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House prices to keep rising for years

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kincella said:
glen, I know what its worth,.......easy to compare, its not like rolling the dice and where the number lands is the price.....the history charts can guide you to future prices.
Click to expand...

No kincella...that's just not true.

9 years ago i was living in a small country town NSW...i went to an auction
for a little 2 bedroom ex commission house, fair/good condition...replacement
value...u know to buy the block and build the same house $55000 > $65000

I was the only real buyer at the auction and the house was "on the market"
got it for $27000...any house is worth exactly what some one will pay for it
on any given day.
 
Glen48 said:
Kincella
complain the FHO set them up in a trap or want the ATO to bail them out just like the suckers in Storm.
Click to expand...

Interesting point. The government did expect people to go and spend the FHG as it was part of the 'stimulus package' so what is their level of responsibilty when things go pear-shaped.
 
hello,

sorry brothers, at the BDO yesterday on a free ride like the bludger's writing those articles Number, crikey I joined the handout crew for a day

what a day, 30+, Louis Christopher still not responding to email's which totally reveals the vested interest he has in the discussion, spruiker

paradise man can wait for the next 40+ years to roll on

thankyou
robots
 
robots said:
hello,

sorry brothers, at the BDO yesterday on a free ride like the bludger's writing those articles Number, crikey I joined the handout crew for a day

thankyou
robots
Click to expand...

Gday m8 .........yep im in the handout crew too ...got given free tix to the "raggamuffin festival" in perth on saturday just gone......... simply awesome :D

no discussions about falling house prices there , only free love and funny odours wafting through the air

i might email "speech "from arrested developmement and ask him what he thinks about all this so called econimical crisis that some seem to be having

me ,im just bumbling along doing my thing


have a great day
 
I realise this is not part of OZ any is not connected to the credit bubble which won't effect OZ....not

The economic crisis has opened up opportunities for apartment tenants. The inventory of vacant apartments is expanding, and rents are dropping quickly in major metros across the country.

For renters with leases about to expire, it's time to negotiate. Landlords are working extra hard these days to keep units filled.

More from BusinessWeek.com:

• Rents Drop Nationwide as Vacancies Spike

• The Best and Worst Housing Markets of 2008

• How Much Home You Can Buy for $500,000

Of course, your ability to hold on to an apartment””especially a luxury unit””depends on how secure you feel about your own job. Americans lost about 2.6 million jobs in 2008 (mostly in the final quarter of the year) and are likely to lose millions more this year. They are losing money on stocks and other investments and are cutting back on costs by downsizing and moving in with family members or roommates as they hunker down for a deep recession.

Landlords, as a result, are forced to offer discounts to fill vacancies. Apartment vacancies spiked in September after the collapse of Lehman Brothers and the eruption of the financial crisis.

Go for a Long Lease

"If you've got job, it's a great time to be a renter and to sign the longest lease possible," said Ron Johnsey, president of Axiometrics.com, a Dallas apartment data company.

BusinessWeek.com worked with Axiometrics to come up with a list of 25 large metros where rent declines accelerated most at the end of 2008. In Salt Lake City, where the economy had been holding up better than most cities, effective rents (including landlord concessions) fell 2.3% in the fourth quarter compared with the previous quarter. By comparison, rents were climbing 3.3% in the fourth quarter of 2007.

The New York metro area, including New York City and its New York and northern New Jersey suburbs, saw a 3.7% drop-off in effective rents in the fourth quarter (compared with a 0.5% increase in the fourth quarter of 2007), according to Axiometrics, which surveys landlords across the nation once a month.

The situation has changed dramatically in the expensive Manhattan market, where tenants are suddenly in control. The layoffs on Wall Street have forced landlords to cut rents; offer one, two, or even three months' free rent; and pay the broker fee that the tenant would otherwise pay (often 12% of the annual rent).

Luxury High-Rises Hard Hit

Vacancies are rising most in the high-end doorman buildings, particularly in the Financial District, said Daniel Baum, chief operating officer for the Real Estate Group NY, a residential sales and rental brokerage firm. But rents are falling all across Manhattan, in all price categories, he said. Some landlords have dropped rents as much as 20% to lure tenants, he said.

"The luxury high-rise market, especially new construction, is the one taking the worst hit," Baum said. "There's a building offering three months' free rent in the Financial District."

Victor Calanog, chief economist for apartment research firm Reis said landlords nationwide are more motivated to cut rents than they were after the previous recession at the beginning of this decade. Landlords now are under pressure to keep tenants because vacancies are higher than they were in 2000 and so are the debt payments they need to cover. Too many vacancies, and some landlords are likely to face foreclosure, he said.

"I've never seen this kind of acceleration in decline," Calanog said. "It's somewhat sobering."
 
More houses being sold is great news, right?

But not for some....

[size=+1]California Home Prices Fell 42% in December as Slump Worsened[/size]

By Daniel Taub

Jan. 27 (Bloomberg) -- California home prices plunged 42 percent last month as the U.S. housing slump deepened and foreclosures hit record levels.

