House prices to keep rising for years

[Beej]

"Property prices are down in general between 10 per cent and 20 per cent and I believe they could fall a further 5 per cent," says chief executive of McGrath Estate Agents in Sydney, John McGrath.

Oh yea but he's a property spruiking real estate agent - why would anyone listen to him???

Beej

 

[juddy]

Oh yea but he's a property spruiking real estate agent - why would anyone listen to him???

Beej

That was just added for comedy effect.

You may have missed the Shane Oliver comment. A month or so ago he was slightly bullish.

 

[numbercruncher]

"Property prices are down in general between 10 per cent and 20 per cent and I believe they could fall a further 5 per cent," says chief executive of McGrath Estate Agents in Sydney, John McGrath.

So early in the crash too .....

 

[Beej]

So early in the crash too .....

Before you all get too excited, let's wait and see what the quarters median stats are actually like. McGrath tend to operate only in the more expensive suburbs and tend to have the prestige end of those (due to deliberate strategy and higher sales commissions). In other words, they don't see what's happening out in "ordinary" land. Also McGrath are really primarily a Sydney agency to boot.

Beej

 

[numbercruncher]

Before you all get too excited, let's wait and see what the quarters median stats are actually like. McGrath tend to operate only in the more expensive suburbs and tend to have the prestige end of those (due to deliberate strategy and higher sales commissions). In other words, they don't see what's happening out in "ordinary" land. Also McGrath are really primarily a Sydney agency to boot.

Beej

So your prediction is the crash will only hit the affulent areas of Sydney ?

 

[Beej]

So your prediction is the crash will only hit the affulent areas of Sydney ?

What do I think? The affluent/prestige market always operates a little differently to the "general" property market. Currently the volume of sales in the $2M+ range are very low. Traditional buyers of premium property are those under the most pressure from the stock market crash and the uncertainty/job losses in the finance industry (which is obviously a large sector providing high income employment in Sydney). This is distorting the statistics in this segment of the market - Ie, although prices may well be "down by 10%-20%" in some expensive area's, this is on a very low volume and a distorted sales mix for those area's. Of course there are some apparent bargains around due to all this - this situation will not last for ever.....and long term you cannot go wrong buying into prestige Sydney property, as the prices are almost totally demand driven and linked very closely to the fortunes (good or bad) of the top end of town and the economy.

However, these "prestige" sales represent only a small proportion of the over-all Sydney market and thus will not reflect much (if any) change in the city median stats for Dec quarter IMO. The lower Sydney price ranges are ticking over quite nicely at the moment - they had their "crash" already back in 2004/05 brought on by high interest rates and CPI increases.

Anyway we shall see in Jan when the stats come out.....

Beej

 

[lioness]

"Property prices are down in general between 10 per cent and 20 per cent and I believe they could fall a further 5 per cent," says chief executive of McGrath Estate Agents in Sydney, John McGrath.

"Those who are predicting a 40 per cent decline are out to sell headlines rather than provide a realistic view on the likely asset revaluation."

He does not know whether the clouds will lift in 2009 or 2010 but says a lot of smart investors have been hoarding cash for when they sense a stable bottom in share and property markets.

The chief economist at AMP Capital Investors, Shane Oliver, expects overvaluation, low rental yields (though growing) and rising unemployment to more than offset the positives of falling interest rates, increased first home owner grants and housing undersupply.

"On balance, we see average house prices falling another 10 to 15 per cent over the year ahead," Oliver says.

"Housing finance is continuing to fall, new home sales are falling and weekly auction rates are running 20 to 30 percentage points below a year ago."

http://www.smh.com.au/news/business/money/property/how-low-can-they-go/2008/12/08/1228584741711.html

What a desperado Juddy you are. How can you look at yourself in the mirror quoting Shane Oliver who is the THE worst forecaster ever. This is the guy who stated the Ords was going to 7500 when the market was topping at 6500. When it collapsed he changed it down to 6000 by year end, then 5500 and then 4500 and now just says nothing. HAHA

In case you have not learnt Juddy, when economists predict one thing, do the opposite and you will be a rich man. By the way, how are those ADY shares going these days?

