House prices to keep rising for years

[kingbrown]

Agreed,...

Also what we call low incomes in Australia are actually quite large incomes by world standards, especially when you factor 9% super, 5 sick days, 20 days holiday, various public holidays, workers compensation, the extrmely low tax bracket and family payments.

not to mention australias average working week is only 38 hours... and there are masive penalty rates if your boss offers you more work... thats somthing I don't get,.. why should i have a penalty for offering staff more work,...

when you think about it,... no wonder we can't compete with over seas labour,..... the labour unions have priced them selves out of the market

I actually dont know what planet you are on mate ?
And i hate people that winge about Australia
min pay and conditions are here for a very good reason
This is why we have a great country

Sounds like you should pack it in and move to China
Would you would more happy with worker conditions and rights there ?
Maybe you could pay them with rice ?

Otherwise be smarter or get out !

 

[wayneL]

...and for a bit of light relief:

Paul Fry and Hugh Laurie(Dr House) - Estate agents on the loose

(from the last property crash)

 

[Tysonboss1]

I actually dont know what planet you are on mate ?
And i hate people that winge about Australia
min pay and conditions are here for a very good reason
This is why we have a great country

Sounds like you should pack it in and move to China
Would you would more happy with worker conditions and rights there ?
Maybe you could pay them with rice ?

Otherwise be smarter or get out !

I hate people wingeing about Australia too,.... people that winge they have it hard here

I am not wingeing, I am just saying that australian workers are on a really good package when you look at how much they earn compared to the hours they have to work. A worker on $15 an hour is really costing over $20 an hour for each hour of work done when you factor in an the other stuff.

What I am saying though is that it doesn't really make sense that I can't offer my staff extra hours with out a penalty, I have staff that are always asking me for more work, but the are capped at 38 hours because I am not going to pay over time.

 

[xoa]

So you think wages should be slashed?

Will that be good for house prices?

 

[Tysonboss1]

I don't know where to begin on this one. As best as I can put it, because on the other side of the capitalism equation is real people with values beyond money.

I understand alot of other people value other things over money, and I aggree if I try and force staff to work over time I should have to pay a penalty,

But if I have a staff member come to me and ask for extra hours each week because they want to buy a car, boat ,house or what ever why should I have to pay penalty rates, I am doing them a favour and getting kicked in the teeth for it.

 

[Tysonboss1]

So you think wages should be slashed?

Will that be good for house prices?

No, not one of my workers is on minimum wage,

I just don't think people should complain when they actually have it pretty good.

 

[gfresh]

I think he's just saying, why should he have to pay a premium (on top of the hourly rate), simply if the workers choose to work further hours than the 40. That's probably fair enough from an employers perspective.

New Housing financing figures just out.... down massively over even just the last month. Cliff jump almost.

http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0?OpenDocument

This is exactly what happened in the UK before the prices went south, financing plunged. The canary is flapping wildly, with a look of terror on it's face. I don't think there should be any doubt that hard times are ahead for many areas of the property industry. If people aren't financing, they're not buying (or building).

If we look at the summary trend.. the charts say it all - we're heading right for 5, and then probably 10 year lows. Nobody should be brushing off these figures.

http://www.abs.gov.au/ausstats/abs@...mmary&prodno=5609.0&issue=May 2008&num=&view=

 

[xoa]

No, not one of my workers is on minimum wage,

I just don't think people should complain when they actually have it pretty good.

Our minimum wage is higher than in the United States, but so are our prices for food, housing, and utilities.

$7.25/hr will get you further in America than $13.50/hr in Australia.

 

[Tysonboss1]

Our minimum wage is higher than in the United States, but so are our prices for food, housing, and utilities.

.

thats because wages are a massive part of the cost base, of food and housing.

wages take about 35% of the revenue of business directly so an increase in workers pay or conditions directly affects the cost of products and services.

and it's just not the pay / hour but all the conditions, such as the lowering of the work week to 38hours from 40, added payed breaks, the progression towards employers having to pay out sick days if they aren't used (sick days are ment to be a safe guard to protect the worker if they get sick but more and more people see them as a right), leave loading (what is leave loading anyway, I already give the person a 4 week payed break why do i have to increase there pay by 17% "leave loading" just because they are on holiday etc etc,...... and now they are talking about payed maternity leave,..

