House prices to keep rising for years

[gfresh]

Some positive news for those looking for it.. Looks like the slide in housing finance commitments has slowed. I wouldn't call it "bottomed" until a couple more months, but prior history shows it's a positive sign.

http://abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5609.0Main+Features1Dec 2008?OpenDocument

 

[Beej]

A much nicer looking chart there gfresh, especially compared to how that one looked half way through last year!

Cheers,

Beej

 

[numbercruncher]

More good news for the permabulls ....

The dire state of the New South Wales property sector has claimed three more building companies in the last few days, just a week after 20-year-old builder Wincrest collapsed with $12 million in debts.

http://www.smartcompany.com.au/Free-Articles/The-Briefing/20090211-Three-more-builders-collapse-in-NSW-.html

I mean the permas way of thinking is Less builders = less houses being built = more demand for existing stock = prices to the moon/pluto/mars ? ie/ demand is the ultimate fundamental be damned with any other rules of the game ??

 

[sinner]

Except London has already shown demand barely makes a difference once prices start to slip.

 

[Pommiegranite]

Except London has already shown demand barely makes a difference once prices start to slip.

Yes Sinner, but don't get caught in the trap of using the word 'demand', when it comes to property. 'Consider' would be a better choice of word.

 

[Beej]

Except London has already shown demand barely makes a difference once prices start to slip.

Isn't the issue in the UK more that potential buyers are simply unable to get finance due to their banking crisis? A problem we don't seem to be having in this fair land, as demonstrated clearly by these latest housing finance stats.... and therefore demand does in fact matter?

FYI more comment/analysis on the rise in dwelling finance approvals: http://business.smh.com.au/business/rate-cuts-boost-home-loan-approvals-20090211-845k.html

Some selected snippets from the article:

Rate cuts boost home loan approvals

Home-loan approvals gained in December as consumers warmed to lower interest rates and Government packages aimed at helping people buy houses.

The number of home loans, seasonally adjusted, gained 6.4% in December from the previous month, according to the Australian Bureau of Statistics. Analysts surveyed by Bloomberg were expecting a 3.5% increase in the month, reflecting the easing credit conditions.

.....

"The sharp policy u-turn by the RBA and government incentives for first home buyers have triggered a rebound in the demand for finance,'' wrote Westpac chief economist Bill Evans in a note to clients.

"Recall that housing finance plunged during the first half of 2008, in the wake of the RBA's aggressive tightening of monetary policy."

"Housing finance has been in recovery mode for the last three months - albeit a modest recovery. The recovery stepped up a gear in December."

"We expect housing finance to rise further in the months ahead. However, as unemployment begins to lift significantly, the pace of recovery will be crimped."

Cheers,

Beej

 

[aleckara]

Isn't the issue in the UK more that potential buyers are simply unable to get finance due to their banking crisis? A problem we don't seem to be having in this fair land, as demonstrated clearly by these latest housing finance stats.... and therefore demand does in fact matter?

FYI more comment/analysis on the rise in dwelling finance approvals: http://business.smh.com.au/business/rate-cuts-boost-home-loan-approvals-20090211-845k.html

Some selected snippets from the article:



Cheers,

Beej

In other words as the debt burden of our nation increases the interest rate has to go lower and lower just to get consumers to keep spending and to prop up the housing industry keeping the game of musical chairs alive until people hit a recession at 0% interest rates. The government seems to have full control of the housing market in other words and it is severely manipulated for the governments own ends.

Hate to say it but it looks like a complete robbery of savers with the Government using housing as an excuse to do so just to keep the housing market alive with the money coming out of savers pockets. The only fundamental on housing therefore seems to be credit and the ability of the masses to borrow, even if there is enough housing per person people will just buy as an investment and the taxpayer will subsidise the rental returns (hence negative gearing). Either way the housing market goes the government has a plan to get more borrowings into the market. The government just wants money via borrowings to keep flowing in and I'm slowly realising that every little policy it has done leans to this effect. So either the saver or taxpayer is paying the borrower/speculator.

Wow this sounds like a big Ponzi scheme doesn't it? Expect the contributors don't even have a choice - the system is designed to make them contribute either via inflation, reduced saving returns or via their taxes. Something is seriously wrong with the picture here in Australia.

