House prices to keep rising for years

[robots]

no, that is a quote from that poster. He lurks somewhere here as well, maybe he can enlighten us.

hello,

maybe you can post the link to the post this person made on the other forum juddy,

i can enlighten you juddy that we still at 7-8x income to average price, rents pumping up, money renting rates coming down, nirvana

hang in there brothers aussieland is cruising, well done

thankyou
robots

 

[juddy]

hello,

maybe you can post the link to the post this person made on the other forum juddy,

i can enlighten you juddy that we still at 7-8x income to average price, rents pumping up, money renting rates coming down, nirvana

hang in there brothers aussieland is cruising, well done

thankyou
robots

You agree that other property markets follow Australia then?

 

[wayneL]

I think you are massively over-rating the connection with respect to the residential property market.... What does the average Aussie care about what a house costs in London or Manchester? There are many occasions when different countries R/E markets can and have moved in completely different directions/trends. The UK is one of the best examples. We can see that happening right now with the US and the UK in the doldrums for reasons of their own making. We feel the impact economically, but also in different ways and currently after 18 months of falls in the US/UK we are seeing nothing like that trend over here in residential property prices.

We have nothing like their credit rationing, we don't have anything like their foreclosure rates, or sub-prime lending stupidity, our banks are not collapsing, recessionary forces are gathering later due to the damping effect we enjoyed from the resources boom, which gives a good chance of a shorter time between decline and recovery, as any economic recovery will likely occur in-line with the other western economies, our exchange rate falling adds more damping to the system, and in an international context actually lowers the cost of our real estate anyway, etc etc. Particular regions here have specific issues (eg Perth, SEQ), but generally across the rest of the country the property market is OK - not flooded with property for sale or loads of forced sales and so on, FHB numbers increasing, which will feed through the chain over the next 6-12 months as it always does.

Economies are certainly linked yes by trade and the international finance system etc etc,no denying that! But large aspects of national economies can and do also march to their own tune despite the broader context, and this is seen historically repeatedly time and time again. Dogged assertions that house price falls in say the UK or the US automatically mean house prices will fall across the board in AU are dramatic, and can try to garner credibility through the air of "offshore expats no better than you yokles" and all that, but at the end of the day such assertions are overly simplistic and by no means gospel.

Beej

The connection was rather obvious when credit and prices were booming, it was a anglo-saxon political-financial phenomenon.

Likewise the Oz economy is intrinsically linked to other anglo economies when there is a downturn. The Olympics served to delay the effects on Oz, because of commodity demand. Of course there are individual factors in each country, but property investors should pay close attention to London Manchester, New York and LA, in the same way that stock investors do.

Stock markets are linked.

Bond Markets/interest rates are linked.

GDP growth is linked.

Yet, you cannot see that property values are linked?

But, believe what you want, it's your money.

 

[robots]

hello,

exactly Wayne, its our money and we can do as we please with it, yes

i have said numerous times we miles ahead of these countries, i am not allowed to mention my view on why as I will get banned (just put an arnie action movie in the vhs and you will see why)

i am not interested on who leads who, many are just looking for another excuse

well done brothers money renting rates coming down in 2 weeks time this is utopia

thankyou
robots

 

[wayneL]

Tech/A

A while back you were asking me about yields over here. Here is the sort of deal that is turning up... up to ~9.75% gross yield (and tenant pays council tax) on asking prices. No stamp duty either at < £175,000.

http://www.ludlowthompson.com/338854

 

[Beej]

FYI to all, APM have recently updated their website with property sales data up to end Dec 08. I haven't seen any aggregate data for the whole 08 4th quarter released as yet, which I am eagerly awaiting, but it is interesting to look at some of the suburb by suburb information available there. (http://www.homepriceguide.com.au/snapshot/index.cfm?s_rid=APMHomePage:Demographics:Link)

One pertinent example: take a look at Mosman (postcode 2088) in Sydney, which is been referenced prominently in many negative newspaper articles as a prestige suburb currently suffering a big downturn in sales and prices. The latest data backs this view (in part) up showing that in the last 6 months the median house price has fallen by 20% (from $2.25M -> ~$1.8M). This is of course due in large part to a lack of sales of higher end properties ($3M/$4M/$5M etc) and a higher proportion than "normal" of lower priced properties (for that area), skewing the figures downwards somewhat.

However, the median price for UNITS in Mosman (and there are quite a few in the area) have actually RISEN by 2% over the same period ($527k -> $538k). This would seem to support other published data showing an increase in FHB numbers and more activity in Sydney in the lower/mid price ranges, plus rising rents are probably also a factor there. So an investor or OO holding a unit in a prestige suburb like Mosman would actually be quite happy with the prices holding up well during a down property market and rent on the up....