There is a general move of the work force getting paid more $$$ for less real hours of work, this can only mean people will end up with less in the end through higher prices,

 

[pepperoni]

I think he's just saying, why should he have to pay a premium (on top of the hourly rate), simply if the workers choose to work further hours than the 40. That's probably fair enough from an employers perspective.

New Housing financing figures just out.... down massively over even just the last month. Cliff jump almost.

http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0?OpenDocument

This is exactly what happened in the UK before the prices went south, financing plunged. I don't think there should be any doubt that hard times are ahead for many areas of the property industry. If people aren't financing, they're not buying (or building).

If we look at the summary trend.. the charts say it all - we're heading right for 5, and then probably 10 year lows. Nobody should be brushing off these figures.

http://www.abs.gov.au/ausstats/abs@...mmary&prodno=5609.0&issue=May 2008&num=&view=

I read this on SMH .. "shock fall" they say but the only real shock was that they went up so much!

Who want to be a wage slave for a bank for 30 years ... all of a sudden everyone woke up and decided they were gonna be the next gordon gecko and max debt was the key... hurry up and bring back the tune in and dropout drop out hippies I say ha ha.

Bank interest being payable in after tax dollars has always seemd to me like locking in almost a -20% return every year and hoping rents and capital gains will do better than that ... god help you if there are capital losses!

When i had mortgages I put every cent into them as I felt needed to make 15 -20% to get a better return. My friends scoffed that I wasnt wheeling and dealing like them ... but I paid off both 30 year mortgages in 3-4 years and they now have nooses around their necks.

One budding tycoon lost everything on one deal ... slow and steady still wins the race I say.

Anyway I think the RBA screwed this country by not hiking rates ON DAY ONE. Yes they were constrained by low US rates but IMO this country has been ruined by housing affordabilty.

So much so I think a move to abu dhabi may be in order until this is sorted out. Yes rents are high but no tax and 40c/l fuel more than makes up for it.

Sorry ... Rant over ... but this state of affairs is a joke

*gets hit on **** by door on way out*

 

[Tysonboss1]

Who want to be a wage slave for a bank for 30 years ... all of a sudden everyone woke up and decided they were gonna be the next gordon gecko and max debt was the key... hurry up and bring back the tune in and dropout drop out hippies I say ha ha.

Bank interest being payable in after tax dollars has always seemd to me like locking in almost a -20% return every year and hoping rents and capital gains will do better than that ... god help you if there are capital losses!

*

I would rather be a slave to the bank than a slave to the land lord,.... the bank interest kgets less and less as you pay offf the loan and they end up giving you the deed to the house,

rent is also paid out of after tax dollars,...

 

[Mofra]

Shortage, what shortage??

Is there really a shortage of housing? Let us turn our attention to the census data at the Australian Bureau of Statistics (ABS):
2001 2006 Growth
Number of Total Private Dwellings 7,790,079 8,426,559 8.17%
Number of Unoccupied Dwellings 717,877 830,376 15.67%
Number of Households 6,744,795 7,144,097 5.92%
Population 18,769,249 19,855,288 5.78%
Number of Dwelling/Household 1.15 1.18 2.60%

WBII, nice work with the quantitative analysis however I can't subscribe to what amounts to a "single property market" theory (I think everyone except robots agrees that mortgage belt properties are in decline and it appears anecdotally that there are a reasonable number of properties available for rent in these areas).

Unfortunately qualitative figures appear to be much harder to obtain.
Vacant properties that are closer to major population centres that have access to readily serviced public transport do seem to be extremely difficult to find - especially those within the means of an average household budget.

 

[pepperoni]

I would rather be a slave to the bank than a slave to the land lord,.... the bank interest kgets less and less as you pay offf the loan and they end up giving you the deed to the house,

rent is also paid out of after tax dollars,...

Rents are also as low as 2% of property price whereas mortgages are 10%.

With the 8% I save I can have compounding for me, whereas the 10% mortgage compounds against me.

