House prices to keep rising for years

[gfresh]

if the doomsayers are right then maybe a whole load of people who are now starting to think "What Criss" will be severely burnt in the next few years, although again from observation the experts are no better than 50/50 with what will actually happen.

:bunny: That is exactly what I think is going to happen.. The Australian "she'll be right mate" will come back to bite many. Rudd and Co really are pulling out all the rabbits out of their hat, but at the end of the day, they know 2009 is going to be a very nasty year for Australians. They even bloody look stressed and worried, it's not an act either.

We're still running on the end of our la-de-da current account surplus when coal/iron ore was shipping in record volumes, and at record prices. Renegotiation time is going to be the totally opposite story, which means at the end of the day, Australia is really going to start to feel it in 09. Companies still debating whether to keep people on will finally start to throw in the towel in the first quarter. ANZ, or any of the other large names aren't letting go of 800 workers just for "fun", they need to cut costs fast, as the capacity to build profits will be much harder for the foreseeable future.

Anybody can dismiss the sharemarket but it should be very valuable leading indicator for any property investors also.

 

[Julia]

............. huge rate cuts, if the doomsayers are right then maybe a whole load of people who are now starting to think "What Criss" will be severely burnt in the next few years

Yep, many will take out loans having done their calculations at 3% or whatever and failed to allow for the time when inevitably rates will rise again.
Especially in a climate of rising unemployment.

 

[gav]

what is the longest period you can "lock in" a housing loan interest rate for?

 

[numbercruncher]

Ive seen 10 years advertised .....

Could be the game plan after the next rate cut, seems inflation is the ultimate plan of the central banks ....

 

[BradK]

I am locking in for seven years around March next year. Because after that, interest rates are going to rise again... and they will rise and rise and rise until 19%! (Well, dipping into the barrell of hyperbole there I admit).

But, this is a suckers trap for anyone thinking the good times have returned.

I think printing this much money and bailouts is bound to let the inflation genie well and truly out of the bottle.

A lock of around 6% for 7 years will do me very well thank you very much - even if it gets to 5 or even 4% for that kind of length of time- well... 6% for long term is a great price given that this is the calm before the STTTTOOOORRRRMMMMMMMMMM

Brad

 

[Indie]

Ive seen 10 years advertised .....

Could be the game plan after the next rate cut, seems inflation is the ultimate plan of the central banks ....

Inflation may be the plan but deflation is the reality.

The surge in bonds and the USD tells the story. Even gold is going down. There is nothing central banks have done thus far that has altered the course of this, and there is nothing they can do. The longer the consumer waits in vain for a market revival, the deeper the damage to consumer confidence will be. The result will be a huge fall in demand for debt regardless of how low interest rates fall. The western world will experience years of negative GDP growth as inventories and unemployment skyrocket. I wouldn't take on any debt for RE or stocks right now or after the next rate cut.

 

[robots]

hello,

its good to see the options thread is opened,

fairly evident loans are still being written in the UK, short holiday

remember its discussion and debate brothers no big deal really

thankyou
robots

 

[robots]

hello,

Brisconnections vs Property, now how's that going

the shonk exchange, fantastic

thankyou
robots

 

[Passive]

Yes, those "educated idiots" will get you everytime.

And also, thanks for cracking me up, and other posters with that sentence.


Asking questions and pulling apart arguments is just what I do for fun, and what I'm good at.


Oh the irony.

Please stick to facts, it's what I have done. And if you can't argue with them, then you need to change your argument, and not get defensive. Oh yeah, and I'm not sure how calling me a dick after you just got pantsed in this debate, really helps your cause.


It's not what I hear and am experiencing.

Personally, I am not renewing a lease on my workplace. The last 3 months have been close to the worst on record for me since I started working for myself.

I speak to people in civil construction, oil and gas engineering and real estate on a very regular basis.

The dad also audits mine sites and divisions of the mining industry for a living, so I am able to find out a lot of stuff that happens before the public knows. It's how I knew MGX and FMG were tearing up contracts left right and centre, before it was announced.

The oil and gas sector has basically ceased ALL design work, and early next year, we will start to see an enormous amount of pain from this sector.


I'm not sure it's me that needs to get out there.

