House prices to keep rising for years

[satanoperca]

another 20 mil could fit in here easy

Try reading Robots before you make stupid statements like this. I recommend the following book, Future Eaters by Tim Flannery to get an idea of the ecological impact a greater population has on this country.

As for Government data being used, I assume you have admitted defeat on our little wager but denouncing it invalid at ASF.

Cheers

 

[Beej]

He's just a tool with an ego.

OZ property is already peaked. If your smart you'll get out now.

There are so many cracks in the fundamentals on property right now.
Government is inflating the bubble
Unemployment is increasing
Stamp duty keeps rising every year (I bet alot of speculators forget to add that to their price - that along with council rates, power, water, electricity, maintenance which also keep increasing etc)

There's not a shortage of houses - there's just an oversupply of speculators

Complete unsubstantiated rubbish! In fact, if you back through this thread, and the old one "Houses to stagnate for years", you will find many similar predictions and advice to "get out now while you can" going back 1, 2 even 3 years! Boy, good advice NOT!

Of course I know that all property investors are complete idiots to you, and they don't know the first thing about the cost of owning property (unlike you of course who is an expert even though you have probably never owned any property in your life). But I guess it's like all the perma-renters that don't account for the rent they would other wise pay into the future (which increases at least with inflation and often faster), when deciding not to buy a PPOR..... Or the costs of moving every 1-2 years + the impact of your kids having to change schools all the time etc etc.

PS: Please explain how stamp duty can keep going up if you think prices are going to fall? On stamp duty I feel it's day's are numbered anyway, and in the not to distant future it will be radically reduced or even removed via some sort of state/commonwealth deal as was intended when the GST originally came in. But when this happens prices will quickly increase by the amount that used to be paid in stamp duty anyway, so only the very nimble purchaser will actually benefit from this when it happens.

PPS: For a more quantitative analysis of the likely impact of rising unemployment on house prices, see the following business spectator article (Chris Joye): ( http://www.businessspectator.com.au...ument&src=is&is=Property&blog=Concrete Detail ). Note that in the early 90s prices rose even as unemployment kept rising and hot 11% in 1993 or so.

PPPS: Good luck debunking the housing shortage story! It's pretty established as a fact. The only credible criticism there involves a long term trend reversal in the number of people per household (which has been steadily decreasing for 20 years), which would of course mean a big reduction in living standards.

As for Government data being used, I assume you have admitted defeat on our little wager but denouncing it invalid at ASF.

A bets a bet and it was based on ABS figures so I think that should stand - I am sure Robots would agree! However, I am expecting an upward revision to the Q1 numbers when Q2 comes out to bring them more in line with all the other data.

Cheers,

Beej

 

[kincella]

geez, whats all these personal attacks against my mate Robots ? its not nice at all....
lets keep the thread nice....
discuss the subject and not the poster...please

ps Robots, thanks for the Morrell and Koren..top end trends link....
psst...shoosh....had to have a little chuckle....

and back there in the country...a contact tells me...her mate a RE agent is still selling 20 houses a month....its a bit harder these days...but thats her average monthly sale....just the same as its been for the past 10 years....
apparently prices have come off a bit...about 5%
hmmmm...what to make of that....
my contact is like self...holds multiple props...wants to buy more....
going out to buy a new car before June 09....and trade in the Lexus
her hubby was going to retire this year, the boss wants him to stay, she thinks he will be too bored.....there goes another boomer, staying in the job a bit longer than he should....those pesky boomers

thought you would like this news Robots, Beej and other mates...
I have been catching up on the work a bit faster than expected...hence the time here today
cheers

 

[Dowdy]

PS: Please explain how stamp duty can keep going up if you think prices are going to fall?

I got confused with Stamp Duty and Land Tax, but that's another cost that goes into buying a house. Stamp duty won't be eliminated. The VIC government just put itself into massive debt so you're going to see stamp duty on for a very long time. What has increased and keeps increasing is Land Tax which in some cases have increased 300% in one year.
You have power bills going up, insurance going up. Do speculators add that into their overall profit?

All these 'little' thing that all you speculators never mention, except you just post the clearance rate week-to-week.

 

[kincella]

land tax on the principal resi has exemptions...land value only applied...not the house value...varies.. 352k in Nsw, 225k Vic, 600 K Qld, 110k SA etc etc etc
we look at the big picture....a small price to pay for all the other benefits

have a look state by state land tax rates
http://www.hotspotting.com.au/index.php?act=viewArticle&productId=159
another link to keep handy
http://www.hotspotting.com.au/index.php?act=viewArticle&productId=1253

 

[kincella]

Why did I think this was funny....?