And whilst Im no expert Im told I should respect compound interest.

"Depending on the source, Albert Einstein referred to compound interest as the eighth wonder of the world, the human race's greatest invention, or the most powerful force of the universe. "

(http://en.wikipedia.org/wiki/Compound_interest)

 

[pepperoni]

Whilst I agree that there is no single property market in Aus, a potential issue for Aus is that its not the only property market in the world.

At these prices some will be forced to look elsewhere (eg me).

Immigrants wont bother coming here, unless they are the 2 bob kind that like the amazing welfare and safety nets in aus ... that jokers like us end up paying for

 

[Tysonboss1]

Rents are also as low as 2% of property price whereas mortgages are 10%.

With the 8% I save I can have compounding for me, whereas the 10% mortgage compounds against me.

And whilst Im no expert Im told I should respect compound interest.

"Depending on the source, Albert Einstein referred to compound interest as the eighth wonder of the world, the human race's greatest invention, or the most powerful force of the universe. "

(http://en.wikipedia.org/wiki/Compound_interest)

As a home owner pays off there loan it works like compound interest in reverse meaning every payment has a higher and higher amount of priciple and less interest,.... so the compounding side of things is still working for them,...

not to mention that rents may be low but they will increase over the years so that difference between loan payments and rent dicreases pretty quickly over a few years when you factor in the actual interest component of the loan is decreasing and the rents you would other wise pay is increasing.

and remember with inflation your property price has a good chance of compounding too,..... and the one thing better than compounded growth is tax free compounded growth which your own home is.

 

[pepperoni]

I guess thats the way my struggling friends saw it when they committed. But when they do the numbers and their $500k house costs them millions over 30 years.

I think its a zero sum game at best with property prices stretched as they are now. Sort of like rushing to buying as many shares as possible after the stock market PE is 40 or something.

I see it in simpler terms when borrowing ie I budget for 10% interest, and would want around 10% CG each year to make it worthwhile, which I personally would never expect over 30 years.

Someone calculated it here before but I think it would mean the average aussie house will be about 3 trillion dollars in 10 years haha.

 

[Pommiegranite]

A sign of things to come over here?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/cmmortgage108.xml

 

[pepperoni]

A sign of things to come over here?

I hope so ... or even better no interest only loans ha ha. They are great for bank profits but life long mortgage slaves are not in the interests of society.

Better lending standards should be set for the people out there that need to be protected from themselves.

Less borrowing = lower prices = people becoming debt free sooner = more money and energy to spend on kids, education, having a life.

 

[Tysonboss1]

I see it in simpler terms when borrowing ie I budget for 10% interest, and would want around 10% CG each year to make it worthwhile, which I personally would never expect over 30 years.

Someone calculated it here before but I think it would mean the average aussie house will be about 3 trillion dollars in 10 years haha.

you miss a couple of points with this statment,...

Firstly you haven't factored in the rent the you would collect if it were an investment or the rent you would have had to pay if it were your home... so you wouldn't have to have CG of 10%,... you might only have to have 6% growth t make it worth while and if you think that prices will average atleast growth with inflation thats 4% staight away and the rent you are saving each year is also growing with inflation.


you also haven't counted on the compounding affect of your interest repayments getting smaller and smaller as you clear down the loan.

I think you are making the mistake of over simplifying your calculations and you are missing some giant factors....

 

[Tysonboss1]

Someone calculated it here before but I think it would mean the average aussie house will be about 3 trillion dollars in 10 years haha.

one of the calculations that I have seen used on this thread was by Number crucher who basically said.

sydney property 100 years ago was worth about $2000 for the median house and if $2000 increase at 10% for 100years then the median has price should be about $50,000,000,.... so he stated that it was clearly impossible for this to happen because sydney's median house price was only $450,000

If you look a bit deeper though and say that a 10% return was made up of 4% rental and 6% capital growth,... then it is entirely possible that this properies that were valued at $2000 100years ago have maintained a return of over 10%,.... because the buildings that are built in the areas where the median homes were 100years ago are valued up to $600,000,000 and have land values in the 10's of millions.