House prices to keep rising for years

[nunthewiser]

So would you SELL what you currently own and put in cash at < 3% before tax, pay rent instead because you think prices will fall?

YES i have sold property already IP,s.

i currently still hold one IP in tasmania also a riverfront block in tasmania . these are mortgage free provided kindly by the sale of subdividing the IP .. why would i sell whats left? . returning a positive cashflow .

i also hold a property in geraldton wa in which i live which by the way was bought some time ago and adjacent to the new oakagee proposed develoipment and hell yeah i will be selling the joint as soon as the hype surrounding the proposed port builds to a nice crecendo ... will i buy again with the profits ... hell yeah ........ BUT i wont be at the beck and call of mortgage rates or employment prospects ...

 

[Bill M]

How can you reconcile this with London? High immigration, high demand, low supply. Their average house price is even a lower multiple of average income than Sydney!

I have repeatedly said, London or USA is not Australia and in particular my area. Totally different circumstances and economics over here. Look and deal with the way things are here, not overseas. Right now everything under 500k is sold within 2 weeks, there are buyers everywhere. The market is very much alive and shows no signs of abating. If I was faced with a rental bill of $500 p/w or a mortgage for 500 p/w I take the mortgage anytime, it was exactly the same argument in the 70's when I first bought. Now I live rent free and my friends who didn't buy are now like the old man posted before, still waiting and still paying rent.

 

[kincella]

since I am in the do nothing mode atm....thinking might help the tradies out in the meantime, and do some reno's on one old place....
then have a bet each way....
see how low the rates go.....and if the housing does slow down and I find another bargain....then just add another to the portfolio....and lock in the low rates for a long time
prices will come back and continue on in a steady pace in the future ...

I figure I have 30 years of retirement in front of me...thats going to need a lot of saving and income to generate...for my lifestyle

 

[singlefished]

What are you on about? Just because a property sells prior to auction? If property was advertised as being available for public auction and therefore if it sells it is included in the reported sales. Anyway you can argue all you like but that's the way auction clearance rates have always been determined and reported.

What side of the bed did you get out of this morning? I wasn't making an argument, I was asking a question. Is that so offensive?

Why are properties that have been marketed as an auction captured within their auction clearance results even if they never made it to auction? Just because it's always been done that way doesn't provide me with an answer.

I think it is fundamentally incorrect to use private sales to beef up the auction sales results based on the marketing campaign adopted. It also provides potential for the publisher to skew the figures to suit their purposes whenever and however they want. Where is the legislation that provides a clear definition of how clearance rates are calculated?

So, you still haven't answered the initial question. If you don't know the answer then thats fine, no need to be getting stroppy! I won't hold it against you as I don't know either!!!!

 

[robots]

I didn't miss it, the auction market seems concentrated with those who are keen to sell, auction numbers are running around 1/4 compared to last year. Unlimited vendors bids are fine, although we've been bidding them down not up. Numerous properties we've looked at have been reduced around 15% since they were brought to market......and that's before we start negotiating.

On another note, anyone notice a flood of properties hitting the market?

hello,

no, there is stuff all for sale in St Kilda at the moment, very very few boards around and as you say a 1/4 compared to last year

fantastic, but thats okay we all have a choice to rent or buy no big deal

why are people so fascinated with what happens in other countries, USA has sub-machine guns for sale in 7-eleven so we must get them in 7-eleven?, no because we the leaders of the true free world

thankyou
robots

 

[satanoperca]

Hi,

I agree with you Singlefished. If a property is sold prior to auction, then it should not be included in the Clearance rates as it never went to auction.

The Clearance rate should only include those properties where by the public(a buyer) had the opportunity to place a bid in at a live auction.

I think this issue is just part of the ongoing problem of trying to analysis RE statistics especially median prices over a short period of time 1-3months.

The only way to determine if a market is on the rise or fall is to study a small segment that you are interested in. I know, that in the area of South & Port Melbourne, Victoria house prices are down approx 10% off peak. My defined segment in the sector is houses/townhouses 2-3 Br b/w $500K & 900K. To ascertain what the market is doing, I have been attending auctions, keeping an eye on what comes onto the market, when, what price, for how long and trying to establish the end selling price. Quite a few properties over the last 6 months have been taken off the market and rented out. The one thing that stands out is that the asking selling price and the rental price for these property is telling of no more than 4% Gross returns. While this sounds alright compared to returns on bank deposits, it may seem crap in the next few years if property only drops 4% per year, then the bank deposit will look good.

Even my above statement cannot be taken as black or white, it also depends on the situation of the property holder. If they own the house outright, they may see bricks and mortar as a safer option than trusting the banks to hold their money. If the house owner owes 100%, then selling know would seem like a smarter option than to keep losing on a investment that more than likely will see no CG this year or the next. But even then, if we say that the owner bought 4 years ago on 100% interest only loan, the CG over those years will have left them will 30%+ equity in the home, leaving them some room to wait before selling (-equity).

So, the subject of property increasing for years has many facets that can be discussed. What might be interesting to debate is why did property prices rise 100% in 7-10years and can those determining factors change due to the current economic climate.

I for one see that if cheap and easy credit is reduced, then this alone will stagnate property prices for several years. And if, unemployment increases this will see stagnation to falling RE prices.

Prices coming down 40% is a black and white statement, it would seem more prudent to place a percentage on a percentage.

Eg Property prices for 09 over 500K to :
Stagnate : 10%
To fall 10% : 45%
To fall 20% : 25%
To fall greater than 20% : 20%

Thus, I believe that prices more than likely fall 10% this year, I have not totally ruled out that they won't fall more than 20% but I think it is unlikely, whilst I think it is highly unlikely that they will stagnate. No I give 0 chance they will increase.

