House prices to keep rising for years

[kincella]

Wealthy Asians buying up in Australia....due to a relaxation of the FIRB

Apart from the fact the Australia is seen as a very attractive place to live.... we have a very large immigration program, 300,000 annual intake this year, and 430,000 foreign students some of whom may stay here.....add to that a very large number of immigrants who have taken up residence here over the last 60 or so years....and then they bring their extended families over....

since everything is so bright and rosy compared to the rest of the world....including property prices not falling over....it does not take much to wonder
just how many more will see Australia as even more attractive place to live....and want to purchase a home here

now back to the FIRB..............
the main changes are the removal of the 300,000 limit on student visa holders for established dwellings, temporary residents will not have to notify the FIRB for purchases..
and the 50% limit on new dwellings to foreign persons is removed........
plus applications to be streamlined and processed faster...

Foreign Ownership Laws are:
New dwellings
 The existing requirement allows
only 50% of new dwellings to be
sold to foreign persons in an ‘off-the-plan’ situation. This was lifted, provided developers market locally
as well as overseas
 Previously, a ‘new dwelling’ was defined as never previously occupied or sold. This now includes dwellings that were not sold by the developer but were rented out for no more than 12 months
Second-hand dwellings
 Student visa holders residing in Australia are no longer subject to a $300,000 limit on the value of an established dwelling purchased as their principal place of residence
 Temporary residents won't be required to notify the FIRB of proposed acquisitions of an established dwelling for their
own residence, any new dwellings and single blocks of vacant residential land
 Foreign-owned companies can now purchase established dwellings for the use of their Australian-based staff provided that they sell or rent them if they're expected to remain vacant for more than six months
Vacant residential land
 Foreign-owned companies, trust estates and non-resident foreign persons who purchase single blocks of vacant residential land must
build a dwelling within a period
of 24 months (previously, within
12 months)
 The conditions previously relating to acquisitions by temporary residents of single blocks of vacant residential land no longer apply

Why were the changes made?
The government’s viewpoint is that it doesn't expect the changes to have any upward effect on house prices.
But they may assist somewhat
in the sale of new unit developments by reducing the compliance burden
on developers to get pre-approval
and lifting restrictions on the sale
of new units to non-residents –
such as the 50% quota and
considering units rented for 12
months as ‘new’ and therefore
available for sale to foreigners.
What effect might this have on Australia’s property market?
The recent changes to Australia’s Foreign Ownership Laws may well allow for an increase in the number of foreigners buying property in Australia.
In the current world economic climate, however, this may not be an automatic outcome and it's difficult to forecast whether the changes will, in fact, lead to an increase in the number of foreign purchasers.
The intention is to simplify the process and in doing so, streamline it, while reducing costs for foreign residents and foreign businesses

http://www.newzealandmortgages.co.uk/wp-content/uploads/Foreign Ownership Aust Apr 09.pdf

 

[kincella]

regarding the question of millionaires....I know quite a few....and its no big deal today....I think we achieved a million millionaires in OZ last year....its rather ordinary unless you start going over the 10 million mark..

of the ones that I know, they all own property, not one is not a property owner..... they all have multiple properties.....and most have at least some debt....

they did not become millionaires by sitting around doing nothing....most are quite a bit smarter than the average person.....
and because they are smarter, they understand debt, there is good debt and bad debt, most are geared up...conservately....

geez the idea that debt is bad is just crazy....there is no way known I could have made the sort of money I have without the debt....

its the stupid greedy ones, bad management etc that fall over.....
hey look at all the companies world wide...with their hands out at the moment....
they took on too much debt, thought the good times would go on forever....


if you have ever had experience in farming....it teaches you to put money aside for the bad times...because, as sure as day turns to night...the bad times will come....probably every 3 years...so for the years you make good money...there will be years when you have to outlay money...but there will be little or none coming in......but also the knowledge that the good times will come again.....so to keep the farm viable and running for the future....
you put the money aside....for those rainy days, or droughts...
most prudent businesses do the same....they do not rely on huge amounts of debt, and they make allowances for disruptions..or what if scenarios

with farming it was mainly due to the weather...too much rain...or not enough....or bushfires to wipe it all out

 

