House prices to keep rising for years

[numbercruncher]

From todays herald Sun with examples of falling prices ...

Auctions slump signals end of boom

MELBOURNE'S rampaging property boom has finally cooled after years of soaring prices.

Auctions failed to fire yesterday and the Real Estate Institute of Victoria last night declared the market had peaked and prices were easing.

At Melton West, a mortgagee sale of a six-bedroom house passed in at $200,000 -- $255,000 had been offered in November.

A MODERN four-bedroom Vermont home passed in for $800,000, despite five buyers having made earlier offers about $850,000; and
AN ALTONA North family cancelled an auction of their three-bedroom home because of a lack of interest.

At auctions across the Barry Plant network yesterday the auction clearance rate was 58 per cent. It would normally be about 70 per cent at this time of the year, Mr Plant said.

"The negative publicity in the past week (about increasing repossessions of Victorian houses) has made people a little cautious about their spending," said agent Jeffrey Anderson, of Woodards.

Houda Hameed, who withdrew her Altona North property from auction, said her house was better than others that had sold in her street.

"I just don't understand why this happened," she said.

http://www.news.com.au/heraldsun/story/0,21985,23266297-661,00.html

haha I like that last line in Bold, will be a common line amoungst RE permabulls, Be interesting to see reactions after 4 more possible rate rises this year.

 

[robots]

hello,

still got 9x earnings though NC!!

oh the poor blighters

thankyou

robots

 

[xoa]

The writing must be on the wall if even the real estate agents have become bearish. Maybe we're not so different to the USA/NZ/UK after all.

It's a virtual certainty that speculators in Melbourne and Perth are going to get seriously burned this year. The party won't last much longer in other capitals either. Expect a crescendo of moaning when quarterly price results come out.

They have nobody to blame except themselves. We're on the dawn of the most predictable bust ever.

 

[robots]

They have nobody to blame except themselves. We're on the dawn of the most predictable bust ever.

hello,

rubbish,

and even if it was to happen most are likely to be "gunna's"

gunna do this and that

thankyou

robots

 

[Uncle Festivus]

The trickle up effect? The herd panics! The real estate contagion has started? And, another 0.5% to go?

IT started in the west, but the mortgage stress that has crippled thousands of families there has now hit Sydney's wealthy Eastern Suburbs.
Dubbed the "affluent stressed'', eastern suburbs residents typically spend 38 per cent of their household income on mortgage repayments, have credit-card debts of between $8000 and $20,000, pay private-school fees and are more exposed to the volatile sharemarket.
They're on good money, but many have borrowed huge sums to buy into the most expensive real-estate market in Sydney and are now facing the prospect of a nightmare in 2008 as rates continue to rise.
In October, Fujitsu Consulting found 2.5 per cent of eastern suburbs families were in some degree of mortgage stress; now it's 6.5 per cent.
And a small group are in "severe stress'' and are trying to sell or refinance or are in receipt of foreclosure notifications, according to Fujitsu Australia managing consulting director Martin North.
"While people have more affluent lifestyles and incomes, the fact is you can't squeeze a lemon indefinitely,'' Mr North said.
The number of properties being offered for sale has increased dramatically this month, due in part to seasonal factors, the timing of Easter and a growing sense of "get out while you can".

http://www.news.com.au/dailytelegraph/story/0,22049,23264814-5001021,00.html?from=public_rss

 

[xoa]

hello,

rubbish,

and even if it was to happen most are likely to be "gunna's"

gunna do this and that

thankyou

robots

Well let's see: We've seen every other developed nation enter a property slump. We've seen property prices here inflate to historically unsustainable levels. And we've seen warnings of interest rate rises. And you're surprised?

It's like standing on the railway tracks, and then being surprised when you get hit by a train. It wasn't a question of if, but when.

 

[robots]

hello,

send me a pm when the average median prices drops let say 10%, 20%, 30% or hell even 50% can you please, please

thankyou

robots

 

[numbercruncher]

" Stagnating for Years " will have exactly the same effect in real terms to people paying the expected 10pc variable rate


Just wait till overseas Investors whom have seen stella returns including a strong AUD start cashing in.

Peak Debt folks, people cant borrow any more to keep the party going, imho Not to mention growing sentiment, if enough believe the partys over, it will be over.

RE bulls have nothing to complain about though, has been a fantastic run for you all, congratulations

 

[xoa]

hello,

send me a pm when the average median prices drops let say 10%, 20%, 30% or hell even 50% can you please, please

thankyou

robots

With interest rates rising, leveraged "property investors" will get raped even if prices don't fall. Who wants to pay $40k interest per year, on a non-performing asset in a weakening economic climate?

The price drop and resultant negative equity will just clinch it, and be the icing on the foreclosure cake for speculators. Their insatiable greed will cause many to lose the family home.

