House prices to keep falling for years

[nunthewiser]

)

In any case argument is all but redundant as this is unfolding as we speak, we will know within 6 months who is right.

who is disagreeing ?

 

[Glen48]

Germany has made it to the recession group today GM is all but finished.
I had to sell my house after a Divorce tried to get $325 K 10 yrs ago and had to take 260K. It sold a few years ago for 800K just shows how big the bubble is.

 

[MrBurns]

who is disagreeing ?

The bulls and bears are at each other as usual, but very soon all they need do is look up at the scoreboard and they'll see whats unfolding.

I have thought residential property prices have been unrealistic for some time and there are many who feel the same way.

 

[tasmart]

Here's a chart from tonight’s ABC news. It looks like the property market is at least 23% overcooked.

The other interesting part of this is that the compound growth line in real terms since 1926 is only 3%.

I would like a better return for my long term life savings.

 

[nunthewiser]

The bulls and bears are at each other as usual, but very soon all they need do is look up at the scoreboard and they'll see whats unfolding.

I have thought residential property prices have been unrealistic for some time and there are many who feel the same way.

and i repeat , who is disagreeing ? ive said my views, mofra has stated his all along this thread also .

still wondering who you talking about

 

[Mofra]

yes but from my understanding you have property as investment also and it kind of counteracts the whole cycle , i too have rented in the past and let other renters pay for my propertys.

yep understand the amount of longterm renters here but still inquisitive if they prepared to rent till they finally decide they have found the perfect low before entering the property market

An interesting aspect you've touched upon by your questions is the activity of the most high profile bear, Stevie Keen.

Despite banging on for years about the impending doom, he only just recently listed his property for sale. At least there are plenty of posters here who have been consistent and put their money where their mouth is.

People wonder why I don't hold much respect for Keen...

 

[cuttlefish]

How much have houses on George Street, Sydney city fallen so far this year?

 

[nunthewiser]

An interesting aspect you've touched upon by your questions is the activity of the most high profile bear, Stevie Keen.

Despite banging on for years about the impending doom, he only just recently listed his property for sale. At least there are plenty of posters here who have been consistent and put their money where their mouth is.

People wonder why I don't hold much respect for Keen...

keens just like the rest of the majority of overpaid mouthpieces , great typist and he bound to call it right sooner or later if he sticks to the same story

 

[Mofra]

The other interesting part of this is that the compound growth line in real terms since 1926 is only 3%.

I would like a better return for my long term life savings.

Fair comment - traditionally equities have outperformed residential property over the long term, although recent events may scare a few for years to come.
I assume the 3% above CPI is capital return only (excluding rental & upkeep)?

 

[cuttlefish]

Does anyone think the prices of farmland at Parramatta will fall as well? I heard it fell a lot during the great depression so was wondering if it will fall again this time.

 

[Mofra]

keens just like the rest of the majority of overpaid mouthpieces , great typist and he bound to call it right sooner or later if he sticks to the same story

My point exactly. Even a broken clock is right twice a day

 

[tech/a]

Well I have properties in Moana and Seaford Rise here in Adelaide.
Last year to September Seaford Rise Rose +13.5% and Moana +15.5%
Rents also rose.
Having bought all mine in 1996-2001 and having had years with growth of 40% I find the argument muted.
As I drive around here (Where I live) there arent many for sale signs.

Its not the interest rate thats going to kill people its being un employed!

 

[chops_a_must]

As I drive around here (Where I live) there arent many for sale signs.

I'd say about 20% of the houses around me have for sale signs on them, or have changed hands in the last year tech. But it is a high rental and thus high specuvestor area I would imagine.

Its not the interest rate thats going to kill people its being un employed!

Correct. And no matter how highly paid you are, or how educated, it is going to bite a lot of people on the **** who would never have thought it possible at one stage.

 

[MrBurns]

and i repeat , who is disagreeing ? ive said my views, mofra has stated his all along this thread also .

still wondering who you talking about

I was talking generally to the bulls that dont see a problem, who specifically ? well I could go back through all the posts and make notes .........naa I won't.

