House prices to keep rising for years

[kincella]

Satan....exactly....most of us are waiting to see what is in the budget....one needs to be informed before making a move....super may be a problem...and that 30% allowance for equipment...has not been legislated...so business are holding off....its a silly situation to be in....all talk...blah blah blah everywhere....wonder why it was not put through and passed...to give business confidence they need...the libs agreed with it...
we can decide after next week....

 

[gfresh]

Nice, some civil debate once again

The herd mentality definitely has a lot to do with it. When everybody talks about how much money they are making in property, when valuations are going up each and every quarter, when the media is all obsessed by it, it's easy for everybody to become caught up in, to want to be caught up in it. It's the Australian obsession.

Then all the talk was of crashing prices, and the fear took over.. When it all slows down, and the easy money is gone, the attitude changes.. there is no longer the pressure to buy, buy now, as there is no instant gratification. Now that fear seems to be fading a little. Maybe it will be a false break, but who can say for sure.

This budget could be the most important in the last decade. It's going to be very interesting. There is talk of "tough decisions" but will they really be made? Not just small concessions. How would have the Liberals tackled this crisis? I still don't quite see what their position would have been/is now if they were running the show.. spend? tax cuts? do nothing? They seem quick on criticism, not big on ideas right now. Anybody can be a critic, it's easy

 

[Soft Dough]

What

You make no sense, explain how I have lost money if I havent sold or have no intention of selling?

1)why would I want to borrow money
2) heard of LOC? I get houses revalued and LOC locked in when prices are rising, not falling
3) why do I need to borrow money again?
4) you are struggling

Oh! i see.

so even though my MFS shares are valued at $0 and I bought them at $1.00, I haven't lost money as I haven't sold them yet.

Can you please explain that to my bank as I want to use them as security for a margin loan.

Thanks

Plenty of people still have access to money.

You seem to think that when assets prices are falling that people still can access gearing vs those assets. Perhaps you should ask your bank manager about this.

You need to remember that the housing bubble is fuelled by increasing debt, debt rising faster than historical rate.

 

[Lancelot]

Oh! i see.

so even though my MFS shares are valued at $0 and I bought them at $1.00, I haven't lost money as I haven't sold them yet.

Can you please explain that to my bank as I want to use them as security for a margin loan.

Thanks

No, you have CLEARLY lost

On the other hand my property still has current valuations and LOC at 3 x purchase, so CLEARLY I have not lost

You seem to think that when assets prices are falling that people still can access gearing vs those assets. Perhaps you should ask your bank manager about this.

You must be "special" if you can speak to the manager.

I had a conversation with my personal banker only a few weeks ago, there was no issue with funding, they almost begged us to take money, almost.

Have you seen the latest figures for home borrowers many FHB's? Apparently they have no issue with their funding either.

 

[Soft Dough]

No, you have CLEARLY lost

On the other hand my property still has current valuations and LOC at 3 x purchase, so CLEARLY I have not lost

Oh so you admit that if the value of the house decreases you have lost money.... a bit of a backflip if you ask me.

( and btw, yes I mainly deal with the manager regarding loans, so that I don't have to jump through as many loops, as my situation is a little different )

 

[Lancelot]

^^ Now your just trolling

 

[Soft Dough]

^^ Now your just trolling

Trolling because you can see what point I was making?

Just admit it, I'll still love you

 

[satanoperca]

Lancelot & Soft Dough, if you wish to be childish, my 3 year old needs someone to play with and is far more persuasive in argument than you too. No flaming, I'm made out of ceramic, I have already been fired.

Cheers

Keep it on track - house prices rising etc

 

[Lancelot]

Lancelot & Soft Dough, if you wish to be childish, my 3 year old needs someone to play with and is far more persuasive in argument than you too. No flaming, I'm made out of ceramic, I have already been fired.

Cheers

Keep it on track - house prices rising etc

Bloody clownish some of these guys I agree

repeat after me - house prices rising etc

LL

 

[Beej]

More on what really happened to house prices during the first quarter of 2009. From http://www.businessspectator.com.au...e-prices-pd20090508-RU6AN?OpenDocument&src=is, here is an extract of an RBA report on monetary policy published today, and some commentary from Chris Joye:

n the RBA’s Statement on Monetary Policy released today, the RBA concluded (p33): “After falling modestly in 2008, nationwide housing prices were little changed in early 2009, although there is some variation in the range of available measures that use different techniques to control for changes in the composition of property transactions (Table 10).”

In Table 10, the RBA shows five different measures of house price changes in the March 2009 quarter.

Four of those measures – from APM, which uses a stratified median price index, and my company, RP Data-Rismark, which uses an hedonic regression technique – were positive or flat across Australia while one, the ABS’s stratified median price index (the one that the media has focused on), was down strongly.

The ABS’s index data does not sit well with the RBA’s conclusion that “nationwide housing prices were little changed in early 2009”.

And to help explain/understand the differences in the data, see the attached graph (from the RBA report).

So, I still reckon property prices were flat to up as reported by APM/RP-Data etc, in most cities (certainly Sydney, Melbourne etc), in the lower and mid price ranges. Possible exceptions are Perth and Brisbane and Perth. Next quarter numbers (including ABS) should provide a clearer picture and trend hopefully.

PS: It is also interesting to note how even though they have fallen more, the top 20% of the market rose a greater amount (in % terms) than the other market segments through 2007, and even after recent falls are still only at early/mid 2007 levels. This fits in with generally accepted real estate "lore" around Sydney circles; Ie, that the top end falls harder in a downturn (usually on very low sales volume though) but rises higher/faster in the good times.

PPS: The graph also shows that current market conditions provide the best opportunities to upgrade the PPOR (if you are already in the market of course), as clearly the "gap" between low-end and mid range property is far less than it has been for the past few years.