I pick the brains of all the experienced "players" I come across, and what I am hearing is shocking. But you shouldn't need me to tell you that. The record house price falls in WA should have already done that for you. But if you can't get the message from that, you are just deluded.

Better than being proactive, I am ahead of the curve. Perhaps you should try it some time.

Guess it all comes down to how intelligently you a have positioned yourself.
We are currently setting records - albeit that is not common across the board I grant you.
Speak to sales people in new housing - the better ones - selling well although not at boom levels - money is there and folk are waiting - i mix intensely with a variety of people as well and have a different take on things. The mining industry is not actually the only industry. Farming sector is in bonanza territory - thanks also to the dollar. The stimulus packages and rate cuts will gain traction sometime and as always the affordable homes along second tier coastal properties from Duncraig up to Heathridge are selling well as an example.

We have been through mining downturns before - immigrants still coming in - the easy times are gone but I do not agree its all doom and gloom.

Good luck with your decision and I hope it works for you.

 

[Passive]

You really aren't that bright are you?

I can leverage my shares 70%+ in my margin loan account if I want. I can buy CFD's on 95%+ margin. Why would I do that? I wouldn't leverage anything like that. I can also leverage options at more than 100% by the way...

I am yet to see any property in Perth that is able to provide a positive return from day one at this stage. And it will be like that for some time as far as I can tell.


And this is why you aren't that bright.

That comment was not directed and said in regards to stocks being safe. Passive said that a recovering stock market was good for property. The point I made was that shares yielding >8% in a recovering market were well and truly more safe than property, which in general, is making a negative yield at the moment, and a better investment.

Nowhere did I say that stocks were safer than property AT THIS TIME.

But... MTS... you know... close to 6% yield, selling staple goods, increasing margins and market share, would be far far far better and safer than property right now for anyone really. And because you property bears are so addicted to it, you can add leverage as well.

Nice touch there - you obviously have an inflated opinion of your opinion. You don't really pants anyone - all I read is someone who has a lot to learn. The time in Perth for postive cashflow is rushing in quickly if you include the depreciation allowance. Also returns on a leveraged property is not gauged on cost. Most property investors bought years back and are now making massive returns which may cause them to withdraw their props from market.
On 10K 7 years ago a property worth 200k is now still valued at 500k , even with a slump, so what is my yield worked on really sunshine - on the 10k or on the 500k? You only learn the benefits of leverage when you do it.

 

[robots]

hello,

yeah good luck and all the best

the past 12mths have been the best going around for me, things are pumping and forward orders are just sensational

thankyou
robots

 

[juddy]

Most property investors bought years back...

I reckon that is way off the mark in WA. The majority of mum and dad investors would have bought during that final frenzy in 2006 (scared of being locked out) before the peak of the boom.

...and therein lies the problem. Amateurs afraid of losing profits. I've seen 2 examples of it already over here.

 

[ROE]

hello,

Brisconnections vs Property, now how's that going

the shonk exchange, fantastic

thankyou
robots

Yeah you forget Centro, ABS, Allco, Babcock Brown
but if you stack against

CBA, CSL, COH, WOW, TRS, JB hi-fi and hundred more the picture is a little weird, they paid you many times over and even at 40% off the market they have bag most investors 5-20 folds and in between the dividend also paid for the the cost of the stock and now you get freebie
dividends and freebie capital growth.

shonky exchange, such harsh treatment for some stocks and a gold mine for other .... oh wait i own some of those stocks stupid me.

 

[Passive]

I reckon that is way off the mark in WA. The majority of mum and dad investors would have bought during that final frenzy in 2006 (scared of being locked out) before the peak of the boom.

...and therein lies the problem. Amateurs afraid of losing profits. I've seen 2 examples of it already over here.

You could not be more wrong on that . Was a huge sport well before the peak. Admittedly many were caught at the top - but a massive amount bought early to have pots of equity.

 

[numbercruncher]

Yeah you forget Centro, ABS, Allco, Babcock Brown
but if you stack against

CBA, CSL, COH, WOW, TRS, JB hi-fi and hundred more the picture is a little weird, they paid you many times over and even at 40% off the market they have bag most investors 5-20 folds and in between the dividend also paid for the the cost of the stock and now you get freebie
dividends and freebie capital growth.

shonky exchange, such harsh treatment for some stocks and a gold mine for other .... oh wait i own some of those stocks stupid me.

