House prices to keep rising for years

[wayneL]

Yes I think the full blown crash is starting, 10pc is huge ! Im guessing most is currently being shaved from the top so far, Medians are great for stirring bubble mania but they look equally bad on the way down too.

And check this out, what I was going on about the Median being changed or fudged or whatever, The medians are shown clear as a bell here in the age ,in the same article only paragraphs apart and it doesnt even look like the reporter noticed!



http://www.theage.com.au/news/national/rates-hit-home-prices/2008/04/25/1208743253101.html

lol gotta love the realestate game.

Notwithstanding the figure fudging mentioned, I don't believe that we bears can dis' the indicies in the way up, and embrace them on the way down. That's duplicitous and damages bear credibility.

 

[Mofra]

This thread just keep on going on and on and on and on.

It's hard to talk to someone who have a vested interest in the investment they own.

But I love this thread in the sense that a lot of valid and interest information are being put up on one side of the argument (which is obviously bearish) and the other side who have essential little viable evidences for counter-argue except to say that "it hasn't crashed yet! at least not me yet!".

Glad you find it amusing, can't help but chuckle when you read a few days worth of posts in a row. Like a verbal game of tennis.

"it hasn't crashed yet! at least not me yet!".

Well, in some respects you could say property has out-performed equities this year, and one quarter of negative growth, in economic terms, doesn't fit the recession definition yet. Is creative analysis as misleading as creative accounting?

 

[nioka]

Figures released today by the Real Estate Institute of Victoria (REIV) show the median price for a detached Melbourne home in the March quarter was $432,500, down 8.4 per cent from the December 2007 median of $472,250.

http://www.news.com.au/heraldsun/story/0,21985,23601336-31037,00.html

All that may mean is that fewer of the better class of home and more of the lower class sold that quarter. You may be comparing apples with pears.

 

[numbercruncher]

Notwithstanding the figure fudging mentioned, I don't believe that we bears can dis' the indicies in the way up, and embrace them on the way down. That's duplicitous and damages bear credibility.

Good and valid point, I was feeling a little turncoat about that

 

[CAFA1234]

I'm wondering if it's a bit of a statistical anomaly.

8.4% is an enourmous drop for one quarter, we would definitely have heard of that sort of dumpage in real time.

Even though a bear, I don't believe it. If it was real, people would be slitting their wrists already.
....
It takes a while for sellers to eventually blink, in my experience... unless the whole market is going to hell in a handbasket. Which it isn't, yet.

Mr Bear - look at the stock market, down (upto) 25% in many places (China 50%) and yet there is no mass suicide. The numbers of brokers jumping off of Wall Street in the 30's was a handful, but it made great press, even 80 years later.


What I can tell you, from yesterdays edition of the Los Angeles Times, is that the county of San Bernardino (East side of L.A.) is down 35%, with a number of zip (post) codes within the county being down 50%. These are not newsmen being dramatic, in fact no headlines anywhere. Just tucked away in the back of the real estate section where the official figures taken from the taxation records of sale.

People are still going about their everyday activities , large screen TVs are still being sold by the truckload etc, etc. However it combined with INFLATION , becoming a bigger problem every day for the lower income guys due to food and gas (petrol), this WILL create problems down the road.

So, Mr Bear, my assertion is that there is a considerable time gap between people getting wiped out and understanding the impact. Like the stages of grief, people are still in the first stage of disbelief. They just don't want to hear about it. Depression comes in much later.

 

[wayneL]

Mr Bear - look at the stock market, down (upto) 25% in many places (China 50%) and yet there is no mass suicide. The numbers of brokers jumping off of Wall Street in the 30's was a handful, but it made great press, even 80 years later.


What I can tell you, from yesterdays edition of the Los Angeles Times, is that the county of San Bernardino (East side of L.A.) is down 35%, with a number of zip (post) codes within the county being down 50%. These are not newsmen being dramatic, in fact no headlines anywhere. Just tucked away in the back of the real estate section where the official figures taken from the taxation records of sale.

People are still going about their everyday activities , large screen TVs are still being sold by the truckload etc, etc. However it combined with INFLATION , becoming a bigger problem every day for the lower income guys due to food and gas (petrol), this WILL create problems down the road.

So, Mr Bear, my assertion is that there is a considerable time gap between people getting wiped out and understanding the impact. Like the stages of grief, people are still in the first stage of disbelief. They just don't want to hear about it. Depression comes in much later.

Good God! Are Australians so much like Americans now that that all forms of literary license now disallowed?

