House prices to keep rising for years

[Passive]

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.

Speculators in any asset class take what their timing gives them. Just as another perspective though quality stuff in Perth in the mid tier coastal stuff is still quite a surprise - have a look at Reiwa site, Padbury - number under offer or sold, Craigie not as much but fewer listings, North Duncraig , Heathridge etc - like in the 90s its a matter of doing your own research, selecting the right suburb now will pay dividends - be it first home buyer/investor. Needless to say whether you agree or not I won't loose any sleep but its not all dead in the water and many are ready to buy in the forseeable future -just another perspective that seems to be supported by the action.

Even if rents have stabilised - which I don't believe - rates have not thus improving cash flow position. All the ducks are lining up for property. Immigration is still high, expats returning is a factor, people leaving the regional areas - time will tell but I see no empty homes.

 

[juddy]

have a look at Reiwa site, Padbury - number under offer or sold

Oldest trick in the book, leaving old listings visible to give the impression of market movement. Not saying that is the case in this case, but it is a tactic widely employed.

In this case, I believe there is renewed interest in the lower price range. Naive youngsters with stars in their eyes and an extra $7k burning a hole in their back pocket wanting to 'get in before they are priced out'. I wonder how many of them worked out that it'll only take a further fall of less than 2% before that $7k is eaten away?

 

[Beej]

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.

So what were the residential mortgage default rates during 1991-1992 when unemployment climbed to 10%? And what happened to median house prices during this same period?

Beej

 

[explod]

So what were the residential mortgage default rates during 1991-1992 when unemployment climbed to 10%? And what happened to median house prices during this same period?

Beej

Hate to be boringly general all the time, but anyway there is plenty of good and authentic news copy out there to back it up.

1991 - 1992 was mild compared to what the signs are saying now. The current deflation taking place across the globe is the worst ever recorded. The deflation of the last three months took 4 years during the great depression.

This is not doom and gloom, unfortunately this is fact. The repercussions of the last three months have only effected the big corporates at this stage, the ripple down is going to be diabolical.

 

[grace]

Guess it all comes down to how intelligently you a have positioned yourself.
Farming sector is in bonanza territory - thanks also to the dollar.
.

Yeh, right.

Farmers who just harvested were lucky to get $250 tonne for their wheat (down from the spuculative traders push of $500 tonne).

Once upon a time, we could employ a person (for a week) for what we could get for a tonne of wheat, now we need 4 tonnes of wheat to do the same.

Farming is not bonanzas territory - far from it.

When interest rates rise again, watch what happens in farming. Farming land has experienced the biggest bubble around! It is already starting to pop.

 

[Beej]

More evidence of increased FHB activity (although it is from a mortgage broker so taken with a grain of salt). However, there are other stats that back this up.

First home buyers storming into property market, says mortgage broker

HAVING steered clear of the property market for most of the year, first home buyers are storming back, Australian mortgage broker AFG says.

AFG said its Mortgage Index shows that the volume of loans arranged by AFG for first home buyers has increased by 120 per cent in three months.

The mortgage broker said that in November, it arranged $474 million in home loans for first time buyers.

This compares to the $215 million it arranged for first time buyers in August.

Source: http://www.news.com.au/business/money/story/0,28323,24766556-5013951,00.html

Beej

 

[MrBurns]

From Crikey today - Always suspected this but never could be bothered to do the sums.

The data provided to The Sunday Age are supplied by the Real Estate Institute of Victoria (which is, in effect, the Real Estate Agents union). However, a Crikey study reveals that the figures claimed by the REIV and reported by The Sunday Age are misleading. Crikey has calculated that the actual auction clearance rate last weekend (based on a sample size of 332 auctions) was approximately 43% -- well below the 55% figure claimed by the REIV.

Last weekend, Crikey attended three separate auctions in Melbourne's South Melbourne (which could loosely be compared to Sydney's Paddington or Woollahra). In each of the auctions, not one single bid was submitted. However, in reviewing the auction results the following day, only one of the three 'passed-in' properties appeared to be counted in the determination of the clearance rate. That means either agents aren't reporting passed-in properties, or the REIV is ignoring data relating to passed-in properties to boost the reported clearance rate.

In addition to such abnormalities, the reported auction clearance rate also appears to include properties subject to 'private sale' (in the listed key, a code is devoted to 'private sale'). A 'private sale' is a negotiated purchase, as opposed to a competitive auction. If the REIV includes private sales in its calculations, this will artificially inflate the reported clearance rates. That is because private sale properties are usually advertised for a number of months and are not considered in calculating the clearance rate during that time.

On Saturday, The Age listed 332 auctions that were taking place that day. Crikey reviewed the actual results reported (assuming that if no result was reported, the property was passed in), comparing the foreshadowed auctions with the listed results. The actual calculation appears far less rosy than the scenario painted by the REIV. Of the 332 Melbourne properties listed for auction on Saturday 6 December, 144 were sold -- a clearance rate of less than 44%. A stark contrast to the reported clearance rate of 55% and well below the clearance rates achieved in 2007, which often exceeded 80%.

 

[Adam A]

What youve also got to remember also, is that the reiv as well as the nsw group are not representitve of the whole industry

approx 50% of agents in both states are not members

Think of that next time their publishing stats

 

[numbercruncher]

More evidence of increased FHB activity (although it is from a mortgage broker so taken with a grain of salt). However, there are other stats that back this up.



Source: http://www.news.com.au/business/money/story/0,28323,24766556-5013951,00.html

Beej

Not only that people held off for the higher Government grant !

