House prices to keep rising for years

[nioka]

Sorry, but I am JUST amazed when you put out the claim that "inflation makes them richer".

There is one exception though, you can try asking the poor billionaires in Zimbabwe. Inflation does not make anyone rich, it is a hidden tax from the government and everyone will become worst off.

While house prices do increase nominally over the "very" long term, it only ever traces with average inflation/wage growth. If your definition that inflation would make them richer, then you better pray that we should experience a hyperinflation and make everyone own a trillion dollar house.

I've done OK by USING inflation over the years. If you can't fight it join it and use it. Inflation is helping pay off a home loan. It doesn't help pay the rent, it increases the rent.

 

[SM Junkie]

I'm trying to get a bit of perspective on the Melbourne market at the moment. It is being touted by a real estate company doing a road show over in the West, that Melbourne will expect in the next 2 years:

• The highest population growth in Australia, and will double by 2050?
• Employment is the highest in Australia
• Demand for housing to be the highest in Australia
• Expect a current capital growth of 25.2% by 2007
• Rental demand currently at .3%

I guess my question is why?

What is or will be happening in Melbourne to expect this sort of increase? Sounds a little to good to me and I have not read anything on this thread that supports these claims.
Appreciate your comments

 

[robots]

hello,

look things are rolling along nicely in Melb,

Mofra has spoken about them recently on this thread and Brumby is doing a very good job,

please check before you buy

thankyou

robots

 

[pepperoni]

What? So is that your uncles house or something????? Or maybe a very short term lease/house sitting type arrangement? $750/week in the regular market would barely get you a 3 bedroom flat or a maybe an un-renovated 3 bed semi anywhere else in Mosman or around the lower north shore. A $5M Balmoral slopes house on a long term lease should pulling $2k-$3k/week and would be snapped up easily in the corporate/executive rental market. Eg: http://www.domain.com.au/Public/PropertyDetails.aspx?adid=5752848 or http://www.domain.com.au/Public/PropertyDetails.aspx?adid=5759222 as a starting point.

I think there is more to that situation than you are letting on.....

Cheers,

Beej

Agree with everything you say, but im here now with my 27m frontage on a 6 month lease through a local agent. I have no connections to swing a deal here.

Ill verify with links when I no longer live here. This money is small bickies to the owner as it is to most owners round here ... and there are not that many people with 2k a week to spend on these joints, there are heaps available here and in the east and nobody wants to leave them empty for 3 months ... there are some of the craziest rental bargains out there it would surprise you.

And Im sure there are crazier bargains in every other rental market in aus.

 

[pepperoni]

From yesterday's WA business news. Isn't WA the recession proof state? Enjoy:

Perth houses prices drop $30,000 - 11 Jul, 06:45am

The median house price in Perth has fallen $30,000 down to around $446,000 in the past six months and the rental vacancy has returned to normal for the first time in several years, according to the data released today by the Real Estate Institute of WA.

Data released today by the Real Estate Institute of Western Australia show that the Perth median
house price has dropped a further $14,000 since March, while the rental vacancy rate has returned
to normal for the first time in several years.

REIWA's preliminary results for the June quarter show a 3 per cent fall in median price, pulling the
metropolitan median down from $460,000 in March to around $446,000.

This follows the median price having peaked at the end of last year at $475,000.
REIWA President Rob Druitt said the post-boom market was still correcting but had now been hit by
the weaker consumer confidence in the overall economy, interest rate uncertainty and petrol
prices.

"Perth has experienced an overall slump of almost $30,000 in the median price since the beginning
of this year, and the June quarter shows that this slump is found right across the metropolitan area
and also that the regions have gone backwards a little too," Mr Druitt said.
REIWA data for June show that Mandurah dropped by 7 per cent, Greater Bunbury by 7 per cent,
Geraldton-Greenough by 9 per cent and Kalgoorlie by around 5 per cent.

Mr Druitt said the large number of properties for sale punctured the myth of a housing shortage.
"In WA we have a situation of oversupply - not a problem with undersupply, and this is due to the
strength of building activity between 2001 and 2007," he said.

There were 17,200 properties on the market in June (down 2 per cent on March), including 2,450
blocks of land.

