House prices to keep rising for years

[So_Cynical]

Good Lord, what a horrid litle dogbox.
Can't believe anyone would pay $350K for that!

I looked at a house today (potential IP), three bedrooms, two bathrooms, two large living rooms, big kitchen, large block with dozens of fruit trees, in a good area, bus stop at door, and would have no trouble getting it for $300K.

This is in a fast growing tourist-oriented Qld town (pop. 55,000), three hours by road fromBrisbane.

Julia this is Ashfield...the inner west of Sydney...not 56 sandfly street, West Hervey Bay

 

[Passive]

Have you ever asked yourself why there has never been such an attempt in history to rectify such a problem?

The government and RBA are throwing darts in the dark, just hoping to score. Really, how long can they really afford to prop up house prices? They have made it absolutely clear this is their biggest fear.

I can certainly see why you are defensive of house prices (you don't seem to have posted on any other thread since joining) as you are invested in the state most susceptible to a large decline.

You may be well ahead in your RE investments, doing it for years and therefore positioned to take advantage of what is happening, but don't kid yourself that everybody is (or has the desire to stay in for the long haul). Investing or even buying a first home in WA in the next 2 years (and in the last 2 years with no cap. growth) is/was an extremely risky move.

The reason for this effort is because they have learnt from doing nothing in the depression years. Additionally Mahatir , with the Asian crisis adopted similar methods succesfully. Trouble with economic theory claptrap is that every negative commentator has to have his/her say and is given airtime when they in fact had no idea this was coming. Additionally I have yet to find one commentator that predicted a boom correctly before the event. Patterns like this defy logic and history will prove you wrong yet again. Booms overshoot the mark as do downturns. WA has a low rate of unemployment and has a hell of a way to go to be as bad as you describe it.

The seeds of opportunity are there - seize them or loose out. The Sharemarket is a basket case and property in Australia is a massive survivor and performer. If the ASX corrects then property will benefit anyway and enough is being done to place a level underneath real estate. Because a house loses 10 - 20% in value the homeowner is not lokely to sell and therein lies its value - its a home first and more and more properties are becoming positively geared and money from the ASX will flow there again soon as the finance industry has proven its reliability and competence - not!

Additionally any property owner with equity will be able to use this resource to invest in the ASX when it improves. You are right I have not posted elsewhere for the rest is a definite waste of time and money at the moment. Don't want to catch a falling knife - when the time is right I will re-invest in the ASX but lost enough on my super to steer clear and the only asset class with any credence at present is r/e.

 

[chops_a_must]

The reason for this effort is because they have learnt from doing nothing in the depression years.

Yes, the new deal certainly was nothing.

Additionally Mahatir , with the Asian crisis adopted similar methods succesfully.

Mahatir pegged the ringgit, Bernanke can't.

Stiglitz has pointed out why certain Asian economies like Malaysia did not collapse, and it certainly isn't because of conventional economic theory, which is why he recanted his previous knowledge, but it is certainly not the path the US is taking. They are going down a conventional economic theory path which is completely different to what Malaysia did and what Stiglitz points out as what worked and why.

Trouble with economic theory claptrap is that every negative commentator has to have his/her say and is given airtime when they in fact had no idea this was coming.

Complete and utter bull****.

Maybe you should look at some youtube videos of Peter Schiff for instance.

Additionally I have yet to find one commentator that predicted a boom correctly before the event.

Peter Newman and his department for one, on oil, the rise of Nuclear, and the rise of China. But they aint economists.

Patterns like this defy logic and history will prove you wrong yet again.

No they don't. They are proven incredibly logical in retrospect.

Booms overshoot the mark as do downturns.

Contradiction within the space of 2 sentences. Well done.

WA has a low rate of unemployment and has a hell of a way to go to be as bad as you describe it.

You either aren't living here, or aren't living in the real world.

The seeds of opportunity are there - seize them or loose out. The Sharemarket is a basket case and property in Australia is a massive survivor and performer. If the ASX corrects then property will benefit anyway and enough is being done to place a level underneath real estate.

This is just pure stupidity.

Why on Earth would people buy property when they can buy shares safely that are returning > 8% yields compared to property that may never provide even a positive return?

Additionally any property owner with equity will be able to use this resource to invest in the ASX when it improves.

Lol.

And that hasn't happened and wont continue to force sales on people's homes?

I look forward to you doing just that.


And here sir, is your **** back. :walker:

 

[Pager]

To be honest were i live in Sydney house prices haven't changed that much over the past 12 months if anything they have edged up a bit.

The interest rate cuts have also helped and to be honest from talking to friends, most are "over" the financial crisis, they are numb to the daily doom and gloom in the papers etc, particualy as none have been affected, as a friend said to me yesterday, he and his family stopped spending when it first blew up but more recently having seen no effect on there lives they used the rate cut saving to buy a boat.

