House prices to keep rising for years

[numbercruncher]

Even if they are franked/taxed the figures on the property example are miles infront.

 

[Beej]

Some good posts on the thread today! Go Kincella, 2Bad4U and Lancelot (plus others) - at least I'm not the only one trying to impart some wisdom for these mis-guided folks Prawn_86 has also raised some good questions and sparked some interesting discussion! Numbercruncher and co, well, they are still going on as they have been for the past year on this and the other property thread like a broken record..... But everyone is entitled to their opinion of course!!

HAVE A HAPPY NEW YEAR ALL!

I've got to finish getting my house ready now for the dozen or so bikini clad ladies that will be seeing the new year in around the pool at my place this evening I'm not joking either! The wifes netball team you see.....

Cheers,

Beej

 

[kincella]

numbercruncher....if for the past 6 months, only the lowest priced props were selling..not ordinary average props sold for less...there is a huge difference....and that would have a major affect on the median value....
it would go way down.....
so on a level playing field....its not comparing apples with apples.....the average house has not been selling...its been taken off the market....

it does not mean prop prices have dropped....you have to dig below the surface a bit to find the truth....
I dont mind.though, if everyone is yelling fire fire....it may give me another opportunity to buy a bargain....
cheers

 

[kincella]

beej...thank you...and wish all of you a very prosperous new year....
ps too much time on my hands atm....just taking a well earned break

will take the dog for a walk on the beach..so she can say hello to her cousins and brothers etc....then buy some takeway...she likes mongolian beef atm...or KFc
cheers

 

[tech/a]

What is the reason that it happend in those countries? and why can`t it happen here.

There is a very very big difference.

(1) Inventory. In the US there was at the beginning of this 9mth supply of housing given its "CURRENT" demand. Now with VERY LITTLE DEMAND,inventory has stretched out even further. Unlike Australia large builders in the US and Europe build large subdivisions of 200+ houses BEFORE they sell them.
We however have more brains and build ON DEMAND.

(2) Record levels of rent demand and with so called "unaffordability" its only getting worse.

(3) We dont have anywhere near the number of low doc loans per capita.

What most of the perma bulls can't seem to get their heads around is there are people out there in different circumstances to them and the fact for someone out of the market or people earning average wages the property market is currently expensive whether you want an investment property or a home to live in.

What makes you think it wasnt exactly the same as it is now in our day.
It was! We needed 2 wages to buy our first home. We DIDNT get a 1St Home owners grant either! We didnt have interest rates at 6.5% either! Try 12%!

Every 15 or so years market conditions like those seen in the late 90s will come around---just wait! (Being sarcastic!).

But read this below very closely perhaps it maybe time to consider what some of us old timers are attempting to impart on you guys----We WERE there once ourselves---we did it so can you!

guys, just a couple of points...two incomes can surely afford a 300,000 place or less...interest rate at 4% = 12000 pa or 1000pm for the interest component...
the other point from a prop investor view...is the capital gains at the end of the exercise.....its not the rental that gets me excited...its the end game

this striving for wages to go up or house prices to come down will get you nowhere...like you want to go back to a time when thats how it was....but the wages were so much lower....
and as for the population...we have lots more wealthier people today...its not millions of poor people and one alan bond any more....I think we made it to 1 million people were millionaires in oz this year...so you are competing against a lot more people who can afford these houses....

what if the wheel has turned and the majority become renters as in europe ??? they will never be able to afford their home.....its really just an aussie abhoration this single minded view...that you must own your own home,,,,forget it and enjoy life regardless

You guys keep comparing Property and Stocks.
What a joke.
How many of you actually have or ever would invest the same as you would on property in shares.
IE take out a loan on $100K and buy $500,000K of shares.
I doubt more than a handful of traders here have ever traded that sort of money particularly borrowed!---or ever will.

How many would have borrowed $2,000,000 in the late 90s to take advantage of the bull run in stocks?-----Zilch here I'll bet.

But a few did with property.

I will be a buyer of property, but not yet!

I see this quote from people all the time.
Question.
Specifically what are you waiting for?? A serious question!
(1)What specific conditions or criteria will set off the BUY button!
(2) What makes you think these conditions will actually occur?

