House prices to keep rising for years

[Kimosabi]

 

[tech/a]

Ah I see.
From new paradim to despair EVERYONE goes broke.
Ill be sure to remember that.

 

[Kimosabi]

Ah I see.
From new paradim to despair EVERYONE goes broke.
Ill be sure to remember that.

Robert Schiller (author of irrational exhuberence) likes to use the Amsterdam house example (from University of Maastricht professor Piet Eichholtz) where records are kept dating back to 1650.

The average house on the Herengracht now costs 2.6 million euros. That is, on an inflation-adjusted basis, just a bit less than in 1736, when house prices along the Herengracht were at their historical high. If house prices keep rising at their current tempo, the 271-year-old record will be tied in 2008…

Sorry Tech/A, but the FACTS and HISTORY seem to be conspiring against you...

 

[chops_a_must]

a quarter of children going hungry thats a big claim by the "report" doesthis mean 25% of kids there are starving or simply not getting dessert

Sounds to far out to be true where bouts did this report come from, got a link ?

The transcript is not up yet, but I will put it up when it is. The jist of it was that hungry kids are now no longer just in the poorer areas, there are now just as many kids going hungry from traditionally well to do suburbs.

I know you are a property perma-bull, but in WA at least, we are bumping up against where fundamentals drive prices higher, and where ordinary people can not afford to pay to even rent.

Here are some clippings from the same programme last week, in the same vein:

First tonight, the flip side of WA's V8 economy. A report published today has documented a dramatic increase in the cost of living. Welfare groups say they're already seeing the fallout with a surge in the number of families seeking support. An overheated rental market and a shortage of public housing are not helping and charities say they're witnessing a new population of homeless seeking crisis accommodation.

...

CLAIRE MOODIE: The Salvation Army which runs soup kitchens in the city is alarmed by the growing demand for its services which it says is the downside of WA's boom society. It's been forced to turn away up to 40 people a right from its Lentara shelter in Northbridge.

IAIN TRAINOR, THE SALVATION ARMY: Today, we're finding more and more people are arriving at Lentara with work. They have a job, but they have no accommodation. If you could see the situations, it would make you cry. We have families living in cars, in parking lot s down by the Swan River.

...

CLAIRE MOODIE: Welfare groups and charities believe they're seeing a new class of homeless - the fallout from WA's soaring cost of living, a two-year waiting list for public housing and an unaffordable rental market.

MICHAEL SHEEHAN, RUAH CENTRE: Single people that are working that have jobs are now actually in crisis accommodation because they can't afford or can't get into private accommodation.


...

IAIN TRAINOR: I've taken people to appointments where there might be 20 people looking for a one bedroom unit and three of those are business people with suits on.

CLAIR MOODIE: So what is the chance of a homeless person getting a private rental these days?

IAIN TRAINOR: I think the term the Australian term is Buckleys and none.

So tell me what happens to society when EMPLOYED people can't afford to house themselves?

Tell me what happens when essential service staff are getting paid less than the average wage, and are being offered pay increases less than the local inflation rate, and cost of living increases?

So something has to give... and if people can no longer afford to pay... the conclusions are obvious.

And besides that, you'd be stupid to buy a house in Perth now, unless you were planning on living in it for the next 30 years, because the amount of infill planning is enormous... and if you aren't near one of those centres, you will be left without transport and services.

Cheers.

 

[chops_a_must]

Robert Schiller (author of irrational exhuberence) likes to use the Amsterdam house example (from University of Maastricht professor Piet Eichholtz) where records are kept dating back to 1650.


Sorry Tech/A, but the FACTS and HISTORY seem to be conspiring against you...

Unfortunately European and Australian property isn't comparable because of the different urban design dynamic. And the changing European city design post wwII, i.e. for cars, has meant an artificial inflation in the previously highly concentrated and mass transit oriented areas.

Luckily, thanks to the end of cheap oil, this will all close up. And certain property values will decrease in relation to the comparable rise in cost of living it takes to live in those areas...

 

[tech/a]

Tell me what happens when essential service staff are getting paid less than the average wage, and are being offered pay increases less than the local inflation rate, and cost of living increases?

So something has to give... and if people can no longer afford to pay... the conclusions are obvious.

Happens at peaks and happens WORSE in troughs.
I dont think its that obvious what WILL happen.

What is needed though and has been an emerging trend in Australia and well heeeled in other countries is higher density housing.
No they dont have to be ghetto's.Mind you its the lack of pride many have which turn good housing areas into ghetto's.

For investors this is the new era in housing,for those who are finding it tough they will--and some will--have to adapt to what life is throwing at them.

Wonder what the reaction would be if a levy was passed to tax everyone owning a home (read mortgage) $5 a week to help those less fortunate?
What a can of worms!

