House prices to keep rising for years

[kincella]

my friends...you are going to love this site I just found....so add it to your favorites...hmmm 9% pa growth year on year for the past 54 years....it cannot get much better than that, for a record, for a passive and safe investment.....

extract...............
Of course, asset prices tend to exhibit exponential growth, so it is far better to look at historical prices on a logarithmic scale. This reveals a striking trend. The growth of Sydney property prices has been remarkably consistent at around 9% per annum over the last 50 years.

Sydney Property Prices (log scale)
Prices for Australia overall show a similar trend, with average prices over the six major capital cities growing at an average of 8.6% per annum since 1955.

http://www.stubbornmule.net/2009/06/property-prices/

 

[explod]

my friends...you are going to love this site I just found....so add it to your favorites...hmmm 9% pa growth year on year for the past 54 years....it cannot get much better than that, for a record, for a passive and safe investment.....

extract...............
Of course, asset prices tend to exhibit exponential growth, so it is far better to look at historical prices on a logarithmic scale. This reveals a striking trend. The growth of Sydney property prices has been remarkably consistent at around 9% per annum over the last 50 years.

Sydney Property Prices (log scale)
Prices for Australia overall show a similar trend, with average prices over the six major capital cities growing at an average of 8.6% per annum since 1955.

http://www.stubbornmule.net/2009/06/property-prices/

I absolutely love your enthusiasm kincella, and Robots of course as well. You have obviously done well out of property and it has been fantastic since I purchased my first home for $2000 back in 1968.

However 80 years ago the majority of ordinary people lost thier jobs and thier homes and walked the streets and outback roads in search of any opportunity just to ease the pain in empty stomachs.

But it can never happen today, they just print a bit more money, lend it out and build the ponzi higher. It is happenning in western countries overseas, police are on clifftops in Ireland to stop suicides over the side. The rate here is the highest ever too.

I live in a good area on the Mornington Peninsula which has had a great run in property the last few years. Every second new house has a tradie living in it with a mortgage and they did well. They are losing thier jobs in droves, the building has stopped. Some are wandering the streets and crime particularly burglaries are up.

There are very many other signs and if you are receptive you can read up on them. North QLD, cant sell and so on.

The point I am leading to is that its been great but maybe not one to be so bullish about at the moment.

 

[kincella]

Explode,
my bullishness has to be read in the context of another 30 years of investing in this asset class.....so its not for the reader to rush out and buy property right now....
those tradies will find work if they really want it......private clients need renovations etc....tradies have made stacks of money past 10 years....they have followed the money....in lots of places the only tradies we can get are the 'grey army'...old codgers, who just do small jobs....or otherwise you pay through the nose
just got a quote for a rain tank and grey water at over $3000 and thats after the rebate....I know the tanks are under $500....
noticed another big double block has been demolished this week....about 300metre frontage...just around the corner....
sister just sold her place in FN QLD...shes moving south
those are bumps and troughs in the road to success.....it will not be a 5 or 10 year drought for anyone...
I know its not all roses, in the short term, but it will be again later.....
cheers

 

[explod]

Explode,
my bullishness has to be read in the context of another 30 years of investing in this asset class.....so its not for the reader to rush out and buy property right now....
those tradies will find work if they really want it......private clients need renovations etc....tradies have made stacks of money past 10 years....they have followed the money....in lots of places the only tradies we can get are the 'grey army'...old codgers, who just do small jobs....or otherwise you pay through the nose
just got a quote for a rain tank and grey water at over $3000 and thats after the rebate....I know the tanks are under $500....
noticed another big double block has been demolished this week....about 300metre frontage...just around the corner....
sister just sold her place in FN QLD...shes moving south
those are bumps and troughs in the road to success.....it will not be a 5 or 10 year drought for anyone...
I know its not all roses, in the short term, but it will be again later.....
cheers

Can see no reason for the "Explode" my post was reasonable in the current climate.

And maybe you are correct, as long as you own your properties outright (no debt) you will be fine.

The bullish stance to those more vulnerable can lead them astray.

And most of the young tradies would have no idea when it comes to fixing or working out solutions to real poblems. Give them a nail gun and a frame no worries. But repair footings or a rotten toilet floor and theyd be sooner on the dole.

 

[moXJO]

I'm a tradie and I'm still flat out, plus I don't advertise to boot. And that’s in a town with 10% unemployment. The good money has gone though.
The housing market where I live is very mixed atm. They are ever so slowly coming down. Some areas are close to 50% down from the heights of the bubble in the area. But there were some real s'holes well overpriced. The good areas are still holding ground, and the still seem to be selling fast. Commercial is dead and not moving though.

