House prices to keep rising for years

[chops_a_must]

I also believe that higher density living is desirable, at the right price. Not $7000 per square metre. I take issue with those greedy individuals who infer that living in a shoebox on a 30-year-mortgage is a solution for those priced out by the bubble.

I wouldn't know enough to talk about money per metre, but I'd say Melbourne Inner City is quite affordable. To me at least, and quite reasonable for that lifestyle. For me anyway.

Compare that to West Perth... and it's a whole different story. I've ranted about Adelaide before. I think that's the worst market. Not in a million years would I consider investing or buying there.

In short, to live - inner city Melbourne is the only place I'd buy right now. To invest, I wouldn't buy anywhere at the moment. I'd wait for the credit crunch to get everyone out in the next year or so... at least then you know you are probably going to get the bottom, or close enough to it to make it worthwhile in the long run.

 

[kermitos]

I'm a noobie to investments, tho I thought I'd share my worth of first hand experience.

I assume there are quite a few ASF'ers here who've been looking around the property market lately (or the past 6mths or so like myself) - making phone calls to agents and attending open inspections. I've been busy driving around Melb's SE suburbs each weekend.

But I'm not sure how many of yous have received phone calls from agents in the last mth or so, coz I've received quite a few, they never use to call, but now I get one every 2 or 3 days. It seems to me that there might be a lack of buyers out there, tho it does not mean prices will drop - tho I'd like to wait and see how it turns out, only time will tell.............

 

[Kauri]

not too flash in Sydney?? From the SMH.. full article link below

http://www.smh.com.au/news/national/when-pain-persists-they-arrive/2008/03/27/1206207300876.html

Cheers
..........Kauri

 

[robots]

You might want to have a look at this; minutes from Paris according to the ad:

hello,

you might want to send the re website a note asking them which area the actual property is, cant be both, the heading boldly says "Croisette"

no body is priced out of RE in aus, plenty around to choose from its just that certain people cant afford what the dream is so the end has to happen,

in summary, its been 2 and half years since the other thread was going, 11 IR rises and prices are still solid across the country and for that matter across the globe (excluding the good ol' US of A because we know what goes on there)

thats all robots has said,

thankyou

robots

 

[chops_a_must]

in summary, its been 2 and half years since the other thread was going, 11 IR rises and prices are still solid across the country and for that matter across the globe (excluding the good ol' US of A because we know what goes on there)

thats all robots has said,

thankyou

robots

Obviously you haven't heard of a place called spain and the goring happening there, have you?

 

[wayneL]

Obviously you haven't heard of a place called spain and the goring happening there, have you?

Or the Uk, Ireland etc atc

 

[robots]

hello,

got any example's of decreases in london? not some average,

asked for it before and didnt get so,

thankyou

robots

 

[wayneL]

hello,

got any example's of decreases in london? not some average,

asked for it before and didnt get so,

thankyou

robots

It's not my patch, and if you want a specific example, I will have to find it through contacts... not easy

But rest assured as soon as I hear of one, you'll be the first to know.

 

[Kathmandu]

Shortages set to fuel housing crisis

Nassim Khadem
March 28, 2008






HOUSE prices across the nation will rise by 30% to 40% over the next five years because of built-up shortages of housing, according to a leading economics forecaster.

http://www.theage.com.au/news/natio...-housing-crisis/2008/03/27/1206207302370.html



Dave

 

[Tysonboss1]

I also believe that higher density living is desirable, at the right price. Not $6000 per square metre. I take issue with those greedy individuals who infer that living in a shoebox on a 30-year-mortgage is a solution for those priced out by the bubble.

As with anthing it is supply and demand,... not "greedy Individuals" that determine the price,

If you increase the supply you will lower the price,..

What has made sydney apartment market worse was that after a boom you should generally have an upswing in new development which increases supply an levels of the market,

however in NSW the development upswing was cut off at the knees by the land tax that was brought in to try and profit from the boom, which made the developers bail out of the sydney market and plunged sydney into the rental crisis we are in at the moment,...

It's all well and good to say things are over priced but if people are lining up to pay that price then it's not over priced,...

At the end of the day somthing that is over priced won't sell,... so if it is selling regularly then i is not over priced,...

 

[stock_man]

hello,

got any example's of decreases in london? not some average,

asked for it before and didnt get so,

thankyou

robots

http://www.propertysnake.co.uk/

Not too sure if this reflects decreases in average sale prices, but shows that vendors are dropping expectations.

(assuming the site is accurate....)

 

[xoa]

As with anthing it is supply and demand,... not "greedy Individuals" that determine the price,

You first premise is correct. But during more rational times, the actual consumers of housing drove the vast majority of demand. That ensured that the prevailing price approximated its intrinsic value. The speculative element was sidelined. Not any more. With "investors" taking out almost half of new home loans, it's not surprising that we've had price spikes of up to 20% pa.

