House prices to keep rising for years

[Sean K]

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

robots, I'd be interested to know what good and bad auction rates are. Since you are quoting this as 'great', what is the market considered good to bad scale, and maybe a reference? Thanks.

In other news:

Property values plummet across Australia
July 13, 2008 - 8:09AM

Plummeting property values have prompted warnings Australia is heading for a one in a 100 year slump.

New figures from property analyst Residex showed house and unit prices in nearly every city and rural centre fell in June, News Ltd reports.

The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

 

[Pommiegranite]

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

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

WBII

Yes..its getting sick isn't it WBII? I can almost hear the sqeals of those highly leveraged 'investors'.

Property nearing once-in-100-year slump

By Fiona Gilles
July 13, 2008 09:20am
Article from: </IMG>
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• Half of all houses lost value last month
• Last time that happened was before the Depression
• Property: news and tips to beat the slump

PLUMMETING property values have prompted warnings Australia is heading for a one-in-a-100-year real estate slump.
New figures from property analyst Residex showed house and unit prices in nearly every city and country centre fell last month. The last time all states fell at the same time was just before the Great Depression.

More than 50 per cent of all homes across the nation lost value in June. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards is warning of tough times ahead. "It looks like we're moving into a one-in-100-year event," Mr Edwards said.

"It points to a situation where unless the Government and Reserve Bank take action Australia could move into a recession.

"The only other times this has ever occurred are before we have moved into severe recessions."

The Residex statistics come at the end of a gloomy week for the Australian economy. Official figures released last week showed housing construction declined for a fourth consecutive month and demand for loans fell 23 per cent in the four months to the end of May.

Higher petrol prices and interest rates, and the share market slump also saw consumer confidence drop 51 per cent to its lowest level since 1992, when the economy was recovering from recession.

Mr Edwards said housing markets in different states usually rose and fell at different times.

"To see an adjustment going on a wholesale basis across the whole of the nation is incredibly unusual," he said. "Never in my lifetime have I seen so many converging negative events."

Residex reports the current median house value in Sydney is $573,000, down 1.05 per cent in June compared with 1.81 per cent for three months to the end of June.

RP Data's director of property research Tim Lawless said what happened in the coming months would depend on inflation.

He showed some optimism, although he said values would probably fall further this year.

"Coming into 2009, it's likely - and it depends on what happens with interest rates - we will start to see some value improvements return to the market, albeit relatively small," he said.

 

[robots]

hello,

i like the one with rents increasing in syd by 15.49%, fantastic

would be similar across aus,

my advice to landlords is not to renew lease, keep things on a month by month to ensure you can react quickly to market conditions,

for eg, if you get a rise in you're rates and insurance whack it straight onto the rent, or if the rba bangs them up lift it again

if the "user" of the investment complains to the tribunal then take all the information to the tribunal, and explain you not running a charity service and the price charging is market rent and the "user" can prove otherwise

stand up for your rights

thankyou

robots

 

[Pommiegranite]

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

"Come back here. I'll bite your legs off !"

LOL

 

[Sean K]

robots, I'd be interested to know what good and bad auction rates are. Since you are quoting this as 'great', what is the market considered good to bad scale, and maybe a reference? Thanks.

robots, you need to seriously answer this question, or your argument is not even moot, but pointless.

 

[robots]

hello,

kennas, normal market conditions are between 65-70% (and i highlighted this when you previously asked it)

when things were hot last year it went to around 80%, when things were cold recently it went under 60% on a couple of occasions,

the auction process is the most transparent way

thankyou

robots

 

[Sean K]

hello,

kennas, normal market conditions are between 65-70% (and i highlighted this when you previously asked it)

thankyou

robots

And thanks for the reference. Next time I'm asked about action rates I will cite you. Cheers, kennas

 

[wayneL]

And thanks for the reference. Next time I'm asked about action rates I will cite you. Cheers, kennas

It seems a fairly opaque stat... try finding it on the net.

hmmmmmm why is that?

 

[Pommiegranite]

hello,

kennas, normal market conditions are between 65-70% (and i highlighted this when you previously asked it)

when things were hot last year it went to around 80%, when things were cold recently it went under 60% on a couple of occasions,

the auction process is the most transparent way

thankyou

robots

Auction clearance rates are, at best, a very weak indicator of house prices.

They need to be taken in context, and the context is very grim.

