House prices to keep falling for years

[Pommiegranite]

That's a very sensible approach - but just be careful to not over-estimate the amount of correction that may or may not occur, and end up missing out on an opportunity when it presents itself. Remember, it can take months just to find the house you are prepared to buy/live in long term, and a lot can happen in the market place in between, so you have to watch things very closely - actually "on the ground", not just from the newspaper articles, abs stats and web blogs etc

Cheers,

Beej

Thanks. I have always kept an eye on the market. I do agree that anecdotal evidence can be very useful. Hopefully though, many dream houses will be coming onto the market, so I will have a choice.

There is a general consensus that we are in for a raft of bad economic data over the next 12-18 months. This should counteract any positivity taken from interest rate reductions.

 

[sinner]

Meanwhile, Bureau of Statistics data showed dwelling approvals fell by 7.2pct to 11,167 in September - the weakest reading in seven years. Approvals in NSW slumped by 26.2pct in September to 43 year lows. “The release of the latest reading on building approvals highlights the importance of the increase in the first home owner’s grant and the substantial interest rate cuts. Investors and homebuyers have been spooked by the sharp falls in house prices overseas and the global economic slowdown. The flow of negative news has been long and exhaustive and home buyers are happier staying on the sidelines,” CommSec Equities Economist Savanth Sebastian.

 

[robots]

Meanwhile, Bureau of Statistics data showed dwelling approvals fell by 7.2pct to 11,167 in September - the weakest reading in seven years. Approvals in NSW slumped by 26.2pct in September to 43 year lows. “The release of the latest reading on building approvals highlights the importance of the increase in the first home owner’s grant and the substantial interest rate cuts. Investors and homebuyers have been spooked by the sharp falls in house prices overseas and the global economic slowdown. The flow of negative news has been long and exhaustive and home buyers are happier staying on the sidelines,” CommSec Equities Economist Savanth Sebastian.

hello,

yes great news Sinner, its a real catch twenty2 out there at the moment

the private "developers" are keeping things ticking over, now whether thats oversupply or undersupply time will tell,

thankyou very much
robots

 

[Reealjrd]

Hello Friends,

There is huge rate cut in interest rates by the banks for home loans. And the real state sector is snipping down. This snipping down has created stress on the big construction companies and builders. Persons having big land and houses are now i\under pressure. Now the time is coming when every low class person can afford a house through banks.

 

[robots]

hello,

yes we still here in the lucky country my friend, the land of opportunity where you dont have to pack heat just to go to the milkbar/7-eleven,

thankyou
robots

 

[awg]

rents dont usually fall much, even when lots of people are trying to sell.

it is much more difficult to sell a place that has tenants, cause it looks very messy.

tenants dont want to live in a house that is for sale, and hate prospective buyers traipsing thru...pretty obvious

although a nice quick sale of a long term tenanted house can be good for everyone, it rarely works that way, in my experience.

mostly sold vacant..i know one gut trying to sell has had place vacant 18 months! (crazy)

My experience of people who have done very well from RE, is that they have non-anglo backgrounds and offer very low prices...they sniff out desperados.

fairly heartbreaking for the vendor, but if you NEED to sell, then you must take the best available offer.

The RE always tries to fluff it up, but the really hard-nosed person is not at all swayed by sentiment or sales tactics..have dealt with Greek and Chinese people...they know the meaning of hard negotiation tactics.

If I was an investor at the moment, I would be making offers 30% below asking

 

[Glen48]

Patrick.net housing crash news | bubble blog
Forrest Gump Explains Mortgage Backed Securities

Mortgage Backed Securities are like boxes of chocolates.

Criminals on Wall Street stole a few chocolates from the boxes and replaced them
with turds.

Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade
chocolates. These boxes were then sold all over the world to investors.
Eventually somebody bites into a turd and discovers the crime. Suddenly nobody
trusts American chocolates anymore worldwide.

Hank Paulson now wants the American taxpayers to buy up and hold all these
boxes of turd-infested chocolates for $700 billion dollars until the market
for turds returns to normal.

Meanwhile, Hank's buddies, the Wall Street criminals who stole all the good
chocolates, are not being investigated, arrested, or indicted.

Mama always said: "Sniff the chocolates first, Forrest".

 

[cuttlefish]

These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime.

The Coogee Bay Hotel must have bought some to use in their desserts.

 

[ROE]

No way I would go variable.. that's why I'm interested to see the lowest fixed rates could actually go Most of that funding is sourced from o/s, that's why I have my doubts they'll go too much lower. But hey, we'll see..

The thing is all those screaming over "high" interest rates 6 months ago no doubt will fail to fix at the best opportunity in maybe 10 years. Ahh.. if only they would fix for 25 years eh.. They're not stupid.



This is probably what I'll be doing.. but for most PPOR people, who like the idea of living in their own house, they don't see these things.

You cant get fix loan in Australia that last 25 years, because we structure them differently..

In America when they say 25-30 years fix loan, that exactly what it is

you stick your neck in for exact 25-30 years and you can not pay off the loan earlier than 25-30 years period.

Here I borrow the loan for 25 years variable but I usually knock it of between 7-10 years.

I think in Australia you cant fix it for more than 5 years.

Crazy to fix anyway because history show variable rates ALWAYS win over fix rate over the term of the loan so have it on variable knock it off in 7-10 years due to the fact rates goes up on the escalator and down with the lift

 

[singlefished]

I think in Australia you cant fix it for more than 5 years.

Just had a quick look at WBC & CBA - WBC can fix for 10 years, CBA can fix for 15....

I don't see the point in fixing for so long - get in and pay it off ASAP as per your advice. Keep up the payments when interest rates are on the way down and you'll be taking years off your mortgage.