Look at America, where some in the real estate industry pressured ordinary families to buy massively overpriced homes, lest they never become home owners. The prevailing consensus among "experts" was that prices would soar for a decade, that the "old rules" had changed and that a "new paradigm" had emerged. We're seeing similar scaremongering here. A simplistic view of supply and demand cannot tell the whole story.

 

[chops_a_must]

As with anthing it is supply and demand,...

This is the sort of bollocks that gets economics a bad name, and the reason it is fundamentally flawed.

Demand for owning ones own home will almost always be 100%. Therefore, economics logic dictates that housing prices should go vertical to match demand.

But what is never charted, never graphed, never modelled, is the ability to pay.

When you get reductio ad absurdum ad nauseam like you do in economics, incredibly important things are left out.

And you get lemmings, and people without any semblance of critical thinking, that bring out these over simplified truisms at any opportunity, who only prove themselves to be sheep.

 

[explod]

This is the sort of bollocks that gets economics a bad name, and the reason it is fundamentally flawed.

Demand for owning ones own home will almost always be 100%. Therefore, economics logic dictates that housing prices should go vertical to match demand.

But what is never charted, never graphed, never modelled, is the ability to pay.

When you get reductio ad absurdum ad nauseam like you do in economics, incredibly important things are left out.

And you get lemmings, and people without any semblance of critical thinking, that bring out these over simplified truisms at any opportunity, who only prove themselves to be sheep.

Chops, I love it, Amen

The hard calculation to make wise trades needs to devorced of all emotion. One of the great mistakes of traders is that they fall in love with a particular stock. You would be aware that at the moment I am a gold bull but the moment I can see the fundamental change I hope and work on the task to have myself ready to get out.

Aussie Stock Forums is number one about investing. Emotionless facts are the way.

The whakkers that measure Real Estate by clearance rate percentages really breaks me up.

 

[shogun]

This is the sort of bollocks that gets economics a bad name, and the reason it is fundamentally flawed.

Demand for owning ones own home will almost always be 100%. Therefore, economics logic dictates that housing prices should go vertical to match demand.

But what is never charted, never graphed, never modelled, is the ability to pay.

When you get reductio ad absurdum ad nauseam like you do in economics, incredibly important things are left out.

And you get lemmings, and people without any semblance of critical thinking, that bring out these over simplified truisms at any opportunity, who only prove themselves to be sheep.

The ability to pay is an inherent part of the demand curve. It is clearly part of economics so your criticism of the field is unfair! Microeconomics builds demand curves from indifference curves which represent how much of something else you have to give up to buy what you want to buy (i.e. the ability to pay). The part time "know it all" journalist economists don't do it and those that like to comfort themselves about their poor speculative position in the realestate market don't do it either but who would listen to them!

Further to that economic logic would not dictate that house prices rise verticle - it depends on the supply curve. The high prices SHOULD incent further development and then supply grows to match demand and prices come back to normal again. Not happening in this market - I suspect it has something to do with government interference (call it bad behaviour) on the supply side.

Anyway - all in all I agree with you - we have hit a ceiling on ability to pay. As credit is withdrawn prices will drop very quickly.

 

[shogun]

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 ?

But then wouldn't the home they were renting be empty? There are so many physical dwellings and so many people to live in them - whether they are rented or bought is irrelevant.

 

[chops_a_must]

The ability to pay is an inherent part of the demand curve. It is clearly part of economics so your criticism of the field is unfair! Microeconomics builds demand curves from indifference curves which represent how much of something else you have to give up to buy what you want to buy (i.e. the ability to pay).

But see, even this criticism which I knew someone would bring up, is evidence of a giant reduction.

Demand is demand is demand is demand.

It's not REDUCIBLE to quantity. And that's the problem. Demand is a psychological function or response, not a number representing quantity at price.

 

[numbercruncher]

I dont see a shortage ?

There are 33,600 residential properties for sale in Queensland, up from 17,500 this time last year.

http://www.news.com.au/couriermail/story/0,23739,23446579-5011140,00.html


P.S Welcome back Davo, sell your IP up north yet ?

 

[Kathmandu]

I did, thanks.

Went fairly fast and possibly could have got a smidge more then, not sure now though.

Dave

 

[refined silver]

It's not REDUCIBLE to quantity. And that's the problem. Demand is a psychological function or response, not a number representing quantity at price.

Sorry, demand as an economics term, means how much will I buy at a certain price. If apartments were $90k and yielding 8%, I'd buy a couple instantly, if they are $350k and yielding 2-3%, I don't want any.

Demand is demand is demand is demand.

A simple desire for something is not demand. I have many competing desires, but since only limited finances, I have to chose between competing desires.

As you've already noted, with limited finances available, demand for housing will drop.