 

[Beej]

"Property prices are down in general between 10 per cent and 20 per cent and I believe they could fall a further 5 per cent," says chief executive of McGrath Estate Agents in Sydney, John McGrath.

"Those who are predicting a 40 per cent decline are out to sell headlines rather than provide a realistic view on the likely asset revaluation."

He does not know whether the clouds will lift in 2009 or 2010 but says a lot of smart investors have been hoarding cash for when they sense a stable bottom in share and property markets.

The chief economist at AMP Capital Investors, Shane Oliver, expects overvaluation, low rental yields (though growing) and rising unemployment to more than offset the positives of falling interest rates, increased first home owner grants and housing undersupply.

"On balance, we see average house prices falling another 10 to 15 per cent over the year ahead," Oliver says.

"Housing finance is continuing to fall, new home sales are falling and weekly auction rates are running 20 to 30 percentage points below a year ago."

http://www.smh.com.au/news/business/money/property/how-low-can-they-go/2008/12/08/1228584741711.html

Another quote from the same article that wasn't posted here in bold

The managing director of researcher BIS Shrapnel, Rob Mellor, is more optimistic. He thinks most of the price declines in Sydney and Melbourne have already occurred but both markets will remain soft into the first half of next year.

Mellor says median prices mask the difference in the performance of the markets within each city. The median prices have fallen because of the bigger falls in top-end prices.

"I think we will start to see a stabilisation in prices at the lower end next year with more first home buyers in the market and investors returning to the market," he says.

Housing demand and sales activity should increase in the second half of next year. Mellor says house prices could start to come back in both cities by 2010 as lower interest rates and the increase in the first-home buyer grant takes effect. However, more economists are becoming pessimistic on the likelihood of Australia avoiding recession.

Lot's of different views out there, as here

Cheers,

Beej

 

[numbercruncher]

Difference is mostly the article is opinion, except the RE agent whos seen actual price falls ....

Sure Aussie RE to boom while world economy tanks and job losses mount .....

 

[juddy]

What a desperado Juddy you are. How can you look at yourself in the mirror quoting Shane Oliver who is the THE worst forecaster ever. This is the guy who stated the Ords was going to 7500 when the market was topping at 6500. When it collapsed he changed it down to 6000 by year end, then 5500 and then 4500 and now just says nothing. HAHA

In case you have not learnt Juddy, when economists predict one thing, do the opposite and you will be a rich man. By the way, how are those ADY shares going these days?

Ahhhh...you know they're under pressure when they resort to personal attacks.

 

[robots]

Ahhhh...you know they're under pressure when they resort to personal attacks.

hello,

you not wrong there Juddy,

hope everyone having a great day

thankyou
robots

 

[robots]

hello,

interesting article from this researcher, he writes all sorts:

http://www.theage.com.au/national/housing-to-survive-nations-tough-times-20081212-6xl1.html

what a day, tonnes of fun on these wet days

thankyou
robots

 

[Passive]

Ahhhh...you know they're under pressure when they resort to personal attacks.

How come its personal when we touch the share holy grail? The sharemarket is running at losses between 40-60% in most cases and losses at 100% in some cases sadly. Why the constant harping on property coming down ?
Is that not personal to all holders is it? Maybe ADY was brought to your attention as a reality check!

Do you bears begrudge the resilience of real estate to long term holders?
It has not collapsed , even in good old Perth. I wonder why this obsession from a small minority to bag this investment class highly prized by the majority of Aussies, as a home firstly and secondly as an investment - by your landlord included.

Becoming cheaper to hold thanks to dropping rates plus has a real danger of stabilising in the meduim price range.

I would have thought the unititiated would learn from experience on these share chat sites, instead you choose to bag. Don't buy guys, rent for the rest of your lives and keep property investing to losers like us.

 

[numbercruncher]

Don't buy guys, rent for the rest of your lives and keep property investing to losers like us.

Fitting advice for the moment but certainly not for life.

