House prices to keep rising for years

[Trevor_S]

Would not want to live anywhere near Townsville or Hamiliton Island right now, with hamish picking up speed. Wonder how all those coastal properties will fair with rising tides and cyclone force winds. Good luck

Seriously ? We're used to it, really no big deal... happens every year and I have been in Townville since '75 and NQ since '65. Might be a big thing for you guys but while alert to the danger, we just deal with it. Don't put all your stock in News reports, much like the GFC there is lots of hyperbole mixed in with the snippets of truth.

 

[Trevor_S]

Sounds a bit like the Goldcoast.

Nahh nothing like it demographically.. more like an amalgam of Canberra, Darwin and Gladstone. Canberra (we have a huge public service population, stable employment as most of the HQ's for the northern area public service is based in Townsville.) Darwin (we have the largest Army base in Australia, massive troop base and they inject a fortune into the city) as well as being typically tropical ie two seasons (wet and humid 'n hot and cool and dry), Galdstone (we have a large manufacturing base with a Cu, Zn, Ni and Mn refineries), logistical support for inland mining (lots of fly in fly out mining) and some tourism. All of the above leads to a huge turnover every year, huge public service /Army exodus and entrance, mining people moving in and out. Land up here is cheaper but the cost of construction is way more ie Building codes + transportation of building materials + cost of labour.

A few pics (taken by me)








Geeze, maybe I should get a job at the tourism bureau

Cairns is more like the Gold Coast, basically a one horse town with tourism being the main drawcard.

 

[knocker]

Nahh nothing like it demographically.. more like an amalgam of Canberra, Darwin and Gladstone. Canberra (we have a huge public service population, stable employment as most of the HQ's for the northern area public service is based in Townsville.) Darwin (we have the largest Army base in Australia, massive troop base and they inject a fortune into the city) as well as being typically tropical ie two seasons (wet and humid 'n hot and cool and dry), Galdstone (we have a large manufacturing base with a Cu, Zn, Ni and Mn refineries), logistical support for inland mining (lots of fly in fly out mining) and some tourism. All of the above leads to a huge turnover every year, huge public service /Army exodus and entrance, mining people moving in and out. Land up here is cheaper but the cost of construction is way more ie Building codes + transportation of building materials + cost of labour.

A few pics (taken by me)








Geeze, maybe I should get a job at the tourism bureau

Cairns is more like the Gold Coast, basically a one horse town with tourism being the main drawcard.

Don't get me wrong. Have a property in Cairns, just don't like this time of the year, especially Larry type cyclones. Like it in winter though not as much as here in the Algarve ;-)

 

[MACCA350]

Young families defying recession to lead revival

WESTERN Sydney is in the grip of a property mini-boom, with exclusive NSW Treasury figures revealing that young families are defying a national recession.

Liverpool, Campbelltown and Fairfield have recorded 12 per cent rises in sales, a six-year high, while Blacktown and Penrith have seen a 20 per cent increase.

A total of 8455 contracts were exchanged on new and existing homes during the three-month period in the Western Suburbs - an increase of more than 1100 over the same period last year.

And then we'll be hearing about all the record repossessions, mortgagee auctions and all round "young families" hitting the wall..........but hey were all thankful for the governments grants and incentives to keep house prices at unaffordable levels

The worlds financial systems come crashing down, thousands loosing their jobs left and right, companies going bankrupt and most affected countries housing values seem to have also been kicked in the gut.........but no not us, just a slap on the wrist..........I think I'll wait for the government incentives to run out and see what happens

cheers

 

[knocker]

And then we'll be hearing about all the record repossessions, mortgagee auctions and all round "young families" hitting the wall..........but hey were all thankful for the governments grants and incentives to keep house prices at unaffordable levels

The worlds financial systems come crashing down, thousands loosing their jobs left and right, companies going bankrupt and most affected countries housing values seem to have also been kicked in the gut.........but no not us, just a slap on the wrist..........I think I'll wait for the government incentives to run out and see what happens

cheers

No need to wait macka!! the power of the media will keep you totally uninformed.

 

[billv]

What % has that place gone down that you bought 12 months ago ? whats it yield ?

