House prices to keep rising for years

[gfresh]

I will let you know how it goes as it will be a good indication of the first home buyers market. It is worth around 500K.

Don't tell my brother, he bought last year in Brunswick for just above $600k He did well on the last place he had in Brunswick East which went from around $300->450k in 5 years or so, which I think got them motivated to take on a bit more. It's a decent area though, not sure it will "crash", but if you are in it for the capital gains, could be a long wait.

 

[MR.]

I now expect falls of up to 30-50% in the next 3 years.

The agents I spoke to also fear the same, they are secretly telling me the party is over.

That is very interesting and will add, because the agent who sold my property appeared to have a similar outlook. Jobs and all!
(Which appeared not to help my mind set!) but then again.

Two months later she now tells me that her daughter has just bought a unit?
What the?
If that...... then..... but...... she said...... (which didn't help)

Everyone loves a bargain perhaps! Can't help themselves?
I have no idea! ........ except

 

[kincella]

the agents like a quick sale....I know several..due to dealings with them...
when I bought those 10 props between 2000 and 2002....they thought the GST would stop everyone from buying....they had lost a bit of money in the sharemarket and were positively gloomy about property.....but I gave excuses, house for brother...or daughter etc...
I believe they did not have a clue....nor again when I was selling between 2003 and 2004....they were a bit excited about all the city people who had sold houses and were heading for tree changes...cashed up buyers
again I gave an excuse to sell....never once mentioned I had tripled my money on the deal.....told them I needed to fund another project....
have an agent looking after commercial props....he has done a lot of money in the stock market....and again are rather gloomy.....

 

[knocker]

the agents like a quick sale....I know several..due to dealings with them...
when I bought those 10 props between 2000 and 2002....they thought the GST would stop everyone from buying....they had lost a bit of money in the sharemarket and were positively gloomy about property.....but I gave excuses, house for brother...or daughter etc...
I believe they did not have a clue....nor again when I was selling between 2003 and 2004....they were a bit excited about all the city people who had sold houses and were heading for tree changes...cashed up buyers
again I gave an excuse to sell....never once mentioned I had tripled my money on the deal.....told them I needed to fund another project....
have an agent looking after commercial props....he has done a lot of money in the stock market....and again are rather gloomy.....

So when selling aproperty how does it work? You give the agent a fee up front? OR IS IT AN ONGOING THING UNTIL FINALLY YOU CAPITULATE?

 

[kincella]

knocker...you dont know how it works.....you never bought or sold a property ??

 

[knocker]

knocker...you dont know how it works.....you never bought or sold a property ??

Bought some years ago. Never sold. Don't know what all the big deal is about owning houses. Over rated if you ask me.

 

[numbercruncher]

I see all you pesky southerners sucked into Gold Coast realestate are getting smoked, first its was 10pc price drops last year and now this enlightening news ......

At least 4000 new apartments are still unsold in Queensland and most of them are believed to have fallen into the hands of their financiers.

awwww that learn yahs to gamble eh ?

Mortgagee sales remain prominent on the Gold Coast, where 1383 new high-rise apartments were for sale in the November quarter. Only 37 were sold in the three-month period.

Queensland beautiful one day perfect the next ? nirvana ?

http://www.theaustralian.news.com.au/business/story/0,,24976946-25658,00.html

Dont worry Kincella, Beej and Robi - your blokes houses/apartments are booming, no pesky commoner could ever afford to purchase them from you ....

 

[robots]

hello,

go for it lioness, you can do as you please man

i am comfortable hanging on for the ride, you might like red shoes i might like white shoes,

its all only debate and discussion, australia is still king man and keep living large

thankyou
robots

 

[knocker]

I see all you pesky southerners sucked into Gold Coast realestate are getting smoked, first its was 10pc price drops last year and now this enlightening news ......



awwww that learn yahs to gamble eh ?



Queensland beautiful one day perfect the next ? nirvana ?

http://www.theaustralian.news.com.au/business/story/0,,24976946-25658,00.html

Dont worry Kincella, Beej and Robi - your blokes houses/apartments are booming, no pesky commoner could ever afford to purchase them from you ....

I reckon our mate KRudd should turn the place into an expensive housing commision rather than fork out the 900 odd bucks lol

 

[Mofra]

I see all you pesky southerners sucked into Gold Coast realestate are getting smoked, first its was 10pc price drops last year and now this enlightening news ......

Have to wonder how many of those are stupid developments where the developers didn't liaise with LMI on whether the apartments were acceptable for their purposes - once GE & PMI say no, you lose a fair portion of your market (including fully securitised lenders having to walk away from the deal).

I know of about 400 of that number and I'm staggered a developer could be so stupid.

 

[wayneL]

Wayne,
"doesn't matter" It appears I don't understand! ???

Capital risk: are we still talking about Government bonds? There is most certainly capital risk for corporate bonds.

If the government guaranteed bonds are "not" traded/sold before their maturity, isn't your nominal capital still guaranteed? I can only assume you speak of selling the bond before maturity?
So then risk is just inflation?

Deduct (tax paid) inflation from the small return and left is your real gain.
(if any ofcoarse) Hold until mature!

Otherwise it troubles me as what you are talking about exactly!
It's all part of learning!
with thanks.
MR.

Bonds have a set "coupon" interest rate. As "real" interest rates fluctuate the value of the bond fluctuates.