There are lot's of other interesting suburbs to look at. Both suburbs where I sold property last year show basically flat median price growth for houses up to Dec 08, but again units show a RISE of 21% in one of them! (probably some other factors at play there as well though). Likewise where I bought my new PPOR, there aren't any falls shown either - probably due to the fact that there is very little property actually on the market, plus 50% of homes in the area are owned outright with no mortgage (this and other demographic data is also available from that APM web site). So I expect prices there to continue to hold up well, and rise strongly in the long term.

A few lower priced suburbs I checked like Kingsgrove, Bankstown, Belmore show increased median house prices. Blacktown, Liverpool and similar have been basically flat - which is good considering they were under real pressure over the past couple of years as interest rates were ratcheting up - looks like they have stabalised despite the international/economic climate. Mid range suburbs like Ryde - houses down 5% but unit UP 7% ($307k -> $330k). Hornsby - houses UP 9% ($505k -> $550k), units UP 6% ($332k -> $353k).

Bottom line - if you are thinking of buying for any reason in the next N months or years, don't just judge the market by newspaper headlines - do your own research, especially for the particular area you are interested in buying in. The story may not be what the headlines and/or property bears here suggest...... The data I looked at also suggest that Sydney at least has held up pretty well (as expected) through to the end of 2008.

Cheers,

Beej

 

[knocker]

FYI to all, APM have recently updated their website with property sales data up to end Dec 08. I haven't seen any aggregate data for the whole 08 4th quarter released as yet, which I am eagerly awaiting, but it is interesting to look at some of the suburb by suburb information available there. (http://www.homepriceguide.com.au/snapshot/index.cfm?s_rid=APMHomePage:Demographics:Link)

One pertinent example: take a look at Mosman (postcode 2088) in Sydney, which is been referenced prominently in many negative newspaper articles as a prestige suburb currently suffering a big downturn in sales and prices. The latest data backs this view (in part) up showing that in the last 6 months the median house price has fallen by 20% (from $2.25M -> ~$1.8M). This is of course due in large part to a lack of sales of higher end properties ($3M/$4M/$5M etc) and a higher proportion than "normal" of lower priced properties (for that area), skewing the figures downwards somewhat.

However, the median price for UNITS in Mosman (and there are quite a few in the area) have actually RISEN by 2% over the same period ($527k -> $538k). This would seem to support other published data showing an increase in FHB numbers and more activity in Sydney in the lower/mid price ranges, plus rising rents are probably also a factor there. So an investor or OO holding a unit in a prestige suburb like Mosman would actually be quite happy with the prices holding up well during a down property market and rent on the up....

There are lot's of other interesting suburbs to look at. Both suburbs where I sold property last year show basically flat median price growth for houses up to Dec 08, but again units show a RISE of 21% in one of them! (probably some other factors at play there as well though). Likewise where I bought my new PPOR, there aren't any falls shown either - probably due to the fact that there is very little property actually on the market, plus 50% of homes in the area are owned outright with no mortgage (this and other demographic data is also available from that APM web site). So I expect prices there to continue to hold up well, and rise strongly in the long term.

A few lower priced suburbs I checked like Kingsgrove, Bankstown, Belmore show increased median house prices. Blacktown, Liverpool and similar have been basically flat - which is good considering they were under real pressure over the past couple of years as interest rates were ratcheting up - looks like they have stabalised despite the international/economic climate. Mid range suburbs like Ryde - houses down 5% but unit UP 7% ($307k -> $330k). Hornsby - houses UP 9% ($505k -> $550k), units UP 6% ($332k -> $353k).

Bottom line - if you are thinking of buying for any reason in the next N months or years, don't just judge the market by newspaper headlines - do your own research, especially for the particular area you are interested in buying in. The story may not be what the headlines and/or property bears here suggest...... The data I looked at also suggest that Sydney at least has held up pretty well (as expected) through to the end of 2008.

Cheers,

Beej

What is you point? Wake up and smell the roses mate. Just because your so called reliable data says prices were stable last quarter means diddly squat. Might as well read the newspapers, or use them along with the other BS that is being published about realestate, in the dunny.

 

[Beej]

What is you point? Wake up and smell the roses mate. Just because your so called reliable data says prices were stable last quarter means diddly squat. Might as well read the newspapers, or use them along with the other BS that is being published about realestate, in the dunny.

Thankyou for such an insightful and analytical response to my post! Very persuasive.....

Beej

 

[knocker]

yes it is about as cryptic as you initial post.