 

[robots]

In other words as the debt burden of our nation increases the interest rate has to go lower and lower just to get consumers to keep spending and to prop up the housing industry keeping the game of musical chairs alive until people hit a recession at 0% interest rates. The government seems to have full control of the housing market in other words and it is severely manipulated for the governments own ends.

Hate to say it but it looks like a complete Roby of savers with the Government using housing as an excuse to do so just to keep the housing market alive with the money coming out of savers pockets. The only fundamental on housing therefore seems to be credit and the ability of the masses to borrow, even if there is enough housing per person people will just buy as an investment and the taxpayer will subsidise the rental returns (hence negative gearing). Either way the housing market goes the government has a plan to get more borrowings into the market. The government just wants money via borrowings to keep flowing in and I'm slowly realising that every little policy it has done leans to this effect. So either the saver or taxpayer is paying the borrower/speculator.

Wow this sounds like a big Ponzi scheme doesn't it? Expect the contributors don't even have a choice - the system is designed to make them contribute either via inflation, reduced saving returns or via their taxes. Something is seriously wrong with the picture here in Australia.

hello,

nothing wrong here in Australia, you have the CHOICE to buy or rent,

and many here reckon renting is heaps better off, so i would say plenty of options available for everyone,

you can always save up and buy a place, easy

thankyou
robots

 

[singlefished]

FYI more comment/analysis on the rise in dwelling finance approvals: http://business.smh.com.au/business/rate-cuts-boost-home-loan-approvals-20090211-845k.html

Some selected snippets from the article:

Cheers,

Beej

I'll match that and raise you two....


"This is the only flicker of life and it's on life support from the first home buyers scheme," Mr Roberts said.

"A deepening economic downturn and the potential for unemployment to rise sharply will no doubt choke off property market activity to some extent," he said.

Housing Industry Association (HIA) chief economist, Dr Harley Dale, said December's figures camouflaged the downturn in the building industry, namely in the `trade up' and investor markets.

http://au.biz.yahoo.com/090211/2/24jfv.html

 

[joeyr46]

A much nicer looking chart there gfresh, especially compared to how that one looked half way through last year!

Cheers,

Beej

That is not very bullish at this stage gone below previous low after a perfect 5 wave count looks like a rally for sure but that may be all

 

[Bill M]

hello,

nothing wrong here in Australia, you have the CHOICE to buy or rent,

and many here reckon renting is heaps better off, so i would say plenty of options available for everyone,

you can always save up and buy a place, easy

thankyou
robots

hello robots old chum, you are dead right in what you say. I did a bit of a run on the weekend up to the central coast NSW (about a 1 hour north of Sydney). Really beautiful brick houses in top suburbs can be bought there for 300K. My mates house is 4 br 2 story brick and only 7 years old, he bought it for 335K 2 Months ago. That's really good considering it's only an hour from Sydney.

Meanwhile another mate is renting a house for $650 p/w in Sydney. Why would anyone in their right mind be renting for $650 when you can buy for $550 (assuming 300K loan at 6.5%)? As you say there are options, I would take the owning my own home option any day and save a $100.

 

[lioness]

In other words as the debt burden of our nation increases the interest rate has to go lower and lower just to get consumers to keep spending and to prop up the housing industry keeping the game of musical chairs alive until people hit a recession at 0% interest rates. The government seems to have full control of the housing market in other words and it is severely manipulated for the governments own ends.

Hate to say it but it looks like a complete Roby of savers with the Government using housing as an excuse to do so just to keep the housing market alive with the money coming out of savers pockets. The only fundamental on housing therefore seems to be credit and the ability of the masses to borrow, even if there is enough housing per person people will just buy as an investment and the taxpayer will subsidise the rental returns (hence negative gearing). Either way the housing market goes the government has a plan to get more borrowings into the market. The government just wants money via borrowings to keep flowing in and I'm slowly realising that every little policy it has done leans to this effect. So either the saver or taxpayer is paying the borrower/speculator.

Wow this sounds like a big Ponzi scheme doesn't it? Expect the contributors don't even have a choice - the system is designed to make them contribute either via inflation, reduced saving returns or via their taxes. Something is seriously wrong with the picture here in Australia.

Aleckara,

Nailed it here you have. I just woke up to this a few years ago. This country is built on property not shares and the govt will do anything to keep the music going, BUT the deflationary spiral about to be unleashed will kill property up to 50% discounts coming even in inner city. Don't get sucked in to this cheap finance they offer as they want us to be debt slaves to capitalism forever. Problem is if deflation wins, capital values decrease for 10 years plus as per Japan found out.

