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It will go up again eventually but it will go down first and stay there for a few years in all probability, the property boom was huge , the crash will be just as big.
House prices to keep rising for years
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It will go up again eventually but it will go down first and stay there for a few years in all probability, the property boom was huge , the crash will be just as big.
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That picture has been getting a workout today Hired Goon..............er I mean, numbercruncher
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nothing.......
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only 1%, I agree it's more like 15% so far.I agree, I dont need some arrogant full of himself ******** telling me house prices have fallen either
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Not according to those links or latest valuations for my areas
https://www.aussiestockforums.com/forums/showpost.php?p=377989&postcount=2682
Maybe in your areas, but I'm not invested there so it's not an issue for me.
You see, looking at the wobbly green line its plain to see that different areas have different cycles, mines on the up, yours is not but was possibly on the up while mine were down.
Cycles eh
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Yeah cycles, boom and bust always in Australia, it will cover the whole property scene though, next year, starting Friday.
It is kind of funny how all of us share investors can handle the fact that the sharemarket goes up, then it comes down.
Why are there so many headstrong property bulls on this sight who don't seem to be able to say the words?
theasxgorilla
Problem solved... next bubble.
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Should I point out that on the x-axis we have annual price growth, not price? Oh, I just did.
HI everyone,
There IS a different opinion in The Weekend Financial Review, December 30 2008 - January 04 2009 issue.
On page 27, titled, "Property : A tale of 2 markets" by Robert Harley, I would like to highlight manually a few paragraphs, especially paragraph 7:
paragraph 4:
"But in 2009, the negatives - falling incomes, debt reduction, unemployment and the wild card, a consumer credit crunch - will outweigh the positives"
(italics and highlight in red is mine).
paragraph 5:
"As always, the impact will vary around the country. At luxury end of the market - for the multi-million dollar mansions and weekend retreats - the fall will be hard. Many boom mining towns will also have a hard landing as investment hit the brakes".
paragraph 6:
"But at the botoom end of the market - in places such as Western Sydney & regional Victoria - activity is increasing due to improvements in affordability, and financial inducements from federal and state governments".
paragraph 7:
"The head of real estate research @ Macquarie Grou, Rod Cornish, is predicting some house price falls in Australia in 2009. In the cities where affordability is most stretched, in Brisbane and Perth, the total decline - from peak to trough - will be in "double digits".
I am not highlighting stuff in Paragraph 7, of page 27, of AFR Weekend Edition of Dec 30 08 - Jan 04 2009:
Ye who understand perfect Queens and OZ English shall comprehend this opinion that double digits total decline can be anywhere from 10.1% to 99.9%. (No lah, just kidding).
Probably 10%( percect) or more , to be very, very conservative!
15%-20% some says in other post in this ASF.
But as I have posted elsewhere on the other forum that is juxtaposed in title to this one, there WILL be a precipitating DROP in house price and everyone knows it...............in fact, now that the saga is full blown, every the very informed, and self serving groups are waking up to the fact that even premium areas in Perth like Mount Pleasant and Pepper Mint Grove are not spared!
If walls can hear, they will hear the sobbing and undried tears of those who have lost HUGE amounts of money in ABC Learning, CENTRO Property, Fortesque Metal, Rio T, etc.
I've tallied the share punt in the Australian in late December 2008. NOT one single prediction came true. in fact, all of you know that Linc Energy and a little well known phosphate mining company in Xmas Island came in tops!
For sale signs are up from Apple Cross to Alaska................
It's not that I am a sadistic person
But property everywhere in the world are the samein Singapore, people rush in to buy homes at the Sentosa Cove
Bankers tell me stories of aunties (mom and dad investors) who are shrewd who put up their 1,000,000 bank term deposit to obtain a 7 times amount and punt on some sea side bungalows.
Some made some real GOOD money flipping these sea side properties, which range from 2 million to 7 million each!!!!!!!
