House prices to keep rising for years

[numbercruncher]

Thats because the Money Renters are refinancing in record droves, 1/3rd of all mortgages sold are currently refinances.

 

[Pommiegranite]

My home is currently up for sale (Melbourne Western suburbs). It has been for about 5 weeks. No offers (no problem).

My RE agent is now suggesting that I should attend other 'open for inspections', to get an idea of comparable homes/values.

He also told me, when I signed up, how the area is booming i.e new town centre etc etc. Isn't it funny how agents always have this microeconomic view?

My dilema is that, I could advertise at a reduced price, but that doesn't mean that the home that I will end up buying (in Sydney) would be reduced in price proportionaly. I think the market is now in the 'cat and mouse' stage i.e viewers not buying, sellers not reducing prices.

Fortunately, I have no homeloan, and can comfortably sit and wait. However, I really do feel for those who will be forced to sell cheaply, only to find themselves never being able to get on the property ladder again.

 

[KIWIKARLOS]

Thats because the Money Renters are refinancing in record droves, 1/3rd of all mortgages sold are currently refinances.

Refinancing isn't a cheap affair the fee's most people have to pay make it only worthwhile to do so to tap equity or get a fixed rate. No one in their right mind would pay $1-2 K in fee's to save 25 basis points would they ?

IMO its way to late to move to a fixed rate loan if things keep going how they are chances are we could see rates starting to come down by year end.
The reduction of carry trades between Jap - OZ has greatly increased the banks cost of capital effectivly doubling the effects of the RBA rises. If carry trades dry up more we could see significant increases from the banks and im willing to be the RBA will decrease if they go to high. I feel we have hit a good rate at the moment enough to dampen spending (cause some hardtimes for those at the lower end) but not enough to significantly slow our economy. Any significant increases beyond say .5% - 1% could really have some bad effects on our economy and would undoubtedly be taking the tightening to far.

 

[pepperoni]

Rent covers interest. Not to mention that its tax deductable.

$100,000 with 20% down = $20000

3% gain = $3000.

3000/20000 = 15%

Any other areas youd like a hand in?



With remaining properties Freehold or geared max 36% passive income is the achieved goal.With rents rising any down turn is like holding your BHP long term and recieving dividend.

Way to break even on that 20k!

If you hold it just about forever that is .... otherwise way to fill govt stamp duty and land tax coffers!

 

[pepperoni]

My home is currently up for sale (Melbourne Western suburbs). It has been for about 5 weeks. No offers (no problem).

My RE agent is now suggesting that I should attend other 'open for inspections', to get an idea of comparable homes/values.

He also told me, when I signed up, how the area is booming i.e new town centre etc etc. Isn't it funny how agents always have this microeconomic view?

My dilema is that, I could advertise at a reduced price, but that doesn't mean that the home that I will end up buying (in Sydney) would be reduced in price proportionaly. I think the market is now in the 'cat and mouse' stage i.e viewers not buying, sellers not reducing prices.

Fortunately, I have no homeloan, and can comfortably sit and wait. However, I really do feel for those who will be forced to sell cheaply, only to find themselves never being able to get on the property ladder again.

Your agent is conditioning you for a low price to make the clearance rate look good for the robots ;-)

I wouldnt sell now .... rent it, or even borrow against it and negative gear.

The transaction costs will just suck mega bucks out of the whole sell and buy thing.

 

[pepperoni]

Refinancing isn't a cheap affair the fee's most people have to pay make it only worthwhile to do so to tap equity or get a fixed rate. No one in their right mind would pay $1-2 K in fee's to save 25 basis points would they ?

IMO its way to late to move to a fixed rate loan if things keep going how they are chances are we could see rates starting to come down by year end.
The reduction of carry trades between Jap - OZ has greatly increased the banks cost of capital effectivly doubling the effects of the RBA rises. If carry trades dry up more we could see significant increases from the banks and im willing to be the RBA will decrease if they go to high. I feel we have hit a good rate at the moment enough to dampen spending (cause some hardtimes for those at the lower end) but not enough to significantly slow our economy. Any significant increases beyond say .5% - 1% could really have some bad effects on our economy and would undoubtedly be taking the tightening to far.

Agree rates are high enough barring any further inflation increases. Any more rate rises will overcook it.

 

[pepperoni]

Thats because the Money Renters are refinancing in record droves, 1/3rd of all mortgages sold are currently refinances.

Refinancing or ixing now vs having fixed in the first place = another 1-2k in bank fees and potentially mortgage stamp duty. The joys of home ownership.

In other news, if stock markets didnt have indicies re agents and robots would be telling you they are up 20% this year .

 

[ROE]

Fortunately, I have no homeloan, and can comfortably sit and wait. However, I really do feel for those who will be forced to sell cheaply, only to find themselves never being able to get on the property ladder again.

