House prices to keep rising for years

MACCA350 · 10 June 2009

Considering exports saved us from a technical recession last quarter, you don't think that the dramatic turnaround of those export and import figures will have a major effect on the economy?

If exports were flat we'd be in negative GDP and a technical recession. And I'd say consumer sentiment would be not very rosy at all.

I don't think China will rescue our exports, someone already mentioned they've been stockpiling and are now at capacity. If anything that would suggest that they've been part of the reason our exports did so well during the first quarter. As that demand drops off our exports will fall(as they have in April).

The effects of the Housing incentives will(and already has from what I've seen while looking for a house) start to taper off. Small Business are not seeing much in the way of support, even the tax incentives are of no hep to those who are running out of cash.

What does Rudd have up his sleeve that would counter these effects?

cheers

aleckara · 10 June 2009

lasty said:
"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.

That depends of where you stand lasty. For people without a home, still studying for a job, our children, people looking to settle into Australia etc. the prospect of another housing boom is very bad news. If your the entrenched and have a house (or multiple ones) a housing boom is great.

A lot of people claim jealously in this forum if people want them to go down - I don't think when talking about basic occuped housing that is an appropriate term. I would like to see the price of everything fall including housing but for good reasons (i.e enough supply of housing, food, oil, etc). Not for bad reasons like people are suffering.

The_Bman · 10 June 2009

Certainly is a crazy time to buy. I'm just going through the process of finalising our first purchase & contract.

The price we settled on in March was at the time on the high side of similar properties in the market for this area. At the time we thought it would drop further however given a 5-15 year occupancy, any short term loss would be more than recovered.

On the weekend a house 1 street away in the same condition, same size, same age sold for $350K more.

lasty · 10 June 2009

aleckara said:
That depends of where you stand lasty. For people without a home, still studying for a job, our children, people looking to settle into Australia etc. the prospect of another housing boom is very bad news. If your the entrenched and have a house (or multiple ones) a housing boom is great.

A lot of people claim jealously in this forum if people want them to go down - I don't think when talking about basic occuped housing that is an appropriate term. I would like to see the price of everything fall including housing but for good reasons (i.e enough supply of housing, food, oil, etc). Not for bad reasons like people are suffering.

How far do you want these prices to fall?
whereabouts?
You can get a 2 bedroom apartment in outer sydney suburbs for 200K, the problem is no one wants to live out there and now it becomes the greed factor.

Uncle Festivus · 10 June 2009

Beej said:
With consumer confidence at those levels (100+ means optimists outnumber pessimists)

100 means the optimists = pessimists. That is, of the 2000 people surveyed, 1001 were optimistic? It's a survey of peoples opinion, hardly the solid foundation for an sustained economic recovery against hard data that says otherwise? And the usual stuff....

Beej · 10 June 2009

Uncle Festivus said:
100 means the optimists = pessimists. That is, of the 2000 people surveyed, 1001 were optimistic?

That's why I wrote 100+!

It's a survey of peoples opinion, hardly the solid foundation for an sustained economic recovery against hard data that says otherwise? And the usual stuff....

Well actually the consumer confidence index is an important leading indicator that historically has a strong correlation with economic outcomes (GDP growth etc). The clear upward trend in this indicator and the fact that it has gone past 100 for the first time in a long time is significant IMO - but stay in denial all you like!

Cheers,

Beej

Soft Dough · 10 June 2009

MACCA350 said:
Considering exports saved us from a technical recession last quarter, you don't think that the dramatic turnaround of those export and import figures will have a major effect on the economy?

If exports were flat we'd be in negative GDP and a technical recession. And I'd say consumer sentiment would be not very rosy at all.

What saved the day was not exports rising

but imports plummeting.

iirc exports fell, but imports fell more ( but i could be wrong on this )

MACCA350 · 10 June 2009

Soft Dough said:
What saved the day was not exports rising

but imports plummeting.

iirc exports fell, but imports fell more ( but i could be wrong on this )

The growth was driven by exports, which contributed 2.2 per cent to the broader result

cheers

Soft Dough · 10 June 2009

MACCA350 said:
The growth was driven by exports, which contributed 2.2 per cent to the broader result

cheers

Perhaps some more realistic commentary ( retail spending was up 2.2% )

http://www.news.com.au/heraldsun/story/0,21985,25583765-36281,00.html

"Exporting more of what we make is obviously positive for our GDP - Gross Domestic Production. As the graph shows, increased exports contributed 0.6 percentage points to the 0.4 per cent March quarter growth rate"

"So a big cut in our imports in the March quarter actually boosted the quarter's overall GDP growth rate by a thumping, extraordinary 1.6 percentage points"

Quincy · 11 June 2009

"Housing fears as loans hit new high" - by Jacob Saulwick.