Now, check this out - today, the last one who HOLD that baby is crying and don't know what to do!
Jump also cannot
Cry also can't do anything
Daily, the bank is banging on their door, knocking for the salvation of the bank's money................................
Same with London..............and the United Kingdom................
Same with Japan...............................................................
in fact, if you read the report by the ex-Reserve bank of New Zealand (Dr. Donald Brash who was RB NZ from 1988 till 2002), he actually in his report in December 2007 says that in the USA, just prior to the subprime crisis, affordability wasn't even a problem even in California where it's a thriving and popular top city in the USA.
It doesn't mean that hot spots must have bubbles..........Check out that report. Anyone who wants that report, I can send it to you if you email me your email. I can't upload is it is bigger than the limit allowed to post.
So, the verdict is going to coming soon
Men always have opinions
To each his own
Just as there is a judgement day, there will be a D Day for the housing market
Lobby groups, self perpetuating groups can lobby as hard..........................
But when the time has come.................
The verdict will be out.........................
It's only fair. What the secular sees as cyclical to me is supernatural JUBILEE
What an exciting time to live in..............
To those who own properties.........rejoice for those of us who need to get into the market.........property drop in my humble opinion is just Nature's way, the JUBILEE needed by ordinary OZ block who have been trying to own a decent roof without the help of their parents and full-tax-paying migrants like us from everywhere who are decent, honest blokes who contribute and integrate into the OZ way of life............................
Happy 2009..................agathos.
There IS a different opinion in The Weekend Financial Review, December 30 2008 - January 04 2009 issue.
On page 27, titled, "Property : A tale of 2 markets" by Robert Harley, I would like to highlight manually a few paragraphs, especially paragraph 7:
paragraph 4:
"But in 2009, the negatives - falling incomes, debt reduction, unemployment and the wild card, a consumer credit crunch - will outweigh the positives"
(italics and highlight in red is mine).
paragraph 5:
"As always, the impact will vary around the country. At luxury end of the market - for the multi-million dollar mansions and weekend retreats - the fall will be hard. Many boom mining towns will also have a hard landing as investment hit the brakes".
paragraph 6:
"But at the botoom end of the market - in places such as Western Sydney & regional Victoria - activity is increasing due to improvements in affordability, and financial inducements from federal and state governments".
paragraph 7:
"The head of real estate research @ Macquarie Grou, Rod Cornish, is predicting some house price falls in Australia in 2009. In the cities where affordability is most stretched, in Brisbane and Perth, the total decline - from peak to trough - will be in "double digits".
I am not highlighting stuff in Paragraph 7, of page 27, of AFR Weekend Edition of Dec 30 08 - Jan 04 2009:
Ye who understand perfect Queens and OZ English shall comprehend this opinion that double digits total decline can be anywhere from 10.1% to 99.9%. (No lah, just kidding).
Probably 10%( percect) or more , to be very, very conservative!
15%-20% some says in other post in this ASF.
But as I have posted elsewhere on the other forum that is juxtaposed in title to this one, there WILL be a precipitating DROP in house price and everyone knows it...............in fact, now that the saga is full blown, every the very informed, and self serving groups are waking up to the fact that even premium areas in Perth like Mount Pleasant and Pepper Mint Grove are not spared!
If walls can hear, they will hear the sobbing and undried tears of those who have lost HUGE amounts of money in ABC Learning, CENTRO Property, Fortesque Metal, Rio T, etc.
I've tallied the share punt in the Australian in late December 2008. NOT one single prediction came true. in fact, all of you know that Linc Energy and a little well known phosphate mining company in Xmas Island came in tops!
For sale signs are up from Apple Cross to Alaska................
It's not that I am a sadistic person
But property everywhere in the world are the samein Singapore, people rush in to buy homes at the Sentosa Cove
Bankers tell me stories of aunties (mom and dad investors) who are shrewd who put up their 1,000,000 bank term deposit to obtain a 7 times amount and punt on some sea side bungalows.