[robots]

hello,

top post Kincella, always a great contributor at ASF

no surprise here:

http://www.theage.com.au/travel/tra...s-third-most-liveable-city-20090609-c10w.html

and a total of four in top 20, man this is the place, all welcome in Australia

plenty of room for others from across the globe, especially the sub-continent

only have to take a food tour of Dandenong to experience the great benefits to society

thankyou
associate professor robots

 

[robots]

hello,

sorry brothers nothing to report:

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

thankyou
associate professor robots

 

[kincella]

Robots,
love your humour...
and you are a valued contributor to the ASF forum yourself.....same as, same as, the rest of the clan
plus you and the rest of our clan.....are some of the 10% of the population that owns 90% of the wealth
congratulations brothers......
seriously though....there is a mongrel that is about to know ...experience some Karma.....he crossed me......
and like an elephant I never forget......
oh and the lawyer that was too weak...karma coming to him as well
.....
just need to call on or a really ugly angry mate of mine to fix things up...... to bring Karma and return it to those that gave me pain...

dont worry its all under control....Karma will prevail
proverb = where there is a will...... there is a way
cheers
PS I really like Karma
or do unto others as they would do unto you...
the unto others will commence shortly

 

[nunthewiser]

can we get a drug testing unit to this thread asap

thankyou

 

[IFocus]

can we get a drug testing unit to this thread asap

thankyou

LOL Nun that's funny crack me up

Well housing has held help well beyond my own predictions but then the Oz economy has held up beyond my wildest dreams also talk about the lucky country.

More power to the bulls

 

[MrBurns]

can we get a drug testing unit to this thread asap

thankyou

This thread is keeping several drug lords in Columbia in business.

 

[singlefished]

This thread is keeping several drug lords in Columbia in business.

I guess that puts the Colombian drug lords amongst the top 10% of population that own 90% of the world wealth... saying that though, you only need a piddly odd $60K or so to qualify - well done brothers and sisters!!!

$2,200 per adult to be in top half of world wealth ranking
$61,000 to be in richest 10% of adults
more than $500,000 to be in richest 1% of adults (group with 37 million members worldwide)

http://www.wider.unu.edu/publications/working-papers/discussion-papers/2008/en_GB/dp2008-03/

 

[singlefished]

....there is a mongrel that is about to know ...experience some Karma.....he crossed me......
and like an elephant I never forget......
oh and the lawyer that was too weak...karma coming to him as well
.....
just need to call on or a really ugly angry mate of mine to fix things up...... to bring Karma and return it to those that gave me pain...

dont worry its all under control....Karma will prevail
proverb = where there is a will...... there is a way
cheers
PS I really like Karma
or do unto others as they would do unto you...
the unto others will commence shortly

Isn't it wonderful when the flaws in one's character come shining through...

Your real name's not Earl J Hickey is it???

 

[Trevor_S]

the Oz economy has held up beyond my wildest dreams also talk about the lucky country.

http://www.theaustralian.news.com.au/business/story/0,28124,25593640-5018061,00.html

It is much too early to declare success and say we are going to avoid recession," says Shann. "We have only just had the large hit from the terms-of-trade fall. That is clearly going to hit business profits and cashflow hard. You have to assume businesses are going to set about slashing their costs and running down inventories, and soon they are going to cut employment."

http://www.businessspectator.com.au...withers-pd20090610-SUSKJ?OpenDocument&src=sph

In fact the iron ore unloaded in China this year is being stockpiled, mostly at or near the ports. Those facilities are now full.

If this sort of analysis is correct, we haven't even started the real decline yet...

 

[Beej]

http://www.theaustralian.news.com.au/business/story/0,28124,25593640-5018061,00.html

http://www.businessspectator.com.au...withers-pd20090610-SUSKJ?OpenDocument&src=sph

If this sort of analysis is correct, we haven't even started the real decline yet...

I don't think anybody is claiming the recession is over - far from it, but you have to admit that compared to other western countries we have been very lucky here and the economy has proven very resilient in the face of serious o/s problems/issues and a large decline in global trade, frozen credit markets last year etc etc. Our economy has only been treading water (zero growth) for nearly a year now - but things have certainly been much worse in the US and UK, even NZ etc.

