House prices to keep rising for years

[MR.]

Below is a link to a document from the RBA which contains updated graphs to September 2009.

http://www.rba.gov.au/PublicationsA...p2009/Pdf/financial-stability-review-0909.pdf

It's a very skinny tightrope the RBA will have to walk as it raises interest rates to more normal levels let alone in response to inflation.

The following graph is from page 46 graph 70. Same link as above.


Affordability*Index constructed as the ratio of average household disposable incometo the required monthly repayment for the median-priced home (housesand apartments) financed with a 25-year loan assuming an 80 per centLVR at the full-doc prime mortgage rate.**Average since 1980 to present; estimate for September quarter 2009.

It's an interesting graph if you have a good look.

- At half the interest rate in 2008, we got near 1989’s (-30%)

- It took 5% interest to achieve the long term “0” in 2009.
- It took approximately 11% interest to achieve the long term “0” in 1991.

- If interest rates now dropped to just 1% we may have the affordability of 1997 again when interest rates were 7%.




Yes it is a very skinny tightrope for the RBA.

## If real estate is under control at say (6% cash rate) and inflation breaks 3%, will the RBA keep raising rates knowing how deep the debts are in real estate?

## If real estate continues on it's merry way up and interest rates continue to rise to slow it down what happens when this fragile economy begins to suffer from the increased interest rates?

## Look how our dollar is strengthening against the other currencies! Imports will be cheaper and our exports and tourism (which we need) will be even more expensive. We have hardly begun raising rates.....

 

[robots]

hello,

just providing my experiences for the forum

oh yeah,

http://www.debtdeflation.com/blogs/

i thought i recognised a familiar name: Adam Schawb from Crikey on the panel for the gig on the 23rd October

amazing, its like a new subculture

thankyou
Doctor Robots

 

[robots]

hello,

and dont forget the weekly readings from this joint:

http://www.morrellandkoren.com.au/topend/

people on the frontline, ramp it up

thankyou
Doctor Robots

 

[robots]

hello,

what a great day its been,

http://www.heraldsun.com.au/business/million-dollar-question/story-e6frfh4f-1225790579554

gee i reckon Pope stole one from you there Nunthewiser,

"sunshine and cupcakes"

thankyou
Doctor Robots

 

[drsmith]

Hello Robots,

There's a lot of vested interests behind keeping property prices high whether that be the banks or government but the reality is that the punchbowl (whether that be low interest rates/government stimulus or commodity prices) will only sustain the party for so long.

 

[theasxgorilla]

Hello Robots,

There's a lot of vested interests behind keeping property prices high whether that be the banks or government but the reality is that the punchbowl (whether that be low interest rates/government stimulus or commodity prices) will only sustain the party for so long.

Which has evidently translated to very bloody long!

 

[robots]

Hello Robots,

There's a lot of vested interests behind keeping property prices high whether that be the banks or government but the reality is that the punchbowl (whether that be low interest rates/government stimulus or commodity prices) will only sustain the party for so long.

hello,

thanks for your opinion drsmith,

mine differs from yours and i believe your comments are incorrect

listen its been done to death these false prophecies of doom and gloom

we now know that all the anti-property bloggers have vested interests to divert people's money away from Property, many have been employed at CFD Companies, Forex Companies, Spread Betting Companies, Futures Brokers, Option Courses

Media, New media etc etc

back in 2001, 2002 it was dont buy its all going to fall off the cliff, make these people accountable

sorry sorry, i know i know its just around the corner

thankyou
Doctor Robots

 

[Soft Dough]

hello,

thanks for your opinion drsmith,

mine differs from yours and i believe your comments are incorrect

listen its been done to death these false prophecies of doom and gloom

we now know that all the anti-property bloggers have vested interests to divert people's money away from Property, many have been employed at CFD Companies, Forex Companies, Spread Betting Companies, Futures Brokers, Option Courses

Media, New media etc etc

back in 2001, 2002 it was dont buy its all going to fall off the cliff, make these people accountable

sorry sorry, i know i know its just around the corner

thankyou
Doctor Robots

So Robots,

What has caused property values to increase?

ie where has the money come from?

Undergrad Soft Dough

 

[robots]

So Robots,

What has caused property values to increase?

ie where has the money come from?

Undergrad Soft Dough

hello,

and thankyou for the questions, we normally run the Q & A sessions during the week at evening time just to keep the site ticking over

but since I recognise Soft as a great contributor to the thread it wont hurt to conduct it on a sunday afternoon

Q1 A. life

Q2 A. the usual place

thankyou
Doctor Robots

 

[So_Cynical]

hello,

and thankyou for the questions, we normally run the Q & A sessions during the week at evening time just to keep the site ticking over

but since I recognise Soft as a great contributor to the thread it wont hurt to conduct it on a sunday afternoon

Q1 A. life

Q2 A. the usual place

thankyou
Doctor Robots

LOL Robots...keeping it simple, and prob one of your best posts.

 

[drsmith]

hello,

thanks for your opinion drsmith,

mine differs from yours and i believe your comments are incorrect

listen its been done to death these false prophecies of doom and gloom

we now know that all the anti-property bloggers have vested interests to divert people's money away from Property, many have been employed at CFD Companies, Forex Companies, Spread Betting Companies, Futures Brokers, Option Courses

Media, New media etc etc

back in 2001, 2002 it was dont buy its all going to fall off the cliff, make these people accountable

sorry sorry, i know i know its just around the corner

thankyou
Doctor Robots

Enjoy the party whilt it lasts but bear in mind the location of the exit for a hasty retreat.

You would like the Perth commercial scene at the moment.

http://www.cityofperth.wa.gov.au/web/Business/About-Business-in-the-City/Major-City-Developments/

Judging by the number of cranes hanging over the CBD most are currently under construction.

