House prices to keep rising for years

[numbercruncher]

Meanwhile in the real world ......

* Tourism, mining jobs slashed in boom states
* Centrelink inundated with jobless
* Queensland, Western Australia hardest hit

QUEENSLAND is leading a spike in unemployment around the nation as the impact of the global financial crisis and end of the mining boom bite hard into the real economy.

Centrelink agencies are being swamped with applications for unemployment benefits as the downturn slashes jobs in tourism and mining.

Meanwhile, figures released yesterday in Western Australia detail an economy showing the last gasp of a mining boom that has helped to underwrite two decades of national prosperity, The Australian reports.

In just four weeks, the number of short-term unemployed in Queensland leapt by 18.7 per cent, compared with a 13.5 per cent increase across the rest of the nation.

The swift rise in people looking for work has the potential to be politically explosive for Queensland Premier Anna Bligh, who is fighting an early election campaign amid Opposition accusations she is running to the polls ahead of the full effect of the global financial crisis.

The jobless surge could cost Labor up to six marginal seats and dash its hopes of winning two Liberal National Party marginals.

While there is always a jump in the number of unemployment benefit claimants at the beginning of a year, new figures from the Department of Education, Employment and Workplace Relations show the number of jobless in Queensland is 45.4 per cent higher than it was at the same time last year.

The number of jobless has soared by 40.5 per cent in WA, which is suffering from the collapse of the mining boom. There have been smaller increases in the southeastern states, with rises of 25.7 per cent in NSW, 25 per cent in Victoria, 15.7per cent in South Australia and 22.4 per cent in Tasmania

http://www.news.com.au/business/money/stor...1-14327,00.html


" House prices to keep rising for years " - yup sure they are mate .....

 

[GumbyLearner]

Meanwhile in the real world ......




http://www.news.com.au/business/money/stor...1-14327,00.html


" House prices to keep rising for years " - yup sure they are mate .....

Of course the WORLD isn't facing it's first credit contraction in 60 years.

Totally agree NC. ------------------------------------------->

 

[Beej]

Meanwhile in the real world ......

http://www.news.com.au/business/money/stor...1-14327,00.html

QLD! The real world! ROTFL!!!!

In the "real world" down in Sydney and Melbourne life goes on, heaps of people still buying houses every week and prices are strong, and rising in some price brackets/area's. These are in the states that have not had the direct mining driven boom/bust impacting the local economies anywhere near as much as WA and QLD, and so have been economically sluggish for quite some time already. I'm just highlighting the facts. Sorry if they don't fit with your view of the world!

Of course the WORLD isn't facing it's first credit contraction in 60 years.

Totally agree NC. ------------------------------------------->

The whole world? So every country including Australia, China etc currently has contracting credit do they? PS: you might want to check the lastest RBA figures released on Friday for AU.....

You know the other thing is, no one used to worry anywhere near as much about the ROTW as all the internet scardy-cats do nowadays! The only people who used to be overly concerned were people running businesses that rely on import/export trade and people with investments in foreign share markets etc. Certainly no-one (especially Mr and Mrs Joe Blogs!) purchasing local property has ever been particularly concerned.... And quite correctly, as the report Kincella posted points out (reposted a page or 2 back here by myself), there is very little systematic long term correlation between housing markets in different countries - they are each driven primarily by their own local factors (supply, demand, urbanisation, population growth, taxation rules/regime, culture, percentage of home ownership, wage growth, demographic trends, household after tax/disposable income etc etc etc).

Cheers,

Beej

 

[Bill M]

Isnt knife catching such a fun sport ?

Just out of curiosity, you are negative on shares, negative on property and negative on the price of gold, are you always this happy? Or are you just happy being negative?:

 

[kincella]

of course buffett would be optimistic.....after 44 years in the business
thats the problem with old timers...after they have survived one crisis...they have some experience when confronted with the next one...etc
and its refreshing to see one optimistic voice...versus all the doom and gloom from everyone else
bit like our prop forum here
..........................................................................................
Warren Buffett says the economic turmoil that contributed to a 62% profit drop last year at the holding company he controls is certain to continue in 2009, but the revered investor remains optimistic.

Buffett released his annual letter to Berkshire Hathaway Inc. shareholders on Saturday morning, and detailed the worst of his 44 years leading the Omaha-based company. But in between the news of Berkshire's sharply lower profit and its nearly $US7.5 billion ($11.5 billion) investment and derivative losses, Buffett offered a hopeful view of the nation's future.

