House prices to keep falling for years

[chops_a_must]

I'd love to see the US regulate their morgtage industry (we dont really need to here) and all markets ban short term trading (must hold for 3 months) or put a 5% stamp duty on shares - then we can clear out all the Volatility Vultures, Options traders and spruikers - only long termers would be left. Buying a stock would be like buying a property - lifetime investment.

Lolza.

Obviously incredibly well thought out when some futures have an effective lifespan of about 3 weeks.

 

[robots]

hello,

let the money box traders do whatever they like, its free market man

all the while the real assets keep in the hands of the wealthy, as construction is continually dropping this just keeps the status quo

thankyou
robots

 

[PropertyGuy]

Big wave to Glen48.

http://www.tradingroom.com.au/apps/...shed/2008/10/287/catf_081013_094500_2788.html

Thanks for that, it freaked me out a little initially, but when I called a buddy of mine who is a Valuer in NZ, I relaxed a bit.

QV Valuers use a methodology known as "Property Value Growth" which is based on comparing the sales price of a property on its "Capital Value" the year before.

In other words this "5.8% drop" in NZ was a year on year drop based on a valuers opinion of what it was worth the year before. Don't get me wrong, I'm a true hater of using median house price to gage our market here, but we are so used to MHP that the thought of a 5.8% MHP drop in a quarter in NZ scared me a bit.

Comparing that to a drop of 5.8% over the year when the basis price is a valuation is a lot less worrying - even if they are just Zealand's

 

[PropertyGuy]

Lolza.

Obviously incredibly well thought out when some futures have an effective lifespan of about 3 weeks.

Not to be a Killjoy but thats the point. Derivative's, futures even options are all (in my very naive opinion) just tools to gamble on the movements of values - scrap em all - they cause the problem. How can an industry that is based purely on volatility (or stability) have any other effect than to cause volatility.

 

[chops_a_must]

Not to be a Killjoy but thats the point. Derivative's, futures even options are all (in my very naive opinion) just tools to gamble on the movements of values - scrap em all - they cause the problem. How can an industry that is based purely on volatility (or stability) have any other effect than to cause volatility.

Yes.

How dare we allow companies to buy and sell oil for our consumption.

Options are a hedge.

 

[nunthewiser]

LOL dear property guy

please ignore chops insults and name calling

he does this when he is feeling mentally flustered

thankyou

i do however agree with his gist of post without the namecalling re derivatives and there need to be here

 

[gfresh]

Not to be a Killjoy but thats the point. Derivative's, futures even options are all (in my very naive opinion) just tools to gamble on the movements of values - scrap em all - they cause the problem. How can an industry that is based purely on volatility (or stability) have any other effect than to cause volatility.

While it's all fallen into a heap now, leading up to that they have also provided ample funding to our financial institutions, and consumers, and also one of the biggest property and general economic booms in Australia's history. Some of which is no doubt has provided the extensive funding for your developments, and is now sitting there as profit, or in your bank account.

While we can deride it all in hindsight, it has provided plenty of opportunities for those that have taken advantage of it and created many wealthy individuals. The only problem has been the final sucker holding the debt when it blows up in their face. Whether that be the banks, over-geared share owners, overly indebted home owners, consumers drowning in credit card debt, or whatever else.

 

[PropertyGuy]

You asked for my reasons for being bearish on property. You spat the dummy and didn't want to listen or go through the points raised when you read something you didn't want to hear. In a thread that IS for that I might add.

You have changed signons - you are the forum troll from a few days ago. You can go jump my friend - Im here to learn what is going on the financial markets and what if any impact I can expect them to have on the proerty markets.

Im happy to share the knowledge and expect some back in return. Your here for cheap thrills and personal insults. The points you raised on being bearish on property where general in nature and not based on any fact. I responded with "what about: 15% reduction in cost of funds, rental market of .9% vacancy (anything below 3% is considered critically low), increased non bank liquidity for residential property, undersupply by 7,000 reaching to 14000 dwellings by 2014 for melbourne, and the first home buyers grant of $14 -$21k, this onto a market that has been flat for 12 months (maybe slightest rise) with the lowest consumer confidance of all time.

