House prices to keep rising for years

[xoa]

Some analysts suspect the initial housing bust could be just the beginning. There might be a second collapse in prices, as baby boomers start to retire/kick-the-bucket in their millions.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/08/REDHVBQ2L.DTL

 

[Kauri]

http://www.theage.com.au/news/national/record-numbers-default-on-homes/2008/03/26/1206207208847.html

Cheers
.........Kauri

 

[dalek]

Some analysts suspect the initial housing bust could be just the beginning. There might be a second collapse in prices, as baby boomers start to retire/kick-the-bucket in their millions.

Just a couple of points about this article.
The proposition that when us Boomers die off that our property will just return to the market must assume that we have no families to inherit and live in them.
Remember that group that are currently renting because they can't afford a home ?

Economists Myers & Ryu's predictions weren't "the worst in history" they were just "ahead of their time."
Just too funny !!!!
And one of primary soothsayers, Gregory Mankiw went on to become chairman of President Bush's Council of Economic Advisers from 2003 to 2005
ROFL !!!

Quote
After all, not all seniors retire or sell their homes and move to smaller places. Many prefer to age in place and live out their lives in the houses where they've built a lifetime of memories. But eventually, as they die off, most of their homes will come on the market.

Myers' and Ryu's foreboding prophecies bring to mind a 1989 study by a pair of Harvard economists, who predicted a 47 percent decline in housing prices during the 1990s because Boomers would stop buying as they aged. Housing-industry economists lambasted that forecast as pure poppycock, and it eventually blew up in smoke.

Indeed, one economist recently called their projection "one of the worst forecasts in the history of mankind."

But Myers and Ryu maintain that Gregory Mankiw, who eventually became chairman of President Bush's Council of Economic Advisers from 2003 to 2005, and David Weil, now working in the economics department at Brown University, were simply two decades ahead of their time.

Mankiw and Weil "may have miscalculated the timing of the decline, predicting its beginning 20 years or more prematurely," the new study says. "But the Baby Boomers will finally start retiring from the housing market."

 

[professor_frink]

I guess the majority of the world that is experiencing falls or flat prices for decades dont have fiat money.

Did you mean for this to read the way it does pepperoni? Care to name a couple of countries that have had a flat or falling market for decades? I didn't know such places existed

 

[gfresh]

Surely people have at least $20k savings to buffer them through a couple of years? That's approx $200wk x 104 to cover any recent rate rises. That's about the depreciation + interest paid on a new car over a few years, which everbody has been loading up on. Who should they be blaming? The RBA here?

If things do get worse, I think it will be good for the long-term strength of the country when people learn that economies do change, and there are cycles, and savings for these sorts of times are required. House prices have been rising for 10 years, and interest rates have been historically low for that time. Easy for some to forget the past before 1998.

As share traders, one of the ley lessons we learn is "never chase prices - prices usually come back to you". Maybe that will soon be learned by those who were chasing whatever house prices asked, without standing back and really thinking hard about it.

 

[juiceman]

Surely people have at least $20k savings to buffer them through a couple of years? That's approx $200wk x 104 to cover any recent rate rises. That's about the depreciation + interest paid on a new car over a few years, which everbody has been loading up on. Who should they be blaming? The RBA here?

If things do get worse, I think it will be good for the long-term strength of the country when people learn that economies do change, and there are cycles, and savings for these sorts of times are required. House prices have been rising for 10 years, and interest rates have been historically low for that time. Easy for some to forget the past before 1998.

As share traders, one of the ley lessons we learn is "never chase prices - prices usually come back to you". Maybe that will soon be learned by those who were chasing whatever house prices asked, without standing back and really thinking hard about it.

As a share trader, don't forget that you can't live in a share certificate

 

[gfresh]

Just a couple of points about this article.
The proposition that when us Boomers die off that our property will just return to the market must assume that we have no families to inherit and live in them.
Remember that group that are currently renting because they can't afford a home ?

What is the net population growth in the US right now? It's possible if it's falling rapidly then it could be a factor soonish, as you've got more leaving than replacing them.. but otherwise, it doesn't seem to be backed up by the important figures, and therefore questionable.

Myers and Ryu project that the ratio of those 65 and over to people 25 to 64 will surge 30 percent in the decade between 2010 to 2020 and 29 percent more in the 2020s, altering the delicate balance between buyers to sellers for the foreseeable future.

30% increase? But what is the total % of population that make up the property market a baby boomer?! say 30% increase of 20% = 26% .. not enough to crash property prices.

I also don't know how relevent that article is to Australia (if at all)...net population increase is still strong here. Last year I believe we had the largest population increases in recent record (large part migration, but still).. ABS doesn't believe this sort of thing will hit us until about 2051 - lot could change in that time! http://www.abs.gov.au/ausstats/abs@...5A9C0859C5F50C30CA25718C0015182F?OpenDocument

 

[Gundini]

As a share trader, don't forget that you can't live in a share certificate

Very true!