He said America has faced bigger economic challenges in the past, including two World Wars and the Great Depression of the
1930s.

''Though the path has not been smooth, our economic system has worked extraordinarily well over time,'' Buffett wrote. ''It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead.''



http://business.theage.com.au/busin...tic-economies-will-rebound-20090301-8l6k.html

 

[robots]

hello,

you the king Beej with your observations:

http://www.realestate.com.au/cgi-bi...r=&cc=&c=26312396&s=vic&snf=rbs&tm=1235863128

i know trembling hand will love the description "premium st kilda hill location"

sold for 1.47m Beej which looks as though you are right that things are moving through the middle and higher ranges as well,

6mths ago another place in redan st, passed in and sat for mths

thankyou
robots

 

[Beej]

http://www.realestate.com.au/cgi-bi...r=&cc=&c=26312396&s=vic&snf=rbs&tm=1235863128

i know trembling hand will love the description "premium st kilda hill location"

sold for 1.47m Beej which looks as though you are right that things are moving through the middle and higher ranges as well,

Shucks - thanks Robots! That place looks quite nice by the way, also looks like it beat the reserve by quite a margin, as was advertised as "over $1.2M" and sold for $1.47M.

Cheers,

Beej

 

[Trevor_S]

Just as a comparison my mate bought a 2 story 4 bedroom brick home on the Central Coast for 335K.

http://www.townsvillebulletin.com.au/article/2009/01/21/34065_investor.html

TOWNSVILLE has been named among most unaffordable places in which to live in Australia.

Skyrocketing property prices are eating up more than half of buyers' incomes on mortgage payments.

and this comment below, made with some jest by knocker may be on the mark

But frankly, wait another year and make an offer for 400k ;-)

It was expected unfortunately, I have no regrets in purchasing my rights issues in WBC @ $15.22. I will hold this stock for many years to come.

As will I, I have held from the days of buying them for $3 when Packer was on the board and they nearly went under, everyone else was doom&gloom about me at the time if I recall correctly, nice buying in retrospect.

I am in two minds about topping up with WBC OR watching the SPSII offer list and buy them @ market OR just buy more WBC if it goes below $15.22 (I never took up the rights offer on WBC, I did with WES)

Also funny thing, ANZ shares jumped on the news

Brings a certainty, nothing "investors" like more then certainty.

 

[MR.]

I just put in an offer for $650,000 (cash) on a unit, where the vendor wants $894,000... we'll see.

This was originally an interesting exercise and I was mightily surprised it was accepted.

and this comment below, made with some jest by knocker may be on the mark

But frankly, wait another year and make an offer for 400k ;-)

Wonder why many "good" realestate agents only accept offers in writing!

Was this the only way you could have realised that the market might be decreasing and some people could be in trouble?

When ya signin?

 

[kincella]

wow...that price for Townsville ??? its just a big old country town imo...was there on a flying visit a couple of years ago....5 star hotel....red carpet...but the 'others' were in thongs, lining up to play the pokies downstairs......
aaarrhhh grrrrrrrrrrrrr
oh well to each their own.....sounds very expensive ....they must be still in mining boom mode

 

[numbercruncher]

Just out of curiosity, you are negative on shares, negative on property and negative on the price of gold, are you always this happy? Or are you just happy being negative?:

Hello,


just replace negative with realistic ......

I doubt you can find a bearish comment on Gold from me ....

Negative on Shares ? Shares is such a diverse word and im certainly not bearish on all shares ..... I own many infact ... ( for better and worse! )

Im mainly bearish on Aussie RE as youve pointed out .... well actually Ive little faith in many many areas of the Australian economy ...



Bit of Quantative easing should sort yahs all out eventually ...

So to answer you enquiry im happy being realistic !

 

[Beej]

Looks like sales of new houses are starting to pick up now:

From: http://business.smh.com.au/business/new-home-sales-surge-20090302-8lv2.html

New home sales surge

New home sales jumped in January as buyers responded to interest rate cuts and the Federal Government's stimulus plan.

Sales of new homes, including multi-unit dwellings, gained by nationally by 8% in January, the Housing Industry Association said, reversing a 1.1% fall in December.

Cheers,

Beej

 

[singlefished]

Should have posted this in the other thread...

Increasing supply leading to less demand for rentals/purchase of existing stock... Unemployment rising... immigration intake under review... not looking good is it?

 

[Trevor_S]

So to me, for Townsville, that type of money seems really high, and therefore possibly very risky, as how many people are around to drive/sustain prices at that level for that type of property? In Sydney the demand is clear and constant for say Bondi or Coogee - will that be the case in FNQ at that price level?

