House prices to keep rising for years

robots · 24 February 2009

numbercruncher said:
Looks like the permabulls demand argument is going to take a bit of a slamming !

http://business.theage.com.au/business/slo...90223-8fge.html

Also still looking for some proof about " House prices to keep rising for years " all weve got all year is salesman/spruiker speil .....

hello,

seaford up 15%, bonbeach up 15%, melton up, st albans up, everywhere for the Dec08 Q

next result out in month or so, great effort I know it can be hard to accept

just try and keep active, go for a walk, do some work to take the mind off things

but not sure why many here care? isnt renting the road to riches (and can be), nothing more than the tall poppy syndrome, the great divide, the rich vs the poor

have a great day

thankyou
robots

numbercruncher · 24 February 2009

knocker said:
About bluddy time. What ijiots let immigrants into a country on the basis they can cut some wood with an electric saw, or cart some bricks around. Even to get in the Uk you need a masters nowdays. Oh well can see the dole ques getting longer already lol

Luckily alot of them only got work visas so the Gov will now give em the old heave ho now they have passed their usefullness ..... still that dole Q expands being financed with borrowed $$ no doubt .....

numbercruncher · 24 February 2009

robots said:
seaford up 15%, bonbeach up 15%, melton up, st albans up, everywhere for the Dec08 Q

Everywhere is up for Dec quarter eh ?

Awesome

Nirvana

Junior · 24 February 2009

kincella said:
I dont get it...really, an extra 7000 is holding up the industry....thats not even 1% of a 500k prop....miniscule IMO....think you will need a lot more than a 7000 prop

really means very little to the serious home buyers...they would have been saving the money anyway...

everyone is getting a handout....except me....I have never been lucky enough ...oh sure I will get the 950 or whatever it is...chicken feed

saw a young couple they bought sydney's west...400,000k both had secure jobs...think public service...good incomes....

I would rather bash the banks..getting billions in handouts.....

the grant is also designed to try to keep some builders in work...keep as many jobs as you can....how many on here have a tradie son that might need looking after...

This is total rubbish...I'm in my mid 20s and know several people who have decided to buy the first home purely because of the grant. It forms a substantial part of your deposit, particularly if you're spending <$400k

Trevor_S · 24 February 2009

robots said:
seaford up 15%,

Houses -3%

robots said:
bonbeach up 15%,

Houses -7%

robots said:
melton up

Houses -1%

robots said:
st albans up

Houses +3%

robots said:
everywhere for the Dec08 Q

I know it can be hard to accept

Indeed... on the face of it, your claim seems be bullsh*t

+stats. above are 6 months to Jan '09.

Temjin · 24 February 2009

Trevor_S said:
Indeed... on the face of it, your claim seems be bullsh*t

+stats. above are 6 months to Jan '09.

Watch it and he will illustrate how the annual change has been 10%+ for all those suburb in the very same report snapshot links you just posted.

robots said:
everywhere for the Dec08 Q

I know it can be hard to accept

Thanks for pointing out the obvious.

kincella · 24 February 2009

the extra 7000 is substantial ???
....correct me if I am wrong....there is a grant of 7000 for old home or 14,000 for a new home.....but both have been boosted by an extra 7000....
when it was first introduced in 2000...the RE agents were adding that amount to the price of a house...when I said I was not a fhb they dropped it instantly
CBA is demanding a cash component to the depost...to prove they can save something...in the old days you had to prove at least 6 months of savings to get a loan...today they are not saving..just using the grants for the deposits...

gfresh · 24 February 2009

I think if buyers are *relying* on the grant to purchase, then it is almost subprime by a different name. Say $7k "real" money + $14k of government's money = $21k/350k prop = 6% deposit. LVR of 94% gives so little in reserve, it's a worry..

gfresh · 24 February 2009

CBA already onto it ... so in my example above borrowers would soon need $10.5k of "real" money ..

http://www.theaustralian.news.com.au/story/0,25197,25092070-2702,00.html

THE Commonwealth Bank will tighten borrowing rules for first-home buyers to insist they contribute at least 3 per cent of the purchase price in their own money, in addition to any available government grants.

The move is in response to growing industry concerns about the quality of loans to the fast-growing, first-home buyer market and is in anticipation of interest-rate hikes in coming years, due to the expected inflationary impact of the large, recent increase in household income.

Currently, government grants of up to $14,000 for an existing home and $21,000 for a new home mean some first-home buyers can purchase dwellings with a 5-10 per cent deposit and no cash contribution of their own.

"Customers who have skin in the game in terms of their own funds are more committed to continue their repayments," CBA group executive retail banking services, Ross McEwan, told The Australian.

"So in the next couple of weeks, we're implementing a policy to require borrowers to contribute a minimum of 3 per cent (of the purchase price) on top of any government grant."
...

Mr McEwan said the bank's mortgage serviceability buffer had been tightened to ensure that customers could still meet their repayment obligations if interest rates rose by 2.25 percentage points. This was higher than the previous buffer of 1.5 percentage points.

gav · 24 February 2009

I'm a FHB and CBA were the only ones who considered me, even though I had 20% deposit (part of that was from the FHB grant, but majority from my own savings). I have a govt job, a good savings history, and I could still meet repayments if interest rates were 12%. But I was turned down by ING and Heritige their reason - I hadn't been in my current job for 12 months.

