House prices to keep rising for years

[brettc4]

Interesting to see on tonights news that auction clearance rates in Adelaide this weekend (14/15 June) were at 40%.

Brett

 

[explod]

exactly, that is why i will be looking to buy around christmas or jan/feb. People are in too much debt, fuel is ridiculous...and not going to get any better
unemployment rate isn't too bad at the moment....but time will tell how that changes.

house prices have no choice but to go down (in the real world anyway) The only thing i see increasing is the very inner city places because of rising fuel costs.

Depends where you are looking to buy. The economics of this downturn, oil, food, unemployment will be severe and last for many years in my view. I would not put a time frame on my return to property investment. Like the sharemarket, it is the direction of the market that determines my decisions.

Having said that, a run on the banks could see money best sitting in property for the longer term.

 

[motion]

exactly, that is why i will be looking to buy around christmas or jan/feb. People are in too much debt, fuel is ridiculous...and not going to get any better
unemployment rate isn't too bad at the moment....but time will tell how that changes.

house prices have no choice but to go down (in the real world anyway) The only thing i see increasing is the very inner city places because of rising fuel costs.

I was thinking the same towards the end of the year would be a great time to buy. I think the media is trying to hype the market up as everywhere I read they are saying house prices are set to rise to record highs between the end of the year and 2011. Now all I can see is the housing market slowing down at the moment...

This is from news.com.au on the front page.

http://www.news.com.au/business/story/0,23636,23869827-462,00.html

"HOUSE prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates."

 

[gfresh]

snap.. working in tandem it seems - http://business.theage.com.au/house-prices-to-soar-20080616-2r6g.html

"Buy, buy, you'll miss out, buy now"

No doubt the scenes played out in this article are occurring right now here in Australia: http://tvnz.co.nz/view/page/411749/1843300

They forgot to mention there is a snowball chance of the RBA lowering rates significantly in the next 12 months at least. Even the RBA has stated they don't wish to encourage speculative property investment, and encourage saving rather than spending. We are stuck with high interest rates for many years, until our miners stop bringing billions of dollars into the country.

 

[gfresh]

fuel is ridiculous...and not going to get any better

But how much is it really costing people each week I wonder if they sat and did the sums? A 30% increase in fuel prices has cost me, wait for it (avg large car), $8/week.. and I do slightly more than the average at 20000km a year.. Even if I did a ridiculous 40,000km a year it would cost me an extra $16 compared to what it did 6 months ago.

People can't afford $20 a week more out of their budget? Are we that indebted we struggle with this?

 

[wayneL]

But how much is it really costing people each week I wonder if they sat and did the sums? A 30% increase in fuel prices has cost me, wait for it (avg large car), $8/week.. and I do slightly more than the average at 20000km a year.. Even if I did a ridiculous 40,000km a year it would cost me an extra $16 compared to what it did 6 months ago.

People can't afford $20 a week more out of their budget? Are we that indebted we struggle with this?

YES!!!

 

[CamKawa]

Does a bank own BIS Shrapnel?

 

[Macquack]

I was thinking the same towards the end of the year would be a great time to buy. I think the media is trying to hype the market up as everywhere I read they are saying house prices are set to rise to record highs between the end of the year and 2011. Now all I can see is the housing market slowing down at the moment...

This is from news.com.au on the front page.

http://www.news.com.au/business/story/0,23636,23869827-462,00.html

"HOUSE prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates."

News Corporation must be suffering from declining real estate advertising revenues.

If you read the BIS Shrapnel report, you will see that News Corp have just picked out the "bits" it likes. For example BIS Shrapnel actually says "all Australian residential property markets will experience marginal price increases in 2008/09. News Corp prefers to interpret this as "HOUSE prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates." Neglecting to include the word "marginal" has more impact.

The BIS Shrapnel report headline states " Interest rate rises to stall residential property price growth in most centres despite record net overseas migration and a rising deficiency of dwellings".

This is another example of creative journalism from News Corporation to twist the truth.

 

[Adam A]

Is it just me? or do others feel that the media are squeezing what seems to me to be the very last drop out of the real estate market ?

I mean i nearly choked on my spam dinner when ABC news had a map of Aus with 10 to 20% price increases forecast for the near future!

Apparently the number of new immigrants per year are going to increase demand.

I think im going mad

 

[Nyden]

But how much is it really costing people each week I wonder if they sat and did the sums? A 30% increase in fuel prices has cost me, wait for it (avg large car), $8/week.. and I do slightly more than the average at 20000km a year.. Even if I did a ridiculous 40,000km a year it would cost me an extra $16 compared to what it did 6 months ago.

People can't afford $20 a week more out of their budget? Are we that indebted we struggle with this?

It's not just the fuel costs though - it's the high interest rates (many were already struggling prior to the numerous rises), the ever-increasing costs of food, energy, even water! Here in Victoria, I believe we're getting a 10 or 20% price hike on our water bill soon ... surely you can see how all these increasing costs can hurt those who simply weren't prepared (dare I say it, the bulk of people).

I know quite a few people who basically pay 95%+ of their combined paychecks into bills (including mortgage) - just think about that for a moment, 95%+; no savings, & very little room for another rate rise / increase of costs! I'm sure there are many more out there already stretching their budgets, & teetering on the absolute edge. All it takes is one final nail in that coffin for the mass of defaults to occur ...