 

[wayneL]

And thanks for the reference. Next time I'm asked about action rates I will cite you. Cheers, kennas

In a stunning feat of Internet sleuthing, I found them:

http://www.reiv.com.au/home/inside.asp?ID=142

Saturday 12 July 2009

Unexpected increases in interest rates by a number of major banks in the last three days cooled buyers enthusiasm at auctions today with the clearance rate of 62 per cent being recorded, down slightly from 66 per cent last weekend. Overall there were 370 auctions today, of which 229 sold, 141 were passed in, 102 being on a vendors bid.

TOTAL AUCTIONS
This week: 370
Last week: 385
This time last year: 401

S Sold at Auction: 178
SB Sold before Auction: 49
SA Sold after Auction: 2

PI Passed in: 141
VB Passed in on vendor's bid: 102

Clearance rate: 62%

Postponed: 1
Withdrawn: 0
Auctions with no result: 49

PS Private Sales: 552

Total Volume (Auctions): $127.07mil

Total Volume (Private Sales): $211.39mil

Total Auctions Houses: 251
Clearance Rate: 61%
Median Price: $545,250

Total Auctions Flats/Apartments: 106
Clearance Rate: 66%
Median Price: $392,000

Total Auctions Vacant Land: 13
Clearance Rate: 54%
Median Price: $240,000

 

[Sean K]

In a stunning feat of Internet sleuthing, I found them:

http://www.reiv.com.au/home/inside.asp?ID=142

Nice sleuthing Wayne!

So, down from the previous week.

Sounds 'great' to me.

And, a good indicator that prices will keep rising for years.

I'm searching for some figures on auction rate variances myself, but no luck so far. I'm not a very good sleuth.

 

[explod]

hello,

kennas, normal market conditions are between 65-70%

when things were hot last year it went to around 80%, when things were cold recently it went under 60% on a couple of occasions,

the auction process is the most transparent way

thankyou

robots

The only transparent way is to collate the total sales for the week against the total properties offerred. Clearance rates only give the percentage of those sold at auction. The REIV are very selective in the release of figues and push the clearance rate as the holy grail almost to the point of deception.

Clearance rates were the same in 1997 down here on the peninsula when it was difficult to sell homes. Houses sold then for $120,000 that sold for $500,000 in 2005.

Clearance rates have no statistical value for what is really happening out there in real estate.

Yes they will vary between 60 and 80% but only reflect the market tug of war between buyers and sellers. At the moment there has been an increase in clearance rates which is a reflection of vendors being more realistic and some being desperate to off load the mortgage they can no longer manage. And a suggestion by the REIV during the week that vendors need to be more realistic in expectations if they want to sell. Of course the agents only want turnover and the newsmedia the fat classified section.

 

[robots]

hello,

check out:

http://www.rba.gov.au/MonetaryPolicy/RBABoardMinutes/2008/rba_board_min_06052008.html

and read comment from RBA that syd and melb are at more stable market prices

wow, how's that even the RBA likes the auction clearance rates

thankyou

robots

 

[explod]

hello,

check out:

http://www.rba.gov.au/MonetaryPolicy/RBABoardMinutes/2008/rba_board_min_06052008.html

and read comment from RBA that syd and melb are at more stable market prices

wow, how's that even the RBA likes the auction clearance rates

thankyou

robots

I think its worth getting the interpretation of the article correct dear Robots:-

Turning to the housing sector, members observed that the level of new building activity was running well below estimates of underlying demand. The early signs of a pick-up in building approvals late in 2007 had since faded.

Other indicators, such as auction clearance rates, house prices and housing finance, pointed to activity in the established housing market also softening.

The available information suggested that house prices rose only slightly in the March quarter, with weakness in prices in Sydney and Perth offset by increases in prices in Brisbane and Adelaide. Auction clearance rates in Sydney and Melbourne had fallen in recent weeks and were roughly consistent with a continuation of stable house prices.

Housing finance had softened further in the past few months. Housing loan approvals as a proportion of housing credit outstanding had fallen significantly in February and another sizeable fall was estimated to have occurred in March, according to bank lending figures. Monthly housing credit growth had slowed to around 0.8 per cent on average since mid 2007, and was likely to fall further in coming months.

The other aspect is that this report is now 2 months old and the March quarter refers to the first three months of the year. A great deal has changed since then. However the overall sound of the RBA report above indicates an ominous outlook anyway. IMVHO

 

[Sean K]

hello,

check out:

http://www.rba.gov.au/MonetaryPolicy/RBABoardMinutes/2008/rba_board_min_06052008.html

and read comment from RBA that syd and melb are at more stable market prices

wow, how's that even the RBA likes the auction clearance rates

thankyou

robots

robots, it might help if you provided a reference that supported your argument.

Turning to the housing sector, members observed that the level of new building activity was running well below estimates of underlying demand. The early signs of a pick-up in building approvals late in 2007 had since faded.