 

[Bill M]

At the bottom of my message there is a link to a 4 Corners interview with Gerry Harvey, I like this guy.

Anyhow he challenges anyone to buy a house anywhere in AUSTRALIA and try and LOSE money in 10 years time, worth a look, here is the link and click on Gerry Harvey, it is 9.45 minutes into the interview where he makes that statement:

http://www.abc.net.au/4corners/special_eds/20090209/gfc/

 

[MrBurns]

At the bottom of my message there is a link to a 4 Corners interview with Gerry Harvey, I like this guy.

Anyhow he challenges anyone to buy a house anywhere in AUSTRALIA and try and LOSE money in 10 years time, worth a look, here is the link and click on Gerry Harvey, it is 9.45 minutes into the interview where he makes that statement:

http://www.abc.net.au/4corners/special_eds/20090209/gfc/

Add purchase costs and holding costs deduct rent and add management fees - you'd be suprised how much you would lose. UNLESS there's a nice bit of inflation going on.

Gerry Harvey is a bit of a cowboy, like the bloke down the pub.

 

[grace]

At the bottom of my message there is a link to a 4 Corners interview with Gerry Harvey, I like this guy.

Anyhow he challenges anyone to buy a house anywhere in AUSTRALIA and try and LOSE money in 10 years time

And I also heard Gerry Harvey say that as the governments are printing more money, there will be more money to be spent, and that must be good for the country......mmm.......can't agree with you sorry Gerry. He should talk to someone who lives in Zimbabwe and see if they agree!

 

[Bill M]

And I also heard Gerry Harvey say that as the governments are printing more money, there will be more money to be spent, and that must be good for the country......mmm.......can't agree with you sorry Gerry. He should talk to someone who lives in Zimbabwe and see if they agree!

Some economists have also argued that the printing of $$$ word wide is only replacing what has been lost so there won't be inflation. I don't know, 2 camps right now, one in deflation mode and one in inflation mode. I don't care, all I know is I buy a house and then rent it out and I have income, nothing has changed there.

 

[shaunQ]

hello robots old chum, you are dead right in what you say. I did a bit of a run on the weekend up to the central coast NSW (about a 1 hour north of Sydney). Really beautiful brick houses in top suburbs can be bought there for 300K. My mates house is 4 br 2 story brick and only 7 years old, he bought it for 335K 2 Months ago. That's really good considering it's only an hour from Sydney.

yeah, used to live near Woy Woy. My parents bought a house there $120K about 15 years ago, sold it for $220K about about 7 years ago. Reckon its on a downturn now - unemployment will hit the coast hard - too much pot.

 

[Julia]

Gerry Harvey is a bit of a cowboy, like the bloke down the pub.

And I also heard Gerry Harvey say that as the governments are printing more money, there will be more money to be spent, and that must be good for the country......mmm.......can't agree with you sorry Gerry. He should talk to someone who lives in Zimbabwe and see if they agree!

I remember a radio interview with GH about a year ago when he predicted that we in Australia would suffer no fall out from the American sub-prime stuff.
I surely wouldn't be making any decisions based on his opinions.

 

[Bill M]

yeah, used to live near Woy Woy. My parents bought a house there $120K about 15 years ago, sold it for $220K about about 7 years ago. Reckon its on a downturn now - unemployment will hit the coast hard - too much pot.

You are right mate, lots of property on the market there right now. Honestly I'm thinking about getting out of Sydney, getting older and just want piece and quiet at much lower prices. By the way where did your folks go? Not much cheap stuff left after central coast? I found CC very good price wise?

 

[singlefished]

At the bottom of my message there is a link to a 4 Corners interview with Gerry Harvey, I like this guy.

Anyhow he challenges anyone to buy a house anywhere in AUSTRALIA and try and LOSE money in 10 years time, worth a look, here is the link and click on Gerry Harvey, it is 9.45 minutes into the interview where he makes that statement:

http://www.abc.net.au/4corners/special_eds/20090209/gfc/

Old Gerry has lost over a 1.5 billion in recent times.... he kept on buying all the way to the bottom last year and admitted he didn't even see it coming.... all the way down.... just like yourself if I remember correctly???

He's certainly done well for himself in the business world, no denying that, but he's certainly proved himself to be no economic guru whose advice you should be following during these troubled times....