If there is a will there is a way....What about people who are born now? cant they afford a house when they grow up? what about your kids? what about migrants that came here with empty handed now and in the future they cant get a house? hmm seem a little far fetch to me

Property is no different from any other assets, there will be cycles and time when things are expensive and cheap...no one can predict the future but what you can be absolutely sure is there are always people who can afford their first home in any time and well into the future.

 

[zt3000]

Problem i see is people that people are lazy to work on a saturday, and have two jobs, night and day to EARN money to pay for mortgage.

$50 a week more ... pffft

go work couple extra hours and you wont have that problem

but nooooooooooo people want their fancy plasma screens in every room, want their 4 holidays a year, want to live in best suburb

face the music people ... only with hard work will you achieve anything

nothing is free and no one will give you a free ride,

our parents made it, and their parents ect ect. They had it much harder i assure you

The other thing, you cant afford something ... why did u purchase in the first place??? simple

On another note ... latest housing figures www.abs.gov.au

VALUE OF DWELLING COMMITMENTS

January 2008 COMPARED WITH December 2007:


In trend terms, total value of dwelling finance commitments excluding alterations and additions increased by 0.9%. Investment housing commitments rose 1.2% and owner occupied housing commitments increased by 0.8%.
In seasonally adjusted terms, total value of dwelling finance commitments excluding alterations and additions increased 3.7%. Investment housing commitments increased 8.3% and owner occupied housing commitments increased 1.7%.


NUMBER OF DWELLING COMMITMENTS

January 2008 COMPARED WITH December 2007:

In trend terms, the number of commitments for refinancing of established dwellings rose 3.3% and the seasonally adjusted series increased 6.0%.
In trend terms, the number of commitments for owner occupied housing finance increased by 1.2% while the number of commitments for owner occupied housing finance excluding refinancing rose by 0.2%.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments decreased from 18.4% in December 2007 to 18.0% in January 2008.
In original terms, the number of fixed rate loan commitments as a percentage of total owner occupied housing finance commitments decreased from 23.4% in December 2007 to 22.3% in January 2008

IMO - housing has long long way to go before we have a downturn ... if any ...

resource supercyle to continue for Decades to come .. long live the bull

(For entertainment purposes only)

 

[explod]

Problem i see is people that people are lazy to work on a saturday, and have two jobs, night and day to EARN money to pay for mortgage.

$50 a week more ... pffft

go work couple extra hours and you wont have that problem

but nooooooooooo people want their fancy plasma screens in every room, want their 4 holidays a year, want to live in best suburb

face the music people ... only with hard work will you achieve anything

nothing is free and no one will give you a free ride,

our parents made it, and their parents ect ect. They had it much harder i assure you

The other thing, you cant afford something ... why did u purchase in the first place??? simple

On another note ... latest housing figures www.abs.gov.au

VALUE OF DWELLING COMMITMENTS

January 2008 COMPARED WITH December 2007:


In trend terms, total value of dwelling finance commitments excluding alterations and additions increased by 0.9%. Investment housing commitments rose 1.2% and owner occupied housing commitments increased by 0.8%.
In seasonally adjusted terms, total value of dwelling finance commitments excluding alterations and additions increased 3.7%. Investment housing commitments increased 8.3% and owner occupied housing commitments increased 1.7%.


NUMBER OF DWELLING COMMITMENTS

January 2008 COMPARED WITH December 2007:

In trend terms, the number of commitments for refinancing of established dwellings rose 3.3% and the seasonally adjusted series increased 6.0%.
In trend terms, the number of commitments for owner occupied housing finance increased by 1.2% while the number of commitments for owner occupied housing finance excluding refinancing rose by 0.2%.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments decreased from 18.4% in December 2007 to 18.0% in January 2008.
In original terms, the number of fixed rate loan commitments as a percentage of total owner occupied housing finance commitments decreased from 23.4% in December 2007 to 22.3% in January 2008

IMO - housing has long long way to go before we have a downturn ... if any ...

resource supercyle to continue for Decades to come .. long live the bull

(For entertainment purposes only)

Yep, our parents made it with only one wage earner. Mum stayed home and rared the childen. The children were well behaved and in thier turn contributed meaningfully. Of course I am now a Grand Parent so can see that we perhaps spoilt you.

Parents today both work and some have 2 jobs on top of that and still struggle to make ends meet.

Your broad rationalisation and analogy is typical of someone not exposed to the real situation out there. A lot of variations that cannot be steriotyped.

 

[tech/a]

Your broad rationalisation and analogy is typical of someone not exposed to the real situation out there.

Everyone is exposed to everything.
We all have the choice of "How Exposed" we wish to be.
Unless you are handicapped in some way.

 

[chops_a_must]

Indeed.

I can pick up 3 bed terraces just over the border around the outskirts of Cardiff with 8 -10% yields. Not a helluva lot going for it either, but at least you get yield... and the tenant pays the rates as well.

Disappointing that you were the only one who cared to comment on South Australian property.