I think Robi is being a wise guy ......

brisconnections (BCSCA) is something everyone will hear about soon I thinks ..... They are trading at like .001c or something but speculators buying them and dont realise one thing and that they are installment warrants !

You buy like 2k worth of these toxic time bombs and you have Million$ in liabilities ..... people will go broke, the underwriters are going to get a smashing - If the Gov has any cash left itll probably be a bailout.

Hopefully for these careless individuals a solution might be found before D-Day ( maybe a good samaritan will open a company especially to mop em up ? ) < that would make for angry underwriters? >

Probably a good thread on its own ....

 

[Indie]

You could not be more wrong on that . Was a huge sport well before the peak. Admittedly many were caught at the top - but a massive amount bought early to have pots of equity.

Surely you jest? What do you mean "before the peak"? What do you mean "caught at the top"? This isn't the top or the peak. Read the heading of this thread again: House prices to keep rising for years. i.e The good times just keep coming.

 

[juddy]

You could not be more wrong on that .

Well unless you bring some figures out, I'll stick to my opinion...

. Admittedly many were caught at the top - but a massive amount bought early to have pots of equity.

Yep, and its the ones who bought just before and at the top that will cause the problems. It hasn't been o/o's that have started the ball rolling, it has been amateur investor/speculators who (as I said previously) never had any intention of being in it for the long run. I know 2 (and that is just in my circle of friends and acquaintances) who were quite happy knocking off 10-15% so they could get a sale and get into cash. Their sole purpose for purchasing in that 2005-2006 period was for capital growth. They were quick off the mark, the slow ones are still coming.

 

[Passive]

Well unless you bring some figures out, I'll stick to my opinion...



Yep, and its the ones who bought just before and at the top that will cause the problems. It hasn't been o/o's that have started the ball rolling, it has been amateur investor/speculators who (as I said previously) never had any intention of being in it for the long run. I know 2 (and that is just in my circle of friends and acquaintances) who were quite happy knocking off 10-15% so they could get a sale and get into cash. Their sole purpose for purchasing in that 2005-2006 period was for capital growth. They were quick off the mark, the slow ones are still coming.

What you fail to realise is that the interest rates coming down is drastically reducing cost of holding, plus with predictions of up to 20% rise in rentals - you are oversimplifying things. If some of these investors are on fixed rates it means they can afford to hold by and large. Majority of property investors (holders = the longer they have held the better)are the beneficiaries of current conditions, and it is only getting better for the experienced punters.
I know - I can't believe the benefits of 3% drop and more to come. Less pressure to sell for all holders.

 

[juddy]

What you fail to realise is that the interest rates coming down is drastically reducing cost of holding, plus with predictions of up to 20% rise in rentals - you are oversimplifying things. If some of these investors are on fixed rates it means they can afford to hold by and large. Majority of property investors (holders = the longer they have held the better)are the beneficiaries of current conditions, and it is only getting better for the experienced punters.
I know - I can't believe the benefits of 3% drop and more to come. Less pressure to sell for all holders.

They never had any intention of holding. Speculators never do.

Predictions of 20% rise in rentals has been made by guess who?...a property investment management group. Can't remember their name, but it was some 100 word piece in the advertising section of Sat's West RE section a couple of weeks ago. Even the biggest bull Rob 'no-conflict-of-interest-here' Druitt reckons rents have stabilised.

 

[chops_a_must]

What you fail to realise is that the interest rates coming down is drastically reducing cost of holding, plus with predictions of up to 20% rise in rentals - you are oversimplifying things. If some of these investors are on fixed rates it means they can afford to hold by and large. Majority of property investors (holders = the longer they have held the better)are the beneficiaries of current conditions, and it is only getting better for the experienced punters.
I know - I can't believe the benefits of 3% drop and more to come. Less pressure to sell for all holders.

What you fail to realise is job losses.

It's irrelevant what you bought at, as if you have anything owing and you default, it's more or less irrelevant. You just default. What matters is if you owe and have to declare bankruptcy, or can get out and not. End result is still likely the same. You aren't left with anything really.

Oh yeah, and good luck with raising rents. That's pure fantasy.