House prices to keep rising for years

[MrBurns]

hello,

yeah we all finished Burns, oh well least i have my appointment at Centrelink on Monday
when Newstart & Mortgage Assistance kicks off it will be great, like I finally became a true brother with all the rest on ASF
thankyou
robots

The economy was bull**** anyway you could smell trouble a mile away, a good cleanout will do us good, house prices were bull****, I was told my house was worth $2M i never believed it though it may have been true at the time it always smacked of unrealistic boom value and there's only one thing that follows that and here it comes, no matter what KRudd tries to do about it, he cant keep the bailouts and grants going forever and when it stops the real crash will start, what you see now is only a warm up.

No problem unless you have a lot of debt.

 

[knocker]

The economy was bull**** anyway you could smell trouble a mile away, a good cleanout will do us good, house prices were bull****, I was told my house was worth $2M i never believed it though it may have been true at the time it always smacked of unrealistic boom value and there's only one thing that follows that and here it comes, no matter what KRudd tries to do about it, he cant keep the bailouts and grants going forever and when it stops the real crash will start, what you see now is only a warm up.

No problem unless you have a lot of debt.

Won't be long now. KRuddys coffers will be nearly exhausted come budget time.. then what? lol

 

[kincella]

I love it how some of you compare the average australian house to detroit....
here are a couple of blogs on the net, for the reality of detroit....it probably is best compared to humpys around /outside alice springs or darwin....

15 posted by Anonymous , January 8, 2009 9:55 AM
@Technogeek It's not a one-off - houses really do go for that cheap, depending on the neighborhood. Detroit is my hometown, and my parents still live there (I went to Ann Arbor for University, met a nice girl, and i'm never going back.)

What this doesn't say is that Detroit property taxes are really expensive; many of these homes have liens or other things you'd have to pay off. My parents live on a corner lot, and the 3 other corners at the intersection are all empty - and our neighborhood used to be nice, compared to what you could find a few blocks in any other direction. Houses that sit empty for more than a month or two often have their wiring and/or copper pipes stolen, followed by the siding or anything else that can be scrapped and sold.

Renting them out isn't the best solution either, as most of the people looking to rent homes in Detroit are seeking to do so under Section 8 housing (a program where the government pays part of the rent for people who can't afford the full amount,) and while Section 8 is a valiant effort, it doesn't produce the most stable or trustworthy renters. We rent out the home my grandmother used to live in, and finding someone who doesn't move in, never pays rent, waits the mandatory eviction period and then leaves before the bailiff shows up is a little more difficult than you'd like it to be.

#2 posted by Cupcake Faerie , January 8, 2009 9:24 AM
It depends on just how much of an urban pioneer you want to be. My wife and I got on this bandwagon two years ago and bought a properties in Kalamazoo, Michigan for $29k and $20K respectively. We lived there for a little over a year before throwing in the towel ( being west coast people, it was just too weird/hostile/racially/class-wise to live there ) and moving to Chicago. We were lucky we could. Now we rent out the properties while we rent in Chicago. Michigan in particular has been *HARD* hit by the recession which has been going on a lot longer than the media would have you believe.Granted, there were some very cool people living in Kzoo, but there were almost all affiliated with the university (WMU). What schizophrenic town!

or read heaps more here
http://www.boingboing.net/2009/01/08/house-prices-plummet.html

if thats your cup of tea.....why dont you go over there and buy a cheap house

 

[Glen48]

House prices all over the World are connected because we need money to buy them, money all over the World is connected because of the credit bubble.
No one knows the true figure house prices went up or down over the past 6-7 years because of the credit bubble.
Once the credit bubble is fully deflated any one with large debit's will be in trouble.
Houses are now just another consumerable item, the same as having a Boat with a 75MM hole in the bottom and you with a cup bailing it out doomed to go down.

 

[Beej]

I just think it is funny how one the bears got caught out trying to BS everyone, and now that has started a frenzy of time wasting nothing posts from a whole bunch of them basically saying "We know best and even though the great crash hasn't happened yet it will you-will-all-see-you-are-all-idiots you've all been smokin weed or something" etc etc. Complete waste of time and space. Really gives me confidence to take what they have to say seriously and factor their views/opinions into important and life effecting personal financial decisions - NOT!

