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House prices to keep rising for years

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I expect the median to go down in the suburbs where all the fhb are...the bottom pickers...suburbs I watch, they bought everything available at the bottom of the market...none of the usual medium houses sold nor the high end

the article I posted was talking of the higher priced suburbs...
 
What I was showing was what was reported from the RPdata source in the Australian did not correlate with RPdata. The stats did not match up.

It is this type of reporting that neither helps the bulls or the bears in their debates on housing issues.

For one of the areas that I study, RPdata shows a 30% increase for houses in Port Melbourne. This is far from reality, the bottom end $400-600K has shown small decreases of approx 5%, $600K-1M approx 5-15%, over the $1M prices have dropped significantly but cannot provide any numbers as this is not my area.

Cheers
 
Beej, please go back to post #4382 , read ALL of what was originally quoted without the ensuing whittling effect of the last few posts or my one line summarising of your statements (which you refer to as twisting...?)

The contradiction....

Beej said:
It is now undeniable that the FHB grant boost, plus the low interest rates, plus probably the sentiment that prices have been flat to falling for some time now (especially in western Sydney), have resulted in large numbers of FHBs who have been sitting on the sidelines coming into the market with gusto.
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Beej said:
It provides an incentive, but only a small one IMO in the grand scheme of things.
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I fail to see how you can argue that the additional incentive has such a small part to play in the grand scheme of things when it is UNDENIABLY contributing with gusto to the most active sector of the property market???


Would the increased activity have been apparent without the FHB boost, we shall never know.

Will the activity increase or decrease if the additional stimulus is removed? We may well find out in the 6 months following the budget.

I'd be inclined to agree with your sentiments (basically fundamentals supporting the market) if FHB activity remains high if stimulus is removed.

Are you prepared to accept that the fundamentals are not supporting the market if FHB activity declines under the same stimulus removal scenario?

I have a feeling the Government will maintain the boost for new residential construction ($21K) and remove it from the established property market (back down to $7K) and if this plays out (or is removed completely) it will shed some light for all to see....
 
I believe the low interest rates are the biggest incentive for the fhb...and there are kids out there with savings/deposits who would have bought anyway...but now sooner...due to the low interest rates...

oh and some of us can relate to this book just released...
making millions the fun way...

I will not buy the book, since like some of my friends here, we have been there and doing that....

I note she states 10 mill gross and 4 mill equity...so leveraged to 60%....
for those interested..here is the ACA snippet

http://aca.ninemsn.com.au/article.aspx?id=793902
and here's the authors web site

http://www.sallycouper.com.au/Making-Millions-the-Fun-Way.html
 
singlefished said:
Would the increased activity have been apparent without the FHB boost, we shall never know.

Will the activity increase or decrease if the additional stimulus is removed? We may well find out in the 6 months following the budget.

I'd be inclined to agree with your sentiments (basically fundamentals supporting the market) if FHB activity remains high if stimulus is removed.

Are you prepared to accept that the fundamentals are not supporting the market if FHB activity declines under the same stimulus removal scenario?

I have a feeling the Government will maintain the boost for new residential construction ($21K) and remove it from the established property market (back down to $7K) and if this plays out (or is removed completely) it will shed some light for all to see....
Click to expand...

That depends. A lot of first home buyers are now spooked into buying in thinking that the price can't go down because the government will give out grants. A lot of them were probably willing to wait before as they wouldn't get into it just before a downturn (and it would be stupid to).

Not all FHB's are stupid. They see the government propping up house prices and get scared thinking if I dont' get in now all the other FHB's will get the properties that I can afford. One man can't fight the government. They were hoping prices will fall, but now they realise they can't fight the government. btw before the FHB grant Western Sydney was doing poorly, now it is doing very well with the FHB grant.

Even if the FHB grant is removed the supply of good properties has been snapped up in the short term. I expect some momentum of panic buyers after the grant is pulled. Although I don't think Rudd will get rid of it - it has been too successful. When you give a vulnerable group in society a bone they will take it even if it is a very high risk proposition since it is better than not having a home at all. A big risk is better than no possibility at all. A person with means wouldn't be tempted as much by this which is what makes it sadder.
 
singlefished said:
Are you prepared to accept that the fundamentals are not supporting the market if FHB activity declines under the same stimulus removal scenario?
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Yes.

My one caveat is that I do expect FHB to slow down in the second half of the year regardless as the employment situation worsens etc. So the current FHB proportion is 25% plus. If it remains above 20% then I would argue the fundamentals were still driving a high level activity. If that rate drops back to < 20% - especially if back to 15% or less (as it did during the first half of last year when interest rates peaked etc), then I would say I was wrong and the main driver currently was likely the FHOG boost. So let's see what pans out! :)

PS: I agree with your speculation that the government will probably maintain the new home boost, but remove it for existing dwellings.

Cheers,

Beej
 
lets look at it from another angle....almost no tradies on this site...too busy I guess...
but if keeping part of the population in work and providing jobs will help our economy than why not ???
tradies and the building industry have been hit hard...those people need jobs too...and they spend just like everyone else....so some where along the chain your job may depend on that industry....whether you are in IT, retail, tourism etc
are any of you just as unhappy with the govt handing out millions of dollars to the car industry ??? been bailing out that industry forever....and why ??? to keep jobs in OZ...regardless if the manufacturer is making a car no one wants or needs...big gas guzzling things...instead of efficient cars....

I believe the govt should provide the grant for new homes only....but the rest of the fhb's might whinge
 
Beej said:
If that rate drops back to < 20% - especially if back to 15% or less (as it did during the first half of last year when interest rates peaked etc), then I would say I was wrong and the main driver currently was likely the FHOG boost. So let's see what pans out! :)
Click to expand...