 

[chops_a_must]

What is needed though and has been an emerging trend in Australia and well heeeled in other countries is higher density housing.
No they dont have to be ghetto's.Mind you its the lack of pride many have which turn good housing areas into ghetto's.

For investors this is the new era in housing,for those who are finding it tough they will--and some will--have to adapt to what life is throwing at them.

Pretty much tech.

Most of my friends, just about everyone I know my age, wants to live in smaller places so long as they are closer to everything.

But in Australia, and certainly in Perth, you just don't get a choice.

I couldn't service a mortgage, even if I wanted to, but by the time I could/ want to, hopefully there will be many more options.

You've been to WA tech, so obviously you've seen what can be done i.e. Subiaco, under the better cities programme. East Perth is another example.

It's then going to be a matter of choosing the correct area. No point in buying a dog box in the middle of nowhere, with no transport.

The secret is going to be buying along railways. Subiaco is a great example of why. In WA at least, you'd want to be looking at Claremont, North Freo, Cott, Maylands, Vic Park (if you could afford these areas). But what will be most interesting will be the Murdoch and inner city plans. By the time I'm ready and wanting to have my own place, these areas will probably be available, and in my price range.

I'll see if I can get the Murdoch plans on here for the reasons why I would be very interested in it...

 

[robots]

Ah yeah, so why have Adelaide and Tasmanian house prices gone nuts in recent years as well?

Most would rather drink battery acid than live in these places.

Report out last night saying 25% of all kids in WA are going hungry each night. No affordability/ cost of living problem at all... clearly.

Thankyou.

hello,

no there isnt an affordability crisis

thankyou

robots

 

[robots]

hello,

since we on about everything,

how is Ruddie looking at taking away the $500 bonus for pensioners,

crikey is this guy for real, oh rudd is such a nice guy

thankyou

robots

 

[tech/a]

Pretty much tech.

Most of my friends, just about everyone I know my age, wants to live in smaller places so long as they are closer to everything.

But in Australia, and certainly in Perth, you just don't get a choice.

I couldn't service a mortgage, even if I wanted to, but by the time I could/ want to, hopefully there will be many more options.

You've been to WA tech, so obviously you've seen what can be done i.e. Subiaco, under the better cities programme. East Perth is another example.

It's then going to be a matter of choosing the correct area. No point in buying a dog box in the middle of nowhere, with no transport.

The secret is going to be buying along railways. Subiaco is a great example of why. In WA at least, you'd want to be looking at Claremont, North Freo, Cott, Maylands, Vic Park (if you could afford these areas). But what will be most interesting will be the Murdoch and inner city plans. By the time I'm ready and wanting to have my own place, these areas will probably be available, and in my price range.

I'll see if I can get the Murdoch plans on here for the reasons why I would be very interested in it...

Chops.

Im thinking more rental.
Sure there will be some buying but more rental.
See with land being so expensive the only way to do it is to have multiple story.
Have you seen what they do with prefabricated high rise housing out of Europe.
I saw an 8 story 100 odd unit developement built foundations up in 3 weeks on Fox the other day--bloody hell thats cheap!

Something will pop up and I may be involved---probably not in Perth but a mate of mine could be---my lips are sealed he is currently in the Industrial developement area ---lucky bastard.

 

[chops_a_must]

hello,

no there isnt an affordability crisis

thankyou

robots

Geez... my argument got trashed didn't it?

Chops.

Im thinking more rental.
Sure there will be some buying but more rental.
See with land being so expensive the only way to do it is to have multiple story.
Have you seen what they do with prefabricated high rise housing out of Europe.
I saw an 8 story 100 odd unit developement built foundations up in 3 weeks on Fox the other day--bloody hell thats cheap!

Something will pop up and I may be involved---probably not in Perth but a mate of mine could be---my lips are sealed he is currently in the Industrial developement area ---lucky bastard.

Yeah, I have seen that stuff, it is pretty impressive. Last I heard was that BP owned a lot of the patents for those quick high density pre fab stuff.

I'd only be interested in buying where you could get good rental occupancy as well... it's why I like the murdoch plans... the hospital right there, the uni as well. I doubt you'd have many vacancies...

Here is a pictorial of the plans for anyone (especially in perth) interested.

 

[Kimosabi]

Housing Bubble, What's the Trouble

 

[wayneL]

Wayne.
I think its kinda dumb using macro economic arguement as a complete blanket.

No it isn't. I know of many good businesses that went broke through failing to look at the macroeconomic picture.

The most successful businesspeople in the long term are those who are adept at anticipating economic cycles. This means looking at the macro picture.

The point Ive been making all along and will continue to make is.
Forget about masses of armaggedon news. If you wish to survive and prosper look at those things that 95% of the population DOSENT. 95% read agree with and act relative to "News".Their results are congruent with that which they BELIEVE.

As above, good businesses go down the toilet by forgetting armageddon news. This is where the now cliched' 95/5 ratio comes in. The 5% will anticipate and/or adapt to the macroeconomic as it unfolds, to ensure their own microeconomic circumstances continue to survive and prosper. We see this in the fortunes of share market/futures traders right now. We see it in the participants of the housing markets here in the UK and the USA.

Ignorers of housing Armageddon are in deep doodoo, whereas those who anticipated and hedged or adapted continue to do just fine.

I put up specific examples to "balance" the discussion.Just as a profitable trader would use specific examples of profit in this Doom and Gloom market.

What you see as chest thumping are simply real life examples of what others (myself in this case) are achieving,would it be less offensive if I said "A guy I know well"?

Tech,

You were one of the first on this forum to pull up hindsite traders who failed to verify their trades, and rightly so. You may have made 500%, but it is just a number plucked out of your @rse until it is verified. It's a hindsight trade until you can prove it.

Therefore, practice what you preach and verify personal examples.

It's all in the delivery. You continue to inflate your ego by finding it necessary to de-edify others. If you would only cease and desist this practice, your contributions would be fully appreciated.

 

[pepperoni]

There IS an affordability crisis .... debt affordability!

Finance costs as much as the mythical returns property robots expect from simply buying a property with no value add. All their property leverage fantasies are dying a sudden death. If i didnt think these baby boomer and gen x morons were I dying breed I be all over bank stocks right now.

Speculating with borrowed money has never been a good idea, especially at the levels favored by auction squad robots.

This thread is one big lol session .... cant wait to see who wasted their weekend at open houses and talking to slimy re agents. Time is money people! If you have that much spare time get a second job stacking shelves and try a well proven path to long term riches SAVING MONEY hahahaha

 

[pepperoni]

New paradigm hahaha ... what did buffet say years and years back ... markets are mechanisms to transfer wealth from the impatient to the patient. Banks are the only people making money out of the recent property frenzy and even they are taking some hits. 10% return on your principal year in year out is a realistic stretch return to shoot for. Slow and steady really does win the race.

 

[xoa]

Walked down to the supermarket this morning and took a look at the local Ray White real estate office. I remember they were trying to rent a modern two storey house in Deagon about 6 weeks ago at $540pw. They're asking $420pw now, which is still pretty optimistic.

The debt-owners must have been smoking some strong stuff to expect such a high rent in one of the poorer suburbs of Brisbane. So many self-proclaimed investors have naively entered the property market, with little or no understanding of their responsibilities or what they can expect from their investment. Weeks of no rent with rising interest repayments gradually beats some sense into them.

 

[robots]

hello,

just a note on auctions this week,

i think the weekend will be pretty ordinary, probably around mid 60's

thankyou

robots

hello,

yes yes, thankyou

67% clearance for yesterday, no problem

next week will probably be interesting as a huge no. go up for sale, mid 60's again, the trophy houses/units are still being snapped up at realistic prices

get in over the next few months if looking to buy a "home"

thankyou

robots

 

[numbercruncher]

Yes yes plenty of news today and of late of absolutely soaring property reposessions, record amounts of RE coming to market, falling clearance rates, sellers accepting less for properties, only a matter of time till falling prices show in the official dodge brothers figures.

So much for " House prices to keep rising for years "

Must be obvious to people by now that a soaring Share market of the last few years contributed massively to the old days of rising RE prices.

The Real Estate Institute of Victoria blamed the 67% clearance rate on surging interest rates and the fact that the number of properties for sale was double that for the Labour Day weekend last year. The clearance rate is the lowest recorded for Saturday auctions since September 2006, and 16% below last year.

REIV chief executive Enzo Raimondo sounded a warning: "The real test will be next weekend, with a record 1400 auctions scheduled. If the clearance rate is similar, than we'll know this is a sign of things to come."

http://www.theage.com.au/news/national/were-feeling-it-as-us-economy-worsens/2008/03/08/1204780131613.html

Even the head of the REIV is starting to see reality.

 

[explod]

hello,

yes yes, thankyou

67% clearance for yesterday, no problem

next week will probably be interesting as a huge no. go up for sale, mid 60's again, the trophy houses/units are still being snapped up at realistic prices

get in over the next few months if looking to buy a "home"

thankyou

robots

Disagree, wait for at least 3 years and get in near the bottom. However protect your cash in the meantime by putting it into prescious metals, oil and alternative energy stocks.

 

[robots]

hello,

explod, do you think prices are going to drop?

i definitely dont

it wasnt long ago 02-04 that auction clearance rates were the same, it was a primo buying opportunity and many who bought have got good gains

thankyou

robots