The median price for a single-family home in the most populous U.S. state dropped to $281,100 from $480,820 a year earlier, the California Association of Realtors said.

[size=+1]Sales rose 85 percent last month[/size]. The number of existing single-family detached homes sold jumped to 544,580 on an annualized basis from 294,520 a year earlier, the Los Angeles- based association said today in a statement.

To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net.
Last Updated: January 27, 2009 14:28 EST
Click to expand...

Glad I don't live in "I'll Be Back" Land :eek:
 
Ooooh lala ....

Wish you didnt provide an official article though, Beej would of demanded that falls of this magnitude are "impossible" ....



:D
 
Aussiejeff said:
More houses being sold is great news, right?

But not for some....

Glad I don't live in "I'll Be Back" Land :eek:
Click to expand...

Interesting article - thanks for posting AussieJeff! I lived and worked in California for a little while, so I am familiar with the place and it's housing market (in some area's anyway) quite well.

In terms of the relevance (or not) of the situation over there to Australia, I note that the article states that 236,000 :eek: homes were foreclosed in CA through 2008. It also states sales volume at an annualised rate of 544,580, but that includes a big jump in Dec, so the actual number of houses sold would be less, probably closer to the previous Decembers annualised rate of ~300,000. Either way, that means that somewhere between 45% -> 80% of 2008 CA home sales were forced foreclosure sales!!!!!

The article also states that it's "typical" for a foreclosure sale to go for 25% under market (historically). So, given that AT LEAST HALF of all CA house sales in 2008, and maybe as many as 80%, were foreclosure sales, is it any wonder prices have fallen by 40+%????

My point is that those big falls have been driven PRIMARILY by the sub-prime crisis, the resulting HUGE and unprecedented volume of forced foreclosure sales , and of course the resulting deep recession the US currently finds itself in (ironically triggered by the whole sub-prime mess in the first place).

What is the foreclosure rate in Australia? It is TINY by comparison! Unless we saw foreclosure rates here approach the massive volumes being seen in the US, we will not - repeat WILL NOT, and can not see price falls here of that magnitude.

Finally, I note that the quoted price fall is median year-over-year (not just in one month as the headline suggests). But it is happening in the US, which fortunately is not the country that we live in, and the property market here is holding up just fine - even showing good price growth in many area's of Sydney and Melbourne in particular through 2008. Interest rates getting cheaper by the month, petrol, food etc getting cheaper = easier and easier for mortgage holders here to make payments.

Remember everything is worse in the US in this type of situation - they had virtually free money for half a decade, they have large numbers of VERY low income earners who were given sub-prime loans to buy houses - these very same workers are all currently losing their jobs, with no redundancy provisions, no welfare safety net etc etc. They have non recourse loans so folks can just walk away and send their keys back to their bank (who might be going bankrupt anyway!).

PS: Here's another article with similar, but also a broader range of stats: http://www.google.com/hostednews/ap/article/ALeqM5h_DkmV9N0qyf2vfd5bqwsVnBh0JgD95RSUA80

One interesting quote is:
The housing market is being driven by bargain hunters snapping up bank-owned foreclosure properties, which accounted for 58 percent of existing homes sold last month, up from 24 percent a year earlier.

"The processing of these distressed properties is almost reaching a frenzied level," said John Karevoll, a DataQuick analyst. "Many of the banks just want to get these properties off their books. People are flocking to buy these foreclosure properties."
Click to expand...

So in true American style, one man's misery has become another's opportunity!

Thank goodness we live in AUSTRALIA!

Cheers,

Beej
 
- Any asset is ultimately worth what it can return. Have you guys worked out the P/E ratio of a house in Gold Coast, Sydney or Melbourne these days? Be sure to subtract your costs like depreciation, rates and land tax from the rental yield.
- You can buy energy, farmland, etc on the stock market right now at huge discounts and single digit PE's, so for me the comparison is clear.
- Houses in Florida for example can be had for US$250,000 down from US$900,000 with water channel frontage like the Gold Coast. So if I had to choose between Florida right now or Gold Coast I would choose Florida.
- the housing market crashed 3 years after the stock market in '87 last time.
- housing is a real asset - a good investment long term but it's all a question of valuation.
 
beej, about 10 Dec 08 I called cba about their home loans....10 mins later they had approved me for refinancing (my current lender was not passing on the rate cuts), just got the paperwork in the mail....6 weeks.....kidding they are not inundated with work....I was told by another on another site early Dec that the banks were so busy it was taking them 4 weeks min to process,,,and big back logs...
so they have offered me 5.14% and more rate cuts to come...only months ago I was paying almost 10%...

oh and pleased you put the perspective into the arguments about the american con job houses......some of them are in all black suburbs,,,totally trashed, and drug dealers in every 3 rd house...nice neighbourhood !
most of us would not consider it ....similar to living in the long grass in Darwin or the alice...or any other shanty town in the middle of nothing....
kidding they try to compare it to Melb...
ggggggrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
cheers
 
I think the main reason why houses haven't started falling at a faster rate is simply due to the FHB, courtesy of the Rudd government. Ironically a lot of young people voted for him.

