House prices to keep rising for years

[Glen48]

Beej
To days Courier Mail reported how Henry is looking a Neg. gearing...Looks like the World is having an attack of commonsense...bring Neg gearing to stop Specusuckers, black ban on Countries who run secret bank accounts, Ceo wages to be tied to profit now if they stop the FHO and bring in CGT on PPOR there is a slight chance things might return to normal.
All we need is the Council to start setting up Tent cities and we are ready for the depression.

 

[Julia]

All we need is the Council to start setting up Tent cities and we are ready for the depression.

And by that time we'll all have talked ourselves into it.

 

[Trevor_S]

One thing I was thinking about today as well was the impact of the potential removal of the FHB grant boost (although given how successful the boost has been I reckon there's a better than even chance it will be extended).

Success ?? !! dismal failure would be a better description, much like Costellos ill conceived baby bonus and the current economic stimulus packages... . All you are doing is taking much needed tax payer dollars (mine) and propping up an overvalued housing market for the benefit of a small section of property owners, rather then using the tax dollars (and deficit spending) to produce productive assets to help u spay it back ! Letting that lower end of the market fall to it's natural level, (perhaps a 10 - 20% fall, or higher !), would achieve less cost of entry for FHB and not result in a tax payer transfer of wealth, not leave tax payers with a massive debt overhead with nothing to show for it and not have starry eyed FHB'ers sidled with a mountain of debt that will come back to bite them.

As interest rates continue to fall due to the worsening economic outlook locally, I am thinking now that the next "wave" buying is going to be self funded retiree's looking for a solid and certain cashflow going forward.

So your argument that everyone will be buying a house ? ... who is left to rent, surely rental yields will fall in that scenario ?

With rental yields of 5%+ easily available, and cash account rates likely to fall to 3/2%,

Grab an AMP bond at >7%, in that case, risk is much lower then buying a house IMO and your chance of capital protection is better then with house prices in these unprecedented times.

 

[Julia]

Success ?? !! dismal failure would be a better description, much like Costellos ill conceived baby bonus and the current economic stimulus packages... . All you are doing is taking much needed tax payer dollars (mine) and propping up an overvalued housing market for the benefit of a small section of property owners, rather then using the tax dollars (and deficit spending) to produce productive assets to help u spay it back ! Letting that lower end of the market fall to it's natural level, (perhaps a 10 - 20% fall, or higher !), would achieve less cost of entry for FHB and not result in a tax payer transfer of wealth not leave tax payers with a massive debt overhand with nothing to show for it and not have starry eyed FHB'ers sidled with a mountain of debt that will come back to bite them.

Yep, that's how I see it too, Trevor. I hate to think what will happen with some of these people who have used the FHB grant plus current low interest rates, when interest rates go back up again. And they will.
The whole scheme could qualify as our very own subprime plan.
Yet another example of the Rudd government's short term approach.

 

[kincella]

surely those young ones will have enough sense to probably lock in the low rates for 5-10 years...
cannot tar them all to the one brush....sure some will encounter problems..but I dont see a massive problem.....
check ...how are the ones going that have had the grant since it inception 1.07.2000 ???? they would have done very nicely
next....
the baby bonus was designed to increase our own population......aka we will need taxpayers in the future....think it hit the right cord and produced almost 175,000 in 2006
unlike Japan where they do not have immigration and a very old population...and the girls are not marrying and having babies

in hindsight...the amount of billions our govt thas thrown out in handouts to anyone, and all the money to the banks, car makers etc
I would think the baby bonus pales into insignificance, but will produce an army of taxpayers into the future...unlike the 100 billion the govt is wasting now

 

[Largesse]

anyone know of a good some good sites on the web to find listings for blocks of apartments?
looking in melbourne, mainly inner east, upto $6m

TIA

 

[kincella]

most agents list on the realestate site or domain...not sure if a block would come under the realcommercial site or property.com.au

 

[MrBurns]

Blocks would be under investments in either site.

 

[IFocus]

Hate to keep bunging on about this stuff but maybe the main stream is starting to catch on about the possible risk bias to the down side rather than upside.

http://www.smh.com.au/national/fears-over-jobless-forecast-20090315-8yq1.html

 

[kincella]

http://www.treasury.gov.au/documents/1239/HTML/docshell.asp?URL=02_Part_1.htm
extract from above

Employment growth has been strong, with unemployment falling virtually continuously, from a peak of around 10 ½ per cent in 1992 to below 5 per cent currently. Labour force participation rates have been rising, particularly after 2000. As a consequence, the proportion of the population aged 15 and over in employment is at its highest level ever (Chart 1.2).

http://www.abs.gov.au/ausstats/abs@...fe659e0304564424ca256ec1000820bd!OpenDocument

in 1983 and around 1992 it climbed above the 10%...
so been there done that and recovered again.....
looks like it takes about 5 years to get it down to 6% again....