So while of course things are far from rosy, we may yet escape without unemployment going up to much more than 8% I reckon. Plus many businesses have already cut back on their inventories, investment in plant etc and pulled their heads in (ie recession mode). Business confidence is now starting to improve.....and the housing market is still burbling along with no signs of a major crash, and residential construction approvals and activity are now on the increase as well, which feeds directly into GDP.

Cheers,

Beej

 

[Trevor_S]

I don't think anybody is claiming the recession is over

That was my point, obviously poorly made... if you read the analysis in those articles, it has barely STARTED here in Aus. ie not that the Aus economy has held up at all, but that we are only just now starting to see it enter recession.

 

[Beej]

That was my point, obviously poorly made... if you read the analysis in those articles, it has barely STARTED here in Aus. ie not that the Aus economy has held up at all, but that we are only just now starting to see it enter recession.

I'm not so sure - I don't see why our "recession" would be delayed compared to other countries that we trade with; I think we have been seeing the impacts of all that clearly since mid last year, it's just that our local economy has remained fairly resilient in the face of that adversity. If the US, UK etc have bottomed and are heading towards recovery later this year (as appears might be the case), then Australia's economy should not really dip too much deeper than it already has. Maybe we will get another mild quarterly contraction or 2 before we start on a steady growth trend again - but this would be seen as a very good outcome under the global circumstances.

To back this up: June consumer confidence figures released today: http://business.smh.com.au/business/consumer-confidence-surges-on-gdp-news-20090610-c2wk.html

Consumer confidence surges on GDP news
June 10, 2009 - 12:01PM (SMH)

Consumer confidence jumped the most in 22 years as Australians took heart from the release of better than expected economic growth figures for the first quarter of 2009.

The Westpac-Melbourne Institute index of consumer sentiment rose 12.7 per cent to 100.1 points, seasonally adjusted, from 88.8 points in May.

In addition April housing finance stats out as well:

House finance extends gains
June 10, 2009 - 12:17PM (SMH)

Australian home-loan approvals rose in April for a seventh month as the lowest borrowing costs in half a century and government cash handouts bolstered demand among first-time buyers.

The number of loans granted to build or buy homes and apartments climbed 0.9 per cent to 60,395 from March, when they advanced a revised 4.8 per cent, the statistics bureau said. The median estimate of 19 economists surveyed by Bloomberg News was for a 1.5 per cent gain.

With consumer confidence at those levels (100+ means optimists outnumber pessimists) and the continuing growth in residential housing finance (which clearly bottomed around Sep/Oct last year), and housing construction on the rise, it's really hard to see how we are only at the very beginning of a recession with much worse yet to come! It looks like quite the opposite to that in fact....

Finally - for some fun, an interesting article here by Ross Gittins that talks about some research that suggests "optimists" usually do better in life than "pessimists"
http://business.smh.com.au/business...n-makes-the-world-go-round-20090607-bzs2.html

Cheers,

Beej

 

[lasty]

The problem is that the media has thrown Australia in with what is happening in the US and UK and teleported it here.
With the doom and gloom comes employer paranoia and the chain reaction.How many businesses have over-reacted?How many consumers have suddenly become frugal from the media scare?
Many "advisors" have told their clients to remain in cash whilst seeing our sharemarket rally close to 30pct.

Moving on, today consumser confidence suddenly jumps 12.7pct best ever since 1986. Housing finance up. Investment finance up.
Positive signs coming from certain sectors.

There are those who are disappointed the property market hasnt fallen and the sharemarket has rallied.
A frustrated investor is a dangerous one and living in hope.

They have a major problem on their hands.Thats when to pull the trigger for the entry back in.

 

[nunthewiser]

everyone forgets about the artificial props of late tho , stimulise this , boost that ........what happens when them numbers are no longer being produced ? ......... anyways .........happy everybody happy

i do hope kincella gets better soon tho

 

[Beej]

everyone forgets about the artificial props of late tho , stimulise this , boost that ........what happens when them numbers are no longer being produced ? ......... anyways .........happy everybody happy

i do hope kincella gets better soon tho

It's Ok nun - we know it's really all "storm clouds and vinegar sticks!"

 

[MACCA350]

Moving on, today consumser confidence suddenly jumps 12.7pct best ever since 1986. Housing finance up. Investment finance up.
Positive signs coming from certain sectors.