I think we will see a pick up in house prices in the short term, further out i haven't a clue but maybe my friend is right don't believe what you read in the papers or see on the news, bad news sells, good doesnt.

 

[juddy]

The seeds of opportunity are there - seize them or loose out. The Sharemarket is a basket case and property in Australia is a massive survivor and performer.

In general, Aussie shares have outperformed property over the last 2 decades.

"Local shares returned 16.2% after tax versus 13.4% for residential property at the lowest marginal rate.

Shares returned 13.9% compared to 12% on property at the highest marginal tax rate."

http://business.theage.com.au/business/shares-beat-property-report-20080519-2fxa.html

At this stage shares, again, look the better option.

 

[numbercruncher]

To be honest were i live in Sydney house prices haven't changed that much over the past 12 months if anything they have edged up a bit.

Which suburb do you live in ?

 

[Beej]

Why on Earth would people buy property when they can buy shares safely that are returning > 8% yields compared to property that may never provide even a positive return?

2 very good reasons:

1) Leverage - you can leverage 80/90% - even 100% easily into property (if you want to and hopefully the cash-flow numbers stack up, but that's another discussion), making the actual return on your money far greater. Only the bravest would ever leverage to this extent into shares. PS - there is a lot of property out there RIGHT NOW that can provide positive return from day 1 - you just have to remove your blinkers and actually go and check the market out!

2) Risk - I am laughing my head off at your statement re "8% yield from shares SAFELY"!! All the guys like you here are predicting economic collapse, doom and gloom, and a share market that could fall much further yet as it did in the GD!! The risk is still far greater. And what's more you argue shares are a better investment? Yet your reasons for a house price collapse require such economic upheavel that it would also have to result in further share market collapses as well? Hoisted on your own pertard there!

In general, Aussie shares have outperformed property over the last 2 decades.

"Local shares returned 16.2% after tax versus 13.4% for residential property at the lowest marginal rate.

Shares returned 13.9% compared to 12% on property at the highest marginal tax rate."

http://business.theage.com.au/busine...0519-2fxa.html

At this stage shares, again, look the better option.

See above points.

Cheers,

Beej

 

[juddy]

See above points.

Cheers,

Beej

See above facts.

Cheers

 

[wayneL]

2 very good reasons:

1) Leverage - you can leverage 80/90% - even 100% easily into property (if you want to and hopefully the cash-flow numbers stack up, but that's another discussion), making the actual return on your money far greater. Only the bravest would ever leverage to this extent into shares. PS - there is a lot of property out there RIGHT NOW that can provide positive return from day 1 - you just have to remove your blinkers and actually go and check the market out!

2) Risk - I am laughing my head off at your statement re "8% yield from shares SAFELY"!! All the guys like you here are predicting economic collapse, doom and gloom, and a share market that could fall much further yet as it did in the GD!! The risk is still far greater. And what's more you argue shares are a better investment? Yet your reasons for a house price collapse require such economic upheavel that it would also have to result in further share market collapses as well? Hoisted on your own pertard there!



See above points.

Cheers,

Beej

To save me typing out a treatise completely demolishing your points, just read the option threads.

Cheers

 

[numbercruncher]

I see Brisbane is going Mental @@ Beej you in on 100pc financing on this fall ?

See the spruikers can only HIDE the truth for so long !

Unrest hits property prices
Georgia Waters | December 7, 2008 - 6:14AM

MEDIAN house prices in Brisbane have dropped nearly 30 per cent over the past three months, but the Real Estate Institute of Queensland has told homeowners not to panic.

hahaha, dont panic its only 30pc you leveraged gamblers !

Median house prices fell in Northgate by 27.6 per cent; in Sandgate by 23.5 per cent; and in Alderley by 23.4 per cent

http://www.brisbanetimes.com.au/news/queen...8584616261.html

Seems "liabilities" that return 3pc p/a are going out of flavour !??

 

[explod]

2 very good reasons:

1) Leverage - you can leverage 80/90% - even 100% easily into property (if you want to and hopefully the cash-flow numbers stack up, but that's another discussion), making the actual return on your money far greater. Only the bravest would ever leverage to this extent into shares. PS - there is a lot of property out there RIGHT NOW that can provide positive return from day 1 - you just have to remove your blinkers and actually go and check the market out!

2) Risk - I am laughing my head off at your statement re "8% yield from shares SAFELY"!! All the guys like you here are predicting economic collapse, doom and gloom, and a share market that could fall much further yet as it did in the GD!! The risk is still far greater. And what's more you argue shares are a better investment? Yet your reasons for a house price collapse require such economic upheavel that it would also have to result in further share market collapses as well? Hoisted on your own pertard there!



See above points.