 

[explod]

hello,

send me a pm when the average median prices drops let say 10%, 20%, 30% or hell even 50% can you please, please

thankyou

robots

From an investors perspective, at the very best, property is going sideways on the chart.

You have not convinced me that property is a good investment at the moment and your continued mantras based on crap indicate that you must be some sort of a nut.

If you look back over this thread you totally ignore good argument. A constructive debate to aid investment knowledge requies one to deal with the issues raised in analytical fashion.

Move on Robots, for the time being the argument is lost. We need to shift the focus to "when will we know the bottom in real estate has been reached?". But the need for that thread is probably a ways off just yet.

Property fall in big letters ON THE FRONT PAGE of todays Melbourne Herald Sun. HELLO

 

[numbercruncher]

Weve heard of Horse Flu - now House Flu is hitting

It started with a trickle in Sydney's west and quickly spread to Melbourne's battler suburbs of Mentone and Melton as it grew into a wave of house repossessions that is now claiming about 800 homes every week around the country, because families can no longer afford their mortgage repayments.

Now analysts are warning another 300,000 households are at risk, particularly if the Reserve Bank, as widely predicted, goes ahead with another rate rise next month - and that's regardless of whether the banks decide to pass on the estimated 35 to 40 basis points they are still carrying from the higher cost of credit.

"The American subprime virus has arrived in Australia," says Jonathan Pain, chief investment strategist with HFA Asset Management. "In an age of globalisation no nation can be viewed in isolation."

http://business.theage.com.au/house-flu/20080223-1u70.html


Experts predicting housing led recession ...

RISING rents are forcing thousands of people to skip meals and admit they are too poor to send their children on school excursions, new figures reveal.

Housing experts warned yesterday that the home affordability crisis threatens to destabilise the economy and drive the country into recession.

http://www.smh.com.au/news/national/skipping-meals-to-pay-rent/2008/02/21/1203467286233.html

 

[numbercruncher]

To rub salt into the wound, could be a double rise next month ?

CONSUMERS have been warned there will be no escaping an interest rate hike next month - and it could be a double whammy.

Explosive documents released yesterday showed the Reserve Bank Board almost went for the shock treatment earlier this month as it battles to control inflation.

Leading economists said yesterday there was a big chance the central bank would push up rates by half of a percentage point next month – double the usual increase.

http://www.news.com.au/comments/0,23600,23244958-462,00.html

Seems the 10pc mortgage may come sooner than later

 

[Uncle Festivus]

With interest rates rising, leveraged "property investors" will get raped even if prices don't fall. Who wants to pay $40k interest per year, on a non-performing asset in a weakening economic climate?

The price drop and resultant negative equity will just clinch it, and be the icing on the foreclosure cake for speculators. Their insatiable greed will cause many to lose the family home.

Actually I think rental income will be one area that will not do too badly in the near future. Unless your circumstances require you to sell your investment property then a steady rental income is assured.

It must be very hard for those people (mortgagees) who are bearing the brunt, and loosing their homes, for our nations prosperity from the commodity boom. The disproportionate burden on them hardly seems equitable does it?

Punish the overconsumers - raise the GST to 15% instead?

 

[chops_a_must]

The writing must be on the wall if even the real estate agents have become bearish. Maybe we're not so different to the USA/NZ/UK after all.

It's a virtual certainty that speculators in Melbourne and Perth are going to get seriously burned this year. The party won't last much longer in other capitals either. Expect a crescendo of moaning when quarterly price results come out.

They have nobody to blame except themselves. We're on the dawn of the most predictable bust ever.

I don't think Perth and Melbourne will crash.

Likely Sydney and Adelaide, Tasmania to be worst affected. They haven't got a mining boom, and Adelaide... well... why the hell would anybody want to live there? No jobs, no attraction for younger folks, no nightlife, no hub, nothing.

Melbourne's inner city is still comparatively low in its cost of living to most other places, hence I don't think it will crash.

I don't think Perth prices will crash, I don't think they can go higher either though. What will be interesting is what happens to prices here when the plans for ~200,000 (from memory) more people living in the inner city are finalised.

FWIW, another batch of houses in my area failed to sell, and got taken off the market recently. Makes about 50% of the houses for sale in my area not selling in the last year. And a completed redevelopment project in the area has only sold about 60% of the dwellings, after having been complete for 6 months.

Cheers.

 

[robots]

From an investors perspective, at the very best, property is going sideways on the chart.

You have not convinced me that property is a good investment at the moment and your continued mantras based on crap indicate that you must be some sort of a nut.

If you look back over this thread you totally ignore good argument. A constructive debate to aid investment knowledge requies one to deal with the issues raised in analytical fashion.