Is the continent of Australia still running out of Land ? Bananas ? Kangaroos are nearly extinct ? maybe rising sealevels are swallowing things up and lowering supply ?

http://news.ninemsn.com.au/article.aspx?id=696600

 

[numbercruncher]

Heres plenty more to add to the oversupply, convert all this empty space to residential

Commercial property sales plummet as credit market squeeze hits
Friday, 12 December 2008
Patrick Stafford

Sales of office towers, shopping centres and industrial properties have plummeted by 65% in the last few months, new commercial property research shows.


The big drop in sales comes as the number of companies in Melbourne and Sydney vacating unused floor space and subleasing offices rises sharply

http://www.smartcompany.com.au/Free-Articles/The-Briefing/20081212-Commercial-property-sales-plummet-as-credit-market-squeeze-hits.html

Plummet is what happens to nearly everything after a credit boom ends

 

[juddy]

. Don't buy guys, rent for the rest of your lives and keep property investing to losers like us.

Ummm...I own my own house, two investment properties (cash flow pos. and I didn't have to rely on the recent interest rate drops for this to happen) and a 10 acre farmlet. What do they say? When you assume...

What I don't like is people who come on here telling how good and easy it is (and is going to be) when really it isn't.

Stop assuming everyone who thinks property is going to drop is a 'renter'. It is a very narrow minded and immature way of behaving.

 

[Beej]

Ummm...I own my own house, two investment properties (cash flow pos. and I didn't have to rely on the recent interest rate drops for this to happen) and a 10 acre farmlet. What do they say? When you assume...

What I don't like is people who come on here telling how good and easy it is (and is going to be) when really it isn't.

Stop assuming everyone who thinks property is going to drop is a 'renter'. It is a very narrow minded and immature way of behaving.

Juddy - fair call and it sounds like you have your own situation fairly well sorted. The fact you haven't gone and immediately sold all your property including your PPOR in a panic shows that you are not actually in the same camp as many of the other bears here, who would advocate that's exactly what you should do. The rest of us, while holding onto our exisiting holdings, are trying to be both cautious, but also have eyes open for potential opportunities in the current market, based on a view that in the long run judiscious property ownership/investment is a good place to make some decent return on capital.

However, you have to admit that a significant portion (not all of course) of the whole "great house price crash brigade" are in fact people who have chosen not to take the plunge into home ownership in the past and are somewhat bitter about the outcome of that choice. They are now hoping and praying for a crash in fact in order to get the chance to rectify their past mistake!

Myself - I've taken advtage of the current market by selling a couple of properties and upgradinng my PPOR at what I consider to be a relatively and historically low cost given what I have gone from -> to.

All I say is that anyone with an interest in property either wrt to their PPOR or investment get out and research the market in their area of choice for themselves. They may be surprised at how things actually are vs what forums like this and various newspaper headlines etc might say.

Cheers,

Beej

 

[Beej]

Sydney auction clearance rate for the weekend 53% on reasonable volume (145/274) and many good prices achieved! Certainly no sign of the great crash as yet..... quite the opposite in fact.

http://www.homepriceguide.com.au/saturday_auction_results/sydney_domain.pdf

Cheers,

Beej

 

[juddy]

However, you have to admit that a significant portion (not all of course) of the whole "great house price crash brigade" are in fact people who have chosen not to take the plunge into home ownership in the past and are somewhat bitter about the outcome of that choice. They are now hoping and praying for a crash in fact in order to get the chance to rectify their past mistake!

Beej

Don't forget that not all were able to get into housing before the booms (6 year range east-west). So you will find a lot of these people hoping for prices to come down are in fact quite young. Through no fault of their own houses have become unaffordable. So again, generalising 'they missed the boat' is incorrect. I would say the majority were just too young.

I love the Aussie cricket team, I go to every match I can, but I still think SA will whip our butts.

 

[juddy]

Sydney auction clearance rate for the weekend 53% on reasonable volume (145/274) and many good prices achieved! Certainly no sign of the great crash as yet..... quite the opposite in fact.

http://www.homepriceguide.com.au/saturday_auction_results/sydney_domain.pdf

Cheers,

Beej

Brisbane 19%.