Cheers,

Beej

Woolworths shares have dropped a great deal but their business model based on food is sound. So the price to yield is excellent value in my humble opinion. And there are many other good examples. Property is a great investment at certain times and so are shares. Usually people have a prime focus or bias on one or the other. That is a shame.

Due to some tough experiences I have learned to pay close attention to all sides of investment. In the last two years I have had a number of short term ASX stock trades in which I have exceeded 100% gains, in fact SBM a little more than that collected in March this year. In the last financial year my share portfolio grew by 60% overall and as it was in my super fund capital gain only 15%. Shares comprise 40% of my super fund. Diversification is protection.

Property: in 2003 I purchased two blocks of land and sold one 9 months later and the other a little over 12 months later with a gain after taxes of 50%. Both blocks more than doubled. And I will return to property speculation again one day. Now is not the time IMO. I am watching the rental market as there will come a time when the fundamentals of this could be worth a look. But at the moment there is too much doubt to be bullish or positive about anything at the moment.

IMVHO batten down the hatches we are in the PERFECT financial STORM; unfortunately.

 

[Glen48]

I wonder how the Real Estate Stats. people do their maths? Do they just average every thing out or take in Bank fee's, entry & exit fees, repairs were share are easier to work out and a bit more precise.
After 30 yrs of buying and selling RE I have only made a profit of 3.5K on 2 houses and large profit on another due to the credit boom I assume the RE increase would only be a few % a yr. otherwise.

 

[Passive]

Yes, the new deal certainly was nothing.


Mahatir pegged the ringgit, Bernanke can't.

Stiglitz has pointed out why certain Asian economies like Malaysia did not collapse, and it certainly isn't because of conventional economic theory, which is why he recanted his previous knowledge, but it is certainly not the path the US is taking. They are going down a conventional economic theory path which is completely different to what Malaysia did and what Stiglitz points out as what worked and why.


Complete and utter bull****.

Maybe you should look at some youtube videos of Peter Schiff for instance.


Peter Newman and his department for one, on oil, the rise of Nuclear, and the rise of China. But they aint economists.



No they don't. They are proven incredibly logical in retrospect.


Contradiction within the space of 2 sentences. Well done.


You either aren't living here, or aren't living in the real world.



This is just pure stupidity.

Why on Earth would people buy property when they can buy shares safely that are returning > 8% yields compared to property that may never provide even a positive return?




Lol.

And that hasn't happened and wont continue to force sales on people's homes?

I look forward to you doing just that.


And here sir, is your **** back. :walker:

You obviously enjoy wallowing in your well researched misery. Pulling apart my points sentence by sentence must make you feel a little smug. However most your retorts, like the one I made about predicting booms, more specifically what we speak about on this thread is about real estate. And sure in hindsight everyone knows - that was my point exactly.

Try and make sense of what is being said rather than trying to be a clever richard.

I live in WA and it is far from being on the skids as you suggest. You may need to toughen up a little as things don't always run smoothly but that does not mean the end is nigh!

Get out there and be proactive and learn from the xperienced players therein lies the essence of humility and growth. Practice makes perfect not just theory.

 

[ROE]

2 very good reasons:

1) Leverage - you can leverage 80/90% - even 100% easily into property (if you want to and hopefully the cash-flow numbers stack up, but that's another discussion), making the actual return on your money far greater. Only the bravest would ever leverage to this extent into shares. PS - there is a lot of property out there RIGHT NOW that can provide positive return from day 1 - you just have to remove your blinkers and actually go and check the market out!

2) Risk - I am laughing my head off at your statement re "8% yield from shares SAFELY"!! All the guys like you here are predicting economic collapse, doom and gloom, and a share market that could fall much further yet as it did in the GD!! The risk is still far greater. And what's more you argue shares are a better investment? Yet your reasons for a house price collapse require such economic upheavel that it would also have to result in further share market collapses as well? Hoisted on your own pertard there!



See above points.

Cheers,

Beej

Yeah there is no money in stock market, don't buy them, they are risky as hell, stock like ABS, Allco, Centro all gone bankrupt stay away...people like Kerr Neilson, Warren Buffett, Charlie Munger, Walter Schloss, Bill Ruane and million more must be pretty stupid to invest in those damn stock markets.

property double every 7 years I tell you...much safer bet ... stock is a gamble dont risk it

 

[numbercruncher]

I see Sydney property gamblers are getting destroyed ! (along with Brisbane)

December 07, 2008 12:00am

SYDNEY'S mid-range and prestige property market has ground to a halt.

Prices have collapsed as buyers wait for million-dollar homes to get even cheaper.

Auction clearance rates have fallen through the floor.

Experts say conditions are tougher than the slump of the early 1990s and predict more pain with 15-20 per cent falls in prices expected in 2009.

Auctioneers are struggling to solicit opening bids and most properties are being passed in.

