House prices to keep rising for years

[Beej]

Hey Enigmatic - no insult was intended, thought that's what you were asking!

Now I am even more confused about what it is you are actualyl asking though?

Glen48 - that is one of the most poorly written and confusing housing bear articles I have seen in a while! My head is still spinning trying to figure out what it is actualyl on about! LOL.

Cheers,

Beej

 

[kincella]

lets clarify something about the banks being swamped.....its CBA firstly...they are offering the best deals, they are the biggest lenders and last year there was probably about 30 + 100's of brokers...all busy in the background.....putting the paperwork together......
but those brokers went to financial heaven...

people are dealing direct with the banks...hence thats why they are so busy...

 

[glads262]

View attachment 29121

This just says it all, doesn't it. EVERYONE on this forum, including me, has only seen the very end of this graph. We know nothing different. Look at the property crash in 1987. Barely a blip.

EVERYONE take note. Prices do not always rise.

Supply greater than demand?? Yeah right. This can turn in a very short space of time.

IE demand - Average number of people living in a house in Australia?? about 2. Does anyone on this forum have a boarder, rent out their top floor or basement, have a relative living with them? Chances are NO.

This is what exists everywhere else in the world. Anyone been to UK??

To reduce all this "excess demand" all that has to happen is:

1. Immigration reduced - ALREADY HAPPENING

2. Government building more social housing - ALREADY HAPPENING

3. People with two homes (ie holiday homes etc) selling one - ALREADY HAPPENING

4. Unemployed people moving in with relatives - GONNA HAPPEN

5. Low paid moving in with relatives - GONNA HAPPEN

6. First home owners being reposessed and moving back with parents who could probably use the board money - GONNA HAPPEN

7. 2 pensioner friends who cannot afford their rent on their own anymore - move in together - GONNA HAPPEN

HOUSES ARE NOT AN INVESTMENT. INCOME IS EATEN UP BY INTEREST. CAPITAL GAINS ARE NOT SUSTAINABLE AT 10% A YEAR!

 

[enigmatic]

I still understand how people get to much over there head, been looking for houses for a few months now and everytime i see something slightly better for slightly more it just seem to make you think hmm what if I just pay a little more.

Any how more to my question.

If the housing market is slowing down for a moment just say a year and then it goes full tilt again.
what are the advantages and disadvantages of spending closer to the upper end of your budget.

For example if you could borrow up to $750,000
then is borrowing 650,000 pushing your luck
or is it about buying a good house at a low price at a good time to buy.

or do you go the other way and buy something say 450,000
find that you can easily manage the payments.. pay extra buy the house earlier and much cheaper and then look at the second more expensive house which may now cost 1million+

I will not take and information as advice

 

[Trevor_S]

http://blogs.news.com.au/couriermai...ouriermail/comments/how_many_homes_are_there/

Amid calls for government support, and warnings of a severe housing shortage, it’s interesting to see some analysts think we have an oversupply of property in Australia.

 

[moXJO]

http://blogs.news.com.au/couriermai...ouriermail/comments/how_many_homes_are_there/

Interesting reply under that

The information is readily available via the ABS site. 1996 dwellings = 7,175,237, with 679,165 unoccupied (9.5% vacant) and population 17,752,829. 2001 dwellings = 7,790,079, with 717,872 unoccupied (9.2% vacant) and population 18,769,249. 2006 dwellings = 8,426,559, with 830,376 unoccupied (9.9% vacant) and population 19,855,288. I would estimate that we now have about 9,100,000 dwellings, with 900,000 unoccupied (9.9% vacant) and population 21,000,000. And with 100,000 homeless we have 9 empty properties for every homeless person.

Noel George Butlin wrote a book in 1964 called “Investment in Australian Economic Development 1861-1990”. He wrote about the 1880s era, which was our second largest property bubble. In his book he states the figures demonstrating that the number of dwellings built exceeded the needs of population growth. In 1891, the census vacancy rates was about 7% in both Melbourne and Sydney, which Butlin described as excessive. The average Melbourne property fell 50% during the 1890s, and Sydney prices fell an average of 40%.

Just like the 1880s, financial institutions competed with each other by lending greater amounts of money than their competition. The more they lend, the greater the profits, and the price of properties reflect this. Property prices is determined supply and demand of money, not supply and demand of property itself.

