House prices to keep rising for years

[Taltan]

Wrong.

Shareprices OFTEN have absolutely ZILCH to do with a business being profitable ...

ZILCH? so I guess the p/e ratio is just something unrelated the analysts made up??? Both markets are often distorted but long-term prices have a lot to do with profitability

 

[Vizion]

Bill -

1985 -> 1986 saw prices drop in real terms in all cities except Sydney, where they went up by only 1.3%
After negative gearing was re-introduced in 1987->1988 prices rose in real terms in every capital, 7% in Sydney and 12% in Melbourne as examples. Stats - A.B.S

They did not reintroduce negative gearing because prices went up, they brought it back because it was not popular at the top end of town where the majority of party funds come from. Little people do not have the ears of politicians etc. I know this as I deal with their offices & state government depts on an ongoing basis. Plus paying 16% interest on a house that is staying still in real terms is not a vote winner even if its a short term thing.

While there was a spike in rental prices in 1986. Rental vacancies remained almost constant from the end of negative gearing until its re-introduction. The facts bandied about do not support the argument that a removal of negative gearing caused a decline in supply which is what allot of people like to throw into the mix. Given a couple of years this would have levelled out when average wage rises had caught up. Not in time to stop a backlash against an incumbent government though. Most people only see short term and tend to be reactionary.

There is allot of misinformation from some very powerful lobby groups here. Most of it is simply not true. The higher the mortgage is the more money banks, real estate agencies etc stand to make on transactions. Not to mention stamp duty for the states, and so it goes on. Our banks for instance went from being profitable to hugely profitable in the space of a decade. Institutions making 25% profit increases per year ongoing, has to come from somewhere. Who does everybody think pays for that really?

Its like the frog in the hot bath analogy, do it gradually and everybody will wear it till it's too late, do it all in one hit and people scream and carry on and get out the bath.

 

[MrBurns]

There is allot of misinformation from some very powerful lobby groups here. Most of it is simply not true. The higher the mortgage is the more money banks, real estate agencies etc stand to make on transactions. Not to mention stamp duty for the states, and so it goes on. Our banks for instance went from being profitable to hugely profitable in the space of a decade. Institutions making 25% profit increases per year ongoing, has to come from somewhere. Who does everybody think pays for that really?

True.

 

[joeyr46]

You agree in doing it across the board so you are not biased either way which is good.

Some 24 years ago one of our previous governments did abolish negative gearing on housing and it stuffed up the whole rental market from memory. Rentals went up, property went up and it did not help low income earners or tenants. It was so bad they they had to reverse that decision 1987, it just didn't work.

My memory is different to yours I remember it being brought in in a budget but the carry on from the vested interests saying what was likely to happen (no evidence mind just opinions ) they reversed it before it came into effect. But your right it was a long time ago under Keating so only 90% sure!

But whether this causes property to rise not sure because we had it when property went backwards as well as rising (faling nearly 50% in some areas) and that is a fact I remember well 100%

IMO I think liquidity is the real cause of prices rising and this is across the board not just property and without any valid reason other than created credit which unfortunately cannot be sustained regardless of what the government does. All other areas have started to unravel can't see why property won't follow.

 

[MrBurns]

Watch Ch2 now....learn something.

 

[Quincy]

House prices to keep rising for years : -

http://www.smh.com.au/business/doll...foreign-property-investors-20091105-hzx3.html

Dollar's strength can't deter foreign property investors

CHRIS ZAPPONE - November 6, 2009 - 7:13AM

The strong Australian dollar has done little to cool overseas demand for real estate as foreign cash seeks out a lucrative home in the nation's residential property market.

Real estate agents say overseas-based bidders are increasingly common at auctions around the country, with the resulting additional demand stoking already rising clearance rates and prices.

John Bongiorno, director of Marshall White & Co, in Melbourne said international buyers had typically made up 5 to 10 per cent of sales, a figures that had recently risen to about 15 per cent. And the dollar's rise had not yet dampened demand.

Mr Bongiorno said his overseas clientele was ‘‘predominately mainland Chinese'', some of which adopted a fly-in, fly-out approach to house hunting.