Move on Robots, for the time being the argument is lost. We need to shift the focus to "when will we know the bottom in real estate has been reached?". But the need for that thread is probably a ways off just yet.

Property fall in big letters ON THE FRONT PAGE of todays Melbourne Herald Sun. HELLO

Hello,

awesome stuff explod, dont really disagree with that highlighted

I wont be packing my bags like Tom R and others and moving on,

and you ignore the facts out there in RE world that prices are still rock solid, I am not here to convince anybody

I am here to report the truth and to help people with financial advice (ps. since I dont charge I can offer all sorts of advice)

have a nice day

thankyou

robots

 

[explod]

Hello,

awesome stuff explod, dont really disagree with that highlighted

I wont be packing my bags like Tom R and others and moving on,

and you ignore the facts out there in RE world that prices are still rock solid, I am not here to convince anybody

I am here to report the truth and to help people with financial advice (ps. since I dont charge I can offer all sorts of advice)

have a nice day

thankyourobots

I did not say the prices are not rock solid, my thrust is that they are going sideways and therefore from a cold hard investors point of view there are better opportunities out there in other investment areas.

Home ownership is a whole different ball game. For investment there is no sentiment attached, we just look for the best yield or growth/ and or if you like short term spikes up or down for trading.

Robots my friend, you infer that property is the holy grail, it is not, no investment is the holy grail. We can only speculate on the best information before us and let the market itself shine the torch.

 

[robots]

hello,

no not at all explod, you summed it up nicely that all investments have pro's and con's,

all I am getting at is that for an owner occupier RE is a fabulous passive investment,

even Tom R (the financial planner man) agrees buying a house/unit is one of the "biggest" investments a person makes,

so just by getting a home you are making investment decisions,

I keep referring to the stat from the ABS that indicates owners are 6x wealthier than renters, this is manily because renters WILL not save the required amount of money to match it with the INVESTMENT made when owning a home,

I am not here to justify why you should buy a property,

how do I know what is going to happen in the future? but because I cant tell you I am a fool,

many here, even you explod will not discuss the "real return" of property ownership/investment,

what I mean by this is how you put down an amout of money to control a asset worth many times more (just like a margin loan), so the real returns are truly amazing and all capital gains tax free

thankyou

robots

 

[gfresh]

You could say what makes you think it was the Gold Coast...I saw that it was Woolongong, and thats quite a distance away.

I think you may have misread what I was implying, I know that particular story was in Wollongong, but that is not to say it doesn't occur far and wide throughout Australia. I live on the Goldcoast, and know many things are not above-board here either.

There was another example on the ABC news tonight.. seaside area in NSW (sorry I did not get the name) where the Labor polly receiving significant electoral contributions from property developers. Ultimately the decision to veto this controversial development was up to this Minister.

 

[Temjin]

I am here to report the truth and to help people with financial advice (ps. since I dont charge I can offer all sorts of advice)

Are you serious robot?

Are you RG145 accredited? Do you even know what it takes to give legal and appropriate financial advice? What kind of experiences do you have in terms of giving "financial advises"? Or you just have several investment properties that have given you cash flow (maybe positive or negative) and gave you unrealised (or some realised) capital gain over the last few years?

Seriously, do you even realise your arguments for PRO property investment so far is completely weak, unintelligent, total disregard of risk and especially to one's financial circumstances? Anyone who is unbiased for property investment would be hard to find to agree with you in comparsion to the logical advises that Tom R have put professionally so far.

Even Tech/A, who have several PIs and is more PRO PI put up a far more effective argument than you.

So my ADVISE to you is to TAKE BACK what you just said by trying to tell the truth because you clearly have demonstrated no where near the knowledge or intelligence (by direct comparsion to those who FAVOUR properties). And not to mention no one on this planet would actually know the truth.

As for giving "financial advise" part, I am seriously hoping you aren't really trying this in real life because you are NO WHERE NEAR qualified for it. And again, not to mention you are not licensed for it and it's illegal for you do so and against the rules of this board.

One major flaw in your so called "financial advise" is that you do not give regards to anybody's own financial situation here and have a total disregard of risks that you perceived to be minimum (or even non-existence) BASED on your "knowledge" so far.

I should be ignoring this thread because it is not getting anywhere due to the massive amount of trolling (from you!). But just can't help it to warn others who may stumble across this thread and "wrongly" took your advises and potentially lead to his/her financial ruin.

And yes, I hope you don't go around in the real world telling everyone that it is time to buy property now and borrow as much as possible regardless of their financial circumstances and tell them to ignore all "negative" fundamentals both locally and globally right now.

 

[robots]

hello,

actually temjin you dont need to be licensed to give information about real estate or loans,

similar to taxation advice if you dont charge then no issue,

just doing my bit for the communiy again

thankyou

robots