Why do you assume that it went down?
I bought a repossesed property, did a mini reno for $5K and a valuation before new year showed a 20% increase.
I don't think prices moved since I purchased it, it was simply a good buy and I added value with my mini reno.
the yield based on purchase price is 6.0%
Also, the rent is about $20-$30 below market but I am not increasing it further because I like this tenant and I also expect rental vacancies to increase.

 

[billv]

And then we'll be hearing about all the record repossessions, mortgagee auctions and all round "young families" hitting the wall.

Macca you've been watching too much telly
Dodgy lending is no longer possible so anyone getting a loan today must have a deposit plus proof of income and employment history.

 

[singlefished]

Sydney auction results for today posted now: http://www.homepriceguide.com.au/saturday_auction_results/sydney_domain.pdf

71% clearance rate on 123/173 with only 2 properties withdrawn. That last part is significant, withdrawals have been common-place up until the last few weeks, so this, in addition to 6 weeks of strong clearance rates, is a clear indicator that buyer competition is back and we may be swinging from a buyers to a sellers market here in Sydney....

Median sale price from the auctions was $623k, and again several $1M+ sales like last week, including 5 $2M+ sales.

How long can this last I wonder? Certainly no great house price crash going on here in Sydney at the moment - quite the opposite! If the newspapers and ASF forums weren't screaming doom and gloom I'd almost think we were in a booming R/E market? Can any of the bears please explain to me how this can be happening?

Cheers,

Beej

Yes, I can.... decided to take your APM suburb list from this weeks sales results (every suburb on the list as a random cross section of the Sydney market) and check how the 6 month median has been going.....

deary, deary, me...

The majority of your million $$$ sales are in suburbs that have seen no growth/losses over the last 6 months and some buyers are obviously seeing some value there, they're probably down sizing to stay within their own neighbourhood and keep their kids around their friends in an environment they know.

Also, these million dollar price tags are in traditional million $$$ suburbs ~ that's obviously what you'd expect to pay if you were looking to buy in these suburbs!!!! Look at the falls across the board, not been many folks entering bidding wars driving the prices up over recent months has there...?

Higher volumes of late could easly be attributed to vendors lowereing their expectations to get their properties shifted before the market turns down even more....

The question is though, "Can any of the bulls please explain to me how they can be in complete denial when it comes to Sydney property prices?"

You've been spruiking for as long as I can remember that Sydney prices bottomed out in 2004 and you're telling us all that auctions are bustling with vendors and the market is looking healthy ~ almost to the point where you'd have us believe that we weren't just heading into a recession but rather we were just coming out of a recession....

Please explain why you have been lying to us all and even worse, why have you been lying to yourselves???

Every bit of negative data or sentiment that somebody provides here gets nonchalantly rebuffed and has to be supported by the OP or argued about until the natural course of the debate gets sidetracked or changes direction...

Look at the figures below and tell me that with only 25% of suburbs in green (and some only just) that we've been in a health market environment over the last 6 months... We still haven't even entered recession (some believe we are already) and you're already patting yourselves on the back thinking the market is in recovery mode!!!!

The market may now be selling a lot more than over the previous few months but remember that rates are as low as they've ever been and the Government is providing additional stimulus to FHB's. These low rates and this FHB stimulus are both unprecedented and unsustainable factors which cannot be relied upon to provide support if the economy continues to slide and we enter an inflationary environment....

Well, for your amusement, please refer the following suburb list median price changes for the last 6 months of which about 95% of the listings have enough data to be statistically reliable (SNR if otherwise) according to APM. Only house median fluctuations have been detailed except for Manly where I have also listed the Unit info for Bill M. 5% plus/minus have been highlighted.