I'd say there is quite a bit going for Cardiff actually. Has a kick **** music scene. Steve Albini does quite a bit of work there for instance - a couple of Perth bands have gone there specificially to record. It is world leading in that regard. But unlike say, Adelaide, young people want to be there. Which from a development perspective, is very healthy.

So yeah, I guess people in Adelaide, seeing as though they don't want to counter what I said, agree that it is a hole, has no future and is a place where young people don't want to be, and where educated persons do not want to stay.

Apart from that annual day of mourning, on proclamation day on or about the 28th December, what else does it have?

 

[theasxgorilla]

Disappointing that you were the only one who cared to comment on South Australian property.

Or Cardiff in Wales even?

 

[chops_a_must]

Or Cardiff in Wales even?

You know what I mean, he was comparing the two. :

P.S. - Swedish property would do very well if/ when energy becomes a real crisis. Lucky buggers with your mass transit systems...

 

[gfresh]

Latest Residex update out. Houses prices fell in Brisbane, Melbourne, Sydney, Hobart, Darwin in February.

http://www.residex.com.au/newsletter/source2008_03aMC.html

Unit prices up in most areas..

Rent up 4% across the board in Feburary... sustainable?

Worth noting "% of suburbs declining in Feb 2008" figures.

Bottom has some valuable advice for buyers.

 

[numbercruncher]

Interesting no RE permabulls have comment on falling prices ? Might be a data error or seasonal anomaly ?

I see the cost of Money might get a bit more expensive yet .....

CASH-strapped home owners should prepare for more interest rate pain.

Just as the banks slapped a second round of independent rate rises on borrowers, Reserve Bank Governor Glenn Stevens has indicated rates could rise again in May – the third time this year.

Australia's central bank chief told a private Treasury seminar that annual inflation could blow out beyond its target to 4 per cent by Easter.

He warned Department of Treasury officials to expect a high number in the next set of consumer price index (CPI) figures, according to a copy of his speech made public yesterday.

"When we get the March 2008 figures towards the end of April, we will most likely find that the rise over the four quarters is more like 4 per cent," Mr Stevens said.

That figure would take inflation well above the RBA's longstanding 2-3 per cent target and increase the chances of more rate hikes.

It came as a report by JPMorgan/Fujitsu this week predicted more than 700,000 households will be under mortgage stress by the middle of the year. Compounding the problem for borrowers is the turmoil in global financial markets which is making it more expensive for banks to source funding.

As a result, most lenders have lifted their benchmark mortgage rates above the Reserve Bank's recent quarter percentage point rise to 7.25 per cent.

Bank of Queensland hiked its rate by 40 basis points – 15 points higher than the official rate increase.

The Commonwealth Bank, ANZ, St George and Suncorp have raised their rates by 35 basis points. Westpac has passed on a 30-basis point increase and National Australia Bank 29 basis points.

Macquarie Group raised rates by a staggering 70 basis points on its low-doc loans – loans for people who can't get standard mortgages because of a lack of paperwork or who are self-employed.

And more rises are tipped to come, even without further prompting by the RBA.

The authors of the JPMorgan/Fujitsu report said the banks had passed on "nowhere near their increased cost of funding".

http://www.news.com.au/couriermail/story/0,23739,23376897-952,00.html

This W/ends auction results will be interesting im sure

 

[robots]

hello,

yes auction rate will be very ordinary today, I would say around 60%

the interesting one is the recomendation not to buy a prop with lease arrangment in place and to keep lease agreements short therefore allowing for increases to easily occur, doh

rents up up and up, about time as they are extremely low

thankyou

robots

 

[numbercruncher]

the interesting one is the recomendation not to buy a prop with lease arrangment in place and to keep lease agreements short therefore allowing for increases to easily occur, doh

I heard that they are also recommending that Investors pray 3 times a day to the Mother of God that they dont end up with a vacant property with a 500k mortgage @ 10pc.

 

[robots]

hello,

what a tent city is starting up in all capital cities,

although wouldnt surprise me if the government helps out all the struggling renters while the people out their doing something get stung with 10% IR's,

thankyou

robots

 

[numbercruncher]

Never mind the tents, renters being targeted by greedy " Investors " could be better off hooking up the caravan doing a 12 month gold fossicking trip around Australia while the caranage unfolds. Least their savings will be getting 8pc whilst on the roadtrip and the money renters will be forking out 10pc.

The unfolding of the Greatest pyramid scheme in Modern history is going to get nasty, oh I mean it already is ....

The Real Estate Institute of Victoria is preparing for a big weekend of auctions but despite the record number of properties going under the hammer the REIV isn't expecting the properties to sell.

A record 1400 homes and units are expected to be put to auction.

The previous record was just over 1200 auctions during the property boom of 2003.

http://www.abc.net.au/news/stories/2008/03/14/2189245.htm?section=business

Lot of competition to " sell " out there !