Some made some real GOOD money flipping these sea side properties, which range from 2 million to 7 million each!!!!!!!
Now, check this out - today, the last one who HOLD that baby is crying and don't know what to do!
Jump also cannot
Cry also can't do anything
Daily, the bank is banging on their door, knocking for the salvation of the bank's money................................
Same with London..............and the United Kingdom................
Same with Japan...............................................................
in fact, if you read the report by the ex-Reserve bank of New Zealand (Dr. Donald Brash who was RB NZ from 1988 till 2002), he actually in his report in December 2007 says that in the USA, just prior to the subprime crisis, affordability wasn't even a problem even in California where it's a thriving and popular top city in the USA.
It doesn't mean that hot spots must have bubbles..........Check out that report. Anyone who wants that report, I can send it to you if you email me your email. I can't upload is it is bigger than the limit allowed to post.
So, the verdict is going to coming soon
Men always have opinions
To each his own
Just as there is a judgement day, there will be a D Day for the housing market
Lobby groups, self perpetuating groups can lobby as hard..........................
But when the time has come.................
The verdict will be out.........................
It's only fair. What the secular sees as cyclical to me is supernatural JUBILEE
What an exciting time to live in..............
To those who own properties.........rejoice for those of us who need to get into the market.........property drop in my humble opinion is just Nature's way, the JUBILEE needed by ordinary OZ block who have been trying to own a decent roof without the help of their parents and full-tax-paying migrants like us from everywhere who are decent, honest blokes who contribute and integrate into the OZ way of life............................
Happy 2009..................agathos.
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1/ They havent seen this before and cant get their head around it yet.
2/ Debt - they are highly leveraged and cant admit that it may be a problem going forward.
3/ see #1 again - they just dont believe their precious property can actually go backwards.
wayneL
VIVA LA LIBERTAD, CARAJO!
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Today on Radio BBC4 was a phone in program on the state of the property market.
Lots of LOLs and headshake moments... very bearish, some talk of 50% falls, lots of denial too.
Here is the replay ~1 hour
http://www.bbc.co.uk/iplayer/console/b00g4b4r
Lots of LOLs and headshake moments... very bearish, some talk of 50% falls, lots of denial too.
Here is the replay ~1 hour
http://www.bbc.co.uk/iplayer/console/b00g4b4r
theasxgorilla
Problem solved... next bubble.
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Re: 2, in an ideal world, would it really be that bad if people did leverage to 100%, or even 110% or 120% if they wanted to do some renovations and buy some furniture?
If rents were a truer reflection of a landlord's mortgage repayment plus other outgoings and some profit then surely anyone who has proven that they can cope with paying rent consistently can handle home ownership. Leverage isn't a problem in itself if you can afford the payments.
Bill M
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I have had several rental properties over the years but I sold the last one about 8 years ago. The only property I have now is the place I live in. These days I invest in stocks and a small amount of interest bearing accounts.
Having lived through a few sharemarket crashes and recessions and property cycles I am now thinking of property again, just a small one, you might ask why.
In Sydney where I live (near the beaches) we have a severe shortage of rental properties. No matter what the economy brings to our door steps we can always rent these properties for good money. A 300K property can rent for around $325 per week. There are no shortage of takers, when there is a open for rental inspection there are dozens of people wanting to rent these places. Recession or no recession they in high demand.
Sales, the lower price range between 300K and 400K they still sell very quickly, the only noticeable difference around right now is that there are less buyers around but that doesn't mean there isn't fierce competition. Most of these properties are snavelled up in 2 to 4 weeks.
Property in my area has never ever taken a 50% fall over the cliff type of dive like the sharemarket has, that is still something I have to get use to. Further more 2 of my stocks have stopped paying dividends and others have reduced dividends. This doesn't happen with renting an investment property, not to me in my area.
