House prices to keep rising for years

[nulla nulla]

I am refinancing....was given rates last week at 5.2 variable and 5.49 fixed...I was going to split it 50/50....since they are so slow doing the paperwork....the bank now wants 70% to be fixed and that rate has jumped to 6.59....so I will stay on the variable....taking a punt as per yesterdays article that fixed and variable would move closer...once the competition between the banks starts....

We went for the variable rate, with CBA, and opened a "miser" account linked to the mortgage. As well as paying more than the required monthly repayment we stashed any spare $ into the "miser" a/c. The benefit of having a reserve of cash in the "miser" a/c is that the balance is offset against the mortgage balance when the monthly interest is calculated. Amounts paid monthly over and above the monthly repayment requirement also show in the account as a credit available for redraw against the mortgage. From time to time this has been a cheap source of funds for the odd share parcel seen as a bargain or a trade oportunity. Once the trade has been completed, the funds go back to the mortgage and the profit stays in the portfolio. Cheaper than a line of credit or a margin loan.

 

[enigmatic]

Hey all just looking for a little bit of info.

Gone to the bank recently to organise my home loan at 4.85% variable with an offset account now my question is are there any advantages in me paying more then is fortnightly required.

can I not just place any extra in the offset account (basically droping the loan the same amount)

If there is any advantages of paying extra to putting the money in an offset account could someone explain them.

 

[Beej]

Hey all just looking for a little bit of info.

Gone to the bank recently to organise my home loan at 4.85% variable with an offset account now my question is are there any advantages in me paying more then is fortnightly required.

can I not just place any extra in the offset account (basically droping the loan the same amount)

If there is any advantages of paying extra to putting the money in an offset account could someone explain them.

As long as you think you have the self discipline to LEAVE the cash in the offset account, then you are better off putting it there IMO. It means that cash is available for sensible, productive spending in the future if you need it like extensions, renovations to your house etc, without the need to go back to the bank.

On the other hand, if you are the type who might be tempted to spend the available cash on say a new car or a holiday, then I would say you are better off putting the extra into the actual mortgage. It's still available to you there if you REALLY need it, but harder to get at as you would have to visit your bank manager

Your call! be honest with yourself

PS: Great mortgage rate you have negotiated there!

Cheers,

Beej

 

[robots]

hello,

some great results out yesterday from Rismark,

its looking good to collect that slab of ruskies and parma from Satanoperca

this is just amazing, through the biggest economic event since the great depression with many calling it a bigger event than the GD and the worst result for many with bricks & mortar was -3% last year

i know its tough to accept but just keep yourself occupied, read the paper, go for a walk, ride the pushie

oh well, i guess some professors get it right and some get it wrong

does anyone know when the internet will be working again in the UK?

thankyou
associate professor robots

 

[kincella]

anyone recall steve keen's prediction of 40% drop in house prices ????
facts/truth coming through show 40% drop in interest rates.....and a drop in the median value of less than 3%.......I feel sorry for anyone who took note of that bad prediction.....

The slight recovery in Australia "has been driven by the 40% fall in home loan rates to 5.7%, which are now at their lowest levels since July 1968,'' said Christopher Joye, managing director of Rismark International.

http://business.brisbanetimes.com.au/business/house-price-rise-bucks-global-trend-20090430-aod4.html

 

[kincella]

Oh dear....now we have another Professor claiming 20% drops.......
extracts from the headline grabbing article to debunk the claims of same....

Christopher Joye, of funds manager Rismark, said despite the "unsubstantiated, hyperbolic claims of some renegades", the figures suggested a "slow house price recovery
He said an increasing number of buyers were investors "positively gearing" ”” looking to make money from rent rather than declare tax losses, as in the past. He cited the Reserve Bank's latest financial stability report, which suggested that the substantial gap between incomes and house prices was permanent.

and to debunk the theory about the grants.......