But as Share Investors you can live in the proceeds from the Share Certificate... (Dividends + Capitol Growth = Mortgage or Rent Repayments)

 

[ROE]

Did you mean for this to read the way it does pepperoni? Care to name a couple of countries that have had a flat or falling market for decades? I didn't know such places existed

Have a look at Japan during the 80's boom and subsequent bust that last
15 in negative years and still struggling till today.

But I think house price still way way under value in Australia.. We should encourage everyone to get into it and buy one before it's too late.

We never have a crash in Australia and we never will, we are different people from Japan,US and UK and the rest of the planet.

Get your foot in the market quick...the longer you wait the dearer it becomes ... BUY BUY BUY

 

[robots]

hello,

in europe we always here people rent for 15, 20 + years and they dont have this fixation with home ownership, (sure some exceptions)

this is entirely because many cannot afford it, my partner from germany and family still there they just could never afford the RE,

the great divide is occuring in aus and our ownership rates of 70% will gradually decline,

although it wont be the greedy landlord to blame (oh hangon I know who will be to blame)

thankyou

robots

 

[professor_frink]

Have a look at Japan during the 80's boom and subsequent bust that last
15 in negative years and still struggling till today.

And Japan is the majority of the world now?? Thanks for the example- I'll just wait for clarification on what pepperoni was trying to say earlier.

But I think house price still way way under value in Australia.. We should encourage everyone to get into it and buy one before it's too late.

We never have a crash in Australia and we never will, we are different people from Japan,US and UK and the rest of the planet.

Get your foot in the market quick...the longer you wait the dearer it becomes ... BUY BUY BUY

 

[Tysonboss1]

Very true!

But as Share Investors you can live in the proceeds from the Share Certificate... (Dividends + Capitol Growth = Mortgage or Rent Repayments)

what capital growth,... the share market has been hit harder than property latly,

and Dividends are just subject to economic down turns just like property.

 

[robots]

hello,

xao are you going to re-summit post

baby boomers (born 1946-1961),

it doesnt surprise that many will gladly inherit the proceeds from their parents hard work, whether it be cash or RE

and yet continue to cry "affordability issue" when many here have repeatedly shown no such thing exists

thankyou

robots

 

[xoa]

Just a couple of points about this article.
The proposition that when us Boomers die off that our property will just return to the market must assume that we have no families to inherit and live in them.
Remember that group that are currently renting because they can't afford a home ?

Economists Myers & Ryu's predictions weren't "the worst in history" they were just "ahead of their time."
Just too funny !!!!

Nobody could have predicted that the baby boomers would use their twilight years to go on a debt fuelled "investment property" spending spree.

The fact remains, that eventually the boomers will sell. The are no real estate agencies or Xinc™ mortgage brokers in heaven.

 

[xoa]

hello,

in europe we always here people rent for 15, 20 + years and they dont have this fixation with home ownership, (sure some exceptions)

If you don't think we should be so fixated on property ownership, why are you a property permabull?

Australia's demographics are wildly different to that of Hong Kong, Luxumbeurg, Monaco, or Germany. Your dream of every Australian renting a 53sqm apartment is a few centuries off.

 

[robots]

hello,

as I look out my window XAO things are as good as gold,

wouldnt have a clue what is going to happen in the future,

just sick of the whingers who claim housing is unafforable when it clearly isnt

any chance of re-submitting the post about the inheritance

thankyou

robots

 

[xoa]

just sick of the whingers who claim housing is unafforable when it clearly isnt

Same.. I'm also tired of hearing people whine about mortgage repayments. If they're not happy with things as they are, they should leave the market and wait for the correction.

But you're deluded if you think property here is affordable. We have the most unaffordable property in the developed world. OECD and other statistics bear this out. And you expect property to get even more unaffordable. It's hard for me to understand your reasoning.

 

[robots]

hello,

frankston, 44km to melb, 200k - 250k,

gladstone park, 24km to melb, 250k-300k

melton, 40km to melb, 200k-250k

units and apartments galore,

friends purchased apartment in paris (marais area) 21sqM 365k aus, in aus you would get double size

thankyou

robots

 

[xoa]

friends purchased apartment in paris (marais area) 21sqM 365k aus, in aus you would get double size

robots

Really, that's interesting. You'd struggle to craft a single bedroom out of 21sqm. Forget about a toilet, kitchen, or dining area. I'm dubious about the existance of that 21sqm apartment, but I'll assume you're telling the truth. In any case, let's compare apples to apples. It doesn't make sense to compare a riverside Parisian arrondissement to Melton.. though I'm sure some patriotic bogans may disagree.

 

[robots]

Same.. I'm also tired of hearing people whine about mortgage repayments. If they're not happy with things as they are, they should leave the market and wait for the correction.

But you're deluded if you think property here is affordable. We have the most unaffordable property in the developed world. OECD and other statistics bear this out.

my paris example was relating to this, in aus you would get double the space

And you expect property to get even more unaffordable. It's hard for me to understand your reasoning.

hello,

many people would be surprised to know the dimensions of a bedroom, alot of places in paris have pull down beds,

a development coming on line in melb of around 270 apartments, with the 1-bedders having pull down beds, 90% sold in a month

melton, frankston and gladstone park are examples of very affordable property

thankyou

robots