You gave me increased unemployment - not "if unemployment reaches 6%, average houshold income will reduce by 2.9% meaning affordability will push out to 45% of household income which is 3% lower than where we were before the latest interest rate cuts so expect moderate growth"

just flat "increased unemplyment" as if that in itself is supposed to be anymore informative than saying "it might be colder this winter" (and hyperinflation)- this is my first forum so maybe ive expected to much....

 

[PropertyGuy]

While it's all fallen into a heap now, leading up to that they have also provided ample funding to our financial institutions, and consumers, and also one of the biggest property and general economic booms in Australia's history. Some of which is no doubt has provided the extensive funding for your developments, and is now sitting there as profit, or in your bank account.

While we can deride it all in hindsight, it has provided plenty of opportunities for those that have taken advantage of it and created many wealthy individuals. The only problem has been the final sucker holding the debt when it blows up in their face. Whether that be the banks, over-geared share owners, overly indebted home owners, consumers drowning in credit card debt, or whatever else.

very good point (i dont have any developments, but i did take advantage of readily available credit).

I suppose it depends on how bad this gets as to how much the system needs an overhaul.

 

[robots]

hello,

you hang in there PropertyGuy,

the money box crew have been having a hard time at the moment, with all the turmoil on the shock exchange and still the "little" issue with houses being 7x average income

they all looking to exert some frustration,

we like the punching bag, the release valve, which we dont mind because we just floating through life thanks to the hard yards the property crew have put in,

next time you walking down the street stand tall brother and be proud of who you are and your achievements

thankyou
robots

 

[chops_a_must]

You have changed signons - you are the forum troll from a few days ago. You can go jump my friend - Im here to learn what is going on the financial markets and what if any impact I can expect them to have on the proerty markets.

Im happy to share the knowledge and expect some back in return. Your here for cheap thrills and personal insults. The points you raised on being bearish on property where general in nature and not based on any fact. I responded with "what about: 15% reduction in cost of funds, rental market of .9% vacancy (anything below 3% is considered critically low), increased non bank liquidity for residential property, undersupply by 7,000 reaching to 14000 dwellings by 2014 for melbourne, and the first home buyers grant of $14 -$21k, this onto a market that has been flat for 12 months (maybe slightest rise) with the lowest consumer confidance of all time.

I can assure you I only have 1 account.

And go on, prove that's what you responded to me with.

 

[PropertyGuy]

I can assure you I only have 1 account.

And go on, prove that's what you responded to me with.

hmm maybe it wasnt you - or for that matter this forum - my sincerest appologies

 

[numbercruncher]

hello,

if i'm on 8% now and goes down to 1% as mentioned by SBH, that makes the interest component of a P & I loan very very very low,

on payments of $300pw, i reckon $200 would be interest, fantastic when they get to 1%,

so for the uneducated: 52wks x $200pw=$10400

no mrs is on the same ride Number, life

thankyou
robots

So that was a couple of posts of waffle to say that you think Interest rates are going to be slashed to 1 per cent ?

or am i still having difficulty understanding ?

 

[robots]

hello,

SBH is suggesting 1% interest rates as mentioned in post,

so Number what happens if IR goes from 8% right down to 1%? in relation to home loan payments

okay put it another way, when the 6mth review comes in from bank, the weekly payment would probably drop from $300pw to $100pw when IR goes to 1% as others are suggesting, FANTASTIC

thankyou
robots

 