‘‘We have people who fly in on a Saturday morning for auctions and will fly out the same day,'' he said. ‘‘They'll just arrive in Melbourne specifically for the auction.''

Marshall White & Co has forged alliances with immigration services firms in China to promote local property.

Further north, the rising demand from Asia, especially China, is even more pronounced.

Tina Edwards, sales manager at Brisbane-based Yong Real Estate , which caters to local and international Asian buyers, said investment from China had ‘‘really soared recently''.

She said the surge may have peaked at as much of 90 per cent of the transactions handled by the firm, with the Aussie dollar's recent jump above 90 US cents (about 6.2 yuan) deterring some buyers.

But Ms Edwards also said temporary lull may also reflect the shortage of suitable properties to sell after a period of sustained demand.

Real estate agents credit the overseas demand as contributing to rising home prices, which have increased nationally 8.1 per cent in the first nine months of the year, according to the RP Data-Rismark Index released today.

A spokesperson for Assistant Treasurer Nick Sherry said despite the rule changes the FIRB rules were designed to spur the creation of additional housing supply rather than add to affordability problems.

Nonetheless, the impact of the new investment has raised questions about housing affordability for would-be owner-occupiers.

One Melbourne real estate agent, who asked not to be identified, privately worried about what the Chinese demand would do for the chances of local buyers.

He said the topic was a constant subject within the real estate industry, although few agents wanted to question a trend that generated financial benefits for them.

In his view, "the rising Australia dollar has not impacted at all the demand from Chinese,'' he said, estimating that currently in Melbourne about 40 per cent of properties over $1 million in the inner suburbs were being sold to Chinese and Indian investors.

 

[Taltan]

Quincy, the source of these articles are real estate agents. I am yet to read any of them ever suggesting the property will turn downwards which makes their opinions generally irrelevant.

Robots - please write in English. Also if you are a doctor please also tell us for what? otherwise in respect of those who have furthered themselves maybe stop using the name.

 

[MrBurns]

One Melbourne real estate agent, who asked not to be identified, privately worried about what the Chinese demand would do for the chances of local buyers.

I'll tell you what it's done it's ruined it Rudd changed the overseas investment rules and has completely put the market out of whack.

Rudd has distorted the property market and the repercussions will be dire.

 

[MrBurns]

.
Robots - please write in English. Also if you are a doctor please also tell us for what? otherwise in respect of those who have furthered themselves maybe stop using the name.

ROFL

 

[Wysiwyg]

Not always but most of the time and at least someones putting in but higher house prices benefit no one but the parasite residential investor.
I say parasite because unlike the commercial property investor or share investor their greed effects couples wanting a roof over their head to raise a family.

Do you mean like taking advantage of people who at this stage in their lives can't afford to take out a mortgage. In a capitalist society anything within the law goes.

 

[MrBurns]

Do you mean like taking advantage of people who at this stage in their lives can't afford to take out a mortgage. In a capitalist society anything within the law goes.

I meant young couples trying to build a life.

And yes you're quite right, as long as it's within the law they can do whatever they like, would be nice if the law made residential investing less attractive for that reason, it's peoples homes we're talking about.

 

[Vizion]

hello,

vizion, fine man, rent no big deal and keep the dollars in shares

At no point did I say that you should rent vs buy, or keep you money in shares. Try to get your facts straight.

What I am saying is that many more should be given the chance to own. That's the Ozzie way is it not? To help the battlers out, not lock them out for years. To let them do what others have been able to do when the cost of ownership was at a level the vast majority could attain. That's called social responsibility not "Socialism" there is a vast difference.

Incidentally I have an IP & PPOR thanks, I'm not renting.

Seriously you put forward no cohesive view point other than to act like a kid in a school yard. "Why?... "just because" aaaaaaaaaaaand repeat.
You remind me of the Monty Python sketch of the man who pays to have an argument.

http://video.google.com/videoplay?docid=-572077907195969915#

If it was not for the comic factor I would have hit the ignore button ages ago

 

[explod]

Robots - please write in English. Also if you are a doctor please also tell us for what? otherwise in respect of those who have furthered themselves maybe stop using the name.

