House prices to keep rising for years

[metric]

yes. house prices will keep rising for years in australia. immigration, increasing population, building material price increases, history, etc.

there may be dips and bumps, but yes ultimately rising.

 

[Uncertain Times]

With LVR on the way down it will start to ease the demand side of the market. If the banks return to the old days they may even start looking at only lending against the full time male income as the female will be out of the work force at some stage as the FHB start having kids in a couple of years.
I can remember both parents and in-laws telling me the bank would only lend up to 30% of one full time wage. So if things start getting tighter in the lending then FHB will be heading back to renting whatever they can find.
Perhaps that will be good for the investor but they may also find it harder to lend money as banks cap the amount they are willing to lend.
You will always see growth in certain areas and around Swinburne Uni in Hawthorn there is a massive undersupply of student accomodation hence the large development going up but how much of these will be built over the coming years due to commercial loan issues.
So there may be continuing supply problems but demand will be restricted due to issues with the supply of credit.
Uncertain times ahead.

 

[kincella]

good point here from Terry Ryder property market forecaster....
extract...........................

Property prices in Melbourne, considered underrated, are also set to increase in value by 2020.

A Mitcham home, valued at $250,000 in 1999, is now valued at $450,000 - by 2020, it has been forecast to be worth $900,000.

"Melbourne tends to be underrated by the market. It's got the strongest population growth of any city in Australia and that's a consistent long term trend with Melbourne because of overseas migration," Real Estate Tim Fletcher said.

"It has the cheapest residential land amongst the major cities and its overdue for a really big spike in values. There's no logical reason why Melbourne houses should be cheaper than Darwin or Perth's or Brisbane - certainly there is no reason why they should be $100,00 cheaper than Sydney's."

http://au.todaytonight.yahoo.com/article/5481349/money/value-home-2020

 

[satanoperca]

Hi,

Saw the spruik last night, property doubles every ten years.

Maybe Kincella you have access to some historical figures on Mitcham for the last 40 years to see if the theory works in reverse, would be interesting to see if it stacks up.

2020 900K
2009 450K
1999 225K
1989 112.5K
1979 56.3K
1969 28.1K

Cheers

 

[hunter and co]

How do you explain the areas that have gone up 500% in the last five to seven years.A bubble?

 

[kincella]

satan...Mitcham Vic or SA ???
fhb prices in 1986 were 67400
see the link for 1986 to 2006

I believe the median price in 69 was about 12,000
and that prices tripled every 10 years....
thats the only way I can match the 12,000 up with 1989 as per the chart

http://www.aph.gov.au/library/pubs/RN/2006-07/07rn07.pdf

 

[MACCA350]

They seemed to ignore that if it's a PPOR then what happens in 10 years when you sell..........live on the streets and blow all the 'profits' on booze and pokies

With PPOR you don't really make a 'profit' you only really profit with IP

cheers

 

[Beej]

They seemed to ignore that if it's a PPOR then what happens in 10 years when you sell..........live on the streets and blow all the 'profits' on booze and pokies

With PPOR you don't really make a 'profit' you only really profit with IP

cheers

That is partly true, however you do reap a "yield" in terms of lifestyle/no rent etc (once your PPOR is paid off). And then if you have played the game and upgraded a couple of times, when you retire you downsize/tree-change etc and that frees a lot of capital up that you can use to help fund retirement.

Cheers,

Beej

 

[Uncle Festivus]

good point here from Terry Ryder property market forecaster....
extract...........................

Property prices in Melbourne, considered underrated, are also set to increase in value by 2020.

A Mitcham home, valued at $250,000 in 1999, is now valued at $450,000 - by 2020, it has been forecast to be worth $900,000.

"Melbourne tends to be underrated by the market. It's got the strongest population growth of any city in Australia and that's a consistent long term trend with Melbourne because of overseas migration," Real Estate Tim Fletcher said.

"It has the cheapest residential land amongst the major cities and its overdue for a really big spike in values. There's no logical reason why Melbourne houses should be cheaper than Darwin or Perth's or Brisbane - certainly there is no reason why they should be $100,00 cheaper than Sydney's."

http://au.todaytonight.yahoo.com/article/5481349/money/value-home-2020

Well one major reason is that you have to live in the place!

Valued at....worth..... he's short on reasons why it's going to go to $900k, other than "its overdue for a really big spike in values"? That's really reassuring, and he's an expert?? Don't you property people know that it's all a function of excess credit/money supply - and that's the problem right now, there is none - it's a global credit contraction. That's why we have all these babysitting grants and tax rorts to keep the property jalopy above water. First the commercials, now the privates.

It's pretty obvious that the property industry & the Gov are getting more interdependent each day to prop each other up - the Gov will have to keep the $21k pork pie going otherwise there will be a bigger crash than what is already coming. Thanks Kevin for the freeby, care of the rest of the Australian current & future taxpayers - I'll give you a big approval in the next poll.