[ROE]

hello,

SBH is suggesting 1% interest rates as mentioned in post,

so Number what happens if IR goes from 8% right down to 1%? in relation to home loan payments

okay put it another way, when the 6mth review comes in from bank, the weekly payment would probably drop from $300pw to $100pw when IR goes to 1% as others are suggesting, FANTASTIC

thankyou
robots

I'm not arguing about house price, I beleive in free market, people buy what the hell ever they want, property, shares, arts, cars, junk bonds... over price, under price, cheap, expensive..they will learn soon enough which category they fit in

but do you know what it mean when interest rate drop? that mean the economy is in trouble, people are losing jobs, retail are falling, not much money is flowing around.

so when people don't have jobs it doesn't matter if it's a $100 or $50 repayment, they still cant afford it

it's better paying $300 and have a job than $50 and you are unemployed I say

when the economy slows and people start to lose job, sentiment drop and no one is willing to pay much for ANY Asset, shares, property, car the whole shi bang

 

[numbercruncher]

hello,

SBH is suggesting 1% interest rates as mentioned in post,

so Number what happens if IR goes from 8% right down to 1%? in relation to home loan payments

okay put it another way, when the 6mth review comes in from bank, the weekly payment would probably drop from $300pw to $100pw when IR goes to 1% as others are suggesting, FANTASTIC

thankyou
robots

1pc - awesome ill play poker at that price as well !!

 

[Beej]

I'm not arguing about house price, I beleive in free market, people buy what the hell ever they want, property, shares, arts, cars, junk bonds... over price, under price, cheap, expensive..they will learn soon enough which category they fit in

but do you know what it mean when interest rate drop? that mean the economy is in trouble, people are losing jobs, retail are falling, not much money is flowing around.

so when people don't have jobs it doesn't matter if it's a $100 or $50 repayment, they still cant afford it

it's better paying $300 and have a job than $50 and you are unemployed I say

when the economy slows and people start to lose job, sentiment drop and no one is willing to pay much for ANY Asset, shares, property, car the whole shi bang

Only a small proportion of people are DIRECTLY effected by a rise in unemployment - for the 90-95% of people still with jobs the interest cuts mean a real ability to either draw down debt faster or take more on at a cheaper cost of they want. In a downturn it is much more the psychology around how secure people feel in their jobs and with their financial position that will determine which option they take, but either way robots is actually right that for the vast majority of people falling interest rates are a good thing financially, whichever way you cut it.

Remember the entire Howard years (politics aside) were generally seen by most people as good economic times, primarily because employment was secure, and interest rates were low. This changed as rates went up quite a bit, but they are now coming back down. Eventually the economy will recover from this current situation and we all then enjoy low interest rates for some time again with inflation also low and under control, and with an increasing level of financial and job security.

Cheers,

Beej

 

[numbercruncher]

Brave and confident words Beej !!

I sincerely hope that this nirvana materialises ! ....


Im not sure youve lived through an economic crisis such as the one we find ourselves now in though ?

 

[Glen48]

John Howard won the last election he gets his super and other lurks doesn't have to answer to any one and didn't bother to regulate the Mortgage brokers who helped put us in this mess.
He was in Government at the right time and loosing his seat was the best thing that ever happened to him.

 

[Beej]

Brave and confident words Beej !!

I sincerely hope that this nirvana materialises ! ....


Im not sure youve lived through an economic crisis such as the one we find ourselves now in though?

You think it is brave to essentially say "No matter how bad things get they will always, eventually, get better"?? I think that's a truism. You can argue all you like about how deep, shallow, or even non existent a slow down from the current situation will turn out to be, but you would be delusional to contend that things will never improve. Personally, I think all the doom and gloom some of you guys here subscribe to is way overdone.

As for having lived through something like now before? Hard to say, I was alive in the early 70s when things were pretty bad - credit crunch, oil shock, 4 year bear stock market, but was only a kid so don't really remember it I do remember having a happy child hood despite all that, my parents always had jobs, a house etc, and I didn't want for anything that I can recall? I do remember the recessions of the early 80s and 90s - very well, and I worked and invested through the latter of those. If you are going to compare things to the 30s (which I think is a mistake), then not many people have actually lived through times like these have they? However, even after the GD things still, eventually, got better!

Cheers,

Beej