I can't believe the media hasn't jumped all over this - keep up your repayments as if the interest rates cuts didn't happen and get out of jail that much faster... all they keep on about is the "savings" and how the pressure will apparently be off working families and home buyers. Now's a great time to keep the pressure on and pump as much in as you can afford into the mortgage and be done with it instead of frittering away the monthly savings on frothy coffee in some cafe down St Kilda way....

 

[ROE]

Just had a quick look at WBC & CBA - WBC can fix for 10 years, CBA can fix for 15....

I don't see the point in fixing for so long - get in and pay it off ASAP as per your advice. Keep up the payments when interest rates are on the way down and you'll be taking years off your mortgage.

I can't believe the media hasn't jumped all over this - keep up your repayments as if the interest rates cuts didn't happen and get out of jail that much faster... all they keep on about is the "savings" and how the pressure will apparently be off working families and home buyers. Now's a great time to keep the pressure on and pump as much in as you can afford into the mortgage and be done with it instead of frittering away the monthly savings on frothy coffee in some cafe down St Kilda way....

Nothing wrong with frothy coffee, I have them every day and love it
it just you dont have it with other things: like a new car, an LCD TV, a 4 beddie house where 2 beddies stores junks.

give and take just dont take and take then you be ok

 

[gfresh]

I've always assumed the "you're better off under variable" applies if you jump in at any random point in time with fixed, you may well be worse off.

However, the average RBA cash rate from 1990 is 6.6%. Add 1% or so for bank mortgage rates, and we have avg ~7.6%. The period where the cash rate has been under 5% is a handful of months at best - 1993, 1998, and 2001/02. If somebody can fix under that I fail to see how they won't be better off - unless I've missed some huge advantage to variable???

Personally I like to keep as many of my costs fixed in my weekly budget and know exactly how much I have left.

 

[singlefished]

Personally I like to keep as many of my costs fixed in my weekly budget and know exactly how much I have left.

True enough - but as you say, these times are few and far between when fixed rates are that compelling... and you also may not be in a position to fix within this short few month time frame (eg: already locked in, stuck in a honeymoon period, don't want to fix, etc...)

You could still effectively "fix" your repayments to suit monthly budget by paying say $200 over the current minimum variable repayments (what you've just saved in monthly repayments over the last few months for example) and absorbing the costs of future rate increases within this $200 buffer...

(Note to self - granny dearest already knows how to suck eggs - just throwing up some thoughts and stating the obvious )

Anybody think the cash rate will be below 5% before the June home buyer grant "bonus" expires? If these particular moons did align then we could see a fair bit of activity during the second quater for those so inclined - regardless whether prices are still heading south or not.

 

[arco]

.
Migrants next target as slowdown bites

The fed govt will consider cutting its migrant intake as it prepares for a spike in unemployment. Immigration Minister Chris Evans said tougher global economic conditions could lead to a smaller migrant intake next year, a move that could have serious implications for sectors short of skilled workers, such as resources, housing and hospitality. The HIA stressed the need to ensure that the most needed skilled migrants arrived in Australia. During hearings Senator Evens flagged the creation of state migration plans as part of a broader effort to ensure the migration system was more targeted.

The Australian Financial Review, Page 3, 22 Oct 2008

Australian economy set to slow
The economy is set for a prolonged downturn as business investment slows on faltering Chinese growth, compounding the effect of weak household spending. Access Economics warns that although Australia is likely to avoid a recession, growth is likely to slow to just 2.1% this financial year.

The Australian Financial Review, Page 10, 24 October 2008

 

[Aussiejeff]

The Coogee Bay Hotel must have bought some to use in their desserts.

"Waiter! There's some poop in my scoop!!"

 

[ROE]

I've always assumed the "you're better off under variable" applies if you jump in at any random point in time with fixed, you may well be worse off.

However, the average RBA cash rate from 1990 is 6.6%. Add 1% or so for bank mortgage rates, and we have avg ~7.6%. The period where the cash rate has been under 5% is a handful of months at best - 1993, 1998, and 2001/02. If somebody can fix under that I fail to see how they won't be better off - unless I've missed some huge advantage to variable???

Personally I like to keep as many of my costs fixed in my weekly budget and know exactly how much I have left.

yeah depend on your situation I guess but for me variables all the way as I can pay off stuff faster .... I usually double my repayment.. I never borrow to a point where I just scratch the repayment... at least 50% buffer for me., then I'm all in to that point and increase them if I can month after month

I called it accelerate repayment, compound interest in reverse

 

[robots]

hello,

good evening, what another great day

ABC gone gone gone, shares outperform direct property yeah right, another donkey

one of these in the portfolio and its no better than cash in the bank

the certificates just keep piling up for people in the draw most likely

thankyou
robots

 

[numbercruncher]

lol Robi .....

Im thinkin that Eddy has been bloke will lose his house too ....

 

[robots]

hello,

investors should of got a place in sunny St Kilda numbercuncher, I heard 14.7% for 3mths, what a return

might even send S.Keen a note about that performance

safe a houses,

plenty of cafe lattes down here, i go to an Asian Bakery on chapel st for the 3x hit each day, Atomica brand, the most consistent and reliable one on the whole street

thankyou
robots

 

[MrBurns]

hello,

good evening, what another great day

ABC gone gone gone, shares outperform direct property yeah right, another donkey

one of these in the portfolio and its no better than cash in the bank

the certificates just keep piling up for people in the draw most likely

thankyou
robots

Thousands of ABC centers to be sold, families lose one breadwinner as they have to stay home and look after the kids, lose their houses, real estate prices CRASH across the whole of Australia.

Great day for cash in the bank.