The returns from stocks income wise are without doubt far better and more tax efficient than real estate but the volatility is extreme. The all ords is off 45% in a year and they predict even higher losses for next year.
So in conclusion a regular secure income from real estate (even if prices don't go up for a while) sounds a lot better than a 50% drop in shares with dropping dividends. For the first time in 8 years I have started thinking about property again, some buyers have disappeared and I like the secure income. Just my thoughts from personal experiences, good luck to you all.
Having lived through a few sharemarket crashes and recessions and property cycles I am now thinking of property again, just a small one, you might ask why.
In Sydney where I live (near the beaches) we have a severe shortage of rental properties. No matter what the economy brings to our door steps we can always rent these properties for good money. A 300K property can rent for around $325 per week. There are no shortage of takers, when there is a open for rental inspection there are dozens of people wanting to rent these places. Recession or no recession they in high demand.
Sales, the lower price range between 300K and 400K they still sell very quickly, the only noticeable difference around right now is that there are less buyers around but that doesn't mean there isn't fierce competition. Most of these properties are snavelled up in 2 to 4 weeks.
Property in my area has never ever taken a 50% fall over the cliff type of dive like the sharemarket has, that is still something I have to get use to. Further more 2 of my stocks have stopped paying dividends and others have reduced dividends. This doesn't happen with renting an investment property, not to me in my area.
The returns from stocks income wise are without doubt far better and more tax efficient than real estate but the volatility is extreme. The all ords is off 45% in a year and they predict even higher losses for next year.
So in conclusion a regular secure income from real estate (even if prices don't go up for a while) sounds a lot better than a 50% drop in shares with dropping dividends. For the first time in 8 years I have started thinking about property again, some buyers have disappeared and I like the secure income. Just my thoughts from personal experiences, good luck to you all.
prawn_86
Mod: Call me Dendrobranchiata
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The only problem with property is you have to have enough spare capital to be able to bring the loan down to cash-flow positive, if your are after a yeild that goes in your pocket rather than straight off the mortage.
If you borrowed 100% of that 300k then the rent payments would only just be meeting the interest repayments, at current rates. But if you had a spare 100k you could knock off the principal straight away then its a different story i guess.
First - apologies to Mr Burns for my "personalisation" of the issue yesterday. Just frustration with the ever repeating same old arguments bubbling to the surface.....
Now as for the above post - sorry but you are wrong if that is your take on those of us with a more positive outlook for AU property (permabulls if you define a permabull as someone who does not expect massive price falls across the board).
1/ I have been invested in property for over 20 years and have actively watched the market for 25 and have seen several boom/bust cycles during this time - and what I have NEVER seen, especially in Sydney, is a great crash in property prices akin to a share market crash. Oz Property is NOT as volatile as shares, FULL STOP. The permabears here better get used to that idea because it is one of the primary reasons why there will not be a great house price crash in this country. Corrections historically play out with small falls (< 10%) over a 12 month period or so on very low sales volumes, followed by a few years of flat to below inflation price growth. During these times it is actually quite hard to find decent property on the market, as all the owners pull their heads in for a while. My prediction was, and still is, that is what will happen this time around again, and in fact we might be done with the falls already now and moving into the next phase as recessionary expectation kicks in - certainly in Sydney and Melbourne anyway.
2/ As a supposed "permabull", I am not highly leveraged at all. 6 months ago I owned my PPOR outright (had for years, and it was my 2nd place - I owned my previous PPOR outright before that too), and had a couple of investment properties at about the 50% geared level (which were cash flow positive and increasingly so at current rates). I have since sold my PPOR and one of the investment properties and used the proceeds to upgrade my PPOR (as in buy a better one), on which I now have a very small mortgage to the tune of about 15% of it's purchase price.