“I’ve bought a number of properties on Terry Ryder’s recommendation and made good capital gains as well as high returns. But the best advice he’s given me is the properties I didn’t buy. Last year he carried out research which helped me realise that investments I planned to make were unwise.”

- Neil Jenman, consumer advocate and author, Sydney

http://www.hotspotting.com.au/index.php?act=viewArticle&productId=6

 

[gfresh]

You have power bills going up, insurance going up. Do speculators add that into their overall profit?

All these 'little' thing that all you speculators never mention, except you just post the clearance rate week-to-week.

Dowdy.. to be fair, power bills are payable by the renters, and so is contents insurance. Any further higher costs such as building insurance can, and probably are passed onto the renter eventually. Same with rates.

If stamp duty costs were to rise excessively, costs would also be passed on in rental costs, and because net yields could become so pissant, nobody would bother investing. If you have less and less occupiers who are buying to live in due to high buy-in cost (e.g. stamp duty), then you've also got higher demand for rentals at higher prices.

Unfortunately the only situation I can see with costs going up and up, is the renter gets screwed as those costs are passed on until something gives. If we're going to be stuck in a massive inflation spiral soonish, and everybody scrabbling to pass on costs, I don't see how the renter is going to be that much better off than an owner-occupier. Unfortunate as that may be.

p.s. Victorians get royally screwed on stamp duty.. I remember 7 years ago when I was still living there the gumbyment promising to reduce this, but hasn't happened yet and I wouldn't be holding my breath. I don't know how long these generous exemptions are going to last in the other states as well - we get it pretty easy up here. The big pits in the State Deficit's are looking wider and wider every month at the moment.

 

[satanoperca]

Why did I think this was funny....?

I have no idea, except Jenman runs an ethics site!

Funny was the fact that his testimonials page also had the title "About the Team". So the people who work for him also vouch that his advice is correct or have I missed something.

Kincella, have you purchased Terry's reports before and found them to be accurate?

Cheers

 

[Largesse]

hello,

apologies for the delay in getting new information out to people here at ASF:

http://www.morrellandkoren.com.au/topend/

weekly update, great seeing new australians participate in the fabulous life on offer in this country

another 20 mil could fit in here easy

special word out to Kincella and Beej who have been on the money for a long time now

thankyou
associate professor robots

hello robots,

i usually love your posts but "another 20m could fit in here easy" is by far the silliest thing i've read you say

thankyou
soon-to-be graduate largesse

 

[kincella]

satan....never heard of him before today....but see the report cards on the left...where he predicted various hot spots etc...and the results were they performed very well in 2008....I dont have time to see how they fared in the YTD
reports do not mean much to me...as I am only interested in 2 suburbs...no where else

 

[robots]

hello,

hello and good afternoon,

just on the bet, Satanoperca has thrown in the ABS data requirement, it didnt come with that originally i think and also wants a +/or- 0.5% leeway now as well

oh yeah Kincella , great reading at Morrell & Koren, honest on the ground reporting of the market and for us it gives a great snapshot of inner Melbourne

gee Sol is in the news, similar great minds

thankyou
associate professor robots

 

[kincella]

hi, you will like the hotspotting site I posted earlier today....
sol from telstra I assume...not solomon lew ?
hehehe they all own houses though

 

[satanoperca]

hello,

hello and good afternoon,

just on the bet, Satanoperca has thrown in the ABS data requirement, it didn't come with that originally i think and also wants a +/or- 0.5% leeway now as well

thankyou
associate professor robots

The variation was an offer, not a requirement. With all the discussion on stats it seemed only reasonable that a tolerance range would be applied.

I don't won't to win any wager on -0.1%, to be that figure is inconclusive whether there was a fall or rise.

Gone out and bought that book yet, you will find it a fascinating read.

Cheers

 

[kincella]

I am a global warming sceptic at this stage....
he does not need to read the book...heres wikipedia...to sum him up

however I agree with Robots.....easy to fit another 20 mill here...they just need to sort out the water problems....and all the other problems we have experienced in the last 10 years of growth....
they were increasing the immigration figure this time last year to about 300k pa...so at that rate over 10 years is another 3 million....more people to tax
http://en.wikipedia.org/wiki/Tim_Flannery

 

[satanoperca]

I am a global warming sceptic at this stage....
http://en.wikipedia.org/wiki/Tim_Flannery

The book is not about global warming, it is about how Australia & NZ and it's inhabitants evolved. The use of land and population growth.

