House prices to keep rising for years

[andy87]

yeh gfresh, some points i dont agree with either, but they're stating the facts, not hypotheticals and you have to admit that it looks a little scary. Dont forget the lag from the US to China. it doesnt happen over night and we still dont know the full extent of America's problems. A whole city/town of 120,000 people became bankrupt in California.

Also, zt3000, dont think that China will be our saving grace. There talking about devaluing, or at least revaluing, the yuan which is potentially a very bad situation. At the moment they're even they are having battles with their inflation, currently 8.5%, because of high commodity prices. So K-Rudd and his posse of show pony's can shove the 'china will keep us afloat and out of inflations way' up there asses cause it is a load of poppycock

 

[Go Nuke]

Ah the old housing affordability topic.

A touchy subject no doubt.
As a tradie i always love hearing this...

Govt is now going to try increase skilled migration to alleviate the skilled labour shortage ...

So being a Boilermaker in the city of Brisbane i dont get paid anywhere near a Boilermaker in the mines...so hey, lets bring in some immigrants to keep the wages pressure down.
Who cares that more than 30% of my income already goes to paying rent for a 2 bedroom unit!

Personaly I hope whats happening in the U.S does come to Australia, because I'll be waiting all cashed up to finaly buy a property when i think it hits bottom.
And even though it would be political suicide, I think there has to be some changes made to negative gearing to help renters get into a place of their own.
There will always be people who are happy to rent, but its almost at a stage where you dont really have a choice.

Surely property prices will be out of reach for aussies and something has to give. Here in brissy you only have to drive on our roads to see that other than the government being behind the 8 ball on infrastructure, people are also being forced to move further and further out because of high rent/property prices...which in turn clogs our roads.

Anyway thats my for now

 

[robots]

Robi had a great idea on this one. Get a new job or a second job!! That will solve the problem! Easy!



Yep, the smart money are definitely packing up and cashing in their profit. My girlfriend's ex-boss is a real estate developer (albert quite a successful one, probably earned him a few cool million during the last few years of boom) but he is now cashing in and slowing down his speculation business.

hello,

in the "getting a base capital started" thread one poster told us how he took on a second job as pizza delivery man and done well,

thankyou

robots

 

[YChromozome]

one poster told us how he took on a second job as pizza delivery man and done well,

There is a good book worth reading called "The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke". While it looks into the two wage family, it also addresses people with multiple jobs.

Essentially at the start some families started getting two jobs to get ahead. This was though as great as they "diversified their risks". If one person in the family got sick or lost their job, they would have the other wage.

The only problem is doing this simply meant house prices rose with the dual incomes and the net effect was nil - or at least it seemed.

Rather now these households are more risker. They now need two wages to survive and hence there is a much bigger risk that one of the two jobs is lost or one member in the family gets sick. Couple this with a slowing economy and rising unemployment and you have bigger risk and more ticking timebombs just waiting to go off.

 

[robots]

There is a good book worth reading called "The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke". While it looks into the two wage family, it also addresses people with multiple jobs.

Essentially at the start some families started getting two jobs to get ahead. This was though as great as they "diversified their risks". If one person in the family got sick or lost their job, they would have the other wage.

The only problem is doing this simply meant house prices rose with the dual incomes and the net effect was nil - or at least it seemed.

Rather now these households are more risker. They now need two wages to survive and hence there is a much bigger risk that one of the two jobs is lost or one member in the family gets sick. Couple this with a slowing economy and rising unemployment and you have bigger risk and more ticking timebombs just waiting to go off.

hello,

and you would cheer chromo if an individual went down wouldnt you,

tall poppy syndrome all over again, thats what the property threads are genuinely about, 40+k views

this is not trollish this is fact and lets discuss!

thankyou

robots

 

[explod]

hello,

in the "getting a base capital started" thread one poster told us how he took on a second job as pizza delivery man and done well,

thankyou

robots

Trouble is Robots, with tough times less people can afford to buy a pizza. Restaurants in fact are reporting a considerable drop off. And as more and more jobs drop off, then more and more people will buy less and that means even less jobs and so on, so that it compounds out the door and onto the street. This is what happens in a big down turn and that looks like where we are headed.

Love your optimism but at some stage common sense needs to kick in if one is to be able to withstand the tough times. Most are oblivious and unfortunately thier pain is going to be great.

 

[wayneL]

hello,

and you would cheer chromo if an individual went down wouldnt you,

tall poppy syndrome all over again, thats what the property threads are genuinely about, 40+k views

this is not trollish this is fact and lets discuss!

thankyou

robots

I'm having trouble linking Chromo's post with the tall poppy syndrome 'bot.

A bearish opinion <> Schadenfreude.

 

[robots]

hello,

for many working is the way, 2 jobs, smarter work, working smarter but it is ridiculed and questioned,

and I wonder if it is the working issue or the property issue,

thankyou

robots

 

[explod]

hello,

for many working is the way, 2 jobs, smarter work, working smarter but it is ridiculed and questioned,

and I wonder if it is the working issue or the property issue,

thankyou

robots

I have worked two jobs and for short times three. Also double shifts on main job. And in normal times it is easy. That is not the issue. The point is that we are fast approaching a time when there will be little or no jobs, particularly in outlying areas and for the decreased jobs in the inner areas there will be fierce competition by those on location.

My Grandparents explained to me well what hard times are about and this time around (1980 was a walk in the park) we are going to have very bad times. The fundamentals compared to the 1920's are worse this time and they are global. They are also different because people could return to the land in the 1920's and find something to feed themselves with. A lot of the good inner farmland now has houses on it here in Vic.