More government intervention here:

http://www.theaustralian.news.com.au/business/story/0,28124,24973301-25658,00.html

The simple truth is that governments have vested interests in property being unaffordable, and the financial system is tied to the value of housing. Most credit in circulation is backed by a secured mortgage on land, so land is the weak point. The truth of the matter is that all the money we have borrowed is in housing so if it goes down our country leans towards insolvency.

The situation should have never reached this point where there is this conflict of interest where inflation of housing is bad, and deflation of housing is worse.

The daily reckonining has posted a table on housing affordability. http://www.dailyreckoning.com.au/au...verely-and-seriously-unaffordable/2009/01/27/

Governments will do anything to stop it from falling. I was bearish on housing but now I'm starting to realise that the Government would probably even print money to stop the fall if it had to. With our government housing can't really go down in the long term.
 
aleckara said:
I think the main reason why houses haven't started falling at a faster rate is simply due to the FHB, courtesy of the Rudd government. Ironically a lot of young people voted for him.

More government intervention here:

http://www.theaustralian.news.com.au/business/story/0,28124,24973301-25658,00.html

The simple truth is that governments have vested interests in property being unaffordable, and the financial system is tied to the value of housing. Most credit in circulation is backed by a secured mortgage on land, so land is the weak point. The truth of the matter is that all the money we have borrowed is in housing so if it goes down our country leans towards insolvency.

The situation should have never reached this point where there is this conflict of interest where inflation of housing is bad, and deflation of housing is worse.

The daily reckonining has posted a table on housing affordability. http://www.dailyreckoning.com.au/au...verely-and-seriously-unaffordable/2009/01/27/

Governments will do anything to stop it from falling. I was bearish on housing but now I'm starting to realise that the Government would probably even print money to stop the fall if it had to. With our government housing can't really go down in the long term.
Click to expand...

So in real terms housing does go down, because our dollar is headed for banana republic status, so your average 400000$ home will be worth as much as the aussie dollar which could be anything from 40 to 50 Us cents. lol

Meanwhile fuel rises, food rises every rises.

Good luck
 
kincella said:
beej, about 10 Dec 08 I called cba about their home loans....10 mins later they had approved me for refinancing (my current lender was not passing on the rate cuts), just got the paperwork in the mail....6 weeks.....kidding they are not inundated with work....I was told by another on another site early Dec that the banks were so busy it was taking them 4 weeks min to process,,,and big back logs...
so they have offered me 5.14% and more rate cuts to come...only months ago I was paying almost 10%...

oh and pleased you put the perspective into the arguments about the american con job houses......some of them are in all black suburbs,,,totally trashed, and drug dealers in every 3 rd house...nice neighbourhood !
most of us would not consider it ....similar to living in the long grass in Darwin or the alice...or any other shanty town in the middle of nothing....
kidding they try to compare it to Melb...
ggggggrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
cheers
Click to expand...

Not like our mates Robots St Kilda hey. No drug dealers there ROFLMAO
 
kincella said:
oh and pleased you put the perspective into the arguments about the american con job houses......some of them are in all black suburbs,,,totally trashed, and drug dealers in every 3 rd house...nice neighbourhood !
Click to expand...

black suburbs, what does that mean, painted black cross on the door, "bring out your dead" kinda thing ? I thought racism was dieing out, apparently not ?

Anyway, these guys look pretty "white", if that is important to you ?
PH2009011603836.jpg

The Growing Foreclosure Crisis

But I have to fess up, I have always been a property bear, for decades. Sure, I have made money of selling several IP's but I don't understand the hysterical value people attach to housing and the assumption that it could never go down. The P/E's based on rental returns have always left me looking elsewhere for somewhere to put my money. With commercial property, I have always been outbid locally by southerners who were happy with 5% net returns when I was looking for 10% - 11% net, I guess they, like those with houses, simply assumed prices will alwya go up and they can cash in on the bigger fool theory. Perhaps they are right :) but because I can't get my head around it, I mostly stay away.
 

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Trevor_S said:
black suburbs, what does that mean, painted black cross on the door, "bring out your dead" kinda thing ? I thought racism was dieing out, apparently not ?

Anyway, these guys look pretty "white", if that is important to you ?
PH2009011603836.jpg

The Growing Foreclosure Crisis

But I have to fess up, I have always been a property bear, for decades. Sure, I have made money of selling several IP's but I don't understand the hysterical value people attach to housing and the assumption that it could never go down. The P/E's based on rental returns have always left me looking elsewhere for somewhere to put my money. With commercial property, I have always been outbid locally by southerners who were happy with 5% net returns when I was looking for 10% - 11% net, I guess they, like those with houses, simply assumed prices will alwya go up and they can cash in on the bigger fool theory. Perhaps they are right :) but because I can't get my head around it, I mostly stay away.
Click to expand...

So how does it all work mate? Net returns and all that stuff? does it really mean anything in these tImes?
 

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