place off quickly, sell and buy in a better area ASAP, probably before the grand kids were really bothered by it. Like I said I know someone personally (a few in fact) who grew up in such area's of Sydney, and they have all got on and done well in life since.

Cheers,

Beej

 

[pepperoni]

The reality is that if that bulls get their 10% pa compounding re growth, our grandkids will be lucky to rent these ghetto properties from funds and the 1% ultra rich.

Inflation due to all the credit/money creation will have compounded 10% pa each year and said grandkids will forever struggle to make ends meet and pay the price for their selfish and fiscally short sighted grandparents.

 

[CamKawa]

The gulf between what's happening in the market place and the views of the permabulls in this thread is amazing.