I'll get interested again in what the bears have to say when someone can post some meaningful AUSTRALIAN property market statistics that support their argument. At least such posts are informative and add to the picture, whatever ones personal view may be.

Beej

 

[MrBurns]

I just think it is funny how one the bears got caught out trying to BS everyone, and now that has started a frenzy of time wasting nothing posts from a whole bunch of them basically saying "We know best and even though the great crash hasn't happened yet it will you-will-all-see-you-are-all-idiots you've all been smokin weed or something" etc etc. Complete waste of time and space. Really gives me confidence to take what they have to say seriously and factor their views/opinions into important and life effecting personal financial decisions - NOT!

I'll get interested again in what the bears have to say when someone can post some meaningful AUSTRALIAN property market statistics that support their argument. At least such posts are informative and add to the picture, whatever ones personal view may be.

Beej

VICTORIAN property values have plummeted about $40 billion in the past six months.

http://www.news.com.au/business/money/story/0,28323,24882746-5013951,00.html

Plenty more to come, stay tuned.

 

[kincella]

beej....we know who we suspect to be smoking dope though....all those outlandish and ridiculous statements they make....
and here is a blog from the detroit blogs.....

#3 posted by t3knomanser , January 8, 2009 9:31 AM
@Brad S. : Or Cleveland.

I moved to Pittsburgh about 20 months ago, and I've been stunned by the fact that somehow, they missed the bubble. Property prices in the city have stayed pretty much the same with little bumps and drops. I did see a 4BR place in my neighborhood for $200K, which is about half the price for other 4BRs; I'm assuming it must be a dump or next to falling over.

Perils of living in the trendy hoity toity neighborhood: rent is cheap if you don't mind small, buying is expensive even if you buy small.

 

[Beej]

VICTORIAN property values have plummeted about $40 billion in the past six months.

http://www.news.com.au/business/money/story/0,28323,24882746-5013951,00.html

Plenty more to come, stay tuned.

Thanks you Mr Burns - interesting article. I note that it is basically saying that since the last peak in Melbourne mid 2008, median prices have fallen about 5% from $450k -> $427k. This would seem to be an accurate statistic. What's the year/year figure? Probably about flat I would expect. I also note the same article points out the following:

However, other suburbs, including Fitzroy and Beaconsfield, jumped 20 per cent.

Ie, if you had bought in those area's in Melbourne, there was still good money to be made, even in the short term. I don't know those area's and don't know why they may be bucking the trend, or if it is statistical anomaly, but I see the same opportunities when I look at specific area's in the Sydney market (as I posted in detail a few pages back). This year is going to provide many more such opportunities I believe.

Cheers,

Beej

 

[kincella]

OK I have found houses in OZ that may be remotely comparable to Detroit....but the govt has to spend $225,000 per house to bring it up to scratch.....(total waste of taxpayers money again, as the house will be trashed again)
.....................................................................................................
Taxpayers could face a bill of about $1 billion to replace or upgrade more than 2000 dilapidated houses in remote WA indigenous communities, including many homes that have been abandoned.

In a scathing report based on an audit of Aboriginal housing, the Department of Housing and Works has condemned successive governments for adopting a “build and abandon” policy in outposts, claiming that homes had been constructed without a program or budget for maintenance.

The department acknowledged that Aboriginal tenants had contributed to the debacle, stating there was now an epidemic of abandoned houses in indigenous communities that were so run-down they posed health and safety risks.

The result was an enormous bill for taxpayers, equating to about $225,000 to bring each house up to standard.

http://www.thewest.com.au/default.aspx?MenuID=146&ContentID=112392

 

[kincella]

beej,
Beaconsfield is way out in the woods past Berwick...and Fitzroy is close to the city....similar to St Kilda, although not as nice, a lot cheaper...and
old 'workers cottages', trendy pubs and very bohemian...imo....last time I was there on a Sunday brunch...saw an old drunk peeing in the shop door....

beaconsfield has a variety of houses...small farms etc... so only a few sales can change the median yet give no indication of what an average house price is, in that area
on the commonwealth bank site...shows all suburbs mentioned as too few sales to make it reliable
http://pvg.webcentral.com.au/propertyValueGuideChart.asp

 

[knocker]

I just think it is funny how one the bulls got caught out trying to BS everyone, and now that has started a frenzy of time wasting nothing posts from a whole bunch of them basically saying "We know best and even though the great crash hasn't happened yet it will you-will-all-see-you-are-all-idiots you've all been smokin weed or something" etc etc. Complete waste of time and space. Really gives me confidence to take what they have to say seriously and factor their views/opinions into important and life effecting personal financial decisions - NOT!