Personally, I believe this level of property ownership, and the financial security and freedom it provides, is attainable to many people here if only they would open their eyes to the possibilities and think long term. I'm not saying don't invest in shares either (I have significant share holdings as well), but I think you are MAD not to see the benefit in acquiring and paying off your PPOR as early as you possibly can in life. Just owning my current house delivers me an effective before tax return of over 9%pa on my invested capital, guaranteed and GROWING, year in year out, just from the rent I don't have to pay to provide a well located (and admittedly pretty nice, EDIT: which is of course my lifestyle choice) home for my family to live in.
3/ I know that individual property markets move in cycles, and there is some linkage between them all, but also some independence. Even more so when comparing to international markets. I also know, from experience, and an understanding of the factors driving our market here, that as a whole it tends to not have BIG falls - it tends to have periods of strong growth (boom), followed by relatively small price falls (gives back maybe the last boom year of growth), followed by periods of stagnation/slower growth before the next boom starts again big time. I also know that most people who wait for price crashes miss out in the start of the next boom and then you never here the end of it from them for the next decade!
So there! In my case at least, your gross generalisations are completely wrong.
Hear hear! This experience mirrors what I have observed in the inner west and lower north shore of Sydney over the past year as well. The Sydney boom ended 4 years ago - it's business as usual now and those who are in denial about that will miss out, again.....
Beej
Just be careful when you see actual figures of house prices dropping....my research has shown the houses that have been selling consistently for the past year, are actually all in the lower price bracket....hence bringing the median price for the area down......*** it has not been the average ordinary home sales with a mix of middle plus some lower and higher props.....
thus if it is only all the lower end...then the median price reflects a lower than average price.....but it is in fact misleading....it only reflects the lower priced props....and probably not the type of property you would be interested in
Gained the impression a lot of talk on this site relates to Perth and WA...or at least the posts I have read....
I follow a regional city on the nsw/vic border...grew up there and have props there....its been hit by the drought of 15 years...they have finally received some rain in the past month....
have copied a couple of posts from another forum....one relates to the perth area...
Unfortunately due to the sharemarket recession and additions to the family i had to get a temporary job untill my property sells (hopefully up nearly $1million in 12months due to subdivision). This temporary job see's me delivering building materials via truck to new homesites in all of Perths suburbs.
Unbelievable nearly every ForSale sign in the not so well to do suburbs has a SOLD or UnderOffer sticker on it.
NOT the recession the media have been portraying, perhaps it is just the very bottom end of town that is selling?
BUT there seems to be NO recession at the bottom end of town in WA and with lower interest rates comming perhaps the big end will start to fire as well as happened in 1987.
Are you ready?
the other relates to the area I follow...............
I noticed the same thing in a suburb I follow...regional nsw/vic border....since Jun 08 to Nov 08...the lower value props were selling, and I believe they were selling at a premium to their real value IMO....however something quite dramatic happened in mid Nov early Dec 08....most of the lower value props has been sold, and in its place were sales of the higher value props....not the average props...the average/normal props seem to have been pulled from sale....deduced because they are not listed for sale and not recorded as being sold.....
so what happened....interest rates were cut in Oct, Nov and Dec
average monthly sales jun to nov were consistent at 30 pm...or one per day on average....
now the interesting thing is if you are looking at the median price for sale for those months...you would notice the average sale price has dropped...compared to last year...on closer examination...and the facts....in the past 6 months only sales occurred at the lower end of the market....imo there were no sales of the ordinary average home in that area.....
some people will be 'fooled' by the median price of those sales...but only some...not all of us....
the sales that did well were those awful little props under 200,000 a far cry from the average home....and they sold for on average about 30.000 higher than normal
traps for players....I would not be at all surprised if this has been the trend australia wide....ie the lower priced homes are selling..bringing down the median prices...fuelling the media and others predictions for a fall....
ps I know the area well, I know the nice areas and the not nice areas....and then there are the rather ordinary places.. research and being familiar with the area ...like doing your homework...pays off....very different to the 'one size fits all mentality' of the mobs...demanding blood on the street.....
