House prices to keep rising for years

[wayneL]

Gfresh I suspect like an affordability crisis it's a creation largely of the media, though it's all a matter of definition. In my suburb which is 10k from the Brisbane CBD, there are houses on decent chunks of land going for under 300k still, and that is for a house that you can live in straight away even if it's not going to suit most Gen Y's expectations, units I'm sure you can find some much cheaper deals if you look hard enough.

Recency bias.

Do the relative value sums for the strata of society expected to live in such an area will show that to be very expensive (in affordability terms).

 

[robots]

Recency bias.

Do the relative value sums for the strata of society expected to live in such an area will show that to be very expensive (in affordability terms).

hello,

household on 80-100k/yr, young couple, easy

if not move a suburb out, work a second job, why should every joe blow get that place anyway,

thankyou
robots

 

[wayneL]

hello,

household on 80-100k/yr, young couple, easy

if not move a suburb out, work a second job, why should every joe blow get that place anyway,

thankyou
robots

I am losing the will to live.

Please somebody, where can I buy a spaceship?

 

[Julia]

There now, Wayne, just remember your recent vow to ignore all this stressful stuff.
Just open some caviar and crack the Krug.

 

[theasxgorilla]

Recency bias.

Do the relative value sums for the strata of society expected to live in such an area will show that to be very expensive (in affordability terms).

Totally, but recency is all you've got if you're an expanding family and raising a couple of kids in a flat isn't going to cut it.

I ran some sums yesterday on relative cost of holding real estate in Aust vrs Sweden. My conclusions were that relative cost or should we say "expensiveness" of a property in Australia has a lot to do with how established you already are on the property ladder, or put another way, how much equity you have. It stands to reason that the more equity you have the less 10% interest rates and once offs like stampduty are going to bite.

Thanks to tax cuts and wage increases over the last decade, if you can managed a 25% deposit then you'll have about the same amount of money left over each month after paying the mortgage. Key difference is that in Aust that mortgage will cost you $2,500 AUD per person to hold (I'm taking about an 800k property, employed couple). In Sweden it'll cost a little over $1,000 AUD, per person.

My conclusion was that wage increases and income tax rate reductions in Australia have largely been negated by higher interest rates and property prices. When you've paid for that out of your higher wages, the bit left over, which is also proportionately higher, is negated by inflation.

I think that there are a lot of bitter 1st home buyers and renters out there who don't realise that a lot of people who they perceive to be winners aren't actually doing it that much easier. And a lot of winners who pretend they are haven't really had a close enough look at the numbers to realise where things are really at.

You're a winner if you got on the property ladder early and resisted the urge to make excessive equity drawdowns for consumption.

You're a winner if you locked rates for say 5 or 10 years at anytime during the last 10 years.

You're a winner if you managed to sell after exposure in a high cap gain area and moved to an area yet to take off.

The big losers are people trying to get on the ladder, as once you're on it, on the sum of things, no one is that much better or worse off.

The bitterest pill to swallow for most is that they're earning more (wage increases), keeping more (tax deductions), worth more (house price increases), but on the sum of things they're not that much better off (unless they go on an overseas holiday or order something off Ebay from the US).

 

[wayneL]

There now, Wayne, just remember your recent vow to ignore all this stressful stuff.
Just open some caviar and crack the Krug.

Yes...

Quite right....

Now, where did I leave that open bottle?

 

[BentRod]

Give em a bell chap.:bier:




PS:
Don't use Willy Nilly.
For emergencies only, eg; taking troll bait

 

[Knobby22]

Robots.

You are too young to remember 1989.
I know one property investor who lost everything.

I don't think the crunch will occur yet. But when it does...

Thankyou.

 

[robots]

hello,

hope everybody is having a great day,

http://www.news.com.au/heraldsun/story/0,21985,24142978-661,00.html

looks as though the MASS unemployment theories are being seriously questioned,

second lot of data out since many claimed the world was going to end, things looking bright

thankyou
robots

 

[WaySolid]

Recency bias.

Do the relative value sums for the strata of society expected to live in such an area will show that to be very expensive (in affordability terms).

How is what I said displaying recency bias?

That same house for under 300k was even more affordable by probably all measures 8 years ago and for a lot of the past, not less affordable.

