House prices to keep rising for years

[robots]

Yep Kincella/Beej, your right - the economy is looking fantastic so you should by all means make the most of it.

But when it turns, I hope you will have the courage to stay & take your licks on ASF?

Cheers

hello,

i am still waiting for an ASF member to take the licks at the pub but has gone quiet

thankyou
professor robots

 

[Buckeroo]

hello,

i am still waiting for an ASF member to take the licks at the pub but has gone quiet

thankyou
professor robots

Hasn't turned yet dummy!

As soon as it does, I will take your offer at the pub - thanks

Cheers

 

[MACCA350]

hello,
the one and only top of the list tax free investment vehicle keeps on and on

And right there is part of the problem and a right sting in the tail for the present and future home ownership dreams of our average citizens..........why, because it inflates prices.........less investment geared incentives = less investors = less demand = lower prices.

They need to get the balance right, at the moment housing is like candy to investors..............and it should be like meatloaf

cheers

 

[robots]

Hasn't turned yet dummy!

As soon as it does, I will take your offer at the pub - thanks

Cheers

hello,

wasnt talking about you but another poster who put a bet on the table, i accepted and WON bigtime, bigtime

poster disappeared, my word is bond unlike other forum users

thankyou
professor robots

 

[Largesse]

hello,

wasnt talking about you but another poster who put a bet on the table, i accepted and WON bigtime, bigtime

poster disappeared, my word is bond unlike other forum users

thankyou
professor robots

Robots,

A True Gentleman. Gracious in victory, even when the lesser man will not honour his wager.

The world needs more Men like yourself.

 

[grace]

Those who say that interest rates at 2007 were high are just plain crazy. I paid 11.5% (and up to 13.5%) variable on my first home loan in the early 90's. Put down 30% deposit and had a very good job. I shopped around at the time and that was the best rate going.

The other interesting thing is that FHB's are currently gaining their loans at 95% debt and 40% with personal guarantees from Mum and Dad. Normally this would be 5% with personal guarantees from parents. I can see some big problems coming there.

 

[knocker]

hello,

wasnt talking about you but another poster who put a bet on the table, i accepted and WON bigtime, bigtime

poster disappeared, my word is bond unlike other forum users

thankyou
professor robots

Well done robots. You are an absolute legend in your own lunch time.

 

[aleckara]

Those who say that interest rates at 2007 were high are just plain crazy. I paid 11.5% (and up to 13.5%) variable on my first home loan in the early 90's. Put down 30% deposit and had a very good job. I shopped around at the time and that was the best rate going.

The other interesting thing is that FHB's are currently gaining their loans at 95% debt and 40% with personal guarantees from Mum and Dad. Normally this would be 5% with personal guarantees from parents. I can see some big problems coming there.

Hi Grace,

A few bad assumptions here. Firstly don't be so naive to suggest that most parents help their children into a home. In fact most "parents" I've met are thinking about their retirement and think their children are spoilt and have it "so much easier than them". It's what all parents think most of the time. With many family breakups happening all across the country I don't see the large population of parents equipped to do this.

High interest rates are better for home buyers anyway. Because in this country a stimulus doesn't result in too many houses built due to governmental constraints, profit gouging and many other things as soon as interest rates fall or grants are given the price rises to accommodate the new money in the market. At least with a high interest rate your savings account can beat house price inflation and you have an incentive to save for a new deposit. There are many FHB's that feel helpless to save for a deposit. As they are saving the house is getting further and further away from them since their accounts are not beating the growth rate in the housing market. Many people are "scared" that it will rise more and when buyers feel helpless like this the FHB works so well. Having money now means you can get on the train quick before it is too late.

I think the whole FHB in general is a bad idea. It definitely does increase the interest rate sensitivity of the country as many borrowers can't afford higher rate repayments.

 

[Mc Gusto]

sunshine and lollipops....lets just keep paying more for houses..it's keeping the economy afloat isn't it?