 

[robots]

hello,

the professor is in the house, great posts again today

thanks Kincella, yes looks good as gold a slab is on the way for Professor Robots and S.Keen is heading up Kosi (great area so he should have a good time)

just nirvana out there in society, life is such a ride

now what was that last parting shot before the internet crashed in the UK:

st kilda units down 50% 2009, fabulous, you still down bro

thankyou
professor robots

 

[trainspotter]

Hey, hey, hey, it's the brickbats and boquet brigade

Major syndicate has fallen over in small country WA town to the tune of thirty million. No K-Mart for the needy. CBD exposure is down 23% and rising.

Flat stats on housing and anything above 500k is dismal. Residential building licences down by 43% on same time last year. Vacant land wiped off 20k and State Revenue Department has sent REFUND cheques to land holders for Land Tax.

Yippeeee ... tell me why I am in property again?

 

[Soft Dough]

my friends...you are going to love this site I just found....so add it to your favorites...hmmm 9% pa growth year on year for the past 54 years....it cannot get much better than that, for a record, for a passive and safe investment.....

extract...............
Of course, asset prices tend to exhibit exponential growth, so it is far better to look at historical prices on a logarithmic scale. This reveals a striking trend. The growth of Sydney property prices has been remarkably consistent at around 9% per annum over the last 50 years.

Sydney Property Prices (log scale)
Prices for Australia overall show a similar trend, with average prices over the six major capital cities growing at an average of 8.6% per annum since 1955.

http://www.stubbornmule.net/2009/06/property-prices/

Not sustainable.

Brought about by a generational change and the baby boomer capitalism. Tell me how are the increases in price going to be sustained with an ageing population, where incomes are going to decrease and taxes for baby boomer services are going to increase.

How can comparative housing continue to increase at a compound rate, in excess of wages growth? It aint going to happen.

If you look at quality and inflation adjusted graph, there is considerable correction still to come.

 

[Taltan]

well lets say one did buy in 2008 at 3% discount or 15,000 less on a 500k house....apart from the high interest rates until Oct 08....now the house gained 3% so in front now by 15,000....and opportunity to pay down the loan faster with the low 5% interest rates.....
or if it was rented out at 4% say 20,000 in....less 40,000 interest expense
claim the loss of 20,000 off tax at 30% = 6000 refund of tax....net loss 14,000 for the year...plus capital gain 15,000....about even....but there could be building allowance and depreciation claims, rates and insurance to increase the losses and increase the tax refund...
the next year rent stays the same...but the interest expense decreases to 5% say 500k @ 5% = 25,000.....and the capital gain of 3% ......
each year the loan reduces, the interest cost is reduced, and the capital gain stays a modest 3%......
sounds boring...slow and steady until one day the house is worth 750k's..the loan is down to 250ks.....thats what entices people into property.....
if one has a good job or career they enjoy....the property is a passive investment.....no need to spend too much time on it....just get on with the rest of their life...

Did you note comprehend my question or do you conveniently igonre its facts? Obviously no-one is going to give you a house at a 3% discount so that 500k house falls 15k (as prices are down 3%). You are not in front 15k. Do you not understand maths. If that is the case I will quickly remind you. If you bought a 500,000 house in Jan 08 that went down 3% its value in Jan 09 was 485,000. If it goes back up 3% its current value is 499,550 so you are not up 15k

 

[kincella]

nit picking now...your question was raised with a quote from Tech a....

regardless....
if house prices were off 3% in 2008....that is 15000 on a 500k prop....
and drum roll....when prices gained 3% in 2009....that was 14550......
do I care about 450 in the greater scheme of things.....
apparently you dont understand....in my example the buyer bought at the discounted price of 485 k's.....so he is in front when the prices rose this year by 3%, and said house is now valued at 500k
oh and just to make things more complicated for you......I used the term discount....but houses were selling for the lower amount....interest rates were high, with hardly any buyers.....truthfully that 500k house would probably sell for 600k's today...since rates are so low, and the fhb market was so hot....but we will stick to the median price for the exercise...
and yes I do tend to ignore posts some times.....because I am too busy, or have other more interesting things to do....or will leave it to another poster, with another view.....
you seem rather angry......like the attempt to belittle me.....
and btw my maths is ok....

here's what I said in that post...............
well lets say one did buy in 2008 at 3% discount or 15,000 less on a 500k house

 

[Taltan]

you responded to my question with an example but put your own twist of a 15,000 discount to distort the purpose of the whole exercise. I was just inquiring whether you don't want to acknowledge what I said so conveniently changed the scenario or whether you were so stupid so as to not understand what I was saying. Turns out its the former.