Corydora of Wollstonecraft, Sydney

 

[singlefished]

Hedonic Price Index Question....

I don't have a clue what a hedonic index is so after noting that RPData uses hedonic price indexing I thought I'd check it out.

Headache!!!!

Now, the best explanation I could find in layman's terms is linked below :

http://moneyterms.co.uk/hedonic-pricing-model/

Now, lots of complex stuff floating around on the internet about this, certainly no shortage on a google search. Terms like hedonic regression pop up with a bit of an explanation in wikipedia :

http://en.wikipedia.org/wiki/Hedonic_regression

So now I'm getting more confused....

I may be getting this wrong but I'm now thinking that a hedonic price is a real price (for example a median price) that has been adjusted according to a set of criteria.

So, is there anybody here who can verify if this is an easy laymans example or not?

A hedonic price model would take the median price of units in a city, for example, and if the majority of units sold were :

1. close to the CBD
2. had good public transport
3. decent shopping within close proximity
4. nice view out the front window

Then these units would be considered more desirable than the median unit and an upward adjustment to the hedonic price would occur. This hedonic price is compared month in and month out to form an index which is then represented on RPData as a percentage gain.​

Could be completely wrong with all of the above but trying to get my head around why it is supposedly better than comparing month on month medians....

 

[kincella]

the refinancing may have something to do with the new inititaves for the US housing market just released last week

my prediction today...
after checking the sold props and whats on the market today...for the suburbs that I watch closely
...I am calling the property market direction, it has officially left the bear cave and has now entered the bull ring....
and it has everything to do with interest rates
:sheep;

 

[Beej]

Hedonic Price Index Question....

I don't have a clue what a hedonic index is so after noting that RPData uses hedonic price indexing I thought I'd check it out.

Headache!!!!

So the bottom line is it seems the RP Data index is an attempt to track like for like house and unit price movements/trends, which would not be able to be skewed in the way median price statistics can be based on the mix of sales over a particular period.

In a way that's exactly how individuals attempt to gauge a local market I would think. Ie you tend to look for what similar properties sell for over time based on your knowledge of the local area and what makes one property more or less desirable (and therefore valuable) than another.

Like anything, it's data point to consider along with all the other data (liek ABS median house price stats, APM house price stats etc etc).

Cheers,

Beej

 

[kincella]

Beej, thats exactly what we do when looking to buy....compare compare compare
there were only a couple of bargain priced props in Toorak back in Oct 08....and the cheaper priced ones noted recently have all sold anyway...
they were not what I was looking for... I could understand why they were cheaper, only one bedroom etc

saw a for sale sign last evening on a very dilapidated block, the usual for that type is for one buyer to attempt to buy the whole block...then bulldoze it
which is what was done to the neighbours 2 doors up...

small section of a popular but busy street...less than 200 metres long section due for over haul...all those awful old 1950 cheapskate blocks of units....and there has been no maintenance....not ever..by the look of them

still quite a bit of building activity going on around me here....they bulldoze and build brand new units developments...4 within a 200 metre radius....have not been out and about further to see...expect similar though

 

[robots]

hello,

good evening fellow ASF members, back in St Kilda after a fine week in Mt Martha

life plodding along well,

Easter next week and as usual the fun is happening on Good Friday RCH day at Telstra Dome

once again ABBAration is playing at 12pm at the stadium so get down there and enjoy some fine tunes

Satanoperca is going to bring down a slab to celebrate the latest results out from RPdata and we might get some kebabs also

thankyou
robots

 

[kincella]

evening Robots....sun shining again in Melbourne town...after that terrific rain...guess you must be pretty happy with the way its all going on the housing front....
copy from another of my posts somewhere today
.......................................................................................
...I am calling the property market direction, it has officially left the bear cave and has now entered the bull ring....
it has everything to do with interest rates
cheers
:sheep:

 

[Adam A]

Oh Kincella

There is nothing so blind as those who cannot see

 

[robots]

hello,

yes great rain Kincella, 20mm around town

the interest rates are having a massive affect, spot on brother

just plodding along like you man on the housing front, amazing how time rolls on and before you know it 1yr, 2yr, 5yrs, 10yrs have passed

and the simple steps you make early in life have a Massive snowballing affect and you end up living large, walking the dog, riding the pushie

enjoying the ABBAration concert with a free slab and kebab from Satanoperca

splendid

thankyou
robots

 

[kincella]

Adam A....totally agree
unfortunately I am an 'old timer' when it comes to property investments....
and as I have another 30 odd years in front of me....I am looking forward to repeating all those wonderful moments all over again

 

[nunthewiser]

Homebuyer stress fuels soaring repossession rate

3rd April 2009, 6:00 WST
Property repossessions in WA have soared after recent job losses, with home seizure court cases up more than 140 per cent in the past year.