See Here

Asked if the the market had been inflated by grants, the Treasurer, Wayne Swan, said yesterday's figures showed the benefits of the Government's economic stimulus packages.

"It has played a very important role in supporting employment in the Australian housing and construction industry."

Does Wayne Swan EVER answer the question asked ?

Uncle Festivus · 11 June 2009

Beej said:
That's why I wrote 100+!

Well actually the consumer confidence index is an important leading indicator that historically has a strong correlation with economic outcomes (GDP growth etc). The clear upward trend in this indicator and the fact that it has gone past 100 for the first time in a long time is significant IMO - but stay in denial all you like!

Cheers,

Beej

A survey of 2000 peoples opinions is economicaly irrelevant - it obviously didn't include 2000 people who have just lost their jobs and/or houses.

Permabulls and/or blinkered Polyanna optimists playing the 'Glad Game' being in denial of economic fundamentals are the ones who caused all this mess in the first place.

Now you would have to agree on at least one thing, and that is the importance of interest rates on property buyers? Yes or no? Now you would also have to agree that long US treasuries yields are going up? Yes or no? If Rudd is in the debt market to pay for his deficit then he will be competing with the other indebted economies in the world for funds, of which the US sets the bench mark.

Central banks are now zero bound on 'official' interest rates - the market is now calling the shots on the risk yield of debt! And guess what, public (government) debt is going up, not down!

10 year US treasuries yields are rising - surely you can't deny that? Simple, hard facts not subject to human opinion.

Prices on longer-term U.S. bonds dropped Wednesday, pushing 10-year note yields to the highest since October, after the government had to pay more to sell $19 billion in debt at its second of three big auctions this week.

dhukka · 11 June 2009

Beej said:
That's why I wrote 100+!

Well actually the consumer confidence index is an important leading indicator that historically has a strong correlation with economic outcomes (GDP growth etc). The clear upward trend in this indicator and the fact that it has gone past 100 for the first time in a long time is significant IMO - but stay in denial all you like!

Cheers,

Beej

Beej,

I wonder if you could provide evidence that consumer confidence is highly correlated with economic outcomes like GDP growth. I thought the following was the highlight of yesterday's consumer confidence report:

“Overall the "Current Conditions" Index was up by only 2.2% compared with 20.7% for the Expectations Index. That emphasis on expectations is similar to the recent result we saw for the US Index when Expectations were up by 10.0% and current conditions fell by 0.9%.

“We are of the view that the "Current Conditions" is a more reliable indicator of the likely outlook for consumer spending. In that regard it is significant that the one component of the Index which fell was the one most closely correlated with overall consumer spending – "Time to buy major household items". That is a major qualification of the reliability of this movement in the Index for predicting consumer spending.

aleckara · 11 June 2009

lasty said:
How far do you want these prices to fall?
whereabouts?
You can get a 2 bedroom apartment in outer sydney suburbs for 200K, the problem is no one wants to live out there and now it becomes the greed factor.

I've been out there and trust me the apartments that you can get for 200K are 200K for a reason. Not for greed, but because of crime and the culture of these areas. Not a place to raise a starting family at all.

How far do I want things to fall? I would like my shopping to be $1, instead of $200 if I could get away with it. I want myself and everyone else to live in the land of abundance. That's the real goal of economic management - even if it is impossible and unattainable. It is to give the most goods and services at the lowest price. Housing is the only good that doesn't really have this competition and I think it is really due to too many vested interests.

lasty · 11 June 2009

Uncle Festivus said:
A survey of 2000 peoples opinions is economicaly irrelevant - it obviously didn't include 2000 people who have just lost their jobs and/or houses.

Ok so lets change the reporting rules then.
Australia doesnt have an unemployment rate we have an employment rate,
therefore we have currently 94.6% employment.. now doesnt that look dandy?

As for the US Treasuries well we all know their shot. Australia is now looking toward Asia for their money.
As the US dollar falls against certain currencies borrowing costs become cheaper.
There was once a time when Japan and others paid up for their dollars.
It will be interesting to see what happens in the coming months as soveriegn risk features in the lending criteria.

lasty · 11 June 2009

aleckara said:
I've been out there and trust me the apartments that you can get for 200K are 200K for a reason. Not for greed, but because of crime and the culture of these areas. Not a place to raise a starting family at all.

How far do I want things to fall? I would like my shopping to be $1, instead of $200 if I could get away with it. I want myself and everyone else to live in the land of abundance. That's the real goal of economic management - even if it is impossible and unattainable. It is to give the most goods and services at the lowest price. Housing is the only good that doesn't really have this competition and I think it is really due to too many vested interests.

