House prices to keep rising for years

[chops_a_must]

I disagree. I speak in English though, not in econolect. :

Obviously why I am not an economist.

**** you Comte!

 

[refined silver]

I disagree. I speak in English though, not in econolect. :

Obviously why I am not an economist.

**** you Comte!

if an economist, an accountant and a geography professor talk about "capital", all will have different meanings for the word, yet all will be correct when using it in their specific field with their specific definition.

 

[refined silver]

**** you Comte!

?????????????

 

[ithatheekret]

Well ...... , what we've recently bought semi-rural , has risen and we had premium built in on the original buying ranges .

Noted a lot of young families competing with us on some though.

The lowest property we bought ($120K ) , is now $155K . ( let @ $175/wk ) , spent $12K on it to get it upto proper standard .

Just waiting for the council rates to start drifting up again .............

 

[refined silver]

hello,

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

asked for it before and didnt get so,

thankyou

robots

Looks like it only just turned 6 months ago. UK top was later than tops in US, Spain, Ireland etc.

 

[pepperoni]

Well mosman seems to have kicked again ... Clearly this means 20% plus compounding forever.

Nevermind that household wealth is going nowhere, rates are, and credit is contracting, housing is finite and therfore the entry level will be in the trillions within weeks.

 

[pepperoni]

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.



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.

If 8% yield is good enough for you who cares if they are 90k or 350?. Personally 8% yield with 9% rates and questionable growth prospects doesnt make either prospect too good for me ... ill take cash or fully franked bank shares thanks ... and I think the wealth creation minded are boring of the fantasy of getting rich off simply buying properties ... *again*

I wonder how the all imporant clearance rates are going ... because I could almost sell at a gain after transaction costs by 2020.

 

[refined silver]

If 8% yield is good enough for you who cares if they are 90k or 350?.

Relativity, thats why.

5 years ago on the Sunshine Coast (Qld) you could buy 2bdrm apartments with sea views 200m from the beach for $90k. A house - 3 bedroom in the same position was $300k. Now the unit is $300k and the house $400k. Its not only about yield.

 

[juddy]

Perth is starting to look quite ugly now. Overall, in excess of 16,000 properties on the market and some suburbs with over 10% of housing up for sale. Should see a nice big correction in the next couple of years. Not that I'd consider buying more property atm, but if I did, Adelaide would probably be the city of choice. Mainly because of the positive media surrounding it's future prospects.

 

[SM Junkie]

Although Perth may have 16,000 properties on the market, it was reported in the West Australian yesterday that prices are still expected to increase upto 40% over the next 5 years.

Key points of the article were:
- shortfall in the construction of 3000 dwellings per annum
- when interest rates stabilise, those pent-up demand pressures would be released and could result in a price explosion
- then the period of underbuilding may have some consequences
- oversupply of houses on the market to remain throughout 2008
- price growth similar to that of recent years is less likely.
- if housing stock does not increase over the next 3-5 years then there will be a dramatic increase in house prices.

Sounds like when the interest rates stabilise, then Perth could have another run. Still a very positive market if you are willing to wait through the current cycle IMO.

 

[juddy]

Although Perth may have 16,000 properties on the market, it was reported in the West Australian yesterday that prices are still expected to increase upto 40% over the next 5 years.

Key points of the article were:
- shortfall in the construction of 3000 dwellings per annum
- when interest rates stabilise, those pent-up demand pressures would be released and could result in a price explosion
- then the period of underbuilding may have some consequences
- oversupply of houses on the market to remain throughout 2008
- price growth similar to that of recent years is less likely.
- if housing stock does not increase over the next 3-5 years then there will be a dramatic increase in house prices.

Sounds like when the interest rates stabilise, then Perth could have another run. Still a very positive market if you are willing to wait through the current cycle IMO.

Hi SM, I think you'll find that prediction was an 'average' prediction Australia-wide. Every news-site across the country carried that story. I think Perth will have another run around 2015, when Delhi get the 2020 Olympics.

 

[SM Junkie]

Ok, bit of a sucker I was. I can see how they have manipulated the information, thrown in a couple of REIWA quotes and eye catching headline. Not to worry, still optimistic about the market. I was on the horse during the last run, so I'm happy for it to catch its breath for a few years before its next run.

 

[Tysonboss1]

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



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

.

people can only pay what they have or what they can borrow so as the price rises this will naturally decrease demand.

Banks just don't lend willy nilly,... there is plenty of serviceabilty checks done when you go for a loan, The only people getting into trouble at the moment are the people that didn't protect them selves by fixing interest rates.

 

[Tysonboss1]

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.

the sydney apartment market has seen many cycles of development out stripping demand, so it is exactly that,.... quantity at a price.

 

[Tysonboss1]

Perth is starting to look quite ugly now. Overall, in excess of 16,000 properties on the market and some suburbs with over 10% of housing up for sale. Should see a nice big correction in the next couple of years. Not that I'd consider buying more property atm, but if I did, Adelaide would probably be the city of choice. Mainly because of the positive media surrounding it's future prospects.

I have never really been into the perth property market, I have been a perth property bear for a long time.

 

[Kathmandu]

The only people getting into trouble at the moment are the people that didn't protect them selves by fixing interest rates.

Or those that purchased houses they could ill afford using Div's as part of the servicability equation.

Share market takes a hammering, sevicability say bye bye's

Dave

 

[wayneL]

The UK house price crash is cancelled! We're seeing rises in asking prices!

Ahahahahahahaha!

 

[pepperoni]

Hmm I wonder if there are any PRICE statistics over all these weeks of reported high "auction clearance rates" in melbourne.

I have learnt from this thread that with a limited supply of prperty, prices should just keep rising and rising and definitely without regard to interest rates, wages, personal wealth. Definitely into the billions in the short term.

I know most people spend much more than their net worth on properties and credit supply is pretty much contracting buuuuuuuuut ......

*googles it*

 

[gfresh]

Clearance rates are down to 63% Melbourne.. Funny how these things get bumped off the front page so quickly.. yet, it's the most viewed story..

http://www.theage.com.au/articles/2008/03/30/1206850707213.html

 

[Tysonboss1]

I have learnt from this thread that with a limited supply of prperty, prices should just keep rising and rising and definitely without regard to interest rates, wages, personal wealth. Definitely into the billions in the short term.

*googles it*

wages and personal wealth will only impact on the median house price,

It is possible for long term property prices to increase faster than inflation without the median house price increasing faster than wages and inflation.