 

[Uncle Festivus]

so been there done that and recovered again.....
looks like it takes about 5 years to get it down to 6% again....

And 1 year to get back over 6%. Your data is 2 years old, reflecting the peak of the cycle.

The jobless rate has soared to 5.2 per cent for the first time in nearly four years, as deteriorating economic growth pushed 47,100 people onto the dole queue in February.

And that's only the 'official' figure.

 

[kincella]

I was not really looking for recent stats...since we know they have been falling....I was looking for the older ones....history...and how high they went and for how long...and thats what I found...............that was my point

now this out today...another housing boom
oh and we will not have a sub prime melt down like the old USA
and if our govt expecting unemployment rates of 10%..why on earth would they keep on allowing immigrants in....to pay them the dole too???
hello...stop the immigration now

back to this article......
its an ad etorial.....promoting this bloke...but put it out as a news item....
since the media prefer the house price crash scenario...this guy would have had to pay them for this one...
http://news.theage.com.au/breaking-...ng-boom-tipped-for-h2-2009-20090315-8yo4.html

 

[Uncle Festivus]

Yes, I agree, re immigration, but do governments ever plan for the future? But with property prices having not really droped by much at all from the peak several years ago ie stagnating, there leaves little room for the type of 'headline' appreciation that preceded the boom before getting to 'unaffordable' levels again, even at current rates? The best money is made after a good old rout, which didn't really materialise thanks to the various financial 'crutches' the RE market is relying on these days -flatlining.

 

[Julia]

the baby bonus was designed to increase our own population......aka we will need taxpayers in the future....think it hit the right cord and produced almost 175,000 in 2006

How sure can you be that these babies will grow up to be future taxpayers?
I don't think too many couples who are working taxpayers would have been influenced by $5000 to have a child they would not otherwise have had.
Conversely, I know of many unemployed young women (who have no intention of working) who saw the $5000 payment as an incentive to produce either their first or an additional child. So imo you have to wonder how successful the plan will be in terms of supporting the tax base for the ageing population.

in hindsight...the amount of billions our govt thas thrown out in handouts to anyone, and all the money to the banks, car makers etc

Unless I'm misunderstanding the situation, the banks haven't actually had any tax payer funds given to them and in fact have paid the government a handsome premium for the government guarantee.

 

[kirtdog]

im currently a first home buyer and im thinking the extra first home buyers bonus has boosted house prices up.. any opinions on this?? Not sure whether to rush in and find a house before the end of the bonus or sit back and relax..

 

[kincella]

Julia...with a 10% unemployment thats 17,500, leaving the 90% of 175,000 as future taxpayers...its a start....
together with the family tax benefit of about 200pf, makes raising a family easier with that cash coming in each fortnight

and even though the govt may not have paid out any money to banks (who knows anyway) they guaranteed up to 2 trillion...

 

[robots]

im currently a first home buyer and im thinking the extra first home buyers bonus has boosted house prices up.. any opinions on this?? Not sure whether to rush in and find a house before the end of the bonus or sit back and relax..

hello,

i wouldnt rush, take your time and do the numbers to see what you can afford and what you get

many believe the "extra" bonus will continue in some form considering the boost it has made to "new" home construction

i wouldnt have a clue, but in 10-15yrs brother you will have a roof over your head and be living it large man

thankyou
robots

 

[Dowdy]

hello,

i wouldnt rush, take your time and do the numbers to see what you can afford and what you get

many believe the "extra" bonus will continue in some form considering the boost it has made to "new" home construction

i wouldnt have a clue, but in 10-15yrs brother you will have a roof over your head and be living it large man

thankyou
robots

LOL. In 10-15 years you'll still be paying for the house so you'll be in debt. Not livin' large. LOL

 

[enigmatic]

Well dowdy that all depends on your goals, if you Believe you will be stilling paying off your house in 10-15years time I'm 99% confident you still will be.
Unless your belief changes offcourse.

On the other hand if you think you will be paying off your 3rd-5th house in 10 to 15years time I Certain you would of paid atleast 1 maybe 2 off by that time.

 

[singlefished]

im currently a first home buyer and im thinking the extra first home buyers bonus has boosted house prices up.. any opinions on this?? Not sure whether to rush in and find a house before the end of the bonus or sit back and relax..

i wouldnt rush, take your time and do the numbers to see what you can afford and what you get

many believe the "extra" bonus will continue in some form considering the boost it has made to "new" home construction

Yup, agree with Robots that no need to be rushing the big decision kirtdog.

If they pull the additional 7K then the boost in prices you mentioned will more than likely come back off by 7K so - you win!

If they keep the bonus going then - you win!

7K isn't that much really and would only be equivalent of maybe 4 months mortgage payments (depending how much $$$$ you want to spend)... if you miss the deadline then between now and then you'd have possibly saved up the 7K anyway so bigger deposit - you win!

Also if they pull it you could possibly use it to your advantage when discussing price - you might win