House prices to keep falling for years

[jeflin]

I think we should thank all the creators of the wonderful CDOs for pumping up home prices. The real beneficiary of this boom and eventual bust is probably the top management of investment banks.

They walk away with golden parachutes after getting their firms, global investors and businesses into a fine load of ****.

 

[Warren Buffet II]

St. Kilda robber

As nice as that?

How about 'patient in a an ambulance on his way to hospital for emergency treatment. Ambulance runs out of fuel in ghetto neighbourhood of St Kilda. Ambulance, paramedics and patient get robbed and attacked with knives. End result: 3 dead, kidneys and eyeballs stolen. Ambulance stripped and now a smouldering wreck'.

I bet the guy that assaulted the ambulance and paramedics at St Kilda was a guy who calls himself robots (He is well knows around that area). He was a believer that the way of house prices was always up and now is living in a container in an empty lot at St. Kilda. . Actually, he was always ramping about his investments there and he never had anything. Funny guy. i am not sure if I should laugh or cry for him.



WBII

 

[robots]

hello,

great posts keep the coming, I wont be getting listed on the "missing ASF person" thread,

i wont be calling for the ban of anyone either just for having a different outlook or opinion,

have a great day brothers, 32 here in Melbourne, just about to start pedalling for a cafe latte on chapel st, and can see the hot air ballons going over the suburbs

utopia, enjoy the day and tell the family you love them

thankyou
robots

 

[ROE]

Denial of House prices.
http://www.msnbc.msn.com/id/27648884?ref=patrick.net

What are you smoking let me repeat the quote
"house price double every 7 years"

I know people a few years back, and I still do, they tell me Property is going to make them retire early and rich and I said cool, that's really nice so I ask casually how do you manage that when you are negative gear, meaning you pump more $$$ in than you collect in rent, aren't you going broke if you don't have a job or cant service the mortgage?

they said no house price double every 7 years sometimes sooner
last year I talk again and I ask how's going is your house price doubling soon?
they say well maybe double every 10 years but not 7 , Some months ago I ask how's going.... they then ask me do you think house will stay flat for a while ...I smile and said I think so

then some weeks ago I ask how is it going?.. Doh!! I have to sell a property because I don't want to keep paying into the mortgage plus if I sell I make a small profit and have a life I hope they make a profit but I know where they will end up ..

To be continued....

I have many friends and they all seems to give me advice, some of them as ridiculous as never pay off principles on your property and always use extra equity in the house to buy more houses.

Great formula for going bankrupt but you know I'm a quiet kind of guy and said too complex for me to understand so I don't get involve

 

[Warren Buffet II]

hello,

great posts keep the coming, I wont be getting listed on the "missing ASF person" thread,

i wont be calling for the ban of anyone either just for having a different outlook or opinion,

have a great day brothers, 32 here in Melbourne, just about to start pedalling for a cafe latte on chapel st, and can see the hot air ballons going over the suburbs

utopia, enjoy the day and tell the family you love them

thankyou
robots

Sorry if I offended you in any way robots.

Please keep posting so I can keep laughing.

WBII

 

[nunthewiser]

hello,

great posts keep the coming, I wont be getting listed on the "missing ASF person" thread,

i wont be calling for the ban of anyone either just for having a different outlook or opinion,



thankyou
robots

Onya robots,

at least you have obviously the character and strength to be able to accept all opinions here without running to the mods everytime someone posts an opinion you do not agree with

without differeing opinions the world would be a rather dull place i reckon

have a great day and may your cockles of your heart be warmed and caressed on a daily basis

 

[numbercruncher]

Hello Robots .....


Seems that 12pc thing you keep going on about might be one big fat lie - Im sure the people who supplied you that information will call it an error ..... ?


Melbourne is nosediving .....

Four-bedroom homes in the inner east, which includes suburbs such as Kew, Camberwell, Canterbury, Richmond and Hawthorn, posted a 13.2% fall in the September quarter.

Three-bedroom inner-east houses have also faired badly, tripling the city median with a drop of 9.9%.

It was a similar case for three-bedroom homes in the inner-south where homes across St Kilda East, Prahran, Caulfield North and Armadale have slipped for the three months to September by 12%.

REIV figures reveal that four-bedroom homes in Melbourne's inner-east have recorded the largest falls over the past 12 months, dropping 15% since September 2007.

http://www.theage.com.au/national/premium-suburbs-bear-brunt-as-real-estate-market-reels-20081111-5mjz.html


Wow the inner East is burning equity faster than the average person can earn it !!

So early in the crash to boot ..... oh well everyone had fair warning i guess ...

 

[Temjin]

Denial of House prices.
http://www.msnbc.msn.com/id/27648884?ref=patrick.net

Gold article, even if it was from "mainstream media" that I tend to be critical of.

My house is better than everyone else!

The psychological effect is just so simply to understand, yet people still fall into it. I guess we are all human beings after all, and it's difficult for us to be logical at all times.