Ambarvale -3%
Artarmon -6%
Ashbury +1%
Auburn +2%
Avalon -5%
Balgowlah -2%
Bankstown +5%
Bardwell Valley -16%
Baulkham Hills -3%
Beecroft -9%
Belfield +3%
Bellevue Hill -37%
Belmore +6%
Berala -5%
Beverley Hills +2%
Bexley -9%
Bexley North +2%
Birchgrove 0%
Blakehurst -16%
Bondi Beach 0%
Bossley Park +1%
Botany -12%
Brighton-Le-Sands -19%
Bronte -5%
Burwood -2%
Cammeray -32%
Camperdown 11%
Caringbah 0%
Castle Hill -1%
Casula -6%
Chatswood -1%
Chippendale SNR (region -15%)
Collaroy -8%
Concord -1%
Concord -14%
Coogee 7%
Cremorne -6%
Croydon Park -7%
Currans Hill -4%
Darling Point SNR (region -15%)
Drummoyne -18%
Earlwood 0%
Fairlight +13%
Five Dock +1%
Forest Lodge -13%
Glebe -6%
Gordon +5%
Greenacre +6%
Greenfield Park -13%
Gymea -6%
Hunters Hill -24%
Hurlstone Park +3%
Hurstville +3%
Illawong -8%
Ingleburn +5%
Kellyville +1%
Killara -7%
Kingsgrove +4%
Kirribilli SNR (region -12%)
Kyeemagh SNR (region -4%)
Leichhardt -4%
Leumeah +4%
Liberty Grove SNR (region -3%)
Lidcombe -6%
Lilli Pilli -3%
Loftus -7%
Long Jetty -5%
Malabar -4%
Manly Houses -18%
Manly Units -12%
Marrickville -3%
Mascot +17%
Matraville -1%
Merrylands 0%
Middle Dural SNR (region -4%)
Miller 0%
Mortdale -4%
Narara -6%
Narellan Vale -4%
Naremburn -5%
Narrabeen -22%
Neutral Bay 0%
Newtown -3%
Normanhurst -5%
North Bondi -31%
North Curl Curl -9%
North Parramatta -2%
North Sydney -21%
North Willoughby -11%
Northbridge +8%
Paddington -7%
Parramatta +13%
Pennant Hills +9%
Potts Point SNR (region -15%)
Queens Park -26%
Redfern +10%
Revesby -2%
Riverview +3%
Riverwood -2%
Rockdale -13%
Rodd Point SNR (region -3%)
Roselands -5%
Roseville +23%
Rozelle -3%
Sans Souci -2%
Seaforth -11%
St Ives Chase +1%
St Marys -2%
Stanmore -8%
Strathfield -8%
Strathfield South +3%
Summer Hill +5%
Surry Hills +13%
Sutherland -6%
Tamarama SNR (region -15)%
Terrigal -8%
Watanobbi -2%
Wentworthville -6%
West Pennant Hills -5%
West Ryde -2%
Wetherill Park +4%
Willoughby -11%
Willoughby East +18%
Yagoona -4%

 

[numbercruncher]

Thats alot of red for the one eyed permabulls to mull over !!


Bet they give every excuse under the sun except popping bubble and GEC ...

 

[numbercruncher]

Seriously ? We're used to it, really no big deal... happens every year and I have been in Townville since '75 and NQ since '65. Might be a big thing for you guys but while alert to the danger, we just deal with it. Don't put all your stock in News reports, much like the GFC there is lots of hyperbole mixed in with the snippets of truth.

And Victoria has bush fires every year .... why the tough talk hamish is now packing 280klm winds, I reckon youve never seen that in your life !

 

[billv]

Thats alot of red for the one eyed permabulls to mull over !! ...

I don't doubt that prices in high end suburbs eg Bellevue Hill did come down but that's common knowledge.


I should now explain to you what a median price is.

If in one suburb for example you have a lot of sales of newly built properties (which are of higher value than the average house) then the suburb median price will go up. This doesn't mean that the prices in that suburb have increased, it simply means that many properties of a particular price range have been selling.

Now that you know what a median price is, I'll have to say that with the FHB grant a lot of lower priced properties are selling so the suburb median price will fall. Before you say anything think what the median price is.
Again this doesn't mean that prices have fallen.

Ofcourse permabears will now pickup on the idea that prices have gone down when the fact is that my porfolio which consists of mainly entry level properties will have increased in value by at least 20%.
You don't have to believe me, go and research it for yourself.


btw I don't need to be convinced one way or another.
whether we like it or not this is how they work out prices.
I should point out though that this is a good thing.
Permabears will now think that property prices are affordable and will be converted to bulls

 

[Beej]

Yes, I can.... decided to take your APM suburb list from this weeks sales results (every suburb on the list as a random cross section of the Sydney market) and check how the 6 month median has been going.....