But Macquarie Bank economist Rory Robertson said this year's price growth was not primarily because of the grants.

"It's because interest rates have fallen into the 5 to 6 per cent range," he said. "The vast majority of home buyers with variable rate mortgages are suddenly enjoying rates lower than they ever had contemplated."
ps fhb's represent less than 30% of home sales

http://business.brisbanetimes.com.au/business/property-bubble-set-to-burst-20090501-ap5k.html

 

[nulla nulla]

As long as you think you have the self discipline to LEAVE the cash in the offset account, then you are better off putting it there IMO. It means that cash is available for sensible, productive spending in the future if you need it like extensions, renovations to your house etc, without the need to go back to the bank.

On the other hand, if you are the type who might be tempted to spend the available cash on say a new car or a holiday, then I would say you are better off putting the extra into the actual mortgage. It's still available to you there if you REALLY need it, but harder to get at as you would have to visit your bank manager

Your call! be honest with yourself

PS: Great mortgage rate you have negotiated there!

Cheers,

Beej

Using "netbank" with the CBA, you have access to the funds in the mortgage linked account ("miser") and the accumulated payments, excess to the mortgage monthyl/fortnightly requirements, without leaving your home.

 

[satanoperca]

hello,

some great results out yesterday from Rismark,

its looking good to collect that slab of ruskies and parma from Satanoperca

Don't start salivating just yet Robots.

The devil is in the detail, please correct me if I am wrong.

"Released 30 April 2009
Property Value Index Release - RPdata

CLARIFICATION: On a quarterly basis (i.e., comparing the first quarter of 2009 with the fourth quarter of 2008), which is the method used by the ABS, Australian residential property values are up 0.1 per cent according to the quarterly RP Data-Rismark Hedonic Index. Quarterly index estimates are ‘transaction-weighted’"

Looks like they just scrapped through will the smallest of positive results.

Still waiting for the ABS 1st Quarter stats to be released.

Overall, the RE market has held up incredibly well with the lowest interest rates in 30 years, unemployment still low, petrol prices still low, inflation dropping and government support and handouts everywhere.

I wonder if the sentiment in the community will change when the budget gets released this month and everyone releases our government has successfully put us in a large amount of debt. Don't worry the GFC hasn't effected our economy, we should be coming out of this recession next year according to the purveyors of truth - Gov.

Cheers

Benjamin

 

[gfresh]

Yeah.. I don't have any faith in a housing industry sponsored measuring system either, especially by ones such as RPdata.

APM stats show it's not so good in the Sunshine State.. -6.1% over the year .. ouch

http://business.brisbanetimes.com.au/business/house-prices-continue-fall-20090501-ap6c.html

House prices in Brisbane have dropped half a per cent in the March quarter, the fourth consecutive fall in value, steeper than the national average.

Confirmation that the property market is treading water came as official figures showed new loans to businesses are falling sharply, suggesting a rapid decline in investment.

The median house price in Brisbane dropped 6.1 per cent in the year to the end of March, the second largest fall across all national capitals.

Unit prices fell sharply by 2.1 per cent this quarter, to $334,015, according to a report released today by Australian Property Monitors (AMP).

 

[MACCA350]

Shouldn't the Reiv quarterly figures be out by now?
Actually just looked at the Dec quarter......
House Median down 9.7%(Dec 07-Dec 08)
House Median down 0.9%(Dec Q)

Unit Median down 5.2%(Dec 07-Dec 08)
Unit Median down 1.1%(Dec Q)

I must have missed that the full year for 2008 showed the Melbourne median drop nearly 10% .............Don't remember that being mentioned in the media much at all, seems to have crept quietly by...........although maybe I blocked it out with all the positives being thrown around lately

So when are the Reiv quarterly figures due out?

cheers

 

[Beej]

Using "netbank" with the CBA, you have access to the funds in the mortgage linked account ("miser") and the accumulated payments, excess to the mortgage monthyl/fortnightly requirements, without leaving your home.