I'll get interested again in what the bears have to say when someone can post some meaningful AUSTRALIAN property market statistics that support their argument. At least such posts are informative and add to the picture, whatever ones personal view may be.

Beej

I agree

 

[cwamit]

sorry no charts just common sense as to why i think house prices will have a correction in some areas of Australia..

i can only speak for my area and frankly its the only place that concerns me anyhow being a potential buyer of property.

if property wasn't overpriced we would not need to have a first home owners grant. for the average income, homes have become less and less affordable. supply and demand always comes back to affordability , the family that looses one job makes the house repayments less affordable to the point of being unfordable. there is a demand for houses, in fact a huge demand but not at current prices.

its assumed lower interest rates make a 500k loan cheaper. but does it? the lower our interest rates the lower out dollar goes, the higher the costs of living become (fuel prices for example), negating the savings for the tight budgeted family.

our currency is understood to be a high risk currency , it declines when our goods are less needed, of course our exports become cheaper and hence helps keeps our commodities competitive but its the amount of commodities/industrials that can be sold that is the factor to viability of an industries workforce, not the price of what that industry receives, this for example is obviously shown in the reduction of staff/contractors on mine sites, with years of ramping up production scale of efficiency goes out the window once demand regardless of price, gets out sync.

why have homes become so expensive, the mining boom in sections of the country has fueled the demand for houses. due in part from a shifting population which creates hotspots of real estate bubbles and also due in part to the enrichment of the stock market that eventualy flows into the enrichment of the housemarket because of risk disinvestment of the stockmarket to the safer holdings of property , house prices are connected to the stock market as much as connected to localized supply and demand issues, but there is a difference where risk disinvestment in the stock market is undertaken when the stock market is booming and therefore debt of property purchased in the period of stock boom can be minimal and therefore in difficult times the need to sell isn't necessarily there , as opposed to the property hotspots created from the supply and demand issues, once the boom is over jobs are lost, and the supply demand ratio is flipped over.

it would be a rose colored (blind) investor to say that the property growth of the past several years wasn't connected to the commodities boom, the supply and demand issues of the time was connected to localized booms as well as enrichment of the stock market.


in boom times of stockmarkets there is also greater borrowing (margin calls) to trade in the share market, when the sharemarket drops this leaves highly leveraged borrowers with debt problems which is usually borrowed on the back of held property value, so this in some ways negates the investor that gained from the stock market and reinvested into the property market for a risk management perspective as opposed to the person that borrowed on existing property to invest in the booming stockmarket on the back of rising property values, its this small percentage of investor that not only can exacerbate the stock price crashing but also has potential ramifications on the property market in the future through loss of equity of the debt originally lost in the stockmarket to potential negative equity.

are houses affordable for the average person/family or just a few?

we have the wages boom in some sections of the work force, workers in the mining and construction industry are obviously the most to loose in the current situation, mine closures and developments are being put on hold. with the wages that have grown in the past years in this sector its made margins slimmer for mining companies in tough times. yet the opposing force of high wages has been the ability of those in the industry to purchase not just a home but also investment properties. we have not been in a boom for long.. and wage growth in these sectors have not been around for long either, at least not in context of the average house/investment loan lifespan. its my presumption to say many workers in these industries have mortgages as demographically speaking these industries attract young people and with the high income came the ability for the higher affordability of house prices, or for those in the industries for a longer time than others, the higher affordability of an investment property.


unlike other countries where there is an acute oversupply brought on by a bubble in the real estate market, our bubble of property is more complex as it is brought on by the bubble of affluence in boom times, creating not an over supply of property but by an under supply of affordable property and hence the home owners grant is in existence to artificially correct this issue, the government should be saving the money for far more productive means to the economy and in effect allowing the house prices to come down making it truly affordable with a natural correction of house prices since now times of affluence is over.. i don't see this happening because the government is too preoccupied with a housing slump and higher unemployment stemming from the housing sector which is only being postponed not prevented anyhow because the negative factors of the global economy is far too strong.

in some places that have been unaffected by the boom times to see increases in property values but in an overall context house are set to drop in my very humble opinion.