Whatever happened to colloquial speech, irony, allegory and metaphor? Must we convey the precise literal meaning of our words now? Is idiomatic speech dead... much worse, been executed by the thought police?

I think I'll go and drown my sorrows, kick the cat and give myself an uppercut, before slashing my own wrists.

Streuth!!

 

[CAFA1234]

Good God! Are Australians so much like Americans now that that all forms of literary license now disallowed?

Whatever happened to colloquial speech, irony, allegory and metaphor? Must we convey the precise literal meaning of our words now? Is idiomatic speech dead... much worse, been executed by the thought police?

I think I'll go and drown my sorrows, kick the cat and give myself an uppercut, before slashing my own wrists.

Streuth!!

And I thought you were serious when you said you didn't believe the figures - how silly of me. next time I'll know.

 

[wayneL]

And I thought you were serious when you said you didn't believe the figures - how silly of me. next time I'll know.

It's true, I'm having difficulty coming to term with those figures at this time.

If it was UK, I would believe it (just), going by the tales of doom, gnashing of teeth and what I am seeing with my own eyes here. But there has scarcely been an anecdote of price falls over there... particularly Melbourne.

As we go out over the next few months/years, I'm with you man. Those that have known me a while know this.

 

[CAFA1234]

It's true, I'm having difficulty coming to term with those figures at this time.

If it was UK, I would believe it (just), going by the tales of doom, gnashing of teeth and what I am seeing with my own eyes here. But there has scarcely been an anecdote of price falls over there... particularly Melbourne.

As we go out over the next few months/years, I'm with you man. Those that have known me a while know this.

April 24th - CNNMoney.com
WASHINGTON (AP) -- The percentage of vacant homes for sale in the United States set a new record high in the first quarter of this year, the government said Monday.

The Census Bureau report shows that shows that 2.9% of U.S. homes -- excluding rental properties -- were vacant and up for sale, compared with 2.8% in the fourth quarter of 2007. It was the highest quarterly number in records going back to 1956.

That works out to 2.28 million properties, up from 2.18 million in the same quarter last year, according to the report.

The West had the biggest gain in vacancy rates among homeowners, rising to 7% in the January-March period from 6.5% in the fourth quarter of 2007.
--------------------------------
So, in California (the West) one in 14 home is empty. These are government figures. Want to but some cheap property?

 

[robots]

hello,

just an article to read, dont read to much into the guy posting it,

http://www.theaustralian.news.com.au/story/0,25197,23609509-36418,00.html

have a great day

thankyou

robots

 

[CAFA1234]

hello,

just an article to read, dont read to much into the guy posting it,

http://www.theaustralian.news.com.au/story/0,25197,23609509-36418,00.html

have a great day

thankyou

robots

Another vested interest putting a brave face on a depressing situation. As far as I'm concerned if you want to know what is really going on, DO NOT listen to anyone who has a vested interest in bulling the market up, or putting forward arguments as to why it will not fall.

It's what the man is paid to do. Nothing personal.

 

[theasxgorilla]

What I can tell you, from yesterdays edition of the Los Angeles Times, is that the county of San Bernardino (East side of L.A.) is down 35%, with a number of zip (post) codes within the county being down 50%. These are not newsmen being dramatic, in fact no headlines anywhere. Just tucked away in the back of the real estate section where the official figures taken from the taxation records of sale.

That makes for interesting news. 50% is a lot, eh? I mean, a 50% loss means a 100% gain to make it back right? Ugly. And if we apply some common wisdom that's bantered around this part of the world (Australia, no I'm not there either but the forum is), house prices double in 7 years. So does that take these places back to 2001 prices already?

 

[theasxgorilla]

All that may mean is that fewer of the better class of home and more of the lower class sold that quarter. You may be comparing apples with pears.

Exactly. In isolation the stat makes for good tabloid fodder but in reality it means sweet FA. It has practically no bearing on a given house in a given street in a given neighbourhood in a given suburb etc. "Housing" stats per se don't measure apples with apples. It's neigh on impossible with the current systems of measurement.

 

[CAFA1234]

That makes for interesting news. 50% is a lot, eh? I mean, a 50% loss means a 100% gain to make it back right? Ugly. And if we apply some common wisdom that's bantered around this part of the world (Australia, no I'm not there either but the forum is), house prices double in 7 years. So does that take these places back to 2001 prices already?

Not sure of the numbers, but lots of the San Bernardino area with the big drops didn't exist in 2001. Huge new development over the past 3/5 years, and of course building in the middle of the desert is not a problem with cheap gas as people can drive. Even more of a problem with the price of gas going up - cheap in the US compared with Europe & Aus, but when it goes up 50% in 2/3 years and you are used to running a Ford F150/250/350 truck (big block little technology) you feel the pinch.