That sounds more like an equity manager type set-up. Great if you have the self discipline to use it wisely!

Shouldn't the Reiv quarterly figures be out by now?
Actually just looked at the Dec quarter......
House Median down 9.7%(Dec 07-Dec 08)
House Median down 0.9%(Dec Q)

Unit Median down 5.2%(Dec 07-Dec 08)
Unit Median down 1.1%(Dec Q)

I must have missed that the full year for 2008 showed the Melbourne median drop nearly 10% .............Don't remember that being mentioned in the media much at all, seems to have crept quietly by...........although maybe I blocked it out with all the positives being thrown around lately
cheers

Don't know about the REIV figures, but the above doesn't fit with any of the other data sources (RP Data, Rismark, APM, ABS). The ABS figures up to end 2008 are here: http://www.abs.gov.au/Ausstats/abs@.nsf/mf/6416.0

They show a year/year (Dec/Q4 07 -> Dec/Q4 08) median price fall of -3.2% for Melbourne, and -3.3% for the national weighted index.

Cheers,

Beej

 

[kincella]

gfresh...would you rather the pig industry or the food industry people monitored the house/ property market ???
they are all the experts in each field....they know their own markets, industry etc

the pig/pork industry specialises in everything relating to that industry....so most of us have confidence in what the industry body states....
same as the housing/property industry

 

[MACCA350]

That sounds more like an equity manager type set-up. Great if you have the self discipline to use it wisely!



Don't know about the REIV figures, but the above doesn't fit with any of the other data sources (RP Data, Rismark, APM, ABS). The ABS figures up to end 2008 are here: http://www.abs.gov.au/Ausstats/abs@.nsf/mf/6416.0

They show a year/year (Dec/Q4 07 -> Dec/Q4 08) median price fall of -3.2% for Melbourne, and -3.3% for the national weighted index.

BTW Here is the link to the Reiv quarterly figures

Cheers,

Beej

That's a major discrepancy between the different data collation groups, what is the cause of such a wide variation? and which figures more accurately reflect the market?

BTW here's a link to the Reiv quarterly figures I quoted: http://www.reiv.com.au/home/inside.asp?ID=1048&nav1=652&nav2=165&nav3=1048

cheers

 

[Taltan]

The REIV publishes its figures based on a survey of its members? This means any properties sold privately are not included. Imagine the ASX being published with a survey of CHESS sponsored holdings, the information is useful but certainly not reliable.

If anyone knows it would be interesting to know how APM, ABS, Rismark, RP Data etc. compile their figures? I would suspect ABS would be the most objective data, yet also the slowest to arrive

 

[gfresh]

gfresh...would you rather the pig industry or the food industry people monitored the house/ property market ???
they are all the experts in each field....they know their own markets, industry etc

the pig/pork industry specialises in everything relating to that industry....so most of us have confidence in what the industry body states....
same as the housing/property industry

But not when they have a vested interest at seeing prices go only one way.. I wouldn't trust the Pork industry telling us pork is really good for you, and telling us there was a pork shortage when I can walk into any store and buy sausages.

I'd be more for a Government or academic sponsored entity, although even they have some political or social interests, so not perfect either. That information should be available for free to every Australian for any property or area - sale price, and address. That data could be based on sale prices based on stamp duty calculations by valuations offices. Therefore no room for agents to fiddle or "forget" to fail to report a low price as per RPdata. Who is auditing or checking their methodology anyhow? nobody I bet..

It's in the Government system somewhere, that I am paying for with my tax dollars, it's just not publicly available

ABS is not bad, but is a little general. It uses valuer general reported prices, amongst a few other things.