 

[basilio]

Real question about what will have the most effect on housing prices.

It's undeniable that the economic situation is far more threatening than 91-92. I think you would have look at 74-75 minimum for a comparison but unfortunately the 1890's look the most comparable.

But how about the impact of immigration on housing demand? As far as I can see there will be a continuing influx of migrants who will almost all have decent savings. Will this group counter the decline in local capacity to purchase homes ?

One last point. As interest rates fall there will be some relief for current home buyers. . I saw Westpac offering 5.19 % fixed for 3 years which is very attractive compared to only a few months ago. Perhaps these falls will be sufficient to support the market.

 

[juddy]

But how about the impact of immigration on housing demand? As far as I can see there will be a continuing influx of migrants who will almost all have decent savings. Will this group counter the decline in local capacity to purchase homes ?

Immigration cuts won't be too far down the line. Already calls for a 25% cut minimum.

 

[Adam A]

Becarefull regarding immigration,if things get tough here rudd will drop it like a stone
It will be a hard policy to sell if hundreds of thousands of aussies are unemployed
Also if things do get tough here why would people want to come here?

 

[robots]

Becarefull regarding immigration,if things get tough here rudd will drop it like a stone
It will be a hard policy to sell if hundreds of thousands of aussies are unemployed
Also if things do get tough here why would people want to come here?

hello,

immigration will increase heaps, it wont be cut

people want to come here man because this is the place to be

thankyou
robots

 

[numbercruncher]

hello,

immigration will increase heaps, it wont be cut

people want to come here man because this is the place to be

thankyou
robots

Yes all construction industry immigrants destroying bogans wages I heard ?

 

[Adam A]

Seeing you put it that way

Youre probably right

 

[robots]

hello,

no chance Number, they all want to work at cafe's and 7-eleven's

thats why building professions are still going strong in the Top 10 most wanted,

St Kilda up 14.7%, building workers in Top 10 man if this the credit crisis its not doing too much is it,

utopia brothers,

I know I know i have to wait, it takes time 6mths, 12mths it always follows the shonk exchange crash

thankyou
robots

 

[Wysiwyg]

hello,

immigration will increase heaps, it wont be cut

people want to come here man because this is the place to be

thankyou
robots

Yes, come to Australia and if you don`t get a job we have an excellent financial support network with occasional generous handouts.

p.s. the beer is cold and the women colder. esok:

 

[homes4aussies]

From Crikey today - Always suspected this but never could be bothered to do the sums.

Try this on for size! There were very misleading data published in the Courier Mail at the weekend - I assume the error was by the REIQ - which no doubt has deceived many people.

They published the house price data to the September quarter for Queensland. However, unlike for all other regions, the Brisbane "change over year" compares Median 12 months June 08 with June 07 - not Median 12 months September 08 with September 07. This leaves the impression that house prices have risen more over the year than they actually have - in fact, the September QTR median price for many suburbs is only very slightly above the Median 12 months June 07 figure, and for a few suburbs it is below.

For example: Belmont - median Sep QTR 08 $439,000 - Median 12 months Jun 07 $507,000, Change over 1 yr 8.9% (note the September QTR 08 figure is actually 14% below the Median 12 months Jun 07 figure)

Either the headings for the "Brisbane" columns are incorrect, or the columns are correct in which case the table consists of two columns of September data and 3 of June data.

I suspect it is the latter because the data do not make sense otherwise. (Since the September QTR 07 was still in the midst of the second wave of Brisbane's bubble, and according to this release prices declined 4.3% in September QTR 08, the annual figures could be expected to be significantly lower than the annual June figures - probably negative for some suburbs.)

Obviously, the fact that this is the first set of figures that really show that the Brisbane market is falling rapidly suggests that the REIQ would be extremely sensitive about releasing these data. So it's hard to understand how this error was not detected - either by the REIQ or The Courier Mail (and Brisbane Times also quotes the erroneous data) - prior to release and publication.

More reason to conduct a review into the functioning of the realestate industry!

 

[IFocus]

Speculators in any asset class take what their timing gives them. Just as another perspective though quality stuff in Perth in the mid tier coastal stuff is still quite a surprise - have a look at Reiwa site, Padbury - number under offer or sold, Craigie not as much but fewer listings, North Duncraig , Heathridge etc - like in the 90s its a matter of doing your own research, selecting the right suburb now will pay dividends - be it first home buyer/investor. Needless to say whether you agree or not I won't loose any sleep but its not all dead in the water and many are ready to buy in the forseeable future -just another perspective that seems to be supported by the action.

Even if rents have stabilised - which I don't believe - rates have not thus improving cash flow position. All the ducks are lining up for property. Immigration is still high, expats returning is a factor, people leaving the regional areas - time will tell but I see no empty homes.

Passive, Chops point of rising unemployment is some thing that worry's me, as yet we don't know how far that will go, we do know commodities across the board have been hammered and there is more to come.

The state has been driven by the commodity boom so the fall out in 2009 / 2010 is still to come here in WA.

Another duck that's turned into a black swan is the rate of fall in the 30 day cash rate. I suspect its unprecedented, the market thinks we are in for a flogging.

And there is credit contraction............the indicators for me are still in a down trend....anyone for catching falling knives?

 

[juddy]

hello,

immigration will increase heaps, it wont be cut

people want to come here man because this is the place to be

thankyou
robots

Increased heaps in times of rising unemployment? You really don't have much idea do you?