 

[Mc Gusto]

my friends...you are going to love this site I just found....so add it to your favorites...hmmm 9% pa growth year on year for the past 54 years....it cannot get much better than that, for a record, for a passive and safe investment.....

extract...............
Of course, asset prices tend to exhibit exponential growth, so it is far better to look at historical prices on a logarithmic scale. This reveals a striking trend. The growth of Sydney property prices has been remarkably consistent at around 9% per annum over the last 50 years.

Sydney Property Prices (log scale)
Prices for Australia overall show a similar trend, with average prices over the six major capital cities growing at an average of 8.6% per annum since 1955.

http://www.stubbornmule.net/2009/06/property-prices/

Looking at those charts and the rise of almost epic proportions over the last 10 years you have to ask yourself whether that is sustainable..? I say no. You then ask whether the current level is maintainable..? For that i am not sure. I feel very sory for those jumping in at the bottom of the pyramid with all the incentives they are receiving currently....where will they be in 12-24 months.

 

[kincella]

you dont see a pattern after 54 years...and believe it has to reverse the trend....
currently the govt is allowing immigration...is it 300,000 per annum ???
Melb receives 1500 people per week....you doubt that puts a strain on housing....all competing for inner city houses
I wish we did not have such high immigration...but thats another subject60

and was it 1960 when they opened the immigration gates to all and sundry

 

[Mc Gusto]

i am confident house prices will drop over the next 12 - 18 months

stock will come on

demand will decrease

unemployment will rise

it may not be a significant drop (20%+) but it will drop.

thanks


Gusto

 

[Mc Gusto]

you dont see a pattern after 54 years...and believe it has to reverse the trend....
currently the govt is allowing immigration...is it 300,000 per annum ???
Melb receives 1500 people per week....you doubt that puts a strain on housing....all competing for inner city houses
I wish we did not have such high immigration...but thats another subject60

and was it 1960 when they opened the immigration gates to all and sundry

i see a pattern up to about 1985 and then a huge uptrend. what is this 54 years?

 

[kincella]

well lets go back to the 1920's shall we....was there electricity on the streets then....my father was running a taxi service in Melbourne....with a horse and cart...6 horses in front....carting the soldiers to the ships going to war or coming back from the wars.....hardly many cars on the road then....
my mother who he had not met at the time was driving a 1925 MG sports car
there was no immigration compared to today....
oh for the good old days...not
hardly worth comparing to today
the charts show 1955 to 2009...= 54 years

 

[trainspotter]

Hey hey hey ... it's the sunshine and lollipops brigade!

Stolen from RP DATA:-

There are currently 113,000 residential homes for sale across Australia with an estimated market value of just over $40 billion. The total number of properties being advertised for sale around Australia has moderated over the last year, with current market stock about 13 percent lower than the same time last year. Auction clearance rates last week remained robust with Sydney and Melbourne both recording clearances above 80 percent. This week’s feature article provides an overview of auction markets around Australia over the last year, highlighting the improvement in clearance rates particularly in the key auction markets of Sydney and Melbourne.

With conditions in Australia’s real estate market improving, so too have auction clearance rates. On average, 70 percent of auctions over the last month have recorded a successful outcome, compared with just 46 percent at the end of last year.

Does not mention if the price is rising or investors are just quitting stock to stay liquid.

 

[gfresh]

The bullish r/e brigade is really working overtime now in every media outlet they can get their snout into.. little sickening, but can't expect much better from sales people.

Yup, many are quitting, but scores of FHB are taking their place, which will bring some stability as long as they don't get rate toasted.. Most of the places on the market that I looked at was ex-rental, or currently rented. Most of them a little scrappy, many rubbish. But they will pass from those without the motivation/cash to fix them up, to those that may.

 

[robots]

hello,

another great week in Australia and would like to welcome any new Australian who made it to our shores this week

enjoy some fine reading at ASF

hey hey hey:

http://www.smh.com.au/national/firsthome-incentive-is-deterring-more-buyers-20090724-dw9s.html

this is just great, they all going to wait until boost ends which may mean the demand will just continue to roll on and on

fabulous, hold onto those titles brothers

thankyou
professor robots

 

[robots]

hello,

congratulations:

http://www.reiv.com.au/news/details.asp?NewsID=809

fantastic effort by Steven, not easy out the front of a crowd conducting the fairest sale process on the planet

thankyou
professor robots