ABS Methology for those interested - http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/F814197BA42AA038CA257226001CC76E/$File/64640_2006.pdf

 

[Lancelot]

Found this good article on Business Spectator today

CONCRETE DETAIL

by Christopher Joye

RSS feed

Posted 1 May 2009 9:43 AM
The mercurial Shadow LP blogs

There are a range of property forums of varying quality on the web that you can find if you have the time to spare (most of us do not).

While I have not spent much time myself on these sites, I am aware that there are forums dedicated to both the “bulls” and “bears”.

I have also been repeatedly told that the bears have a deep visceral hatred of a mysterious contributor otherwise known as “Shadow LP”.

In fact, they dislike this individual so much that they have purportedly banned him from the bear websites.

In any event, Shadow and I got talking privately.

I suggested that I would be happy to encourage a civil debate between Shadow and one of his bear adversaries.

So here is a link to Shadow’s contribution. If there are any bears out there who would like to *objectively* respond in kind to Shadow’s arguments, please use the comment box below.

I think Shadow makes many solid arguments in favour of the medium term bull case while noting that he may change stripes at some point in the future.

Enjoy.

The link to the blog is here Why it Really is Different Here

Pretty compelling and well researched stuff, plenty of charts and links to support the evidence of "Why it is really different here"

 

[Lancelot]

And an article in The Age

Bear sees light at the end of the cave
Michael Pascoe
May 1, 2009 - 9:54AM

The star Australian economist over the past two or three years has been Morgan Stanley's Gerard Minack. He's the bear who cogently warned any who wanted to listen of the impending crash and the reasons for it.

This morning, as the international stock market rally turns eight weeks old, the bear is having trouble growling, daring to say that the low for the economic cycle is in sight.

By the nature of a bear, it is a somewhat grudging admission, one that he qualifies by saying it depends on no new financial market collapse. And, having seen light at the end of his cave, the bear then growls about just what sort of recovery might be ahead - but it is a recovery.<snipped>

http://business.theage.com.au/business/bear-sees-light-at-the-end-of-the-cave-20090501-apec.html

The original comment from Gerard Minack can be found on Eureka Report here The worst is over

 

[Lancelot]

Gotta love todays picture from RP Data

Green Shoots

 

[singlefished]

Gotta love these property gurus trying to make bad data look good...

Sydney house prices fall more than national average

http://au.biz.yahoo.com/090501/31/262py.html

Sydney house prices have remained relatively steady over the March quarter but are down by more than four per cent for the year.

The figures compiled by Australian Property Monitors found prices were surprisingly resilient over the past three months, with units up by nearly one per cent.

APM economist Matthew Bell says, while most areas have experienced weakness at the top end of the market, there has been increased activity at the more affordable end.

He says, despite the possible end to the first home owner's grant boost, median prices are unlikely to experience widespread falls.

"If the first home owner's boost isn't extended in the budget, then there may be some effect, and I don't doubt there will be some suburbs where there will be some falls," he said.

"But you've got to remember that as much as a reason as the $7,000 or $14,000 has been the halving of mortgage payments over the last six months."

The APM data shows Sydney house prices were down 0.2 per cent over the last three months, while unit prices rose nearly one per cent.

Nationally the figures are up slightly for the March quarter, but house prices for the year are down by more than 3.5 per cent.

Darwin is the country's strongest market with gains of more than 6 per cent for houses over the past 12 months.

The simple fact of the matter is that a lot of the analysis provided through whatever media outlet is either biased for or against and data can be interpreted to suit whatever argument depending on who is reporting.

The facts are though that property is still generally trending down even with the lowest rates in many many years and artificial support by the government over the last however many months. Who would have thought...

 

[Beej]

Found this good article on Business Spectator today



The link to the blog is here Why it Really is Different Here

Pretty compelling and well researched stuff, plenty of charts and links to support the evidence of "Why it is really different here"

That is the most awesome, well researched and comprehensive article on the current state of Aussie house prices ever! A MUST read for everyone, no matter which side of the fence you currently sit on.

Thanks for posting that link!

Cheers,

Beej