Mr Druitt said the once tight vacancy rate for tenants had now returned to normal, with REIWA
recording a comfortable 3 per cent vacancy rate, illustrating many new properties had flooded into
the rental system as investor/owners now found it a difficult time to sell.
"For the first time in several years tenants should now find it much easier to find a suitable home.

There is much more stock available and much more competition amongst owners to secure good
tenants.

"However, rents did increase a little in the June quarter, lifting by $10 per week for houses to a
median of $350 per week, while units rose by $10 per week to a median of $320 per week," Mr
Druitt said.

"Given the large number of properties now being passed over into the rental system, it is
reasonable to expect that rental price growth will ease in the latter part of the year.

"Landlords need to be mindful of the changing conditions and not to price themselves out of the
market," Mr Druitt said.

The oversupply of housing is not restricted to the Perth market with both Mandurah and Bunbury
recording high stocks of listings along with healthy vacancy rates which have contributed to no
movement in rents in these regions during June.

OH - MY - GOD.

And this is the only market with fundementals to back up increases (mining).

God help the rest of us ... except melbourne that brilliantly erected that force field against the world economy. With its steady 10% annual compounding growth soon melbourne units will cost more than a whole street in the rest of the world.

 

[pepperoni]

Chinese govt ... at least TRYING to bring about sustainable growth ...

http://www.bangkokpost.com/120708_Business/12Jul2008_biz35.php

Fricken boom bust aussie and us govts.

 

[Warren Buffet II]

OH - MY - GOD.

And this is the only market with fundementals to back up increases (mining).

God help the rest of us ... except melbourne that brilliantly erected that force field against the world economy. With its steady 10% annual compounding growth soon melbourne units will cost more than a whole street in the rest of the world.

You forgot Brisbane where there is so much demand and no enough properties available. Brisbane will compound at 15% year after year. Yeah right....
I am feeling it, it ´s coming, it is becoming an eye sore all those sale signs (2 or 3 per street now). Sell now if you can or sell to robots for a great deal with ANZ.

WBII

 

[robots]

hello,

keep them coming, fantastic

thankyou

robots

 

[theasxgorilla]

I'm trying to get a bit of perspective on the Melbourne market at the moment. It is being touted by a real estate company doing a road show over in the West, that Melbourne will expect in the next 2 years:

• The highest population growth in Australia, and will double by 2050?
• Employment is the highest in Australia
• Demand for housing to be the highest in Australia
• Expect a current capital growth of 25.2% by 2007
• Rental demand currently at .3%

I guess my question is why?

What is or will be happening in Melbourne to expect this sort of increase? Sounds a little to good to me and I have not read anything on this thread that supports these claims.
Appreciate your comments

Firstly, if it's being spruiked it probably is too good.

But in answer to your question, it has everything except warm water.

 

[wayneL]

Firstly, if it's being spruiked it probably is too good.

But in answer to your question, it has everything except warm water.

If I was forced into going back to Oz, it would be Melbourne...

...but not if the population is going to double. Imagine the South East Carpark with 6 million people.

Fuggedit!

 

[theasxgorilla]

If I was forced into going back to Oz, it would be Melbourne...

...but not if the population is going to double. Imagine the South East Carpark with 6 million people.

Unfortunately, a all good things eventually seem to, the inner city affordability ship has said. There is already a generation just starting to reach their 40's who benefited from low inner city real estate prices coupled with redundancy payouts, coupled with privatisation and demutualisation once-off windfalls, coupled with a recovering then booming economy etc. who are now part of the established inner city 'elite'. To aspire to something similar today from within Melbourne can't be easy. I reckon you need at least two high incomes in the household, plus be comfortable with 90+% LVR.

If you think that its an option to live further out then be prepared for the future to make your life hell. The infrastructure barely supports commuting from the middle 'burbs to work today in less than a hour. As density increases this will get worse and worse.

The only thing that will save this situation is if the whole 'transit city' idea succeeds and it becomes possible to earn 100k+ a year working in Ringwood. In fact I think that this idea being successful, coupled with an upgrade of the train system would 'fix' Melbourne for the next 50 or so years.

 

[theasxgorilla]

If I was forced into going back to Oz, it would be Melbourne...

Like me it sounds like you're a long way from wilfully contemplating the idea.