 

[kincella]

HYPERINFLATION coming soon ???
and why it can be good for you, if you have property and debt


Many Germans gained from the hyperinflation. People with property were able to ride out the storm, while those with debts or mortgages saw their value disappear and their debt payments effectively end. Businesses were able to borrow money, spend it on new machinery, and then pay back virtually nothing to the banks. Bankruptcies became almost unknown. In 1913 around 10,000 German firms went out of business due to their debts. In 1923 the figure was less than 200. The speed with which Germans had to spend their money meant that demand in the shops was actually higher than before the period of hyperinflation. In response to this companies employed more workers, and unemployment effectively ended by 1923. Banking jobs, for example, rose from 100,000 in 1913 to 375,000 in 1923. Companies opened new factories to supply the high demands of Germans desperate to part with their cash. The German government also benefited in at least one way. During World War I the government had borrowed vast sums to finance the war effort. As the hyperinflation rose, the government saw its debts being wiped out.

*****. A new currency, the Rentenmark, backed by land and property was created. The new government led by Stresemann realised the mistakes made in the past and tried to solve them. Each Rentenmark was exchangeable for 1 trillion old marks with a limit of 2.4 billion Rentenmarks to be issued. The government also cut its expenditure, partly by sacking around 700,000 employees. However, reparations remained a problem.

In April 1924 the US government brokered a deal with Streseman known as the Dawes Plan, a scheme initiated by US republican politician Charles Dawes to help Germany pay off its enormous war debts. This reduced Germany's annual payments to more manageable levels, and arranged for the Germans to receive loans of 800 million gold marks from banks and businesses in the USA and Europe. In August 1924 the Rentenmark was replaced with a new Reichsmark of equal value. The new currency had backing from gold so inspired confidence. Taxes were raised and by 1925 the German government actually had a surplus. The Pact of Locarno (1925) settled the frontiers between Germany, France, and Belgium.

http://www.tiscali.co.uk/reference/encyclopaedia/hutchinson/m0006106.html

 

[SBH]

I just think it is funny how one the bears got caught out trying to BS everyone, and now that has started a frenzy of time wasting nothing posts from a whole bunch of them basically saying "We know best and even though the great crash hasn't happened yet it will you-will-all-see-you-are-all-idiots you've all been smokin weed or something" etc etc. Complete waste of time and space. Really gives me confidence to take what they have to say seriously and factor their views/opinions into important and life effecting personal financial decisions - NOT!

I'll get interested again in what the bears have to say when someone can post some meaningful AUSTRALIAN property market statistics that support their argument. At least such posts are informative and add to the picture, whatever ones personal view may be.

Beej

AUSTRALIA is part of the world. The bits of the world that are most closely related to us are stuffed... including japan, china, US and UK, UK with a possible IMF bailout on the way! Unbelievable times.

Most statistics are bullsht anyway as you probably know.. and when China hits recession will you really need to look at Australian (REIA/Rudd) statistics to know where house prices are going? It should be pretty obvious.

 

[Glen48]

If the RBA drops rate by .5% thing are not to bad any thing over is means hit the panic button and buy in St Kilda.

 

[knocker]

If the RBA drops rate by .5% thing are not to bad any thing over is means hit the panic button and buy in St Kilda.

Hello

Why bother buying? Just shack up with robots and his druggy mates. lol

Thank you

robknocker

 

[robots]

Hello

Why bother buying? Just shack up with robots and his druggy mates. lol

Thank you

robknocker

hello,

as long as you have a full bag of goof balls knocker the door is open,

will probably have to get another set of bunk bed's from Harvey's joint, the living room is getting tight but they should fit

thankyou
robots

 

[lioness]

Property prices, rents set to soar by the second half of 2009
21/01/2009


With predictions of a looming economic recession and escalating unemployment rates, many property buyers are scared of venturing into the property market even as interest rates fall to record lows and bargains begin to emerge.