 

[Adam A]

Totally agree Nyden

Many people out their hanging on by their fingernails

Read advice in a sydney paper on the weekend (if buying today budget for 4 x.25% interest rate rises)

Great advice considering were now on our what, 7 or 8th straight increase?

 

[kenny]

It's not just the mortgage holders struggling though. The renters and those on fixed incomes are doing it pretty tough too. Sure, their term deposits are earning more but I'm sure some have been thinking about drawing on their capital to tide themselves over. A slippery slope indeed.

Cheers,

Kenny

 

[explod]

Related families, siblings, cousins etc will move together into the 4 bedroom homes. In the late 40's whole families starting out rented by the room.

As unemployment increases (due to oil, food and general financials) the Government will slow immigration.

I notice a lot of new subdivisions in my area devoid of activity. Looks bleak to me.

 

[Gspot]

Related families, siblings, cousins etc will move together into the 4 bedroom homes. In the late 40's whole families starting out rented by the room.

As unemployment increases (due to oil, food and general financials) the Government will slow immigration.

I notice a lot of new subdivisions in my area devoid of activity. Looks bleak to me.

Not so bleak in the West, where the real money is made and used to prop up the weak Eastern states.
If people can't afford a cappaccino then Melbournians are in trouble.
Findind good labour is still the biggest problem over here, followed by finding something decent to rent. Hence more people immigrating and looking for somewhere to live.

 

[pepperoni]

i saw the bis shrapnel nonsense ... amidst the spuiking they admitted "flat prices this year".

They were quoting "12% increases" in sydney, with the small print stating they are not annual but 3 year returns

Syd north shore/northen beaches are best prices and buying conditions for years right now ... back to 2002 prices and Im not sure if it can get better for buyers.

Im buying asap once a suitable property lists.

2 examples of money to be made in the next 5 years:

Amazing position with some of the best views on northern beaches of syd, same house I posted weeks ago, started at 2.1 which seemed reasonable compared to similar properties ... now suggesting 1.6 may be acceptable.

http://www.realestate.com.au/cgi-bi...r=&cc=&c=43493524&s=nsw&snf=rbs&tm=1213665592



9 year old double brick house in northbridge, expectations of 2.8m, now languishing on market for 6 weeks at "around $2m"

http://www.realestate.com.au/cgi-bi...er=&cc=&c=7911637&s=nsw&snf=rbs&tm=1213665054


In fact there have been no sales near market value in northbridge for weeks now .... and more properties listed than ever .... the bad conditions for sellers are just now starting to compound in sydneys supposed "crash proof" markets.

 

[pepperoni]

the odd bit of common sense from the media ... but we all knew that 100 000 migrants from peru, vietnam and somalia wont put any pressure on the median house price of $450k if the come with $1000 net worth

http://www.smh.com.au/news/opinion/...on-house-prices/2008/06/16/1213468325999.html

 

[gfresh]

From above:

Predictions that property prices will rise by 18 per cent over the next three years will offer comfort to Sydneysiders worried about the value of their homes.

Nothing to write home about, especially when people take into account 9.4% home loan rates. They're still going backwards with current rates. Without rises of 30% any newer entrant is going backwards.

Whatever hardship people are facing, RBA doesn't seem to be keen on lowering rates anytime soon. Will raise them if wages start going up it seems (allowing people to get back in front) - therefore people better start getting used to it...

http://business.theage.com.au/economy-under-control-rba-20080617-2rxc.html

In the minutes, the RBA said the board recognised the Australian economy was now slowing after 12 interest rate rises in the past 6 years.

The central bank has forecast employment growth could begin to slow as a side-effect of the drop in business spending, confidence, credit growth and the broader economic contraction.

"Labour market conditions, on the other hand, had remained strong to date,'' the bank said.

"This could be explained by lags, in which case a moderation in employment growth could be expected soon.''

The recommendation to the board was to maintain the official cash rate at 7.25%, and the minutes show the board could be moving towards a neutral stance on interest rates.

"On balance, the board's assessment continued to be that on current policy settings the necessary moderation in demand growth was likely to occur,'' the bank said.

The financial markets were priced for another 36 basis points of rate rises over the next year, before the minutes' release.

The RBA emphasised wages breakouts, as a result of the high inflation rate, could trigger another interest rate rise.

"Should demand not slow as expected or should expectations of high ongoing inflation begin to effect wage and price-setting behaviour, the outlook and the stance of policy would need to be reviewed,'' the bank said.

 

[nioka]

Nothing to write home about, especially when people take into account 9.4% home loan rates. They're still going backwards with current rates. Without rises of 30% any newer entrant is going backwards.

You HAVE to take RENT into account. If you are not paying off a home and are paying rent you are getting a long way behind. Sometimes the rent is more than the interest on a mortgage or at least close to it.

 

[Nyden]

You HAVE to take RENT into account. If you are not paying off a home and are paying rent you are getting a long way behind. Sometimes the rent is more than the interest on a mortgage or at least close to it.

I don't think renters are falling behind? Paying rent is far less expensive than paying off a house; this allows people to save up money ... how is this falling behind? Granted, it is falling behind if house prices are sky-rocketing, but I think those days are over for quite a while

 

[Julia]

I don't think renters are falling behind? Paying rent is far less expensive than paying off a house;

But, Nyden, at the end you own an asset if you're paying off your house. Paying rent you own nothing.