At one recent auction at the Stamford Plaza in Double Bay, six properties ranging in asking price from $550,000 to $2 million went up for auction and there were no bids. At auctions on Thursday night at the Hakoah Club in Hall St, Bondi, properties in North Bondi, Bellevue Hill and Woollahra were all passed in.

Opening bids were so low that the auctioneer was reluctant to accept them - including $780,000 for a three-bedroom, free-standing house in North Bondi, eventually passed in for $925,000.

A Bellevue Hill property which had a $7 million asking price sold at mortgagee auction last week for $4.1 million.

Vaucluse is now among the top suburbs in Sydney under mortgage stress

......

http://www.news.com.au/dailytelegraph/stor...5006009,00.html

 

[explod]

Yeah there is no money in stock market, don't buy them, they are risky as hell, stock like ABS, Allco, Centro all gone bankrupt stay away...people like Kerr Neilson, Warren Buffett, Charlie Munger, Walter Schloss, Bill Ruane and million more must be pretty stupid to invest in those damn stock markets.

property double every 7 years I tell you...much safer bet ... stock is a gamble dont risk it

And to elaborate in support Roe

Actually there are many examples, but Babcock and Brown is a good example because it is current. With not very much charting/trend following experience it was not hard to see that this was a stock in trouble in august 07. there was a rally but certainly by the start of this year when it hit $20 you would be out.

Now this is done by not listening to anyone else but following a few simple chart rules and following the trend on a chart. For share trading such tools are plentiful, well laid out and cost nothing more than your good internet connection.

Wish I had known these tricks 20 or 30 years ago. But they are not tricks, just a practical approach.

 

[numbercruncher]

Property bears tend to attract bad news, I see our Taswegian cousins are getting their second heads DECAPITATED !!

HOBART'S residential property bubble has burst, with prices falling more than in any other state capital in Australia..

http://www.themercury.com.au/article/2008/12/07/42871_todays-news.html


I hear the natives will be OK - but leveraged up speculators are going to be royally rooted ? maybe just a rumour ??

 

[ROE]

I wonder how the Real Estate Stats. people do their maths? Do they just average every thing out or take in Bank fee's, entry & exit fees, repairs were share are easier to work out and a bit more precise.
After 30 yrs of buying and selling RE I have only made a profit of 3.5K on 2 houses and large profit on another due to the credit boom I assume the RE increase would only be a few % a yr. otherwise.

No man pro RE investors thinks share investors are a bunch of fools who has no idea about money and the logic of money.

Shares investors don't own properties they just a bunch of bear scare mongering moob.

The logic of negative gear/negative equity even though you lose money each month but still you not losing money that the sort of logic we have to work with.

 

[Beej]

I see Sydney property gamblers are getting destroyed ! (along with Brisbane)

Meanwhile, back in the real world Sydney auction clearance rate was ACTUALLY 52% on good volume this weekend (see previous post https://www.aussiestockforums.com/forums/showpost.php?p=369785&postcount=2362)

I sold a $1M property in Sydney just 4 weeks ago - 80 people inspected it, several interested buyers and obviously at least one who put their money down. Plenty of buyers still around - defintely not as strong as last year, but nowhere near as bad as the picture you are trying to paint.

I also have a shortlist of properties for sale on domain.com.au that I built up while looking around over the past few months. Not looking now (as bought again), so not adding to that list. These are all places well in the 7 figures. Of 70 properties that are on that list (the majority of which I inspected), 45 have sold, and 25 are still on the market. I know the price each sold property sold for and they all sold for around the expectation - nice stable market in fact. The unsold properties are all either too highly priced for the market or are compromised properties in some way (which is kind of the same thing). So I KNOW that this segment of the market, whilst nowhere near boom time, is still ticking over quite nicely and there are many great opportunities to secure premium property at predicable, stable prices without too much buyer competition.

As for Brisbane median down 30%???? - Bull crap! Please point to the median property statistics that show that??? You are just making things up now....

Oh and PS - like your arguments, the link you posted is broken

The logic of negative gear/negative equity even though you lose money each month but still you not losing money that the sort of logic we have to work with.

Can you read? Noone here is talking about negatively geared property at the moment. That is the beauty of the current market - if you open your eyes (and your mind).

By the way - many of us with a more positive outlook on property actually own shares as well you know - but with your binary thought patterns and inane postings I wouldn't think that would matter to you!

Beej

 

[numbercruncher]

m8 just reporting it as its released, if you have better info you should take it up with these guys ?

MEDIAN house prices in Brisbane have dropped nearly 30 per cent over the past three months, but the Real Estate Institute of Queensland has told homeowners not to panic

http://www.brisbanetimes.com.au/articles/2008/12/07/1228584616261.html?s_rid=smh:top5


Never know might be fabricated to stir you up ? give em a call ?