AUSTRALIAN house prices were overvalued by between 5 and 15 per cent even before prices surged another 4 to 5 per cent in the June quarter, the International Monetary Fund has warned.

The IMF's annual review of Australia has issued a sharp warning for the first time that the high and rising levels of household debt and net foreign debt make it vulnerable to a sudden collapse in the confidence of global investors.

''Australia's persistent current account deficit, sizeable short-term external debt, and the worsening households' balance sheets were seen as vulnerabilities,'' the IMF's board concluded.

A similar warning was delivered by IMF staff who visited Australia in June to meet Treasurer Wayne Swan, Reserve Bank governor Glenn Stevens and senior officials.

''In the past, Australia has readily financed its current account deficit, but global capital markets and the availability of capital have become more challenging,'' the staff report said.

''Staff projects an increase in net foreign liabilities to 70 per cent of GDP by 2014, assuming current account deficits of about 4 per cent of GDP are sustainable.''

If markets decide they are not, the report warns, a capital shortage could reduce future growth.

Neither the staff nor the board proposed ways to reduce Australia's dependence on debt, other than to urge the authorities to lean on the banks to reduce their short-term foreign debt - which banks are already doing.

The IMF's concern matches the views put by Mr Stevens last month, when he warned that Australia and the world would have to get used to working with less debt and ''scarcer and more expensive credit'' in future.

The IMF praised the Rudd Government for its fiscal stimulus, calling it a ''timely policy response, which has effectively cushioned the impact of the global financial crisis on the Australian economy''.

It estimates that, while the discretionary fiscal easing will amount to more than $100 billion or 8 per cent of GDP by 2012, the benefit the economy derives from it will be close to 10 per cent of GDP over that time.

But it forecasts that Australia's recovery will be slower than Treasury and the Reserve Bank predict, with growth of minus 0.5 per cent this year, 1.5 per cent in 2010 and 2.8 per cent in 2011.

If so, it says, the Government's debt will take longer to repay than Treasury forecasts, with net debt in 2019 likely to be 10 per cent of GDP rather than the 4 per cent officially predicted.

http://www.theage.com.au/national/debt-a-threat-to-growth-says-imf-20090809-ee9x.html

 

[MrBurns]

sunshine and lollipops....lets just keep paying more for houses..it's keeping the economy afloat isn't it?

AUSTRALIAN house prices were overvalued by between 5 and 15 per cent even before prices surged another 4 to 5 per cent in the June quarter, the International Monetary Fund has warned.

But when will it correct ?
I will be one hell of a correction when it does.

Ever time I go to an open for inspection it's almost all Chinese people attending, I think KRudd is smuggling them in overnight then when it reaches a certain saturation he will get up one morning and only speak Chinese from then on and welcome us to the new Australia.

 

[grace]

Hi Grace,

A few bad assumptions here. Firstly don't be so naive to suggest that most parents help their children into a home. In fact most "parents" I've met are thinking about their retirement and think their children are spoilt and have it "so much easier than them". It's what all parents think most of the time. With many family breakups happening all across the country I don't see the large population of parents equipped to do this.

The 40% of FHB's with parents giving personal guarantees are current stats coming from the Banks. I'm very worried for both the FHB's and the parents in relation to this. I can see a heap of pain coming for both parties.

 

[satanoperca]

hello,

wasnt talking about you but another poster who put a bet on the table, i accepted and WON bigtime, bigtime

poster disappeared, my word is bond unlike other forum users

thankyou
professor robots

And who would you be referring to?

Robots,

A True Gentleman. Gracious in victory, even when the lesser man will not honour his wager.

The world needs more Men like yourself.

Grow up and don't make assumptions about someone who you know nothing about.

Robots, I have a life outside ASF and do not always check. Try sending mail before you assume that I would not honour the bet.

I will contact you privately about catching up on the weekend down in St Kilda with a case of beer and parma at the local. Gee you won big time!!!

Yes, you won the bet, RE was up for the first six months of the year, but still down YoY according to the weighted average supplied by the ABS.