Beer :drink:& skittels:kiffer:

 

[kincella]

festivus....you dont get it...the govt have not build any new public housing since the 1970's...that used to be paid with our taxes......
only last week they said they will start again...20,000 houses over next 5 years.....big deal
and who would be the more efficient providor....the govt with all those awful
little boxes, no resale value

 

[MACCA350]

That is partly true, however you do reap a "yield" in terms of lifestyle/no rent etc (once your PPOR is paid off). And then if you have played the game and upgraded a couple of times, when you retire you downsize/tree-change etc and that frees a lot of capital up that you can use to help fund retirement.

Cheers,

Beej

Agreed, but if you are selling and buying in the same market waiting 10 years won't make much of a difference since all the values increase so your only really moving sideways in the same market.

cheers

 

[Beej]

It's pretty obvious that the property industry & the Gov are getting more interdependent each day to prop each other up - the Gov will have to keep the $21k pork pie going otherwise there will be a bigger crash than what is already coming. Thanks Kevin for the freeby, care of the rest of the Australian current & future taxpayers - I'll give you a big approval in the next poll.

Beer :drink:& skittels:kiffer:

This has always been the case! As Kincella said, there is the public housing vs supporting the private sector to produce most/all housing side of the relationship (negative gearing, tax breaks etc). As for the FHB grant, my dad told me on the weekend that in 1966 he got a $750 grant to buy his first house! That's about $20k in todays dollars! I never got anything like that when I first bought in 1992, and I had to pay full stamp duty! These things come and go at various times. So really nothing has changed, nor will it - so if that's what you are waiting for you will probably be waiting a loooooong time in this country!

As for the global credit contraction, there are certainly issues globally for various reasons, and they do impact Australia to some degree, (mainly the contraction we are currently seeing due to dampened consumer confidence and a reduction in international trade), however I think your views are an over-simplification of what is actually going on and why. Additionally, credit for residential housing loans in AU has been INCREASING for the past few months, see: http://www.abs.gov.au/ausstats/abs@.nsf/mf/5671.0?OpenDocument. So there goes your argument right there!

Oh yeah that's right I forgot, we are 6/12/18/24/36/48/60 months behind the US, the world is ending, every one is going to lose their jobs etc etc etc.....

Cheers,

Beej

 

[enigmatic]

Can you explain to me how you can consider this trending upwards.
Your comprehension and understanding is much needed

 

[enigmatic]

And yes I know it appears to be trending upwards however this is always expect when you have a free fall which can be seen by the May 08 seasonally adjusted figure being much lower then the moving avg lets just wait 2-3 more qtrs to see the direction of the trend.

 

[Uncle Festivus]

Additionally, credit for residential housing loans in AU has been INCREASING for the past few months, see: http://www.abs.gov.au/ausstats/abs@.nsf/mf/5671.0?OpenDocument. So there goes your argument right there!

Let's see the whole dataset -

http://www.abs.gov.au/ausstats/ABS@...CA2575780017B5D2&0&Jan 2009&16.03.2009&Latest

Even without charting the data, it's obvious the grants/loans/tax breaks are getting out of hand with the bounce from the low's, & hence the moves by the creditors to reign them in, and moves to give borrowers 'holidays' if they get into trouble - the start of moral hazard here, take the risk, the government will bail you out if it goes wrong? Is the Government game to take away the stimuli and let the market go cold turkey? I don't think so.

 

[Beej]

Can you explain to me how you can consider this trending upwards.
Your comprehension and understanding is much needed

Well for a start, all I said was the last few months showed an increase. Tomorrow data for Feb is being released - I'll discuss the emerging trend with you then

PS: The auction clearance rates, increasing median prices in Melb/Sydney, ongoing FHB activity etc etc over Q1 09 all indicate to me that there is a pretty good chance that the finance figures from tomorrow will show yet another increase for Feb - possibly a pretty decent one. Want to call it the other way then and we will see who was right tomorrow???

Cheers,

Beej

 

[enigmatic]

Not really interested in month by month basis or even qtr by qtr.

Currently the overall market has a belief that this is the end of the down turn so I'm reasonably confident that the trend will appear upwards I'm more interested in what happens once lending tightens and the FHBG is removed.

 

[MrBurns]

You cant defy gravity forever, once the doubling of the FHBG stops in June you will see the market hit a brick wall.

 

[Beej]

You cant defy gravity forever, once the doubling of the FHBG stops in June you will see the market hit a brick wall.

Except gravity for property prices pushes prices upwards - not downwards! It is property price falls that actually defy gravity! Looks to me like gravity is back in control in Sydney and Melbourne at least. You can deny all you like - wait for the FHBG boost to removed etc, I think all will be surprised by the resilience of the property market. Interest rates are the major factor.

Beej

 

[roofa]

I think this is relevant to your current discussion.



http://www.news.com.au/heraldsun/story/0,21985,25300375-662,00.html