 

[gfresh]

I enjoyed it I think it's probably fair to say the FHG has put a bit of a floor on the lower-end from falling too much (same in inner brisbane) for the moment.. BUT the question is whether it's the larger grant, lower interest rates, or a combination of both?

If it's the grant, then June that ceases, and February (more than likely) we will get our 1/1.5% drop and that will be "it" for rates too. From there, other than Rudd pulling out another housing rabbit (possible), the market will be left to whether it can sustain itself, or not.. and as we've seen in the UK and the US, recessionary forces seem to overpowering any interest rate cut movements.

 

[gfresh]

Some interesting charts on wages I've quickly done up.. total wages, including part-time + full time, which is probably the most important one. These are only nominal, not inflation adjusted.

* From 2000, Queensland wages went from approx $600 -> $870 (45%)

* For NSW same period, wages went from approx $650 -> $910 (40%)

So it is probably right to argue that strong wage rises have supported higher housing prices. Conversely, house prices in QLD have increased by much more than these figures (in most reasonable areas), so was that justifiable? Another question re: QLD - are these wages a bubble due to resources?? Are they sustainable?

Very interestingly, for NSW, wages have actually started to flatten off since mid-2007. Since 1983, we can see this has never happened for this length of time. This should be a big concern to NSW investors... how is a flattening, if not even reduction in wages going to support and large rises in prices if this trend continues for much longer?

I have a feeling there would be a bit of "padding" on these incomes over the last 8 years as well due to extra income from share portfolios, property income, bonuses and other such items when times are good. Which must be shrinking already.

 

[Glen48]

Those 3,000 who use to work for Crazy Clarke's etc will be out today selling houses.
Few days time BHP and RIO workers homes going on the market.
Few days time more sellers .....

 

[lioness]

Those 3,000 who use to work for Crazy Clarke's etc will be out today selling houses.
Few days time BHP and RIO workers homes going on the market.
Few days time more sellers .....

Yes, Glen, good thinking, wait for all the unemployed to dump their houses and buy them for 50% discounts. I am thinking the same as you, getting ready to load up over the next few years.

That was what you were thinking right? Or are you just thinking misery full stop?

 

[knocker]

So can anyone tell me what Australia does, aside from important foreign students et al? sell chucks of land and or dig it up? and now they can not even ek a living from farming because they have built to many houses. lol

 

[knocker]

Yes, Glen, good thinking, wait for all the unemployed to dump their houses and buy them for 50% discounts. I am thinking the same as you, getting ready to load up over the next few years.

That was what you were thinking right? Or are you just thinking misery full stop?

be my guest lioness. then what will you do when the bank comes after you? lol

 

[nomore4s]

be my guest lioness. then what will you do when the bank comes after you? lol

lol, get bailed out by the government.:

But you cannot lose, don't ya know

 

[Beej]

So can anyone tell me what Australia does, aside from important foreign students et al? sell chucks of land and or dig it up? and now they can not even ek a living from farming because they have built to many houses. lol

That's right! Everyone in Oz just sits around making smart a*se comments on internet forums all the time and no one in the whole country ever does anything productive - you are a great example!!

Beej

 

[IFocus]

That's right! Everyone in Oz just sits around making smart a*se comments on internet forums all the time and no one in the whole country ever does anything productive - you are a great example!!

Beej

Here in the west where we do dig up dirt and ship it the BHP news today has really shaken a lot of cages unfortunately agriculture is also taking a dive income down 40% according to a headline the other day.

This all flows back to mortgage payments at some time in the future and it doesn't just stop at the WA border....its coming to a suburb near you soon I think

 

[nomore4s]

Probably been posted before but....

Just to reinforce what IFocus has just said.

Bankruptcies on the increase in WA, this article is from the 5th of Jan so with more mining jobs going expect it to keep increasing.

Alot of jobs starting to be shed pretty viciously now, as well as things like the Storm Finance debacle house prices could really start to come under pressure as our economy continues to deteriorate.

On an a side note - business up here while still plentiful it is now becoming harder to get paid, over the last few years we have very rarely had to chase money but now we are having to chase a lot of payments down - and it's not just us. A sure sign money is slowly drying up.

 

[MrBurns]

Probably been posted before but....

Just to reinforce what IFocus has just said.

Bankruptcies on the increase in WA, this article is from the 5th of Jan so with more mining jobs going expect it to keep increasing.

Alot of jobs starting to be shed pretty viciously now, as well as things like the Storm Finance debacle house prices could really start to come under pressure as our economy continues to deteriorate.

And we're still only in January.........