This whole "bust" could dragged on for quite long...

 

[Beej]

Gold article, even if it was from "mainstream media" that I tend to be critical of.

My house is better than everyone else!

The psychological effect is just so simply to understand, yet people still fall into it. I guess we are all human beings after all, and it's difficult for us to be logical at all times.

There's nothing new in that - it's the issue that exists in all market conditions - Ie sellers having to adjust their expectations to meet the market - woo hoo big news! I don't see what the big deal is really? Nor what that has to do with how the US housing market problems pan out from here?

Cheers,

Beej

 

[jonojpsg]

Hello Robots .....


Seems that 12pc thing you keep going on about might be one big fat lie - Im sure the people who supplied you that information will call it an error ..... ?


Melbourne is nosediving .....



http://www.theage.com.au/national/premium-suburbs-bear-brunt-as-real-estate-market-reels-20081111-5mjz.html


Wow the inner East is burning equity faster than the average person can earn it !!

So early in the crash to boot ..... oh well everyone had fair warning i guess ...

I visited my brother in St Kilda a couple of months ago and there was a place for sale down the road - 3-4 bedroom house on small block (are there any large blocks in melb suburbs???) in need of reno and they wanted $700k for it

If you are talking about prices like this falling by 10-15% in short order I can't see why this is a problem. Who would want to pay that much for a dingy old place in the burbs anyway?? Specially when you can buy a beautiful new house overlooking the river and city in hobart for less than that

However it is the median prices which are the issue - inner city burbs with median prices at the $600k+ level falling by 20% should not have marked effect on median prices as these places are all at the top end of the list - although the flowon effect would see houses in outer suburbs pushed down also but by less %.

 

[Beej]

I visited my brother in St Kilda a couple of months ago and there was a place for sale down the road - 3-4 bedroom house on small block (are there any large blocks in melb suburbs???) in need of reno and they wanted $700k for it

If you are talking about prices like this falling by 10-15% in short order I can't see why this is a problem. Who would want to pay that much for a dingy old place in the burbs anyway?? Specially when you can buy a beautiful new house overlooking the river and city in hobart for less than that

However it is the median prices which are the issue - inner city burbs with median prices at the $600k+ level falling by 20% should not have marked effect on median prices as these places are all at the top end of the list - although the flowon effect would see houses in outer suburbs pushed down also but by less %.

Re the St Kilda house you are kind of missing the point and not seeing the drivers of the market (and thus prices) in an area like that. News flash - people that want to live in a trendy inner city/bay-side suburb like St Kilda aren't usually looking in the Hobart suburbs as well! Would be a pretty long commute from Hobart to your Melbourne CBD job.....

St Kilda is clearly trendy and up and coming. The house you saw may be dingy now, but someone will buy it and spend some fairly serious $$$ renovating it - when done it will be transformed into a most desirable home that would blow your socks off. The fact that it is run down now makes it the perfect "blank canvass" for your typical inner city housing renovation project. It will be worth a LOT more money once completed as well. I bet if you check that place will have sold by now, as it is priced well below the current median price for that area.

As Robots points out, St Kilda prices are on the move: See http://www.homepriceguide.com.au/sn...r Urban&region_code=0301&state=VIC&source=apm which indicates a 21% rise in median values there in the past 6 months.

PS: In Sydney and Melbourne a lot of people don't like "new" houses, as they are poorly built compared to "old" houses. What many people like (especially people with money) are stylishly renovated, well located, and well built old houses (full brick etc).

Cheers,

Beej

 

[Judd]

Hmmm. Buy a place for $1m. Spend $400k on renovations. Sell for $1.2m. Watch a real estate agent cry out "Look at the capital gain of 20%!"

It is all in the perception.

 

[Beej]

Hmmm. Buy a place for $1m. Spend $400k on renovations. Sell for $1.2m. Watch a real estate agent cry out "Look at the capital gain of 20%!"

It is all in the perception.

Or buy a place for $350k, spend $350k on it, sell 2 years later for $1.4M, like some good friends of mine did - that's a "perception" I like

PS: I thought they were mad at the time for spending that much money (on renovations) in the area they were in, but they correctly picked the trend and I had to eat humble pie!

Cheers,

Beej

 

[numbercruncher]

Ahhhh War stories from the days of Irrational exhuberance being shared over a BBQ .... love it ....

 

[Pommiegranite]

Or buy a place for $350k, spend $350k on it, sell 2 years later for $1.4M, like some good friends of mine did - that's a "perception" I like

PS: I thought they were mad at the time for spending that much money (on renovations) in the area they were in, but they correctly picked the trend and I had to eat humble pie!

Cheers,

Beej

Tell them to do it again.

Buy a place for $1.4million, spend nothing on it, sell it in 3 years time for $700k

 

[Indie]

[QUOTE=Pommiegranite;360955]Tell them to do it again.

Buy a place for $1.4million, spend nothing on it, sell it in 3 years time for $700k[/QUOTE]

Yes, and the point of this thread lies herein.