Went in for a look at another Unit on Sunday (2 of the 4 have been sold, both for $1.7Mil each, 2 left to sell), list price was $1.7Mil, dropped to $1.5Mil without asking and "we'll look at offers" from the RE Agent.

Got home, had a think and fired off an email offering $990,000 (subject to finance) on Sunday night ... cheeky bugger, yes I know but hey, it's a nice place Got a reply back with $1.3Mil as a counter offer, I fired back saying $990,000 cash offer (no finance), heard nothing back as of yet.

Have a second inspection tomorrow on the other place mentioned before.

That aside, all this D&G is starting to infiltrate my usual pessimism and turn it into depression !

We talked once again about just buying a decent 2nd hand motorhome, traveling around for 12 months and having a look, keep the cash in the bank and rent the current PPOR out in the interim (next door rents currently for $510) and ending up in Tas. as originally planned !

of course if they come back an accept the $990,000 (which was actually a serious offer !) what is that a sign of ? good buying or the sky is falling from the resi market. and stay away ?

 

[kincella]

gist of the article today is ...investors are losing their homes to the banks...so the tenants are kicked out...
but the banks dont keep or hold the houses...they sell them...to other IP investors or fhb's

then the homeless people get help from the govt...which finds them another place to live...at the rate of 645 a month....not sure if that is 645 houses...or 645 people...(more like) it a month....

so...some prop investors are doing ok....all these tenants looking for homes...
not sure how many mortgage sales per month happening...
this story is about NSW only....so similar stories for each state...
http://www.news.com.au/business/money/story/0,28323,25136079-5013951,00.html

 

[numbercruncher]

House prices to keep rising for years

 

[Trevor_S]

wow...that price for Townsville ??? its just a big old country town imo...

Went for a second inspection on the place we had offered $650K for, (down from $809K asking) looks the goods, got the contract, will take to my solicitor as well and lots of paperwork to read over (rates, body corporate etc). Like the location, like the aspect blah blah.

Had a second email back from the $990,000 offer on the other unit we were interested in. They "want to deal" if I can go up a bit more. In all honestly, spending $1,000,000 on an apartment (plus $30G in Stamp Duty) would suck up just about all my cash, that alone would make me nervous ... so even if they accepted, a long hard think may see me baulk at it. Very nice place though... I mean who doesn't want a bidet in the ensuite 3 bedroom, 3 bathroom, huge study blah blah blah.

 

[Trevor_S]

Had a second email back from the $990,000 offer on the other unit we were interested in.

Just got an email back saying they would get me a contract on Monday ! I guess this means they will hope for a better offer this weekend !

Well now we will have a choice:

• Unit for $650K down from $809K asking (brand new, cash deal)
• Unit for $1Mil down from $1.7Mil asking (two of the 4 have been sold at $1.7 Mil, 2 left to sell, brand new, cash deal)
• or keep the status quo, leave my cash as cash and ivest as I see fit.

 

[Beej]

Just got an email back saying they would get me a contract on Monday ! I guess this means they will hope for a better offer this weekend !

Well now we will have a choice:

• Unit for $650K down from $809K asking (brand new, cash deal)
• Unit for $1Mil down from $1.7Mil asking (two of the 4 have been sold at $1.7 Mil, 2 left to sell, brand new, cash deal)
• or keep the status quo, leave my cash as cash and ivest as I see fit.

Personally, I would still never pay either amount for any strata title property in a regional town in Australia, when as I have pointed out before you are at (and beyond) trendy beach-side Sydney prices at those levels. The amount of negotiability in the prices shows you how thin/illiquid the market is for that sort of property up there IMO, and clearly in this case the developers are trying offload quickly at virtually any price in order to eliminate their debt.

Additionally, Torrens/Freehold title is a must IMO if paying decent money for property - as you want to have sole control over your land and property - I hate body corporates - both the fees and the bloody managers and committee's etc! Plus you can't easily improve the property and add value.....

If you were getting a freehold block of land with a really nice house on it by the beach, near a good part of town etc, then I would say there might be real value and potential there....Just my 2c worth anyway.

Cheers,

Beej

 

[kincella]

Funny...I thought Townsville , centre of the storm fiasco, had 800 houses at risk of being repossessed....unless they are hoping for the govt to bail them out ??? should be a smorgasboard to choose from, in the months ahead...

agree with Beej....only Sydney or Melbourne warrant that type of money....