Absolutely hear hear have tried in vain on just this point. His flaunting of some Honorary Phd is a disgrace to the traditions of academia, would have thought the monitors would have picked up in this ignoramus, but alass to no avail.

And I'm with all the other recent posters, the efforts should be towards all being able to afford and keep thier own home.

How about some incentives and tax breaks for traders/investors in the markets? Of course it is rediculous and so is the property negative gearing etc. If one has suffiecient to invest/speculate then an even palying field that does not drain others through the tax system. But obviously the real estate/property lobby has the biggest effect on elections perhaps.

And that also is not socialist, it is a democratic fair go.

 

[trainspotter]

Give over guys ... robots is the real deal ... he has stuck to his story of "House prices to keep rising for years" and they have. The thread is not about affordability or locking out FHB or young couples etc. Whilst I personally do not agree with all that is written he has not waivered in his endeavours to keep the sunshine and lollipops brigade on the up. Have we ever considered that robots could be a real estate agent ramping the cause? HAha hah aha h ha ........ I think not. Just a genuine guy who strongly believes in residential real estate or owning your own home.

Yes, some of the subject matter is peurile in the way it is written and lacks panache of a recognised PhD BUT he is correct thus far. In other words I have not seen any data that proves otherwise. Now before the rest of the ASFers go on the "FLAME ON" approach, think about it in it's most simplistic form, "Have house prices continued to rise?" Yes or no? Ummmm ....... I think robots has got us cold on this one.

 

[Mofra]

How about some incentives and tax breaks for traders/investors in the markets?

They (we!) do. I can claim any interest deductions from margin or other loans and claim that against income earned from investment or trading activity. Deductability of interest is not asset class specific as far as I am aware.
Any acquisition costs (be it stamp duty for homes or brokerage for equities) can be used to increase the cost base for CGT purposes as well. Again, not asset class specific.

Obviously it is more noticeable for property because the amounts claimed are generally much higher.

 

[Wysiwyg]

"Have house prices continued to rise?" Yes or no? Ummmm ....... I think robots has got us cold on this one.

Yes but who or what group pushes the average cost of housing up? The Real Estate Agent? The Politicians? A Professional Group of Real Estate Investors?

Who?

 

[Vizion]

If this thread was only about prices rising then I would think it would have been a damn short thread. Prices will always rise eventually. That's a given I would think To be fair, Robbie has stated more than once he's in it for the long haul.

This thread though has developed into so much more. I don't see why that's a problem There are obvious problems of affordability for a great many and that has been of growing concern for many. People want to discuss that.

Robbie's general attitude seems to be more "stuff them" and that's gotten some peoples backs up methinks.

I am of the "opinion" that there will be a correction in pricing or something else is going to give. I would rather see a controlled (if that's even possible) one rather than an uncontrolled rout

 

[explod]

Have we ever considered that robots could be a real estate agent ramping the cause? HAha hah aha h ha ........ I think not. Just a genuine guy who strongly believes in residential real estate or owning your own home.

:

Absolutely spot on, last week when I did a tretise on the Real Estate Agents there was not a post for 20 hours, unprecedented silence, and on a Sunday Monday too when the ramping over the weekend sales is usually at its height.

Dont' you worry about the ole innocent sounding Robots.

Reminds me a lot of norm galleger

 

[robots]

hello,

so vizion, you going to sell up or ride out the storm you are predicting

sit on them brother

thankyou
Doctor Robots

 

[Macquack]

Yes but who or what group pushes the average cost of housing up? The Real Estate Agent? The Politicians? A Professional Group of Real Estate Investors?

Who?

I put the blame/credit squarely at the hands of the private banks that are soley responsible for increasing the size of the money supply. The Reserve Bank tries to control the growth in the money supply by trying to control the private banks credit creation process.

For robots and Co, do you acknowledge that house prices would not continue to rise without the private banks perpetually increasing the money supply? The downside to this is that all new money created reduces the value of all existing money.