House prices to keep rising for years

[Quincy]

CBA raises rates 0.1 to 5.74% - the 4 pillars of monopoly?

CBA's group executive of retail banking, Ross McEwan, blamed higher funding costs for the decision, which will add around $220 a year to a $300,000 variable rate mortgage.

"We fully understand that any increase in interest rates impacts on our customers and for that reason, have continued to absorb as much of the additional funding costs as long as we could," Mr McEwan said. "Unfortunately, we have seen the bank's wholesale funding costs remain high and continue to increase as previous long term funding matures and is replaced with new funding at significantly higher cost."

Based on the above statement by the CBA, it is hard to imagine that interest rates for home loans (say for the next 12 to 18 months) will head in any other direction than up from here on in.

 

[Soft Dough]

CBA raises rates 0.1 to 5.74% - the 4 pillars of monopoly?

No doubt reflecting what is happening in the real world of funding and NOT rudd and swan's simplistic popularist viewpoint on how banks should be run.

 

[gfresh]

great if you're a shareholder the banks are going to come out of this so damn rich..

Based on the above statement by the CBA, it is hard to imagine that interest rates for home loans (say for the next 12 to 18 months) will head in any other direction than up from here on in.

yes.. looks like 6.5% interest rates at the end of next year.. and wouldn't be surprised with a 0.25 rise before the end of the year to act preemptively on inflation.

 

[MACCA350]

CBA raises rates 0.1 to 5.74% - the 4 pillars of monopoly?

US 30 year fixed mortgage rate up 0.51 from 4.78%(2/4) to 5.29%.

...........so the rate rises begin

cheers

 

[kincella]

One in 10 workers self employed: ABSJune 12, 2009 - 2:29PM
One in 10 Australian workers are their own boss, official figures show, but that proportion is expected to drop as the economy slows.

Experts expect the ranks of the self employed to dwindle as the global financial turmoil makes consumers less likely to spend money on their homes.

Australian Bureau of Statistics figures, released on Friday, show the self employed were more likely to be males working in the construction sector.

Of Australia's 10.75 million workers, 10 per cent of them were independent contractors in either their main or second job in November 2008.

ref..from theage today...
and gilliard is expecting 1 million unemployed...the banks putting the rates up...very conflicting ideas....
approx 10 million workers, 1 in 10 self employed, 1 in 10 out of work
looking like a W shaped recession now

 

[Quincy]

It may be easy for Australians to look at the subprime crisis in the US and say it can't happen here. But we did have a small-scale version of it in western Sydney, when the first-owner intake of 2001 became the negative equity club two years later when the property bubble popped. To appreciate the dumb luck involved, imagine if a global financial crisis had hit in 2004, not 2008. Our banks would have been sprung with a customer base over their collective heads. It is important to note that Sydney never did recover after the Howard grant warped the market. On the latest count, house prices in the nation's largest city are 7.3 per cent lower now compared with the end of 2003.

In every other capital, prices are at least 20 per cent higher, notwithstanding more recent drops. Melbourne is 31.4 per cent more expensive than it was five years ago, Brisbane 35.5 per cent and Perth 77.6 per cent. That's why the entry price for first-timers is an average loan approaching $300,000. When interest rates rise again, as they inevitably will, watch the newest arrivals to the market squeal. Their complaints will test the government's character.

In Australia, property ownership is seen as the principal marker of personal wealth. But self-reliance built on subsidy is surely an oxymoron.

http://www.theaustralian.news.com.au/business/story/0,28124,25627834-25658,00.html

 

[kincella]

I still says its all a hullaballoo....25% are FHB's...75% are not....
years ago when I was a FHB....no incentives or freebies were available...its been hard at times....its not easy peasy as some would make you believe....but its worth it....
and it makes you stronger....
I tell the babes...its like a forced saving plan....
and since you all need a plan at some time to get back onto a sensible path in life...you may as well start as early as you can...

you should read my post yesterday with the article...about how the older ones are the investors rather than the young....
so its probably more about gaining experience and information rather than the pros and cons thats tossed around on this site.....
between the older wealthy investors and the younger non wealthy non investors...
cheers :sheep:

 

[gfresh]

It is important to note that Sydney never did recover after the Howard grant warped the market. On the latest count, house prices in the nation's largest city are 7.3 per cent lower now compared with the end of 2003.

I can see a bit of that happening in SEQ for the next few years.. especially with the high influx of growth (mining) into the state slowing down for a while. Government will also be cutting back due to a shattered budget, and a large proportion of workers here are public service, forget the exact percentage, but I think it's as high as 20%. Plus the fact that wages here in general are still not as high as Sydney or Melbourne, so it's going to be a while before that catches up as well. Then throw in massive inflation coming.. and it's a tough mix.

 

[Trevor_S]

no incentives or freebies were available..

I doubt that is true. I know I received a whack of stamp duty reduction on mine.