House prices are going to go down IMHO . period

 

[wayneL]

hello,

for many working is the way, 2 jobs, smarter work, working smarter but it is ridiculed and questioned,

and I wonder if it is the working issue or the property issue,

thankyou

robots

That does not answer my question. How is it tall poppy syndrome?

I think people are just questioning the "get off your @rse and earn more" answer to high house prices. It leaves folks vulnerable to a drop in this "extra" income for whatever reason.

 

[Mofra]

House prices may have risen overall in recent years, but they are still the poor cousing on a dollar vs dollar comparison basis:

http://www.news.com.au/business/money/story/0,25479,23721991-5013953,00.html

 

[Temjin]

hello,

and you would cheer chromo if an individual went down wouldnt you,

tall poppy syndrome all over again, thats what the property threads are genuinely about, 40+k views

this is not trollish this is fact and lets discuss!

thankyou

robots

Wow, you are already using the term "tall poppy syndrome" as a basis for your argument. A fact???!!! You are merely critising and is pretty much the same for trolling.

We are not being negative or being jealous of other accomplisment, we are just being REALISTIC. Like I said, plenty of successful property investors (and personally I know two, the other is a developer himself) are BEING REALISTIC and SMART by cashing all in and wait for the correction to finish off. They have a bearish view on the property market for a valid reason.

 

[Gspot]

I have worked two jobs and for short times three. Also double shifts on main job. And in normal times it is easy. That is not the issue. The point is that we are fast approaching a time when there will be little or no jobs, particularly in outlying areas and for the decreased jobs in the inner areas there will be fierce competition by those on location.

My Grandparents explained to me well what hard times are about and this time around (1980 was a walk in the park) we are going to have very bad times. The fundamentals compared to the 1920's are worse this time and they are global. They are also different because people could return to the land in the 1920's and find something to feed themselves with. A lot of the good inner farmland now has houses on it here in Vic.

House prices are going to go down IMHO . period

Going down? Yes, on the east coast, where people are selling up and moving to WEST OZ, where the labour shortage is still huge!
And when they move here, where do they live? All over the state. At the moment real estate isn't giving great returns,maybe, but the rent is more than covering the cost of holding these properties. The secret is buying affordable houses, which can be found in the south west, and easily rentable.

I know of alot of people working 2 weeks on, 2 weeks off, on the mines. They are taking their families to little seaside towns to live, like Denmark, Walpole, Dunsborough, Augusta. Great fishing, surf, wine. Why wouldn't you?
Let's also not forget, that the baby boomers retiring, has only just started.

 

[wayneL]

...but the rent is more than covering the cost of holding these properties.

eh?

 

[Gspot]

eh?

Bought a 4 x 2 in Denmark for $295000. Rent for $260 a week. Negative gear, plus depriciation tax, makes it only $100 a week out of my pocket, give or take a few dollars. For me it's better than putting in the bank.

 

[wayneL]

Bought a 4 x 2 in Denmark for $295000. Rent for $260 a week. Negative gear, plus depriciation tax, makes it only $100 a week out of my pocket, give or take a few dollars. For me it's better than putting in the bank.

Fair enough, but that doesn't cover holding costs.

 

[Kimosabi]

Bought a 4 x 2 in Denmark for $295000. Rent for $260 a week. Negative gear, plus depriciation tax, makes it only $100 a week out of my pocket, give or take a few dollars. For me it's better than putting in the bank.

I'm still trying to work out why people think making a loss is so great. Maybe people should start running their investment property's as a business.

Running a business at a loss isn't much fun so I can't see how running a investment property at a loss is considered such a great thing.

Just because the herd is running off a cliff does it doesn't make the herd smart.

But the real question is, why does the Government reward and encourage us to go into debt???

 

[WaySolid]

I'm still trying to work out why people think making a loss is so great. Maybe people should start running their investment property's as a business.

Running a business at a loss isn't much fun so I can't see how running a investment property at a loss is considered such a great thing.

Just because the herd is running off a cliff does it doesn't make the herd smart.

But the real question is, why does the Government reward and encourage us to go into debt???

It's not great, just a kick along for investment return.

I guess the idea is that the private sector will provide housing to the population and the government won't have to.

Why would the govt subsidize someone to take a margin loan and invest in shares is another question to ask.

 

[robots]

hello,

its a myth that years ago all property was positively geared,

in 1998 when i bought one unit the total cost of mortgage, rates etc was around $270/wk, could of rented same place in complex for $180/wk

how long has negative gearing being going for?

thats right waysolid, people get deduction on margin loan interest if in negative situation (thats okay though)

thankyou

robots

 

[Tysonboss1]

I'm still trying to work out why people think making a loss is so great. Maybe people should start running their investment property's as a business.

Running a business at a loss isn't much fun so I can't see how running a investment property at a loss is considered such a great thing.

Just because the herd is running off a cliff does it doesn't make the herd smart.

But the real question is, why does the Government reward and encourage us to go into debt???

It's only a cashflow loss for the first few years till inflation of the rent catches up with your loan payments, and you have the capital growth also to look forward to.

Think of it like taking a loan to by some shares,... with current margin loan rates around 10.1% does it mean that any stock paying less than 10.1% dividend yeild is a bad investment, No it doesn't because the investor accepts that they will have a shorterm cashflow loss but over time as the share price and the dividend increase the short term loss is quite small compared to the over all gain.

If lossing $50 or $80 a week from your pay secures you a $250,000 asset that increases at 10%, then in my book thats better than putting that $80 a week in a cash account.