Cheers,

Beej

 

[kincella]

beej, if you are out there on the 'ground' checking the properties and prices you know exactly the situation....as a few here have attested to....

note ING still has commercial loans at 6% variable rates and some nice rates for 2-3 years....I have never had a rate this low...so looking to access some equity for a little spendathon...and reno's
sinces its commercial property....it will really test the valuer...lets see how low they can go
cheers

 

[Taltan]

Beej

I went to business spectator to read some of Chris Joyce's comments. Turns out he's the managing director at Rismark - Advanced Real Estate Solutions. Now he wouldn't have a self-interest would he???

Any guesses what the fishmonger told me once when I asked if his fish were fresh???

 

[Beej]

Beej

I went to business spectator to read some of Chris Joyce's comments. Turns out he's the managing director at Rismark - Advanced Real Estate Solutions. Now he wouldn't have a self-interest would he???

Any guesses what the fishmonger told me once when I asked if his fish were fresh???

You can dismiss his information offhand if you like - although you should be aware that he is a well respected individual and he + his company are consulted regularly by the government and the major political parties on issues related to the property market, housing etc. Regardless, I don't know who the hardcore bears WOULD listen to in regards to issues related to the property market? As anyone who actually knows anything about it or collects data, or god forbid earns a living from R/E etc is instantly labeled a spruiker and dismissed!

However - in this case, the data being presented is from the RBA - not Rismark. The full RBA monetary policy update can be founds here: http://www.rba.gov.au/PublicationsA...icy/Statements/statement_on_monetary_0509.pdf. The section of the housing market is very interesting indeed.

Cheers,

Beej

 

[dhukka]

You can dismiss his information offhand if you like - although you should be aware that he is a well respected individual and he + his company are consulted regularly by the government and the major political parties on issues related to the property market, housing etc. Regardless, I don't know who the hardcore bears WOULD listen to in regards to issues related to the property market? As anyone who actually knows anything about it or collects data, or god forbid earns a living from R/E etc is instantly labeled a spruiker and dismissed!

However - in this case, the data being presented is from the RBA - not Rismark. The full RBA monetary policy update can be founds here: http://www.rba.gov.au/PublicationsA...icy/Statements/statement_on_monetary_0509.pdf. The section of the housing market is very interesting indeed.

Cheers,

Beej

How much more can you embarrass yourself Beej? Do you actually understand what an objective source is? The guy uses hedonic regression methods, that should be enough to send off alarm bells in and of itself. And since when does consulting for the government actually instill credibility? Afterall it is the government that continues to pursue the bankrupt subsidization policy of the real estate industry.

 

[Beej]

How much more can you embarrass yourself Beej? Do you actually understand what an objective source is? The guy uses hedonic regression methods, that should be enough to send off alarm bells in and of itself. And since when does consulting for the government actually instill credibility? Afterall it is the government that continues to pursue the bankrupt subsidization policy of the real estate industry.

Dhukka you are the only one embarrassing yourself here at the moment with your personal attacks and name calling....

Once again - my post and the comments are from the RBA Monetary Policy Update, it is not Chris Joyes work. So criticise him all you like, but it's irrelevant with regards to the data and commentary posted.

Beej

 

[explod]

Dhukka you are the only one embarrassing yourself here at the moment with your personal attacks and name calling....

Once again - my post and the comments are from the RBA Monetary Policy Update, it is not Chris Joyes work. So criticise him all you like, but it's irrelevant with regards to the data and commentary posted.

Beej

It seems to me that you are trying to convince yourself that property is ok, and maybe it is. However there are enourmous amounts of real financial data that indicates all is not well. Be objective and consider that property may be in for a siginificant correction before this crisis is over. I am standing on the sidelines to see what pans out, there are much firmer investments elsewhere at the moment, when I am sure that we are rising off the bottom will be keen to get back in

 

[kincella]

rather than relying on the media or any other sources for information regarding house prices....do yourself a favour and go out there to open houses..and check out private sales and auctions...for anything you may be interested in below 1 million...see what you come up with...
Beej has been offering you some excellent information....
we all know most investors wait until everyone is doing it, before they jump on board and go for a ride....

wonder how many sales may have gone thru the past 2 months....since thats how long its taken to actually receive the paperwork for a loan....and I may be lucky to have it sorted before the end of this month...which makes it 3 months.. most borrowers are in the same situation....
and the best information I have gained here..is something outstanding....those stats do not include units or detached houses...how surreal...when that market represents 30% of the total market....
geez...what other industry only uses 70% to play god with the figures

 

[explod]

rather than relying on the media or any other sources for information regarding house prices....do yourself a favour and go out there to open houses..and check out private sales and auctions...for anything you may be interested in below 1 million...see what you come up with...

I go to open inspections very often. I work for a person who has been selling property down here for 45 years. His brother-in-law is a real estate agent and 5 years ago I owned five properties in the Mount Martha area.

All I am saying is, there may or may not be a problem, but from what I do know it is not a time to be bullish yet. That is why I am standing aside.

Open up to the big picture, we have enourmous equity contraction, and my take on money supply we will soon see a big increase in the cost of getting it, interst rates will be going back to Whitlam's banana republic days, if you remember,,17%.

A time to take a deep breath and stand aside.

 

[robots]

hello,

i thought we like Japan, US, UK etc so arent interest rates going down down down to 0.5-1%

in for the ride brothers

thankyou
robots

 

[Soft Dough]

hello,

i thought we like Japan, US, UK etc so arent interest rates going down down down to 0.5-1%

in for the ride brothers

thankyou
robots

Yes isn't it good to see that our reserve bank has watched and learned that keeping interest rates as high as possible when lending has got out of control is beneficial ( unlike in the US ). Unfortunately they have learned this too late, but better late than never.