That aside, here's a link to a SMH newspaper from the 1980's about real estate in Sydney

http://news.google.com/newspapers?id=JsMRAAAAIBAJ&sjid=DecDAAAAIBAJ&pg=3658,4454312

In particular read the last part of Section 1 about the federal government grant for first home buyers

 

[kincella]

Trevour...dont call me a liar....fhb grants, schemes and incentives came in later....but not when I bought my first house....
they have not been around forever

 

[Trevor_S]

Trevour...dont call me a liar

I didn't, I did doubt your memory however. You were emphatic that you never received ANY HELP, at all, in terms of grants, freebies etc.... I call bullsh_it.. I never received a FHB grant either but I did receive a fair whack of Stamp Duty rebate back in the '90's. The article I linked to was from 1980 and showed there was a FHB grant way back then (obviously it was taken away at some stage and then reinstated) !!!

they have not been around forever

Indeed, but there was one back in the 1980 ! (nearly 30 years ago) for example, so it is something that comes and goes and as long as I can remember there has been stamp duty reductions for FHB's in QLD (as another example). I am not sure how long the federal scheme had been in place in that instance, nor how long it continued. I was pointing it out as an EXAMPLE that a FHB grant is not a new thing and has been around for quite some time (off 'n on) as a housing incentive.

 

[kincella]

my memory is fine about my first home, it was earlier.... before 1980

 

[robots]

hello,

good evening brothers, i hope the day has brought happiness to you and the family

hey hey hey:

http://www.reiv.com.au/home/inside.asp?ID=162&nav1=652&nav2=162

thanks to Enzo for the speedy way in which REIV get the results out there to the public, top effort man, true professional

MASSIVE 84%, yes MASSIVE 84%

oh well, gee still doesnt look as though the internet is working in the UK yet

just another day helping out the community

thankyou
associate professor robots

 

[kincella]

Morning Robots,
I will be happier come July after I have met all the June workload, and hoping to take a break to attend to some other committments that need attention.

In the meantime...Chapel St was the worst for traffic yesterday, it was so cold, obviously they came in their cars instead of walking.....
now look at this article...it sounds radical to begin with...and then a sensible solution......but we do not have this problem here in Australia....
the other thing that springs to mind....some of the bigget companies in the US went bust....they became to big to manage.....then I get a litte twitch... and wonder if Woollies and the Banks here going overboard, in the big is better stakes....with their grab for petrol and liquor ?
Safeway in Toorak is a joke with its delve into newspapers....they only sell the age and herald sun....not the Fin Review ...luckily for the Newsagent I go there to get my reading material....and been spending more time at Coles to buy my fav foods...Safeway no longer stock them
back to housing.......an extract only

US cities bulldoze their way to survivalTom Leonard, Michigan
June 14, 2009
DOZENS of US cities may have neighbourhoods bulldozed as part of drastic "shrink to survive" proposals being considered by the Obama Administration to tackle economic decline.

The Government is looking to expand a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, the treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the presidential election campaign, Mr Kildee has now been approached by the US Government and a group of charities that want him to apply what he has learnt to the rest of the US.
http://business.theage.com.au/business/us-cities-bulldoze-their-way-to-survival-20090613-c6r9.html

 

[robots]

hello,

good morning Kincella,

yes all about location location location, hope you snuck in a treat for your dog at KFC

but we will be bull dozing as dont we follow the US in everything?

thankyou
associate professor robots

 

[robots]

hello,

and 400 properties up for auction, 84% clearance rate

are those numbers okay?

thankyou
associate professor robots

 

[kincella]

Hi Robots,
no treat for the dog...parking was too hard to find... I had spent more than half an hour extra sitting in traffic yesterday...in Chapel St...Toorak car parks's not much better either...
might go and get her a kangaroo tail from the pet shop today...
now back to the auctions...
couple of weeks ago they were selling as many at private sales as they were at auction...I wonder if that is still the case.....Morrells will have a report out Monday..so we may have the numbers then.....
cheers

 

[kincella]

amazing...what are these people thinking....paying 100k more than the reserve...or was the reserve too low to begin with ???
its all rather interesting
I imagine Sydney is doing the same....

In Surrey Hills, an $80,000 bid failed to knock out the competition for the three-bedroom Federation house at 19 Sunbury Crescent. Fletchers said the rise was from $630,000 to $710,000 ”” trumping the market price by $20,000 ”” but the price increased another $15,000 to make a sale at $725,000.

The single-fronted weatherboard at 62 Adam Street in Burnley sold for $704,500, with at least five bidders pushing the price $104,500 above the reserve. Biggin & Scott had advertised the two-bedroom house at $530,000 to $580,000.

Six bidders took the three-bedroom townhouse at 49 Clifford Place, Clifton Hill, from an opening at $680,000 to a sale under the hammer at $786,000. Collins Simms said the reserve was $755,000.

Barry Plant Real Estate sold the three-bedroom family house at 69 Sevenoaks Road in Burwood East for $540,000 ”” nearly 26 per cent above its reserve ”” thanks to six bidders. Chief executive Barry Plant said money from the state trustee's auction (minus costs) would be donated to the Peter MacCallum Cancer Centre.

 

[robots]

hello,

Burnsie, any commentary on the results this week with 400 auctions?

thankyou
professor robots

 

[MrBurns]

hello,

Burnsie, any commentary on the results this week with 400 auctions?

thankyou
professor robots

G'day robots, I expect clearance rates in the FHB range to remain high til after the end of Sept, then well.....wait and see.

The Asian participation in the market at all levels seems particularly high, don't know why.

There wil be a severe correction but eventually prices will recover and continue up as they always have done in the past.

Boom and bust as usual here in Australia.