Given the following :
Historically low interest rates
Government handouts everywhere
Low unemployment
A biased media
Freely available credit

I cannot understand why they didn't go up even more. When one or more of these conditions changes, will they be able to keep going up. Only time will tell.

Given the above, are you willing to place another wager on property prices, you can come up with the terms and conditions?

Cheers

 

[MrBurns]

And who would you be referring to?
Grow up and don't make assumptions about someone who you know nothing about.
Robots, I have a life outside ASF and do not always check. Try sending mail before you assume that I would not honour the bet.
I will contact you privately about catching up on the weekend down in St Kilda with a case of beer and parma at the local. Gee you won big time!!!
Yes, you won the bet, RE was up for the first six months of the year, but still down YoY according to the weighted average supplied by the ABS.
Given the following :
Historically low interest rates
Government handouts everywhere
Low unemployment
A biased media
Freely available credit
I cannot understand why they didn't go up even more. When one or more of these conditions changes, will they be able to keep going up. Only time will tell.
Given the above, are you willing to place another wager on property prices, you can come up with the terms and conditions?
Cheers

I didnt think you'd disappeared, your earlier comments about the bet didnt sound like someone who would avoid the cost of a few beers and a parma.

You're right on the housing even the IMF is warning us now, this could be VERY nasty, I've seen housing slumps before but I'm getting a real bad feeling about this one.

 

[trainspotter]

Stimlus, rates drive rise Posted Tue Aug 4, 2009 12:03pm AEST

http://www.abc.net.au/news/stories/2009/08/04/2645528.htm

Mr Christopher says it is clear that Federal Government and Reserve Bank policies are driving the sharp price rises.

"The reason why we're having this rise is because of macro factors, being the cuts in interest rates and the expansion of the First Home Owners Grant scheme," he said.

Louis Christopher also expects the price rises to continue over the next few months.

"I believe that the next quarter, being the September quarter, we are likely to see further rises," he said.

"When we look at the most recent short-term indicators, such as auction clearance rates, stock on market levels, housing finance, they're all indicating right now that this current quarter is also experiencing house price rises."

He thinks the size of the bounce may cause the RBA and Government to look closely at how they can contain the price explosion if it does persist beyond the current quarter.

"Over the medium to long-term, this certainly raises some key questions for the Federal Government and the Reserve Bank of Australia," he said.

"Clearly having prices rising at nearly 5 per cent a quarter, each quarter, is not sustainable, and it certainly risks building another housing bubble."

The Reserve Bank governor, Glenn Stevens, already gave a stern warning in a speech last week about the dangers that a lack of home construction and the consequent rise in existing house prices would pose for Australia's economic recovery.

 

[satanoperca]

Flip of a coin :

Heads - housing led recovery
Tails - housing led recession

The coin is still in the air.

 

[MrBurns]

Flip of a coin :

Heads - housing led recovery
Tails - housing led recession

The coin is still in the air.

Recovery ? I think it's over recovered to buggery.

 

[satanoperca]

http://news.brisbanetimes.com.au/breaking-news-business/aussie-average-new-mortgage-highest-ever-20090809-ee0y.html

Average mortgage/Average Income = Approx. 7

Sustainable, yes, just don't let IR, unemployment and tax rates increase and government stimulus, credit availability,government revenues, credit growth and debt decrease.

And if that doesn't work out we can always look to the Dragon to buy the whole country.

Cheers

 

[robots]

hello,

thanks Largesse,

just plodding along and asking the questions, ASF Members List allows you to check up when people last logged and I find it a great resource

no double or nothing for Robots, i like collecting

wouldnt have a clue about the future direction just in for the ride

won BigTime

thankyou
professor robots

 

[Beej]

no double or nothing for Robots, i like collecting

Hey Robots - you could collect, but still make a new bet? I think that's what satanoperca was asking for anyway?

Cheers,

Beej

 

[robots]

hello,

yes i know, but i lucked that one and will enjoy it in all its glory when the day arrives

thankyou
professor robots