House prices to keep rising for years

[Beej]

My first post on ASF (although been reading a lot), so be gentle

What I fail to understand is why do we have to rely on Enzo to provide dodgy (or not) numbers. Why don't we have transparency in the RE market, just like any other market?

People are following articles in the electronic and printed media, like a herd, without being able to make an informed decision when buying / selling a property. These articles are driven / payed for by interesants, resulting in massive confusion and a distorted market.

I mean, goverment (state or canberra) must know all the RE transactions results to collect stamp duty - isn't this info public property (if not, it should)?

And why can't you fine experts apply technical analysis techniques to the RE market (median figures maybe) and reach a conclusion (or at least an agreeent)?

Firstly - welcome!

Land Titles offices don't get the sales information (and collect stamp duty etc) until settlement of a property sale which typically occurs 6 weeks after contract exchange (the initial sale). So the only way initial sales data can be collected immediately is via non compulsory reporting by real estate agents and so forth; this is what APM and REIV etc base there initial auction sales data on each weekend. 1 week later RP data report auction sales data which is meant to more accurate., but still not 100%.

A couple of months later we get the house price tracking stats from APM, RP-Data, Residex and finally the ABS - they are all based on actual government reported sales (via land titles registration), but each uses published but different statistical techniques in what they report.

In terms of technical analysis, many people do it, all the data providers mentioned provide both public and private (subscription only) reports for investors, R/E agents etc, but at the end of the day any forecast/prediction, just like for the stock market, is nothing more than someone's opinion, and no guarantee of future outcomes!

The best thing to remember about real estate is that all markets are local. DYOR in your target area if looking to buy or invest, and understand, the dynamics driving it, who is selling and who is buying and what the trends are and so on. Don't rely on newspaper articles, or internet forums etc to tell you what is going on

Cheers,

Beej

 

[MACCA350]

Well that's possibly a straight error in the REIV published results. Check their website today - have they corrected any of the numbers? When I check such calcs on the APM reported numbers they seem to add up - have you checked the APM Melbourne auction results for the weekend against the REIV numbers?

Cheers,

Beej

Just checked and nothing has been changed. It's not just one number wrong though, there's holes all through it.

Had a look through the APM website but I'm not sure I can access their data, don't you need a subscription for the latest data?

cheers

 

[MACCA350]

This should make the good doctor incoherent again:

cheers

 

[Beej]

Just checked and nothing has been changed. It's not just one number wrong though, there's holes all through it.

Had a look through the APM website but I'm not sure I can access their data, don't you need a subscription for the latest data?

cheers

For weekly APM auction results go to http://www.domain.com.au/Public/weekinreview.aspx?cid=AuctionResults and select city. You will get the last weeks results as collated by APM. It's not 100%, there are often missing auctions and so forth, but it probably get's 70-80% of results, and it's available every Saturday evening at about 7pm for that day's auctions.

Cheers,

Beej

 

[MACCA350]

Thanks Beej, no problem with their figures. I was wondering where Domain got their reports from, I originally thought their data was pulled from their advertised properties.

Interesting that they report 709 properties at 78% clearance rate while REIV reported 818 properties at 82% clearance rate for the same week..............not a major difference but would be interesting to follow up in a few months time with the data pulled from the land titles registry to see which data is more accurate. Do you know if any of them give weekly results with the land title data so I can check against.

cheers

 

[Mofra]

Loan Mortgage Insurance is a rort.

One of the new breed of 'insurance products' (product my a*se) that requires one party to pay a premium for the benefit of insuring another party!

If you default on a loan, it is not you who benefits from the insurance, but your lender.

The report goes on about housing affordability. I suggest this form of rip-off insurance be scrapped which will improve housing affordability.

I wouldn't say it's a new breed of product, as it has been around for years.

The whole LMI issue is a bit chicken and egg though - would lenders be willing to lend above 80% LVR as they do now if they knew they had to front the risk? I'd suggest in many cases no, even if the LMI lending guidelines are often more stringent than standard lending terms. In some respects it's a "nice" evil to have if it allows more people to obtain credit once they meet reasonable criteria.

 

[Beej]

I reckon rates go up .5% tomorrow.

Wrong again Mr Burns!

 

[MrBurns]

Wrong again Mr Burns!

I thought later they'll be kind to all the bleeding hearts on Cup Day but watch out next month.

Another nail in the coffin of the property bulls.....HA. perhaps young Aussie couples will be able to pick through the bargains and forced sales that are to come, unfortunately some of those forced sales will also be from young Aussie couples, thanks Rudd you steaming pile of .........errrr....Krudd.

 

[robots]

hello,

yeah wrong again Mr Burns, oh well maybe one day the stars will aline for you brother

and so everything goes along its merry way

yeah blame someone else again

thankyou
doctor robots

 

[gav]

Oh no, a whole $35 (ish) extra per month... How ever will I cope?

Seriously, if you can't afford interest rates of 12%+, you shouldn't have bought in the first place.

 

[satanoperca]

http://rba.gov.au/MediaReleases/2009/mr-09-25.html

Housing credit growth has been solid and dwelling prices have risen appreciably this year. Business borrowing has been declining as companies have sought to reduce leverage in an environment of tighter lending standards.