 

[Mofra]

I'm trying to get a bit of perspective on the Melbourne market at the moment. It is being touted by a real estate company doing a road show over in the West, that Melbourne will expect in the next 2 years:

eeek 1: If you are thinking of doing any business with a spruking company, first find out how they make their money. Due diligence isn't just for purchase of tradeable commodities

• The highest population growth in Australia, and will double by 2050?
• Employment is the highest in Australia
• Demand for housing to be the highest in Australia
• Expect a current capital growth of 25.2% by 2007
• Rental demand currently at .3%

Not sure where they got this figure (or how they are planning on travelling back in time); even the AMP permabulls predicting the ASX to get to 6500 in the next 12 months aren't this optimistic. Preditions for the whole market are useless anyway (as if anyone actually assumes the entire market rises & falls at the same rate ).

I guess my question is why?

What is or will be happening in Melbourne to expect this sort of increase? Sounds a little to good to me and I have not read anything on this thread that supports these claims.
Appreciate your comments

Sounds far fetched to me - I'm expecting most areas to fall in real terms in the short term, as the urban sprawl in many areas has outpaced the infrastructure to such a large degree massive swarthes of the city are at the mercy of higher transportation costs. In land area alone Melbourne is one of the biggest cities in the world, and such a low density populace makes infrastructure investment far more expensive.

 

[noirua]

The property situation is now moving towards crash and burn. Anyone who has investments in funds holding large percentages of properties should think carefully as some UK and US funds have now stopped withdrawals or require 12 months notice to sell shares or units.

 

[wayneL]

Well I'll be!

Crash Gordon's "No more boom and bust" just happens to be....

boom.... and bust!!!!

Flint admits to an unsustainable boom

Gordon Brown promised 'no return to boom and bust'. Did anyone tell his housing minister?
All comments (42)


You don't expect a government minister to admit that the housing market bust threatening the whole economy follows an unsustainable boom. "No return to boom and bust" has been the Brown mantra for as long as anyone can remember while "sustainable" is a newer buzzword. But housing minister Caroline Flint is a one-woman animal liberation movement: she just goes on letting cats out of bags.

http://www.guardian.co.uk/commentisfree/2008/jul/05/property.creditcrunch

 

[Pommiegranite]

Oh dear..oh dear! Hey Robots..why buy an IP now...when you can buy one for 10% off (or probably more) in 12 months?


http://www.skynews.com.au/business/article.aspx?id=248833

Aus house price fall
Updated: 19:06, Saturday July 12, 2008
A new report shows Australian house prices fell in every capital city last month.
It's the first time it's happened since the Great Depression, and housing experts say we'd better get used to further falls in the market.
To get buyers to part with cash and sign contacts is becoming very hard due to mortgage stress.
It's estimated the typical house around Australia will fall by around 5- 10 per cent over the next 12 months.
The big increase in rental prices are also affecting tenants have already eroded the latest tax cuts. Experts say those people who are selling homes should price them correctly to move it quickly.

 

[robots]

hello,

another great day on the cards,

auction rate cleared to 62% yesterday, business as usual by the looks of it

plenty of fun and games with many negotiations behind closed doors,

any chance you can get some figures from the SRO on a sale which shows it dropped by 10%?maybe a house or unit that sold last year and sold again this year, goodluck with it

thankyou

robots

 

[Warren Buffet II]

It is coming, one-in-a-100-year event.....

http://www.news.com.au/story/0,23599,24012370-2,00.html

WBII

 

[Pommiegranite]

hello,

another great day on the cards,

auction rate cleared to 62% yesterday, business as usual by the looks of it

plenty of fun and games with many negotiations behind closed doors,

any chance you can get some figures from the SRO on a sale which shows it dropped by 10%?maybe a house or unit that sold last year and sold again this year, goodluck with it

thankyou

robots

I heard it was a sickly 54%. I also heard that there were hardly any negotiations on passed in properties.

Got a link to your figures Robots?

 

[wayneL]

hello,

another great day on the cards,

auction rate cleared to 62% yesterday, business as usual by the looks of it

plenty of fun and games with many negotiations behind closed doors,

thankyou

robots

Whenever robots posts, I think of The Black Knight in Monty Python & the Quest for the Holy Grail.

"It's only a flesh wound"

LOL