Oh and Trev, Seaford units were up 15% for the Dec Q, I think that's what Robots was referring to.

Glen48 · 24 February 2009

Gav
turned down...........you was lucky.
We use to get up before we went to bed.. that's nothing I have a mortgage.......ooooooo you win.
Just think what your future could have been like if it was approved????????
Paying rent to a Bank for life on a object loosing money. Wait a few more years save up and pay cash .

Beej · 24 February 2009

Glen48 said:
Gav
Just think what your future could have been like if it was approved????????
Paying rent to a Bank for life on a object loosing money. Wait a few more years save up and pay cash .

That is the worse advice ever when it comes to your PPOR......

Besides, your advice in this case is probably falling on deaf ears, as Gav got his loan from the CBA and has bought his place already - congrats Gav! You will never look back!

Renting money, renting a place to live, what's the difference? At least with the former you actually own something. I think Gav mentioned elsewhere he expects to have his loan paid off in ~10 years anyway. If he has planned this properly, in all likely-hood he will pay it off even faster than that

Cheers,

Beej

kincella · 24 February 2009

I doubt if your ( average wage earner 'tinks') saved money all theirr life..that they would ever have enough to pay cash for a house...in the meantime...all that money spent on rent
two incomes no kids...tink...otherewise once the kids arrive..theres no hope

gav · 24 February 2009

Yes Beej, you are correct. CBA approved were the only ones who would consider me, and they did approve the loan. I dont see why I would continue trying to save for a larger deposit Glen, when the minimum deposit is the same as renting in the area. Why rent and pay off someone elses mortgage, when I can pay off my own? Especially when I can pay it off in less than a decade

kincella · 24 February 2009

I know I am dreaming...but what if the govt bailed out all home owners...say take 50,000 or so off your loan....sounds ridiculous...

not dissimilar to bailing out the banks in the billions..or the car industry

but look at it another way...dropping interest rates takes a similar amount off the cost of buying your home
eg 100,000 loan dropped from 10% to 5% save 5000 pa...x 10 years = 50,000
or the average loan of 240,000 save 12,000 x 4 years = 48000

now if we can just get it down to 3%...sorry retirees...the savings are even bigger
I am obviously bored...
cheers

Bill M · 24 February 2009

gav said:
Why rent and pay off someone elses mortgage, when I can pay off my own? Especially when I can pay it off in less than a decade

Congratulations on the purchase Gav, well done mate. The debate of paying the same for a mortgage as you would for rent has been going on for decades and nothing has changed, you made the right decision. In 10 years time it's "check mate" YOU WIN, game over and you will be living rent free for the rest of your life.

robots · 24 February 2009

Bill M said:
Congratulations on the purchase Gav, well done mate. The debate of paying the same for a mortgage as you would for rent has been going on for decades and nothing has changed, you made the right decision. In 10 years time it's "check mate" YOU WIN, game over and you will be living rent free for the rest of your life.

hello,

yeah, congratulations Gav, well done man, i with the same bank as you

i am on 5.23% basic variable, nirvana yet the neighbours are paying close to $50/wk after ALL my costs now with IR drops, spot on Numbercruncher nirvana

top purchase Gav, congratulations Gav well done from all here at ASF

check mate alright Bill M, and how ten years will fly by

sorry sorry i know i know i know no-one will have a job in 2010

thankyou
robots

Mofra · 24 February 2009

gav said:
I have a govt job, a good savings history, and I could still meet repayments if interest rates were 12%. But I was turned down by ING and Heritige their reason - I hadn't been in my current job for 12 months.

They'd be fully securitised lenders so regardless of your deposit and capacity to pay, LMIs aren't looking at anyone with < 12 months with the same employer.

Mofra · 24 February 2009

gfresh said:
I think if buyers are *relying* on the grant to purchase, then it is almost subprime by a different name. Say $7k "real" money + $14k of government's money = $21k/350k prop = 6% deposit. LVR of 94% gives so little in reserve, it's a worry..

That is subprime? I've heard some extravagent claims by both sides of the bull/bear divide, but this is up there with the best of them.

a. 94% LVR loans would be LMIed, zero defaults allowed at this LVR. That is not subprime.

b. No gen savings loans are almost non-existant in Australia (and were a very small fraction of the market in the first place, the bulk of which were recent Uni grads in high-demand professions). 5% min gen saings is almost a universal requirement accros lenders in the current marketplace. Not subprime.

c. In any case, the UCCC requires a borrower to ensure they have capacity to pay (unlike NINJA loans in the US). Not subprime.

d. No / Low docs have much lower LVR requirements (under 80% for Low Doc) so even our closest equivalent to some of the more adventurous US subprime loans have better standards. The above case would clearly be full doc and therefore: Not Subprime.

e. You'd need that to purchase even at below the median price in Australia, due to the requirements to pay stamp duty, LMI etc. This would be verified prior to a formal approval on a loan. Not Subprime.

singlefished · 24 February 2009

Trevor_S said:
Houses -3%

Houses -7%

Houses -1%

Houses +3%

Indeed... on the face of it, your claim seems be bullsh*t

+stats. above are 6 months to Jan '09.

sounds like it will soon be cheaper to buy a 2 bedroom house instead of a 2 bedroom unit...

Go the FHB's!!!

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