However, the current buying opportunity may end sooner than you think when the property market recovers towards the end of this year, according to a property expert.

Malcolm Reid, a property developer and a former economist for the Reserve Bank of Australia and the Australian Post Office, said that, after a sluggish performance in the beginning of the year, property prices will rise again, significantly.

"As an economist who follows many economic sources each month in the USA, UK and Australia and all the property issues in Australia, I am completely convinced that the second half of 2009 will see an enormous rise in most residential rents and prices after a mild low in the first half. As usual, it will take all but the hardened property investors and respected property forecasters by surprise," he said.

He noted that rents have risen strongly throughout 2008 because of a fundamental imbalance between rental accommodation sought and the supply of such accommodation, especially for Melbourne apartments near the CBD, Docklands and inner suburbs.

"Population, as the main driver in rents and property prices, is expanding rapidly, especially in Melbourne. New births are booming - partly due to incentives - and immigration/internal net migration is the strongest in years and forecast to continue as far as the eye can see. We need approximately 170,000 additional accommodation units per annum to satisfy this growing demand.

"Our building industry at full stretch has rarely achieved this figure. The poor sentiment has caused many developers to delay, defer or completely abandon proposed projects, so supply is falling further and further behind demand for rental properties.

"Due to the inevitable long lead times, rents MUST continue strongly for a minimum of two to three years."

With interest rates falling rapidly to all-time-low levels, Reid said investors can now selectively buy at positive cash flows. "Many smaller investors have been scared off the stock market - understandably - and will enter the property investment market as soon as it seems to have stabilised. Markets always turn before the stats are there to prove it. The best property commentators are almost universally bullish now about the Australian property market after a certain amount of mortgagee sales in the first half."

PS Fitzroy North outperforms St Kilda year in year out!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[knocker]

Property prices, rents set to soar by the second half of 2009
21/01/2009


With predictions of a looming economic recession and escalating unemployment rates, many property buyers are scared of venturing into the property market even as interest rates fall to record lows and bargains begin to emerge.

However, the current buying opportunity may end sooner than you think when the property market recovers towards the end of this year, according to a property expert.

Malcolm Reid, a property developer and a former economist for the Reserve Bank of Australia and the Australian Post Office, said that, after a sluggish performance in the beginning of the year, property prices will rise again, significantly.

"As an economist who follows many economic sources each month in the USA, UK and Australia and all the property issues in Australia, I am completely convinced that the second half of 2009 will see an enormous rise in most residential rents and prices after a mild low in the first half. As usual, it will take all but the hardened property investors and respected property forecasters by surprise," he said.

He noted that rents have risen strongly throughout 2008 because of a fundamental imbalance between rental accommodation sought and the supply of such accommodation, especially for Melbourne apartments near the CBD, Docklands and inner suburbs.

"Population, as the main driver in rents and property prices, is expanding rapidly, especially in Melbourne. New births are booming - partly due to incentives - and immigration/internal net migration is the strongest in years and forecast to continue as far as the eye can see. We need approximately 170,000 additional accommodation units per annum to satisfy this growing demand.

"Our building industry at full stretch has rarely achieved this figure. The poor sentiment has caused many developers to delay, defer or completely abandon proposed projects, so supply is falling further and further behind demand for rental properties.

"Due to the inevitable long lead times, rents MUST continue strongly for a minimum of two to three years."

With interest rates falling rapidly to all-time-low levels, Reid said investors can now selectively buy at positive cash flows. "Many smaller investors have been scared off the stock market - understandably - and will enter the property investment market as soon as it seems to have stabilised. Markets always turn before the stats are there to prove it. The best property commentators are almost universally bullish now about the Australian property market after a certain amount of mortgagee sales in the first half."

PS Fitzroy North outperforms St Kilda year in year out!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

More words of wisdom from of all things a property developer.lol What do you expect him to say? The truth?

 

[knocker]

hello,

as long as you have a full bag of goof balls knocker the door is open,

will probably have to get another set of bunk bed's from Harvey's joint, the living room is getting tight but they should fit

thankyou
robots

Hello,

Think I might knock that offer back lol

thankyou

Roboknocker