Mofra seemed to waste no time denegrating one of my posts so I assume the cat is a bull, anyway I'm not interrsted in arguing with anyone the facts will speak for themselves.

 

[cuttlefish]

The problem imo with the ABC news chart that CamKawa posted is that it doesn't take into account land values. If you take a portion of land anywhere in Sydney and look at what it was worth in 1929 vs what the same piece of land in the same location and of the same size is worth now you will have significantly more than 3% growth. The same will apply to more or lesser extent in all growing cities.

 

[cuttlefish]

I was talking generally to the bulls that dont see a problem, who specifically ? well I could go back through all the posts and make notes .........naa I won't.

Mofra seemed to waste no time denegrating one of my posts so I assume the cat is a bull, anyway I'm not interrsted in arguing with anyone the facts will speak for themselves.

Some people will take their analysis a little further and won't have a black and white opinion.

There will be a negative impact on property prices, but its depth and duration will vary enormously depending on the location and type of property involved. Similarly the affect of an economic slump on rentals will vary in different locations. This will depend on a multitude of factors including the types of industry that make up the local economy, the drivers for local population growth and the rate of population growth, the current and historic vacancy rates, rental yields and supply situation etc. etc.

It is far too simplistic to make a blanket statement that property prices will fall 40%.

I've yet to see much detailed analysis beyond these blanket statements and very little historic price analysis that takes land values into account. Back in the 60's a 'house' was on a quarter acre block. In 2008 a 'house' in McMansion ville is on blocks as small as 200sqm or 400sqm. Thus the 1960's house is actually now 3 or 4 blocks of land ... or if its in a high density area it might even be a block of 8 or more flats ... or have been consolidated into a larger block of 50 flats ... or may even have been consolidated into a highrise office or apartment block .... or turned into 5 ultra trendy restaurants, or a luxury beach front hotel etc. etc.

Property investment is about location and land.

 

[Pommiegranite]

An interesting aspect you've touched upon by your questions is the activity of the most high profile bear, Stevie Keen.

Despite banging on for years about the impending doom, he only just recently listed his property for sale. At least there are plenty of posters here who have been consistent and put their money where their mouth is.

People wonder why I don't hold much respect for Keen...

Unless you know the full value of his portfolio across all asset classes, then passing judgement of when he sells is pointless eg keen could have had 50mill in stocks and had no need to sell a 500k home.

 

[tech/a]

Some people will take their analysis a little further and won't have a black and white opinion.

There will be a negative impact on property prices, but its depth and duration will vary enormously depending on the location and type of property involved. Similarly the affect of an economic slump on rentals will vary in different locations. This will depend on a multitude of factors including the types of industry that make up the local economy, the drivers for local population growth and the rate of population growth, the current and historic vacancy rates, rental yields and supply situation etc. etc.

It is far too simplistic to make a blanket statement that property prices will fall 40%.

I've yet to see much detailed analysis beyond these blanket statements and very little historic price analysis that takes land values into account. Back in the 60's a 'house' was on a quarter acre block. In 2008 a 'house' in McMansion ville is on blocks as small as 200sqm or 400sqm. Thus the 1960's house is actually now 3 or 4 blocks of land ... or if its in a high density area it might even be a block of 8 or more flats ... or have been consolidated into a larger block of 50 flats ... or may even have been consolidated into a highrise office or apartment block .... or turned into 5 ultra trendy restaurants, or a luxury beach front hotel etc. etc.

Property investment is about location and land.

Good God an intelligent post on the topic.

 

[MrBurns]

It is far too simplistic to make a blanket statement that property prices will fall 40%.

Frankly I just assume people will understand that some areas will fall less than others, some areas will retain most of their value, I don't feel the need to point that out when i make a statement like that.

The market will fall dramatically, thats my opinion people will do their analysis after the fact as usual, those who try beforehand will fail because we have never been in this position before.

I'm fairly conservative but I'm almost certain this is the "big one"

 

[tech/a]

I'm fairly conservative but I'm almost certain this is the "big one"

Compared to what?
The fall of the Roman Empire?
The Great Depression which will be renamed "The not so Great Depression?"

Do you EVER get out of your Comfort zone?
As you perceive it of course.