If I was to give figures for properties under 500K, then they would be different to the above, but I have not studied this market that is being support from government through FHBG.

Cheers

Benjamin

 

[hotbmw]

guys, what about the effect of inflation. after what the US govt announced mid last week its confirmed that the whole world will print away. do u think prices will increase and those who have saved and hold money in cash over the next year or 2 waiting to buy will miss the boat?

 

[nunthewiser]

guys, what about the effect of inflation. after what the US govt announced mid last week its confirmed that the whole world will print away. do u think prices will increase and those who have saved and hold money in cash over the next year or 2 waiting to buy will miss the boat?

a sinking ship is always best viewed from the jetty rather than being on a sinking ship wishing you were on a jetty

just thought i,d post that while the subject of boats came up

 

[kincella]

just came back from chapel st....its the busiest I have seen it in a long time...pavement packed with shoppers, and all those young things, and the worst traffic jam...sat there for at least 10 minutes...
restaurants are full....
someone had better tell all those young ones about the GFC...since they dont appear to be taking any notice....and just carrying on as usual

 

[apra143]

I have repeatedly said, London or USA is not Australia and in particular my area. Totally different circumstances and economics over here ...

Only a matter of time: Australian housing market holds sub-prime danger

 

[MrBurns]

just came back from chapel st....its the busiest I have seen it in a long time...pavement packed with shoppers, and all those young things, and the worst traffic jam...sat there for at least 10 minutes...
restaurants are full....
someone had better tell all those young ones about the GFC...since they dont appear to be taking any notice....and just carrying on as usual

I notice that too, impossible to get around on the weekends, traffic jams everywhere, I guess Brumby will wake up to it one day then do what he does best.....nothing.

 

[MrBurns]

just came back from chapel st....its the busiest I have seen it in a long time...pavement packed with shoppers, and all those young things, and the worst traffic jam...sat there for at least 10 minutes...
restaurants are full....
someone had better tell all those young ones about the GFC...since they dont appear to be taking any notice....and just carrying on as usual

I think perhaps they're all out there spending $3 on a latte' like robots and nothing else.

Retailers are going broke by the truckload, so the people are out there but not spending.

 

[robots]

I think perhaps they're all out there spending $3 on a latte' like robots and nothing else.

Retailers are going broke by the truckload, so the people are out there but not spending.

hello,

today i upped it though MrBurns, 1 latte on chapel and 2 slices of pizza at south melbourne market,

kincella, last 2 weekends I have been on the pushie down to sth melbourne and the joint is packed, not bad for the second most expensive market in the state

thankyou
associate professor robots

 

[MrBurns]

hello,

today i upped it though MrBurns, 1 latte on chapel and 2 slices of pizza at south melbourne market,

kincella, last 2 weekends I have been on the pushie down to sth melbourne and the joint is packed, not bad for the second most expensive market in the state

thankyou
associate professor robots

I cant believe the numbers of people out there, i dont go out a lot on the weekend but if I try to go anywhere it's bumper to bumper all the way like peak hour runs for 24 hours.

 

[kincella]

not sure why the traffic is so bad...probably the knowledge, that the trains don't come with brakes?? or the system is so packed anyway...so they are reverting to using their cars
been to sth melb a few weeks ago...could not find parking within the timeframe, so gave up, came back empty
its the same wherever I go..traffic is busy and slow, ages to find a park etc

a bike is obviously the way to get around....

autumn is the best time in melb....perfect one day, gorgeous the next
cheers

 

[robots]

hello,

i also stick to the trams on weekends with the 5 x Weekend Daily Ticket which costs basically $3.00 for all day everywhere travel on the met on Sat or Sun, fantastic you have your own driver

always see some wak characters,

the AFL kicks off on the weekend coming and before you know it another year has passed, then another, then another, then another and you living large after making some simple decisions

thankyou
associate professor robots

 

[Bill M]

Only a matter of time: Australian housing market holds sub-prime danger

huh? It's been nearly 2 years since subprime reared it's ugly head in USA. Could you please inform us to how much LONGER we have to wait in Australia? Been waiting a while but it's just not happening

 

[numbercruncher]

The market here continues as expected to be flooded by unsold inventory, substantial discounts abound where ever you look .... does this mean less peoples(demand) are moving to QLD ? I sure hope so

You will never again in your lifetimes see RE at a price to income ratio that was seen in the 2007 frenzy......


" House prices to keep rising for years " ....... hahaha funny stuff.

 

[MrBurns]

The market here continues as expected to be flooded by unsold inventory, substantial discounts abound where ever you look .... does this mean less peoples(demand) are moving to QLD ? I sure hope so
You will never again in your lifetimes see RE at a price to income ratio that was seen in the 2007 frenzy......
" House prices to keep rising for years " ....... hahaha funny stuff.

Eventually they will rise again but it will be a long wait this time and not untill all those with too much debt have had their **** well and truely kicked.

And thanks to Rudd you can add a lot of FHB's to that list.

 

[Bill M]

The market here continues as expected to be flooded by unsold inventory, substantial discounts abound where ever you look .... does this mean less peoples(demand) are moving to QLD ? I sure hope so

Last week I was up the Gold Coast and there was plenty of building still going on. I was staying in Burleigh and there was a couple of new high rises going up. Near the Miami pub close to the Ford Dealers on the main drag there was a 5 story new apartment block across the road. They wanted 495k for a 1 br unit. Are they kidding themselves? Who's going to pay that and live on a 6 lane highway? The whole building was empty, no one living in it, nothing appeared to be sold. Sometimes I think developers are kidding themselves. I see inventory everywhere on the Gold Coast but as for Sydney we have no more land, the Northern Beaches is built out. You really need to pick your areas in this business. I am not an expert on the Gold Coast but I can see problems of over priced supply emerging.