Suburbs have life cycles, mine is gentrifying and people with more money are moving in and pushing up relevant multiples, so the relative value sums for the people expected to live here would be an interesting measure, not quite sure how to measure it best, but I doubt it is becoming less affordable. In a sense this shows that you buy a 'property' not the median price when you invest in real estate, mine is doing well as the suburb is redeveloping and repricing itself, all very good for me

 

[WaySolid]

hello,

hope everybody is having a great day,

http://www.news.com.au/heraldsun/story/0,21985,24142978-661,00.html

looks as though the MASS unemployment theories are being seriously questioned,

second lot of data out since many claimed the world was going to end, things looking bright

thankyou
robots

I bet 100% of my net worth that the world isn't going to end

Doesn't mean we won't see a significant correction in property, or... an extended stagnation even (time to reboot that thread maybe??).

It's not about being right for me. It's about making some money and reacting to what situations happen. Predictors can predict.

Part of the fascination with these threads for me is that people can be so certain, on either side of the crash non crash divide. Better to adopt a bit of humility and recognize that maybe you don't know what's going to happen exactly I reckon.

 

[WaySolid]

hello,

household on 80-100k/yr, young couple, easy

if not move a suburb out, work a second job, why should every joe blow get that place anyway,

thankyou
robots

I'm not an expert on the subject, Matusik has done some research I think is pretty compelling however.

http://www.matusik.com.au/Default.aspx?tabid=114

There are some well though out arguments about affordability in those dox I think. All depends how you define 'affordable' and other terms as well.

 

[wayneL]

How is what I said displaying recency bias?

That same house for under 300k was even more affordable by probably all measures 8 years ago and for a lot of the past, not less affordable.

Suburbs have life cycles, mine is gentrifying and people with more money are moving in and pushing up relevant multiples, so the relative value sums for the people expected to live here would be an interesting measure, not quite sure how to measure it best, but I doubt it is becoming less affordable. In a sense this shows that you buy a 'property' not the median price when you invest in real estate, mine is doing well as the suburb is redeveloping and repricing itself, all very good for me

The recency bias is already explained.

But if your suburb is gentrifying, that's certainly a positive over the long term.

 

[robots]

hello,

http://www.theaustralian.news.com.au/story/0,25197,24180830-36418,00.html

some good rises in there, should keep things plodding along,

10% for miners
7.7% for construction workers (wat the?)

with "new" housing in the doldrums and supposedley "housing" a no go zone its interesting they pull a 7.7% rise,

might start shopping at Aldi to bump it up a bit more, pep you know where one is in melbourne?

thankyou
robots

 

[robots]

hello,

good evening brothers,

http://www.domain.com.au/Public/Art...at to bricks and mortar&s_rid=theage:Homepage

a bit of a laugh for you, have a great weekend

thankyou
robots

 

[robots]

hello,

WOW. the clearance rate yesterday went ballistic, up 6% in a week

its rollin' on brothers

thankyou
robots

 

[Sean K]

hello,

WOW. the clearance rate yesterday went ballistic, up 6% in a week

its rollin' on brothers

thankyou
robots

What was the % price rise in the houses sold for the month?

Has more relevance to:

"House prices to keep rising for years"

thread topic.

Prices may have actually gone down robots, which explains the increased sales.....

 

[lioness]

I have been following this thread for 6 months now and never posted.

I have also readmany articles on why house prices should collapse such as highest debt levels in the worl, % rates rising, negative savings etc etc etc.

Now answer me this everyone on fundamentals HOW can house prices collapse when we have strong employment, housing and rental shortage and an interest rate cycle about to come down 1% over the next year and a country obsessed with home ownership.

I see it flat to negative 5% at the worst and so what if that happens, they have gone up 600% anyway.

 

[motion]

Well I think the market has turned.. again been to lots of auctions over the last 5 months.. and the last 4 weeks I have see an increase in bidders and prices going above what you would have thought it would go for..

I think a lot of First home buyers are getting into the market and more investors are coming back... I really think we have hit bottom... but they just my thoughts for the Sydney Market..

 

[xoa]

I have been following this thread for 6 months now and never posted.

I have also readmany articles on why house prices should collapse such as highest debt levels in the worl, % rates rising, negative savings etc etc etc.

Now answer me this everyone on fundamentals HOW can house prices collapse when we have strong employment, housing and rental shortage and an interest rate cycle about to come down 1% over the next year and a country obsessed with home ownership.

I see it flat to negative 5% at the worst and so what if that happens, they have gone up 600% anyway.

How could UK house prices collapse? How could Irish house prices collapse? How could NZ house prices collapse? How could South Korean house prices collapse? I'd speculate (no pun intended!) that the bubble was caused in equal measure by greed, foolishness, and arrogance. Who would have thought that a 600% spike was unsustainable?

Now that Australian house prices have statistically started to fall, I'm sure the permabulls will try to convince everybody that the bottom has been reached on a monthly basis for the next 36 or so months.