For instance to buy a bond right now, because interest rates are lower than coupon rates, you would have to pay more than the face value of the bond, only to be redeemed the actual face value at maturity... a capital loss.

You can of course get capital gains as well, but we're talking about certainty here.

Pull up any chart of any government bond product and you will see this. The folks who bought gu'mint bonds in a panic at the beginning of this year are facing losses.

See http://stockcharts.com/h-sc/ui?s=tlt

The value moves around just like a stock.

It's the reason bonds are such highly traded instruments.

 

[Glen48]

Even the White House has dropped 23 M in value, not that B O could afford to make the mortgage payments.

 

[Aussiejeff]

Hmmm. The Oz Property Trust sector got absolutely SMASHED yesterday.

Would someone like to explain to me why this sector is now so "on the nose" and what ramifications this significant sell-off over the last few months in that sector might have with regard to the future of both commercial & private RE developments?


Chiz,


aj

 

[dirty_harry]

Good question. The market seems to be pricing in the end of the world and/or cap rates going well over 10%. If this actually happens then you'd better hide out somewhere and grow potatoes. However if governments manage to reflate the system with their money printing and handouts, property trusts could reinflate dramatically, because property is after all a hard asset. It's just a question of valuation.

 

[robots]

hello,

http://business.theage.com.au/business/housing-stimulus-is-working-broker-20090205-7yjz.html

3 FHB's i know have entered in the past 3mths

one going from St Kilda to Caroline Springs (healthcare worker)

one going from Mornington to Frankston (young couple early twenties, building worker)

one going from pMelbourne to sMelbourne (late twenties, government worker high roller)

bloody hell, whats going on I thought banks weren't lending with all three getting finance easy

oh well cheer up brothers, keep rocking

thankyou
robots

 

[MR.]

Bonds still carry capital risk, whereas term deposits do not (ignoring default risk.)

Capital risk: are we still talking about Government bonds? There is most certainly capital risk for corporate bonds.

If the government guaranteed bonds are "not" traded/sold before their maturity, isn't your nominal capital still guaranteed? I can only assume you speak of selling the bond before maturity?
So then risk is just inflation?

Bonds have a set "coupon" interest rate. As "real" interest rates fluctuate the value of the bond fluctuates.

For instance to buy a bond right now, because interest rates are lower than coupon rates, you would have to pay more than the face value of the bond, only to be redeemed the actual face value at maturity... a capital loss.

Ok... we are on the same track!
Depends what we intend on doing with the bond.

If you bought the bond "new", when released, and it was held for its full term the bond "doesn't" lose any capital value just like a term deposit.
(apart from any inflation to be deducted)

To explain:
If we bought an existing bond (today) we will pay higher than face value because the bond may have been issued when the interest rates were 7% and now are 3%. The bond is calculated and sold taking that higher interest rate on the bond into account with the number of years remaining. (7% - 3% = 4%) So the bond is sold in round terms 4% higher than the actual value of the bond. It makes the traded bond on parr with current interest rates being 3%. From then on the holder is basically getting the 3% on their outlay until mature. No actual "capital" or "outlay" would be lost.

Now what Wayne is saying if the bond was sold/traded before maturity and the going interest rate was say 10% that same bond needs to be calculated to take the bond rate all the way up to 10%. The bond "outlay" when bought (new or not) was calculated at 3% interest. (3% - 10% = -7%) by the number of years left until maturity.
CAPITAL LOSS....

Capital is lost because unless you reduce your bond "capital" or "outlay" to make the sale attractive you will not sell the bond with 3% interest when the going rate was 10%.

To back track:

For instance to buy a bond right now, because interest rates are lower than coupon rates, you would have to pay more than the face value of the bond, only to be redeemed the actual face value at maturity... a capital loss.

Yes, but during that time the bond was held the interest was at a/the higher rate, (than the market rate at the time of purchase.) The actual "outlay" is not a capital Loss but the face value is as you say.

You can of course get capital gains as well, but we're talking about certainty here.

The value moves around just like a stock.

It's the reason bonds are such highly traded instruments.

Thanks Wayne for your response.

"talking about certainty here"..........? When do you think?

 

[noirua]

The UK's largest mortgage lender the Halifax has reported a 1.9% rise in house prices during January.

The group said it is important to not place too much emphasis on any one month's figures, but added market activity may be stabilising.

 

[Trevor_S]

Gold Coast prices on the up

http://www.brisbanetimes.com.au/new...ian-house-price/2009/02/05/1233423369334.html

The Gold Coast has long been home to some of the state's highest median prices and, despite recent media attention suggesting otherwise, little has changed.

Mermaid Beach's median increased by 9 per cent to $1.3 million last year, based on 55 home sales. At Surfers Paradise, there was a modest 2 per cent jump to $1.27 million.

 

[knocker]

The UK's largest mortgage lender the Halifax has reported a 1.9% rise in house prices during January.

The group said it is important to not place too much emphasis on any one month's figures, but added market activity may be stabilising.

Only because there variable is at 4% and gov gives concessions to house less than 170000. THink it is a just a blip on the radar

 

[knocker]

Gold Coast prices on the up

http://www.brisbanetimes.com.au/new...ian-house-price/2009/02/05/1233423369334.html

Ah yes the reputable Brisbane Times ROFLMAO