I've already shown this APM data (and provided the link for individual research) many times, and argued (as you have shown us) that a great number of Sydney suburbs have actually seen price growth over a period where median prices have fallen by about 4%, the media has been full of GFC/recession doom and gloom, and the sharemarket crashed by 55% etc etc. So what does your data prove that we don't already know? Nothing. The auction results for the past few weeks though are starting to tell a different story - if you are too blinkered in your views to see it, that's not my problem!

The majority of your million $$$ sales are in suburbs that have seen no growth/losses over the last 6 months and some buyers are obviously seeing some value there, they're probably down sizing to stay within their own neighbourhood and keep their kids around their friends in an environment they know.

Also, these million dollar price tags are in traditional million $$$ suburbs ~ that's obviously what you'd expect to pay if you were looking to buy in these suburbs!!!! Look at the falls across the board, not been many folks entering bidding wars driving the prices up over recent months has there...?

In other words, as I am pointing out, this indicates the market may have found/is finding it's bottom for this cycle. The key indicator to me is the fact that turnover in the higher price ranges is now increasing. The lack of turnover in the upper end of the market has been the main factor producing large negative median price changes for those suburbs during the last half of 2008, rather than just individual property price falls.

And by the way, the auction clearance rate, and some of the prices being achieved, DOES in fact suggest there are bidding wars going on and plenty of buyer competition starting to push prices again. How else do you explain $2.8M for the 2 bedder on Bondi Beach?

The question is though, "Can any of the bulls please explain to me how they can be in complete denial when it comes to Sydney property prices?"

That is a silly question - it's the property perma-bears who are in denial. I'm only posting the facts.

I've also participated in the Sydney market late last year and KNOW what is actually happening. I'm only trying to counter the un-substantiated negativity here so that some people don't end up missing what might be for them the opportunity of the decade to take advantage of the Sydney housing market.

You've been spruiking for as long as I can remember that Sydney prices bottomed out in 2004 and you're telling us all that auctions are bustling with vendors and the market is looking healthy ~ almost to the point where you'd have us believe that we weren't just heading into a recession but rather we were just coming out of a recession....

Please explain why you have been lying to us all and even worse, why have you been lying to yourselves???

That's a serious and false allegation. Please find one post, one statement that I have made that contains a lie? (And you better be able to prove it). What's more, why don't you tell me what it is you actually think I am lying about and what view I am trying to support by doing so?

Seriously it's stuff like this that drives people away from forums - just because they have a different opinion to yourself and have the ability to substantiate with facts and rational arguments, you accuse someone of being a liar and a spruiker. Typical bear stuff though - play the man not the ball..... I've been personally attacked here by numerous idiot perm-bear posters before, I'm labeled a perma-bull and a spruiker (show me where I have ever spruiked property sales etc?). I've had my views constantly mis-represented, and now I'm being accused of lying. It's no wonder when I joined this discussion it was dominated by bears, as the tactic seems to be to attack anyone with a different view and drive them out of the forum as quickly as possible.

Every bit of negative data or sentiment that sfomebody provides here gets nonchalantly rebuffed and has to be supported by the OP or argued about until the natural course of the debate gets sidetracked or changes direction...

LOL - this is really funny! Just sounds to me like you are upset that you may be losing the argument?

The market may now be selling a lot more than over the previous few months but remember that rates are as low as they've ever been and the Government is providing additional stimulus to FHB's. These low rates and this FHB stimulus are both unprecedented and unsustainable factors which cannot be relied upon to provide support if the economy continues to slide and we enter an inflationary environment....

Low rates and FHB stimulus are neither nothing new, or unsustainable.

FHB stimulus has been around since 2000. Low interest rates are nothing new - interest rates often cycle to lows. It's a deliberate policy adopted by the RBA during economic slow downs and one of the impacts of this is it helps support property prices at such times through exactly the type of buying we are seeing occurring right now. The impact of FHBs + low interest rates starts to be seen in the low end of the market, and it then flows through the rest of the market over the next 6-18 months. Again we are starting to see that already right now in Sydney.

If the economy does not start to show signs of recovery by the end of 2009/early 2010, then yes I would agree that the current property upturn could halt. However, if economic recovery does begin, then right now may be seen when we look back as the point in time where the market had bottomed and started to turn, due to all the factors you correctly list working as intended. Re heading into a future inflationary environment - well that can only cause property prices in absolute terms to head one way - up.