I think it's pretty obvious what the situation will be in the FHB segment of the market... and it will be like a tap being turned off! This segment I would think would then remain very subdued for at least 12 months, way below 20%.

FHB who would have bought anywhere in the next 2 years, are now structuring their whole plans around buying before the extra boost ends.. so I don't see where any more are going to come from. There are only a few cashed up whackos like myself that explicitly waiting until *after* the grant ends to jump in.

Have to love the ACA stories, maybe they should put up a few who leveraged to the hilt, borrowed into the sharemarket, and lost their life savings.. oh wait, that's a bit negative isn't it. Easy to make money in the last 7 years in property, no doubt about it, even a monkey could do it without any real skills whatsoever. Buy and wait for the value to go up, go to a bank that will throw you more money like confetti every 12 months because everybody else has been doing the same around you, and away you go..how clever.
 
Beej said:
Yes.

My one caveat is that I do expect FHB to slow down in the second half of the year regardless as the employment situation worsens etc. So the current FHB proportion is 25% plus. If it remains above 20% then I would argue the fundamentals were still driving a high level activity. If that rate drops back to < 20% - especially if back to 15% or less (as it did during the first half of last year when interest rates peaked etc), then I would say I was wrong and the main driver currently was likely the FHOG boost. So let's see what pans out! :)

PS: I agree with your speculation that the government will probably maintain the new home boost, but remove it for existing dwellings.

Cheers,

Beej
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We'll have to be careful though, if the the @rse really falls out of the rest of the market and FHB activitity declines but at a lesser rate, %ages of FHB activity could be seen to have risen.

Cross that bridge later :)
 
gfresh...hindsight is a wonderful thing...apparently some monkeys did not make a profit...assuming those foreclosures mentioned this week...in the boom times st george had average of 80 a month....now in the bad times..its jumped 50%
 
gfresh said:
FHB who would have bought anywhere in the next 2 years, are now structuring their whole plans around buying before the extra boost ends.. so I don't see where any more are going to come from. There are only a few cashed up whackos like myself that explicitly waiting until *after* the grant ends to jump in.
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And me.... but with almost 25 years of savings and 12+ years of living rent, expense and at times TAX free (throughout the Middle East & Asian regions at employers cost) the sector of market we are looking at is seldom touched by FHB's. I'm just waiting for the global economic environment to show some evidence of sustainable improvement before purchase though.
 
ABC last night claims FHO scheme has helped 30K purchase their own home and are they are now set for life and part of the dream waiting for the price to double by 2019. I see on ACA some 50 yr old woman has 60 homes .. well done.
Now the recession is over according to the experts all is rosy.
 
ABC Radio PM program -

http://www.abc.net.au/pm/content/2008/s2527313.htm

MARK COLVIN: The Reserve Bank's latest report card on Australia's financial system shows that the share of bad loans on the books of the banks more than doubled last year, and bad loans to business more than tripled.

The number of Australians unable to pay their mortgages also soared. At least 20,000 households are now 90 days or more behind on their loans; an increase of about one third in the space a year.

.........
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http://www.abc.net.au/pm/content/2008/s2527312.htm

MARK COLVIN: The Reserve Bank has warned home buyers about the dangers of too much debt.

The head of the Reserve Bank's Economic Analysis Department says because of low house prices and interest rates, buyers need to consider whether they'd be able to continue paying their loans when rates rise.

The warning from Dr Anthony Richards comes as the Government considers continuing the doubling of the first home owners grant beyond June.

Almost 30,000 home owners took advantage of the $14,000 grant in the 3.5 months after it was introduced.

Dr Richards has questioned whether low rates and the extended grant will lead to more lending to risky borrowers.

Some say the answer's already in and it's yes.
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How is this? rates are at record lows? unemployment is only just picking up off it's very lows? first home buyers are still buying?

couldn't have anything to do with people taking on more than they can really afford would it? surely.. :cautious:
 
Seems everyone knew that except Rudd and Swan, I mean they wouldnt deliberately suck young preople into a festering property bubble would they ? just to make themselves look good ?, like sending youg people to the front line as canon fodder ?, no surely not.:(
 
Bill M said:
hello robots, i was watching the today tonight program this evening and I saw a guy in melbourne hanging off the back of a truck whilst he was riding his pushie along, trying to get a free ride he was. unfortunately he fell off in front of the news crew and i am concerned, was that you? are you ok?:eek::confused:

let us know if you are ok.

thankyou,
bill m

ps. how is st. kilda? over here, things as usual.
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hello,

apologies for the poor posting performance this week, have been an avid reader though

wasnt me Bill M (silly free-loader), i am ok and appreciate the concern,

have been down at parents place in Mt Martha and never take passwords with me so havent been able to log on

back home now in St Kilda, man we got the cars burning it up around Albert Park, AFL again at the G so all things good as in St Kilda BillM (property wise as well)

welcome back robots

thankyou
robots
 
wondered where you were Robots...missed your daily pieces....

are they hornets out there buzzing round right now ????
noisy critters...bad enough the squeals from the cars all day
but a perfect autumn day in Melb...as usual

now about the interest rates....I will probably load up a bit more...get a few jobs done around an old house...needs a new roof...some outdoor entertaining area...
seems like a good idea...with even lower rates on the horizen...more sense to do it at low rates then at high rates....
apparently others are using the low rates to pay off debts....smart cookies...most of them
cheers
http://news.theage.com.au/breaking-...g-low-rates-to-repay-loans-20090327-9dx1.html
 
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