Well thats the cost you pay isnt it, safety and lifestyle, which is a form of greed as all countries have a similar problem.

MrBurns · 11 June 2009

Quincy said:
"Housing fears as loans hit new high" - by Jacob Saulwick.
See Here
Does Wayne Swan EVER answer the question asked ?

NEVER - they spend all day being coached how to use every question to parrot their BS and avoid the real issues.

Uncle Festivus · 11 June 2009

lasty said:
Ok so lets change the reporting rules then.

As the 'Glad Gamers' usually do when the going get's tough ie the mark to market rules

lasty said:
As for the US Treasuries well we all know their shot. Australia is now looking toward Asia for their money.

And the rest of the world isn't? He who pays the best yield will get the money....

kincella · 11 June 2009

Aleckara wrote....Housing is the only good that doesn't really have this competition and I think it is really due to too many vested interests.

It is not so much a vested interest, its the competition, to get into the nicest suburb you can afford....and to avoid the cheaper places, because of the crime and atmosphere that comes with those suburbs...
Vested interests infers conspiracy....when in fact its a very competitive market...

You think there is no competition....try over 120 people with 6 bidders at houses valued over 2 million as per last weeks Morrel and Koren reports.

as an aside.......
I have heard reports of whole suburbs becoming homes to predominately Pakistani's...or asians etc....
and the current race crisis in Sydney..reported on the news last night....as the Indians moving in, in large numbers to a predominately Lebanese suburb.

Oh and I like the way we whites are not allowed to say the word race...or we are racist....but they are allowed to call us whites.... racist.....
anyone surprised its mainly the lebanese attacking the indians....so its more of a race war between those two groups....

lasty · 11 June 2009

Uncle Festivus said:
As the 'Glad Gamers' usually do when the going get's tough ie the mark to market rules

And the rest of the world isn't? He who pays the best yield will get the money....

Ask Zimbabwe about yields and see how much they are getting

aleckara · 11 June 2009

kincella said:
Aleckara wrote....Housing is the only good that doesn't really have this competition and I think it is really due to too many vested interests.

It is not so much a vested interest, its the competition, to get into the nicest suburb you can afford....and to avoid the cheaper places, because of the crime and atmosphere that comes with those suburbs...
Vested interests infers conspiracy....when in fact its a very competitive market...

You think there is no competition....try over 120 people with 6 bidders at houses valued over 2 million as per last weeks Morrel and Koren reports.

as an aside.......
I have heard reports of whole suburbs becoming homes to predominately Pakistani's...or asians etc....
and the current race crisis in Sydney..reported on the news last night....as the Indians moving in, in large numbers to a predominately Lebanese suburb.

Oh and I like the way we whites are not allowed to say the word race...or we are racist....but they are allowed to call us whites.... racist.....
anyone surprised its mainly the lebanese attacking the indians....so its more of a race war between those two groups....

Competition doesn't come from buyers, it comes from people providing the goods (the builders and the sellers). When sellers feel the freedom to hold on, or developers have economic profits consistently it isn't that competitive of a market. Its no conspiracy, just a lot of government incentives that encourage inefficiencies in this market and cause people to act that way. I don't blame people buying heaps of properties - I never said I have. I see it as one of the only ways to the average person to preserve money in a constant inflation environment. If you didn't your cash would be worth nothing today. But that's the other side of the coin of the same problem - money in terms of houses is worth less and less because of these incentives. The government has mismanaged money, infrastructure, services, housing, immigration (I do believe part of the problem is that some capital cities can't handle the people in them) particularly in NSW severely.

And to be honest I'm not really interested in the upper end of the housing market. Despite its values it is so small that it doesn't really affect the overall living standard of the country too much. I'm interested in the affordable housing and what happens to that.

When the party started it was better. Young couples moving into new neighbourhoods (even in Sydney) 20 years ago with new houses starting families. They did very well and in comparison to what a lot of average new home buyers need to settle for today they lived the dream.

Compare apples to apples please. Don't compare apartments with crime issues (not racist - just stating a fact that there are gangs of these people in a lot of these areas or people I wouldn't want my kids anywhere near - not a good environment for them) with peachy new neighbourhoods with better quality homes than today's new ones where kids could play in the street. I do think housing may rise - I just don't think it is good for the country.

House prices to keep rising for years

MACCA350

aleckara

The_Bman

lasty

Uncle Festivus

Beej

Soft Dough

MACCA350

Soft Dough

Quincy

Jack of all trades master of 0

Uncle Festivus

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dhukka

aleckara

lasty

lasty

MrBurns

Uncle Festivus

kincella

lasty

aleckara

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