Beej

 

[numbercruncher]

I should now explain to you what a median price is.

If in one suburb for example you have a lot of sales of newly built properties (which are of higher value than the average house) then the suburb median price will go up. This doesn't mean that the prices in that suburb have increased, it simply means that many properties of a particular price range have been selling

Now that you know what a median price is

crackn me up dude .....


" House prices to keep rising for years "


nope .... isnt happenning yet ....

 

[billv]

I had to double take at that - I thought you meant 80% deposit, but no, 80% debt - very conservative. Don't stop at one, there's lots of bargains now so you may as well pick up two - you can't lose!

Yes you can lose.
To go for 2 more there are 2 ways of doing this.
I'll be using existing equity or will be using my own money as the 20% deposit.

1. To use equity
I'll have to revalue my properties and I don't want to do it yet.
It will be wiser to do it in 6 months time when prices would have increased.

2. To use my own money
but this means I'll have to put my hand into my offset account but that's money for a rainy day eg lost my job, got sick etc so I'm not doing it. I could probably go with 10% deposit but then I'll have to pay LMI and I don't see the point in that.

I'm buying for the long term. I don't expect prices to double overnight therefore IMHO aggressive investing in this environment is not justified.
btw, the same applies to shares, I'm buying when I can afford it BUT without gearing

 

[billv]

crackn me up dude ...

At least you've learned something today

You and the other permabears didn't know what a median price is did you?

 

[kincella]

lets see..that first house we bought in 1970 for 12,000 was valued for the divorce in 1978 at 70,000....but not sold until the recession of 1989 for 80,000 so thats an increase of 660% over 19 years.....
but it was still 600% over 8 years....from 1970 to 1978
those were the bad old days of high interest rates up to 18%, and all the other world crisis

it still proves the concept of triple the price over 10 years.....

and in case the bears have a problem with that.....it was used to lovingly house the family, plus 3 dogs, 2 cats and 5 horses across the road...
there were loads of parties and family gatherings and celebrations....
we hardly ever considered the value of the house in financial terms...we were too busy enjoying life

so lets see now....fhb house prices in the 300,000 range....in 10 years they will be 900,000.....scary isn't it.....if you are a bear.....but the opposite if not
cheers

 

[Macquack]

I'm labeled a perma-bull and a spruiker (show me where I have ever spruiked property sales etc?).

And from the same post

...so that some people don't end up missing what might be for them the opportunity of the decade to take advantage of the Sydney housing market.

 

[Beej]

And from the same post

Hardly spruiking - spruiking is where you talk up the value of an individual property etc - like share ramping. Saying that you think it could be a good time to buy because we could be at the bottom of the property cycle, and posting price data, auction results etc to back this view up is NOT spruiking... but, whatever.

What do you label people who run around saying "the sky is falling" - "don't buy a house because prices are going to crash 40%!!!", "Sell your PPOR and IPs now before it's too late!!!!" etc etc? Anyone taking their advice faces more financial hazard/risk as anyone who takes the advice of people suggesting that now is a good time to buy. No matter what happens over the next few years, property values will only go up over the long term.....

Beej

 

[MACCA350]

Macca you've been watching too much telly
Dodgy lending is no longer possible so anyone getting a loan today must have a deposit plus proof of income and employment history.

And what happens when rates go back up?

The governments incentive are targeted at new home buyers, in many cases are inexperienced and will stretch themselves to get in, as rates start to rise they will feel the strain until they fall behind, before they know it the bank moves in.

And that's not even talking about those who loose their jobs. Even if they don't loose their jobs, many companies are cutting the fat, which means many will loose overtime and other bonuses which many have been counting on.

cheers

 

[billv]

lol You say Sydney has been in recession for the past 2 years and things will not get worse.

mate, when the NSW economy was contracting because of the housing slump nearly every other state was expanding due to the resources boom.

The RBA in my opinion made the mistake and increased interest rates too far and chocked the NSW economy.
It took a while for them to wake up to the fact that without the heart (Sydney) the body can't function.

Now they dropped interest rates and with the FHOG there is room for Sydney and OZ housing in general to expand and this will create jobs here and around the nation. That's my take on the whole thing.