Nobody can argue about profits made in the boom years, stocks are the same. The credit market has now topped. No question. The writing is on the wall in every other part of the economy. Anyone who thinks the asset class of property can escape the carnage unfolding in the economy is in denial. Plain and simple.

 

[MrBurns]

Or buy a place for $350k, spend $350k on it, sell 2 years later for $1.4M, like some good friends of mine did - that's a "perception" I like

PS: I thought they were mad at the time for spending that much money (on renovations) in the area they were in, but they correctly picked the trend and I had to eat humble pie!

Cheers,

Beej

BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

 

[Beej]

Tell them to do it again.

Buy a place for $1.4million, spend nothing on it, sell it in 3 years time for $700k

The difference being, the story I related has actually happened.

Yes, and the point of this thread lies herein.

Nobody can argue about profits made in the boom years, stocks are the same. The credit market has now topped. No question. The writing is on the wall in every other part of the economy. Anyone who thinks the asset class of property can escape the carnage unfolding in the economy is in denial. Plain and simple.

The point being that there is not, as yet, anything to deny. Has there been a 30-40% crash in prices?? No way, not even close! So far all we are seeing is a vanilla property market slow down, like many that I as a market participant and keen observer for 25 years, have seen several times before. There is no concrete evidence to suggest it is more than that.

As always in this situation there will be pockets of relative disaster (where price inflation really did get way out of hand), and there will be pockets of relative good performance. Sydney for example is done with falls - it will not go down much from where it is right now - because it hasn't gone up as much as other area's, and the boom here finished 4 years ago in 2004. SEQ/Perth - more falls to come IMO. This scenario is playing out clearly in the latest stats (biggest falls in SEQ and WA, smallest falls in Sydney - mainly top end now, lower price range is actually starting to pick up quite a bit in Sydney). 30%-40% falls to come? I don't think so. Dream on. It is the price crash "dreamers" that are in denial IMO - continuing to justify their own poor decisions of the past (especially since the stock market crashed).

The thing that consistently AMAZES me about this thread is the smugness/ certainty/ "everyone else is an idiot" attitude of many of the bear posters here. The reality is that anyone who had the means and DIDN'T buy into property in that last 10-15 years are the idiot's..... hoping/praying for a massive crash is not going to rectify that mistake!

Those that only now have the means to enter the property market should view the current time and the next year or 2 as a GREAT opportunity with the market at it's most affordable for years. In a decade we will look back at 2008/2009 as we now look back at 1991/1992 in terms of the opportunity.

Even if you subscribe to the "great economic disaster of our times" to come doomsayer view, then you will still need somewhere to live, and property is about the best inflation hedge there is. You may as well park your cash in the best located/fitted out house you can afford, where at least you get a lifestyle benefit out of it (Unlike gold etc), plus a direct financial/cash-flow one (ie, you don't have to pay rent). There is real tangible value in property that short of nuclear war or something similar cannot be destroyed in the way the value of other assets can be.

Life goes on, people are still buying/selling/living in and enjoying property every day as this endless, and mostly irrelevant debate rages on here.

Cheers,

Beej

 

[numbercruncher]

The thing that consistently AMAZES me about this thread is the smugness/ certainty/ "everyone else is an idiot" attitude of many of the bear posters here

No Bears in this thread, just realists ......


Read the paper folks ( if you dont have a net connection ) .....

Prices are dropping across the entire nation, make that the planet ....

 

[lioness]

I visited my brother in St Kilda a couple of months ago and there was a place for sale down the road - 3-4 bedroom house on small block (are there any large blocks in melb suburbs???) in need of reno and they wanted $700k for it

If you are talking about prices like this falling by 10-15% in short order I can't see why this is a problem. Who would want to pay that much for a dingy old place in the burbs anyway?? Specially when you can buy a beautiful new house overlooking the river and city in hobart for less than that

However it is the median prices which are the issue - inner city burbs with median prices at the $600k+ level falling by 20% should not have marked effect on median prices as these places are all at the top end of the list - although the flowon effect would see houses in outer suburbs pushed down also but by less %.

Jono,

You don't understand demand and supply my friend.

Firsty, no-one wants to live in Hobart and that is why real estate is so cheap.

Every other doomsdayer on here hoping inner city prices will crash 30-50% are dreaming. I live in Fitzroy North and prices here are even better than St Kilda. Shoe boxes with 5 metre frontages that are renovated sell for 1.2 million(one just sold last week for that). Double fronts sell for 1.5 to 2 million renovated.

Prices have not come down here at all. Everyone living here has high disposable incomes and couples here have 2 income on high income as professional couples. Even when one loses their job, the other kicks in to keep paying the mortgage.

So there is no crash, a SLOWING yes of up to 5-10% MAXIMUM.

You guys just don't get it. Inner city blue chip you will never lose over 7 years.

I have 2 cars and fill each car up once every 2 months, people live here for convenience and lifestyle.