Other indicators, such as auction clearance rates, house prices and housing finance, pointed to activity in the established housing market also softening.

The available information suggested that house prices rose only slightly in the March quarter, with weakness in prices in Sydney and Perth offset by increases in prices in Brisbane and Adelaide. Auction clearance rates in Sydney and Melbourne had fallen in recent weeks and were roughly consistent with a continuation of stable house prices.

Housing finance had softened further in the past few months. Housing loan approvals as a proportion of housing credit outstanding had fallen significantly in February and another sizeable fall was estimated to have occurred in March, according to bank lending figures. Monthly housing credit growth had slowed to around 0.8 per cent on average since mid 2007, and was likely to fall further in coming months.

The 'stable' house prices comment in there doesn't seem to sit well amongst the other comments that suggest softening and falling prices.

I found this document from AMP (May 08) interesting, and summary:

Key points
Rising interest rates and a rise in mortgage stress to record levels have led to a deterioration in the outlook for house prices. This comes at a time when Australian housing remains very overvalued, affordability is terrible and low rental yields are making housing less attractive for investors.

While the housing shortage and the low likelihood of a recession should prevent sharp falls in Australian house prices, modest falls are now likely over the year ahead.

 

[robots]

hello,

people can question what the auction clearance rate's mean but it is evident that the head honcho's look at clearance rates,

"in more recent weeks clearance rates have fallen to more stable conditions"

the clearance rates have been around 60-70% for many many months now which the RBA states as more stable conditions, okay

which supports my claim that it is going along nicely,

people please remember I wouldnt have a clue what is going to happen and have NEVER said things are going to rise by 25%/pa, find it if you think I have

i support the occurrence that housing still remains for many people their biggest "investment", and the benefit in senior years are astonishing

thankyou

robots

 

[Aussiejeff]

hello,

people can question what the auction clearance rate's mean but it is evident that the head honcho's look at clearance rates,

"in more recent weeks clearance rates have fallen to more stable conditions"

the clearance rates have been around 60-70% for many many months now which the RBA states as more stable conditions, okay

which supports my claim that it is going along nicely,

people please remember I wouldnt have a clue what is going to happen and have NEVER said things are going to rise by 25%/pa, find it if you think I have

i support the occurrence that housing still remains for many people their biggest "investment", and the benefit in senior years are astonishing

thankyou

robots

Robots,

Errr. aren't a lot of so-called "honchos" now becoming the severed heads of failed companies and institutions.....???

And generally speaking, the benefit in senior years from owning a property only holds up if an individual has managed to purchase a property under favourable buying circumstances (low interest loans, low market prices) and subsequently they are able to dispose of that property at a good profit (less inflation) - again, under favourable selling circumstances ( high market prices) prior to them moving permanently into some sort of aged accomodation to see out their final years. Market position and timing (which often means a HUGE amount of luck is involved - being born in the right year and place in society etc) is crucial to this.

Right now, I personally would not be trying to give anyone the impression that it is a great time to invest in property.....

Methinks 8%+ interest on bank accounts is looking better every day in the short term....

Chiz,



AJ

 

[pepperoni]

Looks like the bears have been right so far ... and as has been said no area is immune.

From this story http://www.news.com.au/dailytelegraph/story/0,22049,24010820-5001021,00.html

"While Plumpton, near Mount Druitt, was the worst-performing suburb, with negative capital growth of 5.74 per cent in the three months to June and 1.96 per cent in June, Whale Beach came in as the third-worst performer, with negative growth of 3.73 per cent and 1.14 per cent, respectively."


A year of that would see a further 12-24% drop.

 

[Snakey]

Nice work .. Im renting a $5m house on one of the best streets on balmoral slopes. 300m to beach, 4 bend, 2 car remote garage, big island kitchen, floor boards, lawnmowing and 3m ceilings for 750 a week.

My missus chucks in 250 a week so she can lay claim to 90% of the house ha ha.

I shake my head ... the property is free falling and the capital could be invested for almost $8k a week interest.

I'm no expert but it doesn't add up ... Not my problem though ... Ill happily live in australias most exy real estate for chickenfeed at 37.

Nice work pepperoni. Oh yes I forgot to mention that includes lawn and garden trimming. Not all land lords bought in late and squeeze every last dollar out of their tenants.
My land lord was given this house and 5 others from a dieing gay who had no one to leave it to. So no need to squeeze the tenant and add stress from an empty house.
While Robots rides a bike only to have capital losses im living the good life:

 

[Snakey]

some how i don't believe you are telling the truth

Drop around and see me one day: