House prices to keep rising for years

[robots]

hello,



yes great effort lioness, super funds and asx back down to 2004 levels and some on he shonk exchange down to +10yr levels,

anything in fitzroy nth down to those levels lioness? any rents been cut or slashed, any land disappeared of the planet

keep bumping up the rents brother, rents still very very cheap and have enormous scope for growth

ps. look at 06-08, when that great thread "house prices to stagnate for years" was going strong, I can see why it got banned, just too embarrassing for some (in the motherland?)

thankyou
robots

 

[MrBurns]

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

Just goes to show you what sort of tossers con their way into Govt positions, cant find reference to him on Google anywhere, which is a bit sus if he's who he says he is.

 

[sinner]

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.

Vested interest spruiks again!

Does Mr Reid do this at the beginning of every year to ensure good sales or something?

Here are the start of 2008 spruiks from Mr Reid, hopefully we will have to wait till 2010 to hear from him saying the same thing over and over.

http://www.yourmortgage.com.au/news/2125/default.aspx
A repackage of original article by Mr Reid: http://www.aabglobal.com/blogs/mich...lbourne-s-properties-will-keep-on-rising.aspx

and a REBUTTAL
http://bubblepedia.net.au/tiki-index.php?page=House Prices Double Every X Years

A particularly humorous inability to calculate the exponential function comes from Malcolm Reid:

Let's look at the facts about property markets.

England has by far the longest uninterrupted collection of price statistics on land and property compared to any other country on earth. This is because, when the Normans conquered the Saxons in 1066 A.D., they introduced a method of governing England through a unique collection of statistics in every parish.

The Doomsday Book, maintained in every parish in England since 1088 a.d., has collected meticulously accurate statistics on every birth, death, marriage and sale of land. Because of this unique and accurate history of land prices, researchers have done much study on property prices in England.

The result is that, for 919 years, property prices have risen at a compound rate of increase of 10.2% per annum. The Rule of 72 states that any number which increases at 10% p.a. compound, doubles every 7.2 years. So, for over 900 years, property prices in England have been doubling, on average, every 7 years.

The formula for exponential growth is (1 + interest rate/100)time

10.2% over 919 years gives us: (1.102)919 = 5.81 e+38

Which means that anything that grew at that rate is now worth 581,000,000,000,000,000,000,000,000,000,000,000,000 times as much.

The CIA world fact book gives the 2007 United Kingdom GDP at $2.147 trillion. In the middle ages there were 240 pennies to the pound, which means that if you bought a house for a single penny and it grew at 10.2% annually, your thousand year old mud hut would be worth 112,754,230,709,517,155 times the yearly economic output of the entire United Kingdom!

Thankyou for the rebuttal, bubblepedia. Who would listen to Malcom Reid after viewing his poor maths?

 

[IFocus]

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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Fascinating Lioness I have just finished reading the latest Frontline Weekly Newsletter from John Mauldin where he discusses how intractable the credit crisis is in the US / Europe and how and why credit expansion wont becoming any time soon.

It would appear that Malcolm Reid (economist?) is not interested in how the global scene could feed back into the Oz economy affecting incomes, confidence etc. Regardless prices will soar.

If this is to be the case then we really are "special" an island nation protected, Melbourne being its epicenter.

Mean while here in Perth (we are not "special) unsold housing stock continues to remain well beyond the mean average but its OK because rents are rising and vacancy remains low head west and grab a bargin.

http://reiwa.com/research/listings-rental-trends.cfm

 

[sinner]

I forgot to mention, Mr Reid recommends investors leverage their current home to get the 10-20% needed for their next property! You know, rather than saving!

Maybe he could go and work for Storm Financial.

It all makes sense, as long as your investment timeframe is 900 years.

 

[Trevor_S]

Mean while here in Perth (we are not "special) unsold housing stock continues to remain well beyond the mean average but its OK because rents are rising and vacancy remains low head west and grab a bargin.

http://business.watoday.com.au/busi...he-way-up-a-rush-back-down-20090123-7oom.html

A wage of $60,000 in WA to be a motorcycle courier ?!?

MICHAEL SMITH moved 4000 kilometres across Australia in July to earn $120,000 as a blaster. Now the 30-year-old explosives expert is a motorcycle courier making half his former wage.

What I found interesting was this bit

Caught in the downturn, Mr Smith, the motorcycle courier, is contemplating selling two houses he bought with borrowed money unless he can find another high-paying mining job. "I've applied for everything, but a lot of the mining work is frozen now."

 

[juddy]

"Caught in the downturn, Mr Smith, the motorcycle courier, is contemplating selling two houses he bought with borrowed money unless he can find another high-paying mining job. "I've applied for everything, but a lot of the mining work is frozen now."

Hmmmm...didn't that Passive fellow tell us investors would be the last to sell?

 

[knocker]

"Caught in the downturn, Mr Smith, the motorcycle courier, is contemplating selling two houses he bought with borrowed money unless he can find another high-paying mining job. "I've applied for everything, but a lot of the mining work is frozen now."

Hmmmm...didn't that Passive fellow tell us investors would be the last to sell?

My nephew was works as a paper boy at a newsagent. Some guy who also delivers papers was boasting, 2 years back, about how he was on the dole delivered papers early morning and his wife had kids and he had a house and an investment property all on borrowed money lol
what a classic. must be one of robots mates.

 

[robots]

My nephew was works as a paper boy at a newsagent. Some guy who also delivers papers was boasting, 2 years back, about how he was on the dole delivered papers early morning and his wife had kids and he had a house and an investment property all on borrowed money lol
what a classic. must be one of robots mates.

hello,

what gear do you think the paper delivery man is on Knocker? goof balls?

thankyou
robots

 

[lioness]

hello,

View attachment 27529

yes great effort lioness, super funds and asx back down to 2004 levels and some on he shonk exchange down to +10yr levels,

anything in fitzroy nth down to those levels lioness? any rents been cut or slashed, any land disappeared of the planet

keep bumping up the rents brother, rents still very very cheap and have enormous scope for growth

ps. look at 06-08, when that great thread "house prices to stagnate for years" was going strong, I can see why it got banned, just too embarrassing for some (in the motherland?)

thankyou
robots

Hi Robots,

I need some advice from you or anyone on here please.

My tenant rang me direct to ask why my rent has gone up to $425 per week. I explained to him the usual inflation blah blah etc. I have dealt with him directly on a few issues and we have a very good undestanding.

In fact my real estate agent told me to put it up to $450 per week, but they are very good tenants and have been there for 2 years. So he wants me to accept $415 as a discount. I also could lock him in for 2 years as he wants to stay on for that long, but if rents rise I would do myself a disadvanatge.

I am now thinking why should I bring it down to $415 as my agent told me he is getting up to 70 groups of people going through inspections for rentals in Fitzroy North and these places are renovated 10-15 years ago and my is in good condition.

Any thoughts anyone on what I should accept or tell him bad luck pay up?

I think landlords hold all the cards at the moment???

 

[MrBurns]

Hi Robots,

I need some advice from you or anyone on here please.

My tenant rang me direct to ask why my rent has gone up to $425 per week. I explained to him the usual inflation blah blah etc. I have dealt with him directly on a few issues and we have a very good undestanding.

In fact my real estate agent told me to put it up to $450 per week, but they are very good tenants and have been there for 2 years. So he wants me to accept $415 as a discount. I also could lock him in for 2 years as he wants to stay on for that long, but if rents rise I would do myself a disadvanatge.

I am now thinking why should I bring it down to $415 as my agent told me he is getting up to 70 groups of people going through inspections for rentals in Fitzroy North and these places are renovated 10-15 years ago and my is in good condition.

Any thoughts anyone on what I should accept or tell him bad luck pay up?

I think landlords hold all the cards at the moment???

Ok I was in real estate for 20 years (commercial/industrial)so here's my take.

Yes you could get a higher rental but that would involve some vacancy time and letting fees.

Also you dont know who you will get next time.

My advice, even in a hot marjet, is to keep the good tenant and take a slight discount, make sure they know how generous you are being and they will pay on time every month.

In short a good tenent is worth a discount, as you will have less vacancy, less letting fees and less trouble.

My bill is in the mail.

 

[Glen48]

Agree lock em in and hope they don't loose their job/s.
I see on Ch 10 news a bloke purchased on the G.Coast a house for 9m down from a valuation mid last yr of 14M and not long ago it was valued at 17M not that's a good investment beats Storm hands down.
Wonder what the new owner would get for it by next W.end?

 

[lioness]

Ok I was in real estate for 20 years (commercial/industrial)so here's my take.

Yes you could get a higher rental but that would involve some vacancy time and letting fees.

Also you dont know who you will get next time.

My advice, even in a hot marjet, is to keep the good tenant and take a slight discount, make sure they know how generous you are being and they will pay on time every month.

In short a good tenent is worth a discount, as you will have less vacancy, less letting fees and less trouble.

My bill is in the mail.

Hi Burns,

I had also came to that conclusion. Good advice and thanks.

Now this forum is becoming worthwhile.

More talk on topic and less fluff.:iagree:

 

[MrBurns]

Hi Burns,

I had also came to that conclusion. Good advice and thanks.

Now this forum is becoming worthwhile.

More talk on topic and less fluff.:iagree:

Not only is it in your interests but it's more human . it's not good for the soul to screw good people for a few dollars if it's not nessessary. Good luck.

 

[numbercruncher]

More talk on topic and less fluff.:iagree:

" House prices to keep rising for years " - is not happening ....