It is a naive person who believes that we can support a doubling of the population and keep our standard of living the same and our environment clean. Just need to go to some of our neighbours to see this.

As you have just pointed out we are currently faced with some huge problems, that being water, let alone how we would feed so many people and the impact it would have on Australia.

If you have ever looked on a map, Australia is mostly desert, hence the majority of Australia's population is on the coast.

Or you advocating the Japanese approach to population where by the country starts to starve if you close of its ports to food importation. They are not self sufficient and we are slowly becoming the same way.

And were do you stop if you want more people to tax, 20M, 30M, 40M, why not aim for one billion, plenty of sandy desert to grow that food in.

Green shoots seem to be abound everywhere.

 

[robots]

hello,

just like to say a special welcome back to Kincella and thank him for the informative posts, hold your head high man

check this brother:

http://business.theage.com.au/business/australia-bestplaced-to-beat-recession-20090526-blrg.html

no surprise there though, and plenty more space across the country for others to join us on this fabulous ride

thankyou
associate professor robots

 

[kotim]

Some of you would no doubt have heard recently about Australias new subprime mortgages in the last 2 years. In the last 2 years the first home buyer average loan has grown by 52000 dollars.

Ultimatley this means that such growth in such short term means that many of those first home buyers maxed out their lending capacity at 5% loans.

So now lets see what happens if interest rates go up again, because if the stimulus package even half works? interest rates would pretty quickly climb to 7% minimum without too much trouble. Now imagine all those people paying an extra 40% in repayments over a 5% loan.

Its sad but we are being set up for a big property implosion, not necessarily in terms of price so much I believe, although we will see further substantial price falls, but more so in relation tohow long our markets stays down.

Funny isn't it, if the stimulus package works, inflation will take off along with interest rates, and if it doesn't it means another bad alternative anyway.

This is a lose lose situation for the country.

Personally I believe gov't should legislate maximum percentage of loan anyone can get according to their slaries. It is just plain wrong that so much money should go to just simply supplying a roof over peoples heads.

 

[satanoperca]

hello,
check this brother:

http://business.theage.com.au/business/australia-bestplaced-to-beat-recession-20090526-blrg.html
thankyou
associate professor robots

Yawn.

Report :
Servcorp, a provider of virtual and serviced offices globally surveyed
7500 international business people from 24 countries to determine something based on a whozemeewhat scale.

Great PR stunt for Servcorp, smart move.

And government data is not good enough for you.

 

[Largesse]

Some of you would no doubt have heard recently about Australias new subprime mortgages in the last 2 years. In the last 2 years the first home buyer average loan has grown by 52000 dollars.

Ultimatley this means that such growth in such short term means that many of those first home buyers maxed out their lending capacity at 5% loans.

So now lets see what happens if interest rates go up again, because if the stimulus package even half works? interest rates would pretty quickly climb to 7% minimum without too much trouble. Now imagine all those people paying an extra 40% in repayments over a 5% loan.

Its sad but we are being set up for a big property implosion, not necessarily in terms of price so much I believe, although we will see further substantial price falls, but more so in relation tohow long our markets stays down.

Funny isn't it, if the stimulus package works, inflation will take off along with interest rates, and if it doesn't it means another bad alternative anyway.

This is a lose lose situation for the country.

Personally I believe gov't should legislate maximum percentage of loan anyone can get according to their slaries. It is just plain wrong that so much money should go to just simply supplying a roof over peoples heads.

Kotim,
If interest rates are to get back to 7% the economy will have to improve pretty substantially. You would expect house prices will recover in line with the greater economy barring any unexpected altering of the Supply/Demand equation.
So while repayments will increase, homeowners should have increased equity in their homes aswell. It then just becomes a judgement call as to whether these will offset each other.

However, if people have overpaid now, they may not see the same increases in the equity in their homes. But that becomes a case by case issue.

Well thats my view on it anyway.

 

[Soft Dough]

Kotim,
If interest rates are to get back to 7% the economy will have to improve pretty substantially.

Depends what the cause of inflation is.

Imo it is more likely our next round of inflation will be in a low growth, high unemployment environment.