I even missed out on one I had my eye on
thus if it is only all the lower end...then the median price reflects a lower than average price.....but it is in fact misleading....it only reflects the lower priced props....and probably not the type of property you would be interested in
Gained the impression a lot of talk on this site relates to Perth and WA...or at least the posts I have read....
I follow a regional city on the nsw/vic border...grew up there and have props there....its been hit by the drought of 15 years...they have finally received some rain in the past month....
have copied a couple of posts from another forum....one relates to the perth area...
Unfortunately due to the sharemarket recession and additions to the family i had to get a temporary job untill my property sells (hopefully up nearly $1million in 12months due to subdivision). This temporary job see's me delivering building materials via truck to new homesites in all of Perths suburbs.
Unbelievable nearly every ForSale sign in the not so well to do suburbs has a SOLD or UnderOffer sticker on it.
NOT the recession the media have been portraying, perhaps it is just the very bottom end of town that is selling?
BUT there seems to be NO recession at the bottom end of town in WA and with lower interest rates comming perhaps the big end will start to fire as well as happened in 1987.
Are you ready?
the other relates to the area I follow...............
I noticed the same thing in a suburb I follow...regional nsw/vic border....since Jun 08 to Nov 08...the lower value props were selling, and I believe they were selling at a premium to their real value IMO....however something quite dramatic happened in mid Nov early Dec 08....most of the lower value props has been sold, and in its place were sales of the higher value props....not the average props...the average/normal props seem to have been pulled from sale....deduced because they are not listed for sale and not recorded as being sold.....
so what happened....interest rates were cut in Oct, Nov and Dec
average monthly sales jun to nov were consistent at 30 pm...or one per day on average....
now the interesting thing is if you are looking at the median price for sale for those months...you would notice the average sale price has dropped...compared to last year...on closer examination...and the facts....in the past 6 months only sales occurred at the lower end of the market....imo there were no sales of the ordinary average home in that area.....
some people will be 'fooled' by the median price of those sales...but only some...not all of us....
the sales that did well were those awful little props under 200,000 a far cry from the average home....and they sold for on average about 30.000 higher than normal
traps for players....I would not be at all surprised if this has been the trend australia wide....ie the lower priced homes are selling..bringing down the median prices...fuelling the media and others predictions for a fall....
ps I know the area well, I know the nice areas and the not nice areas....and then there are the rather ordinary places.. research and being familiar with the area ...like doing your homework...pays off....very different to the 'one size fits all mentality' of the mobs...demanding blood on the street.....
I even missed out on one I had my eye on
wayneL
VIVA LA LIBERTAD, CARAJO!
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The bulls make fine arguments, but if accurate, will leave Australia with the most expensive property market on the planet in a couple of years.
Is it worth it?
Is it worth it?
prawn_86
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While i can see what you are saying, how do you propose that young people such as myself (21yo) acquire a house early, when the wages of 'standard' jobs (teacher, nurses, clerks etc) are not enough to cover the 'average' mortage?
Surely it is better renting and investing/saving the difference, until they/I reach a point at which i have a large enough deposit to be able to start paying off principal in large amounts, rather than just paying off interest.
The place we currently rent, has a prime location, yet the rent we pay is only about 90% of what the mortage would be if it was a 100% loan (was only about 50% when rates were higher), and thats not taking into account bodycorp fees and maintenance, rates etc
hello,
of course it is, expensive to who? not everybody on a pittance WayneL
to even say these things is so far fetched, you can buy property for an assortment of prices and as such something for everybody
oh, the great divide
thankyou
robots
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Your approach prawn is spot on for the moment. With property prices at best going sideways it is a time to sit and watch as all indications point to better buying opportunities later (18 moths or so) The financial contagion has not hit properly yet so lets watch and see what plays out, then act when some certainty returns.
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