I suspect the same economics are playing out in the subs of the major Aussie cities. Who wants an hour, or 2 hour drive into Sydney from the North West subs that have seen huge development over the past few years?

In the Sydney area of Manly (nice world class surf) the price of a standard 2 bedroom 1000sf unit has not moved much since the peak in 2003. $500/600k is still the go. The boom in Melbourne / Perth / Adelaide / Brisbane appears to have bypassed Sydney. I'm sure here are others who can explain this - maybe it was way overpriced in 2003?

 

[noirua]

House prices in the U.K. have just shown their first 12 month decline with a fall of 1.6%. Some predictions are for a fall of 6 - 9% in the next 12 months.
The Royal Bank of Scotland is raising AUS$26 billion and the Halifax Bank of Scotland is expected to raise about AUS$9 billion.

 

[CAFA1234]

House prices in the U.K. have just shown their first 12 month decline with a fall of 1.6%. Some predictions are for a fall of 6 - 9% in the next 12 months.
The Royal Bank of Scotland is raising AUS$26 billion and the Halifax Bank of Scotland is expected to raise about AUS$9 billion.

Yes, people have such short memories. I paid 100k (pounds) for a house in Hampshire / Sussex borders in 1986. In 1990 it was worth 160k and in 1993 I could have picked up the next door (same model on new estate) for 128K - that was a big drop in 2 years. Ended up not too bad by selling in 2003 for $320k. Just like Australia back in 1989/1990, houses DO go down in value. Timing is everything!

 

[numbercruncher]

Anyone read this report by Fujitsu Consulting and JP Morgan ? I think they have a little more credibility than your local RE agent or permabull But even to a RE bear it sounds a bit scaryish ...


A few snippets of expected carnage ...

Fujitsu Consulting and JP Morgan's latest data predict that almost 1 million households will experience mortgage stress by September, with 40 per cent of those under severe stress.

Fujitsu predicts that every 25 basis points rise in the mortgage interest rate from now on will push 150,000 more households into mild stress, and half again into severe stress.

Even more disturbing, on present trends a household in severe stress has only a 50 per cent chance of saving the house, North says.

http://www.theage.com.au/news/planning/weather-the-perfect-storm/2008/04/21/1208742855463.html?page=2

Scary Huh !


On " present Trends " thats 200,000 forced sales and 15,000 more for each 25pc raise.

 

[YChromozome]

In the Sydney area of Manly (nice world class surf) the price of a standard 2 bedroom 1000sf unit has not moved much since the peak in 2003. $500/600k is still the go. The boom in Melbourne / Perth / Adelaide / Brisbane appears to have bypassed Sydney. I'm sure here are others who can explain this - maybe it was way overpriced in 2003?

Despite what people tell you about house prices can continue to go up, there is an equilibrium point where house prices go too far that people can't afford them - they simply outstrip wages/household income. I suspect Sydney reached that equilibrium point in 2003, and the rest of Australia is just meeting it now.

 

[KIWIKARLOS]

Exactly and alot of people will be argueing the increased inflation point when it comes time for them to talk wage increases. I work for the state gov and i can promise you that no gov worker / union will be accepting anything under 4% min.

You have to relise as well there is plenty of work out there many people can work a few extra hours overtime or get a second job. Times aren't always easy but as long as you can survive the tough times you will be loving the good times.

Does anyone relly doubt that the housing market etc will never recover ? I would suggest that it would probably recover strongly on the back of the east asian development. When japan was industrialising over 20-30 years the US its largest trading partner had some its best years as well. China is our largest trading partner and we will prosper from them for decades.

I think that inflation rather than massive amounts of depreciation will happen in oz. With energy prices going up all the building materials will rise accordingly. Most australian economic markets are holding up pretty well considering the scale of what is happening at the moment but the scales will balance sooner rather than later.

Aus dollar strong, GDP growth most likely 4+% one of the highest in the OECD, unemployment at 4.2%, a tax break coming hardly comparable to the US

 

[numbercruncher]

Post from another forum, take it as a grain of salt if you wish

I started looking for homes in sydney about 1 month ago. Did a search for homes between 200.000 and 250.000. Nothing turned up : 0 results. I can remember the cheapest house was in the 300.000's. Today I did the exact same search , and I get 7 pages worth of homes ( about 50 homes, not counting doubles ) for sale for less than 250.000 AUD. Same search-engine, same search details.

Probably in Sydneys trasiest suburbs, but if true it shows the guts starting to fall out of the low end.