Am I missing something here, house prices up, housing credit up - banks all happy. Great
Business borrowings still declining, but who cares about that it is only the workhorse of the economy that creates wealth to buy houses/service mortgage debt or is it in the short term.

So interest rates up under the guise of the inflation genie or the fact that we need house prices to keep rising by growing debt, no need for companies to expand and grow anymore. This debt is provided by foreign investors who are attracted by our high interest rates - money flow into the country.

I hope we see business lending trend change directions or I cannot see how property price growth will be sustainable over the next 2-5years.

Cheers

 

[MrBurns]

hello,
yeah wrong again Mr Burns, oh well maybe one day the stars will aline for you brother
and so everything goes along its merry way
yeah blame someone else again
thankyou
doctor robots

I heard someone saw thousands of rats running along Acland St St Kilda, could those be rats deserting a sinking ship ?

 

[robots]

hello,

yes you are missing something, its like a small self sufficient hobby farm

ticking over, slowly growing, slow and steady

but because many have the blinkers on when it comes to housing its must be out of whack, not right

"business" is the only thing which does something for the economy

sorry sorry i know i know, its all going to go bust in 6mths, 12mths, 2 yrs, 3yrs, 5yrs

going to be great to be around for the next 40+yrs here at ASF

thankyou
doctor robots

 

[explod]

http://rba.gov.au/MediaReleases/2009/mr-09-25.html



Am I missing something here, house prices up, housing credit up - banks all happy. Great
Business borrowings still declining, but who cares about that it is only the workhorse of the economy that creates wealth to buy houses/service mortgage debt or is it in the short term.

So interest rates up under the guise of the inflation genie or the fact that we need house prices to keep rising by growing debt, no need for companies to expand and grow anymore. This debt is provided by foreign investors who are attracted by our high interest rates - money flow into the country.

I hope we see business lending trend change directions or I cannot see how property price growth will be sustainable over the next 2-5years.

Cheers

Then why are small businesses finding it increasingly difficult to borrow. Builders finding finance very tight to impossibe for even small extension projects. Maybe the stats are reflecting that and being read the wrong way.

Spose we all only see things the way we want it to be.

 

[satanoperca]

Explod,

Business finding it hard to obtain credit and in many cases having credit lines reduced is what I'm also seeing.

It could be seen that businesses are deleveraging, paying down debts or not able to obtain credit. Either way, it is not all green shoots.

Just trying to understand the fundamentals aside from property always goes up which is a myth as shown by the chart above unless stimulated with "over a 10 year period or more"

Robots, given you impeccable qualifications in this area I would have thought you were capable of giving an explaination of australia's economy at little more indepth than a self sufficient hobby farm. Did you get that from the back of the wheaties box.

sorry sorry i know i know, its all going to go bust in 6mths, 12mths, 2 yrs, 3yrs, 5yrs

Little over dramatic.

 

[robots]

hello,

i need to explain it that way here at ASF because so many small minds around

like a people's poet, someone who can explain things easily to the lower classes of society

sorry sorry sorry, the anti-property bloggers say its all going to crash, 40%, 50%, interest rates to 20%, sorry sorry

thankyou
doctor robots

 

[Bill M]

Update on my situation. Bought a house outside of Sydney and was in 2 frames of mind on whether to sell my well located Sydney unit or rent it. Whilst I was moving last week on Wednesday I noticed a unit down the passage way was open for inspection (for rental). The rental for a 1br unit with no views was $370 p/w. I witnessed (in a 15 minute open for inspection window) at least 1 dozen parties come through that unit. When the agent was locking up I approached her to come and look at my place and give me a quote on how much rental I could achieve.

She told me that out of all those people who saw the advertised unit one party needed/wanted that unit so badly they offered $390 p/w for it (more than the listing price). I think they must have taken it as the unit is no longer available for rent. (All in 15 minutes)

This agent told me that as I have storage, a breakfast bar and ocean views my unit would get $420 p/w very easily and that we could try for more.

This was more than I expected and I will for sure now become a rental property investor again.

People seem to forget that there is a severe shortage of good rental properties in Sydney, people actually outbid each other looking for that home. I am in the process now of preparing my unit for rental.

Incidentally, I mentioned this way back in the thread, the cheapest home loans you were ever going to get was when the RBA brought rates down to 3%. At that time you could have fixed a 5 year loan at 6.5% and if I was a first home buyer I would have definitely taken up that offer with all the other grants. Since then rates are creeping up but the situation is still pretty good at current rates and offers. Good luck to all property investors, nothing beats that weekly income coming in.

 

[MrBurns]

Good luck to all property investors, nothing beats that weekly income coming in.

Congratulations but dont forget the income is less, Council and Water rates, agents fees, maintenance, insurance and vacancy.
I've never found residential investments are any good unless there's capital gain to look forward to.

 

[robots]

hello,

well done Bill M, good work man and hope you enjoy the new location

thankyou
doctor robots

 

[Bill M]

Congratulations but dont forget the income is less, Council and Water rates, agents fees, maintenance, insurance and vacancy.
I've never found residential investments are any good unless there's capital gain to look forward to.

Yes that is true but I have weighed this up. What would you do with 400K? Put it in cash 4%? Put it in shares + or - 50% (big risk) or plug it into good old fashioned bricks and mortar where the rent comes in week after week and the price might stay the same for a while but keeps going up in the long term? For now I will stay a property investor, who knows what I might do later.