Consumer confidence can change very quickly, what happens if GDP goes negative:


Trade balance dives into the red

The outlook for the Australian economy has been dealt a reality check after the nation's trade balance unexpectedly fell into deficit in April.

...nation posted a $91 million trade shortfall as exports of coal, iron ore and wheat fell.

...Exports tanked 11 per cent from March to April, as the value of mining exports plummeted.

...Sales revenues for coal and iron ore fell 18 and 21 per cent respectively. Non-rural exports declined 15 per cent.

...imports fell 2 per cent to $21.77 billion in April with capital goods, such as trucks and machinery, down 1 per cent while consumer goods decreased 1 per cent.

Today's data follows an unexpected 0.4 per cent rise in March quarter GDP, defying expectations that Australia would record two consecutive quarters of negative growth (the technical definition of a recession).

But today's figures suggest things turned grim in the second quarter.

Trade slump undermines GDP optimism

Economists say the first trade deficit in nine months underscores the risk that the economy could still contract.

Today's official figures show a sharp slump in exports has dragged the $2.3 billion trade surplus in March to a deficit of $91 million in April.

...Sales revenues for coal and iron ore fell 18 and 21 per cent respectively and non-rural exports declined 15 per cent.

...imports fell 2 per cent to $21.77 billion in April

Strong exports helped the economy escape negative growth in the first quarter (Q1), but Westpac Economist Anthony Thompson says it will be a different story in the second quarter (Q2).

...The 11 per cent fall in exports was the biggest drop in 12 years.

JP Morgan economist Helen Kevans says it is a sign of more bad news to come.

..."But looking at the numbers today it's not just a fall in volumes owing to weaker external demand, it's also a fall in prices for our key commodity exports.

"And for that reason exports are going to remain weak for an extended period."

...2 per cent fall in imports also signals bad news ahead.

"We saw a dramatic drop in import volumes in the first quarter and that's a symptom of firms slashing investment, which is of course bad for the employment outlook," she said.

Is Rudd planning on going into more debt to keep the official figures rosy.......seems we were able to stave off the natural decline, but are we now going to see an accelerated slump into recession?

cheers

 

[Beej]

Is Rudd planning on going into more debt to keep the official figures rosy.......seems we were able to stave off the natural decline, but are we now going to see an accelerated slump into recession?
cheers

I don't see why this would produce an "accelerated slump into recession"? So trade is now (finally) dropping off, but in GDP terms this can easily be offset, at least partially, by increased activity in the housing construction sector and through consumption/spending by the newly confident Aussie consumer (60% of our GDP is from the services sector). So those figures, while not great, IMO don't paint a doomsday picture - they just confirm an outlook that includes a few more quarters yet of flat or mildly negative growth. Trade will bounce back strongly once the US/UK/China etc get going again properly.

The thing with government fiscal response (ie stimulus) to economic contraction is it acts like a shock absorber does on your car. You hit a pot hole, but the shockie stops the wheel (and therefore the car) from dropping all the way into the hole. By the time the wheel does start to fall (because the fall has been "delayed"), your car has travelled over most of the pot hole so your tyre hits ground again on the other (rising) edge of the pothole. At that point the shock absorbers work is done and it is not needed until the next pot-hole in the road....

PS: The current government stimulus still has a lot of wind left in it's sails - only about 1/3 of the $67B allocated to the 3 phases (cash, shovel ready capital works, long term infrastructure), has been unleashed so far. Most here under-estimated the impact of the first 1/3 of that stimulus, don't make the mistake of underestimating the impact of the remaining 2/3 that have yet to be spent!

Cheers,

Beej

 

[lasty]

"Consumer confidence can change very quickly, what happens if GDP goes negative"

Wasnt that meant to be in the last figures?
The problem is that the recession that was meant to be didnt eventuate and wasnt the media disappointed.
It was like, crikey the US had one and the UK had one, where is Australia's?
The same can be said about Swine Flu.
Once again as other countries dismiss it as a common cold, Australia was squealing for those little piggies to hit our shores.

We have seen a couple of pessimists with plenty of air time trying to alarm the masses.One in particular is calling for doom and gloom despite stimulus packages and economic indicators starting to turn the economy around.

With these types there is wait until this happens or wait until that.Unfortunately when they dont eventuate they have quietly slipped away with their tails between their legs hibernating for the next downturn.