 

[MR.]

View attachment 34161
- If interest rates now dropped to just 1% we may have the affordability of 1997 again when interest rates were 7%.

Anyway, home loan interest rates would need to be between 1% and 3%.

Q1 A. life

Q2 A. the usual place

thankyou
Doctor Robots

After just 833 posts here on this thread Robots you have sumed all those posts up in just 4 words!

In other words "Property doubles every ten years." Nothing more to add. It just does.

Got it.

 

[Soft Dough]

LOL Robots...keeping it simple, and prob one of your best posts.

Says a lot about the other 832 posts.
At least he consistently doesn't answer questions, or form opinion.

 

[explod]

hello,

thanks for your opinion drsmith,

mine differs from yours and i believe your comments are incorrect

listen its been done to death these false prophecies of doom and gloom

we now know that all the anti-property bloggers have vested interests to divert people's money away from Property, many have been employed at CFD Companies, Forex Companies, Spread Betting Companies, Futures Brokers, Option Courses

Media, New media etc etc

back in 2001, 2002 it was dont buy its all going to fall off the cliff, make these people accountable

sorry sorry, i know i know its just around the corner

thankyou
Doctor Robots

Of course dOCTORthing me jig we should not advise anyone. In the investment field you have to be licensed to do that. It seems the Real Estate Industry are immune.

Of course the comparison between them and second hand car salespersons is often quoted. They have someone sign up, a coupla adds in the newspaper, put it on the net and a few open inspections and they collect up to 3.5% on a half mil home; a tidy sum for about ziltch.

Many people are starting to sell with agents (I have used a local called "Property Shop, a lad by the name of Peter Cincotta I think runs it) on the net which is a start but the big turn which will one day catch on will be on an Ebay system, with a bid going for a few months and the legals done between the parties solicitors.

Its the ramping of agents, the media that feed of it, and the banks that create these distortions.

And baby this bubble is the baby of bubbles leading to a flood of tears.

A Real Estate Agent I worked for a few years ago said the three Ps for position is really pi s in thier pockets three times.



The leeches need to be weeded out. Perhaps a thread on this ought to start. Bit tired at the moment

 

[gfresh]

Explod.. it's very unfortunate ebay Aus hasn't gone the path of the US and allowed direct private listings. Domain of course made sure they got their claws in their first though, so it's linked off to them They do allow private listings though their site now, but it's pretty expensive ($499 for 1 month!).. The ebay way of comission on sale would be much better. Talk about protectionism though for the realestate industry!

 

[MACCA350]

Explod.. it's very unfortunate ebay Aus hasn't gone the path of the US and allowed direct private listings. Domain of course made sure they got their claws in their first though, so it's linked off to them They do allow private listings though their site now, but it's pretty expensive ($499 for 1 month!).. The ebay way of comission on sale would be much better. Talk about protectionism though for the realestate industry!

That would depend on the commission rate.

Either way you have to pay for advertising, I wouldn't class $499 for 1 month listing expensive. Going through an agent a $800k property would cost about $5k for 1 month advertising campaign, this would include signage, 1 month paper/internet/agent magazine placements, open house appointments and the agents contacting people/developers they know who would be interested. Add in commission an you'd be up for about $30k.

Do I think it's worth $30k, not at all...........but on the flip side paying only $499 and having none of the other benefits of using an agent, you may only get $700k for that otherwise $800k property...........I don't know, I'm not sure anyone can say for certainty whether agents are worth what they charge.

cheers

 

[robots]

hello,

hahaha, hilarious so ebay okay to collect commission but RE agent the devil

anything you sell on ebay you pay a cut

whats been written in the other 6000 posts?

thankyou
Doctor Robots

 

[explod]

hello,

hahaha, hilarious so ebay okay to collect commission but RE agent the devil

anything you sell on ebay you pay a cut

whats been written in the other 6000 posts?

thankyou
Doctor Robots

In the modern day of the internet, no one should collect, it all should be between buyer and seller only, a few cents to ebay maybe but internet will hopefully get to the stage that it is just one on one and the providers only get the normal fee for connection.

As for as agents getting a bit more on the price, the market will soon overcome that and agents will become reduntant.

Bring back the conductors on trams where at least there was a service provided and a pay packet instead of the dole.

 

[robots]

In the modern day of the internet, no one should collect, it all should be between buyer and seller only, a few cents to ebay maybe but internet will hopefully get to the stage that it is just one on one and the providers only get the normal fee for connection.

As for as agents getting a bit more on the price, the market will soon overcome that and agents will become reduntant.

Bring back the conductors on trams where at least there was a service provided and a pay packet instead of the dole.

hello,

ebay would be at least 4-5% of final selling price, yeah good result

and no, trams are running fine without conductors, they where slackers

full tram, what does the conductor do, nothing

thankyou
Doctor Robots

 

[satanoperca]

Good Evening All,

Auctions Results from the Weekend.

I noted down from the REIV website last week all auctions for the following suburbs and the results reported by REIV.

Port Melbourne - 12 Listed Auctions
REIV reported :
5 sold
4 Pass In
3 Unreported - (passed in?)
2 additional entries listed as sold to boost results

Sunshine - 3 Auctions
REIV reported :
3 Sold
1 additional entries listed as sold to boost results

Malvern - 7 Auctions
REIV reported :
7 Sold - 100% correlation

Mentone - 10 Auctions
REIV reported :
3 Sold
2 Passed In
3 Unreported - (passed in?)

Richmond - 24 Auctions
19 Sold
3 Passed In
2 Unreported - (passed in?)
1 additional entries listed as sold to boost results

To be fair, I will check their results later in the week.

Conclusion - take the auction results with a grain of salt and do your own research if you intend to buy or sell property.

Cheers All & Hello to the Dr