 

[robots]

Hi all
I have been reading nearly all comments in this thread, one thing I dont understand is when people say that we will not have a property crash.
It happens in USA, Europe ect. What is the reason that it happend in those countries? and why can`t it happen here.

hello,

we dont sell guns at Kmart, 7-eleven, or the $2 shop and we dont do crack in this great country

IMO thats why we sitting pretty brothers

and for the record we used to sell guns at Kmart, but the fine people of this country saw the light and CHANGED things

thankyou
robots

 

[Bill M]

With all due fairness, the All Ords closed today at 3,659 points. From the 1st. of Jan to 31st. of Dec the loss from the opening to the close was -43%. Dividends have gone down also.

On the other hand, my property has maintained it's price. Rental prices if anything have gone up. You can say what you like but in 30 years of investing in both shares and property, property has NEVER EVER in my suburb (Sydney Beaches) taken such a dive, just something to consider.

 

[robots]

hello,

thanks Bill M, fine contributions

you right up there next to me in the Top 5 contributors for this thread

thankyou
robots

 

[generalofthearmy]

this discussion is superfluous considering whether the prices increase or not. no one here has any idea, nor should pay any attention to any of the opinions stated herein.

 

[kincella]

general....I and a few others do know what we are talking about....and then you come in to stir the pot....good luck....
doubt anyone here would ask for your opinion..but one never knows!

 

[chops_a_must]

So what's it to be?
a) All these extra people will buy houses pushing prices back up again.
b) All these people will be so far priced out of the market it will create boom times for property investors.
c) A little bit of a) and a little bit of b).

"The self-deception of the mass speculator must, however, have its element of justification. This is usually some generalised statement, sound enough within its proper field, but twisted to fit the speculative mania. In real estate booms, the "reasoning" is usually based upon the inherent permanence and growth of land values."

Guess who?

- Benjamin Graham.

1/ - yes we have. The only one's who haven't seen it before are those too young (and this goes for both sides of the argument).

Yet we have someone else here, as a Perth property perma bull who has selectively completely ignored the historical vacancy rates in Perth, and completely discounting the risk that that entails.

Every 15 or so years market conditions like those seen in the late 90s will come around---just wait! (Being sarcastic!).

You guys keep comparing Property and Stocks.
What a joke.
How many of you actually have or ever would invest the same as you would on property in shares.
IE take out a loan on $100K and buy $500,000K of shares.
I doubt more than a handful of traders here have ever traded that sort of money particularly borrowed!---or ever will.

I see this quote from people all the time.
Question.
Specifically what are you waiting for?? A serious question!
(1)What specific conditions or criteria will set off the BUY button!
(2) What makes you think these conditions will actually occur?

1. You continue to show your complete and utter ignorance of the futures market.

2. Most who can or will be able to afford to buy property, are waiting for conditions that make it an acceptable investment. It is not right now, in any typical case, by any stretch of the imagination.

3. Until the buying conditions of 2 are met, there will continue to be better opportunities available.

4. Property is an investment, not a trade. Therefore the same principles that come into play with any type of investment, come into play with property. It has to make sense. It does not now. But at some point in the future, in some locations, it will make sense. It is already starting to make sense in isolated cases here, with a lot of margin called and bankrupted western suburbs properties coming onto the market here in Perth.

 

[dhukka]

With all due fairness, the All Ords closed today at 3,659 points. From the 1st. of Jan to 31st. of Dec the loss from the opening to the close was -43%. Dividends have gone down also.

On the other hand, my property has maintained it's price. Rental prices if anything have gone up. You can say what you like but in 30 years of investing in both shares and property, property has NEVER EVER in my suburb (Sydney Beaches) taken such a dive, just something to consider.

I doubt you'll ever see a 40% decline in eastern suburbs property prices either. However if we've learned one thing this year it is that history isn't as good a guide to the future as most people believe, regardless of whether you've been investing 30 years. I wonder if you still think CBA was a good buy at $50 back in February?

 

[Lancelot]

2. Most who can or will be able to afford to buy property, are waiting for conditions that make it an acceptable investment. It is not right now, in any typical case, by any stretch of the imagination.

Good O, keep renting

3. Until the buying conditions of 2 are met, there will continue to be better opportunities available.

Fantastic, load up and place your bets

4. Property is an investment, not a trade. Therefore the same principles that come into play with any type of investment, come into play with property. It has to make sense. It does not now.

There is still opportunity, some places getting near CF+ again especially with some work or re-development

But at some point in the future, in some locations, it will make sense. It is already starting to make sense in isolated cases here,

see above, makes even more sense if prepared to do some work and not just take the lazy mans way out and pray for a crash

with a lot of margin called and bankrupted western suburbs properties coming onto the market here in Perth.