 

[numbercruncher]

Not only is it in your interests but it's more human . it's not good for the soul to screw good people for a few dollars if it's not nessessary. Good luck.

Nicest thing one of the " House prices to keep rising for years " crew have said for the entire thread. I dont think your compratriots agree though.

 

[numbercruncher]

Hello


Some more price crash hippies hitting the headlines.


Thankyou.

AUSTRALIA is home to three of the most "severely unaffordable housing markets" studied by an international group that predicts the housing bubble here is yet to burst.

The public policy group Demographia, which conducted the study, said affordability in Australia was worsening relative to Britain, Ireland and New Zealand, where prices had recently collapsed.

Australia would be next, it said. "Sooner or later, the inherent instability that characterises virtually all bubbles will lead to house price declines in Australia."

Alan Moran, director of the deregulation unit at the Institute of Public Affairs, said house prices may have collapsed in Australia over the past few months.

But affordability was a problem, he said. "Adjusted for inflation, the average house price in Australia is now more than twice what it was 20 years ago."

http://www.smh.com.au/news/national/housing-bubble-yet-to-burst/2009/01/25/1232818248039.html


Never mind 20 years ago, try 10 ......

 

[Beej]

Never mind 20 years ago, try 10 ......

I think that stat may be a little exaggerated/misleading, but of course it does also show why property is such a good investment!

Adjusted for inflation, Australian "real" wages have increased by how much over the same period? About 60% or so isn't it?..... The number of dual income households has increased by how much over the same period? Interest rates over the past 20 years have been on average about half what they were over the preceding 20 year period. Inflation over the past 20 years has been on average about half what it was over the preceding 20 year period. The average house in Oz has increased in size and amenity by about 50% over the past 20 years. All these factors have contributed to strong property price rises over that time that have outstripped the raw CPI rate yes.

Will these factors continue to drive house price rises in unison for the next 20 years? Unlikely, but I don't see that as meaning we HAVE to have a great house price crash. Rather I think the average/median house price growth will be slower over the next 20 years, through a combination of increased building/availability of entry/lower priced housing, as well as a general moderation in price growth to something closer to CPI for established homes, all depending on the specific area of course.

I also think that rents will continue to grow in real terms here over the next 20 years until they are closer to the levels paid in countries like the UK and the US - one thing that people always gloss over is how LOW our rents are here by world standards, even though our house prices are high.

I also always note that these types of stats/studies ignore units. The facts are that many city dwellers start out in units nowadays as their first home (much like is the case in some of the favourite comparable cities often cited here in Europe and the UK). I think that if unit prices are looked at by the same study you would find the price growth has not been as dramatic for them - so essentially houses have, and will continue to, become more exclusive for all us coastal city dwelling aussies.

And just another quote from the same article which I find interesting:

But an economist for CommSec, Savanth Sebastian, said falling interest rates and the first-home buyer's grant would help keep prices steady.

"We are not going to see dramatic falls this year," he said.

"In November we had more home buyers signing on the dotted line for mortgages than in the past year … It really suggests that if employment holds up, the housing sector is set to see some strong growth over the next couple of years."

The increased FHBs WILL be enabling sales volume/turnover/prices to pick up further up the ladder and it will be starting to happen right now - but won't show up in price stats until we get the Q1 and Q2 figures for this year. Q4 figures for last year will confirm the increased activity in FHB price ranges and that median prices have stabalised, even grown, any many area's where those type of properties are prevelant. As is normal, watch Sydney and Melbourne in particular for this as those 2 cities lead the markets here in AU.

EDIT: PS: The guy in the article who made the "doubled in real terms over 20- years" statement also says this:

Like Demographia, Mr Moran favours reducing the regulations that govern building in Australia.

"The reason Australia is so expensive is because of the regulatory-induced supply shortage that has pushed up the price of land permitted to be used for housing."

So bottom line until that issue is addressed even this guy admits that reduced supply and increasing demand will continue to keep/push prices higher. This supports my view stated above about how ultimately average price growth will be moderated in part through increased building/availability of cheaper housing.

PPS: Happy Australia Day to all!!!

Cheers,

Beej

 

[numbercruncher]

Hello


You waffle so much salesman spiel that it makes me dizzy.

The RE bubble is crashing along with the worlds economy, no matter how much sugar and spice you sprinkle on it.

Your lucky that the Labor party bubble lovers are proping it up, slowing the demise a little.

Funny how things pan out, Turnbull reckons he would let it burn.


Thankyou.

 

[Beej]

You waffle so much salesman spiel that it makes me dizzy.

Apologies if my posts stretch you a little intellectually - I put a lot of effort into creating content that contains facts, arguments and reasoned opinion - yes. They sit in sharp contrast to the drivel that constitutes most of your posts......Hopefully most others reading this thread gain more from my posts than you are able to!