Alarming Supreme Court figures released yesterday show low interest rates were not enough to save many West Australians from losing their homes in the past three months, with almost 400 repossession applications processed in the March quarter.

This is a rise of 143 per cent on the 164 repossession cases recorded at the same time last year and there are fears the rate will continue to increase with further unemployment predicted.

The rate of repossession applications is at its highest level since at least 2000 and has increased for the fourth consecutive quarter.

WA Council of Social Service chief executive Sue Ash said the March quarter repossession figure was worse than expected and she warned that more people would lose their homes in coming months amid further job losses or cuts, mortgage stress, health reasons and relationship breakdowns.

She said Perth and Bunbury’s fringe areas continued to have a noticeable increase in property repossessions.

Ms Ash said WA’s steep rise in repossessions and bankruptcies should spur the State Government to boost funding for community services to help people handle financial turmoil.

“This is a very worrying trend and the State Government should do all it can to ensure that WA doesn’t follow the lead of western Sydney, the capital of mortgage repossessions in Australia,” she said.

Some people had turned to paying mortgages with credit cards or gambling to pay bills.

In a similar bleak by-product of the global financial crisis, figures from Queensland-based insolvency firm SV Partners released this week show a 15 per cent rise in personal bankruptcies in WA over the past year.

Hegney Property Group chairman Gavin Hegney said most recent repossession victims would be non-conforming loan holders, high-risk borrowers with bad credit, because their interest rates were still high, or those with fixed-interest loans.

“A lot would have just got into the market at the peak of the boom and I’d probably say they have since lost their jobs or fallen on hard times,” he said.

Real Estate Institute of WA president Rob Druitt said repossessions were not endemic in WA. He expected the rate to plateau because he did not believe unemployment would blow out in WA as much as in other States.

A Supreme Court spokeswoman said not all applications resulted in repossessions. “The matter could be settled by consent between parties or settlement of the debt through alternative arrangements,” she said.

KATE CAMPBELL

Sunshine and lollipops anyone?

 

[nunthewiser]

Treasury says jobless rate to rise
3rd April 2009, 18:53 WST

The Australian economy still faces a difficult time despite the efforts of world leaders to kick-start global growth through a ground-breaking agreement at the G20 Summit in London.

Treasury Secretary Ken Henry confirmed on Friday the jobless rate would be higher than seven per cent next year, well above the latest reading of 5.2 per cent.

mmmmmmmm my last post seemed to have not attracted the attention of the sunshine and lollipop crew........

this post should set there minds at ease

sunshine and lollipops guys ...... i read it right here

 

[kincella]

Yawn....
glass half full or half empty.....
7% unemployment or 93% employment
so you are banging on about 7% unemployment
we say its wonderful there is 93% employed
currently the ratio is 5% versus 95%
:sheep::sheep::sheep::sheep:

 

[Beej]

Sunshine and lollipops anyone?

I think most have have said we expect the market to struggle more in Perth than the major east coast cities anyway haven't we? The RP data posted earlier shows Perth and Brisbane as suffering at the moment, while other cities are seeing a flat or growing market. Which is hardly surprising given the MASSIVE boom both cities saw over the past few years while Sydney/Melbourne etc were basically stagnant.

Cheers,

Beej

 

[robots]

hello,

http://www.news.com.au/heraldsun/story/0,21985,25285409-664,00.html

what Scott doesnt understand is that people are starting up the "ultimate" savings plan ala paying off the mortgage

and this is clearly supported by stats out from ABS that home owners are 6x more coined up than renters

another dismal story out of the US this morning, yes we are different alright, no 9mm's at Bunnies here

thankyou
robots