A lot as in a few or a lot as in the majority?
I suspect a few as in not enough to make a difference to the majority

 

[chops_a_must]

Even single digit numbers in illiquid markets like Mosman Park/ Peppy Grove, would be a lot, in comparison to times gone by.

Impossible to quantify though...

 

[2BAD4U]

"Yet we have someone else here, as a Perth property perma bull who has selectively completely ignored the historical vacancy rates in Perth, and completely discounting the risk that that entails.

What vacancy rate problem? 2% that's a huge problem isn't it

And if all you bears are right then the vacancy rates will go down because no one will be able to afford to buy a house and all will be renting. So which is it to be? Careful you don't fall off the fence.

Happy New Year everyone and good luck to all in 09 when both shares and property will start to rebound.

 

[chops_a_must]

What vacancy rate problem? 2% that's a huge problem isn't it

Christ some of you perma bulls are stupid.

Did you notice the word "historical" in there?

Nothing in Perth in the last 10 years has changed the factors that contribute to high occupancy rates over the longer term.

 

[robots]

hello,

yeah, all the best brothers

remember its only debate and discussion, its not an argument

we all still in the trenches together,

thankyou
robots

 

[2BAD4U]

Christ some of you perma bulls are stupid.

Did you notice the word "historical" in there?

Nothing in Perth in the last 10 years has changed the factors that contribute to high occupancy rates over the longer term.

Don't bring christ into it he had his turn last week.

OK so lets average 4% vacancy, thats 2 weeks a year at a median rent of $350 that's $700 a year. Quick sell it's gunna break the bank.

 

[tech/a]

1. You continue to show your complete and utter ignorance of the futures market.

One contract can control $100,000 US but your not investing $100,000 of your hard earned.
I was and am talking on the topic of comparison of Share Investing to Property Investing.
Just let me know when you have $100,000 in your Margin Account for trading futures and your trading 100 Nasdaq Futures Contracts.---Even better let me know when its a couple of Mill.
Your hooting and hollering is becoming tedious.I'm not going away.

2. Most who can or will be able to afford to buy property, are waiting for conditions that make it an acceptable investment. It is not right now, in any typical case, by any stretch of the imagination.

What are these conditions? I saw conditions as plain as a futures scalp in the late 90s and will list them off if you want---Frankly I doubt you or those "Waiting" actually know what they are waiting for.
List them!

3. Until the buying conditions of 2 are met, there will continue to be better opportunities available.

In the meantime if you have a deposit and your waiting for these conditions to be ideal---- trade futures?
So New home buyers with $50,000 should be looking at what?
List these better opportunities?

4. Property is an investment, not a trade. Therefore the same principles that come into play with any type of investment, come into play with property. It has to make sense. It does not now. But at some point in the future, in some locations, it will make sense. It is already starting to make sense in isolated cases here, with a lot of margin called and bankrupted western suburbs properties coming onto the market here in Perth.

Now Chops your showing your ignorance and arrogance in property knowledge. Flipping or trading properties is certainly a property strategy.In Fact I'm in the beginnings of building 4 apartments to flip before they are constructed now.

My replies aren't for the Chops of the world who are experts in everything without ever taking part---but those who genuinely want to know how those who are involved actually do it.
On this site being experienced and successful in what you do is seen as flagrant self indulgence.
Fortunately there are enough genuine people who appreciate the efforts of those willing to show the rare glimpses into their experiences.

Something you regularly attack and rarely contribute.

So get off my case and have a Great and Safe 2009.
See you next year.

 

[chops_a_must]

Don't bring christ into it he had his turn last week.

OK so lets average 4% vacancy, thats 2 weeks a year at a median rent of $350 that's $700 a year. Quick sell it's gunna break the bank.

That's an absolutely cretinous way to look at it. If you analyse like that, no wonder you think property is such a great investment at all time highs.

Vacancy rates in Perth have typically been between 5-10% from memory.

But the effects are much more pervasive.

Firstly, it drops the overall worth of property, because the risks of it going unoccupied are far higher.

Secondly, you are in a race to the bottom to attract renters, reducing returns, which further may drop the value of the property.

And thirdly, you may not know which areas will go unoccupied, and once one area does gain an occupancy problem, the effects are circular.