House prices to keep rising for years

[Tysonboss1]

I've been keeping an eye on the number of rental properties available in what Domain.com.au defines as the Melbourne region for the last month. Here's what I have found.

Date ------------# of properties for rent in Melbourne
07.06.2008 ----7770
14.06.2008 ----7949
21.06.2008 ----8100
28.06.2008 ----8158

As you can see the number of properties for rent in Melbourne is steadily increasing. I can't see rents soaring in the face of increased supply.

It depends where they are and the type of property, it's possible for certain types of property to increase rent yeilds as others stagnate, depending on the demographics, same can be said for certain suburbs,

for instance an over supply of 1 bed apartments in outer sydney, won't affect the rents of tight supply 3 bed inner city units with harbour veiws and car spaces.

figures that blanket whole cities and different classes of property are next to useless.

 

[gav]

Sorry but leaving someones property in a mess isn't justified ever! If someone every done that to my property they would regret it. I had an old school upbringing and believe in the old school way of getting things sorted. You lost all sympathies with that comment.

You live in a country which has the greatest amount of opportunities available to able and willing workers. You just have to be prepared to go take those opportunities or put up and stop your whinging. I know whinging is an Australian favouriate past time but really it is the lucky country and people should thank there lucky stars they were born here and not say Iraq or Afganistan.

I agree, leaving a property in a mess is never justified, but I wouldnt have any sympathy for the land lords in those few cases that I mentioned. Even with my bad experiences with the place I'm currently moving out of, I guarantee you that come inspection time next week, that place will be spotless and squeeky clean. Just because I get treated bad, does not mean I would lower myself and do the same. I was brought up better than that.

And as for your comment about the amount of opportunities we have in this country, I totally agree. I served in the Army for 4yrs and was deployed overseas. Some of the things I have seen, I will never ever share with another person. It breaks my heart to see the world that these ppl have to live in.

If I have offended anyone with any of my comments, that was not my intent, and I dont want this topic locked. I was just bringing to light some of my personal experiences, and the experiences of those around me - because often Land Lords have no contact with tennants, they just go through the real estate agent. Which means they have no idea of the tennants side. I would hate to hear of a someones property being left like a dump, the whole point of this was to let Land Lords know that if they have good tennants, then treat them well because there are alot of bad ones out there.

Robots, CamKawa, thanks for your kind comments. Robots, I rent near the area you spoke of in your post, properties getting trashed around here arent uncommon. Im currently on 35K per yr, but I no longer go wasting my money on cars, alcohol, etc like my mates, and can budget which means I can pay all my bills, and put a little away most weeks, which is better than alot of ppl who are renting. I only recently began investing in shares, hopefully one day I'll have enough to own a house myself

 

[gfresh]

Your comments do raise an issue pertinent to house prices - the immediate future of the mortgage borking industry.

Maybe this sparked your thinking, but there was a segment on Inside Business this morning, stating that the share of mortgage brokers is dropping rapidly, and also commissions are plunging, and layoffs are occurring. The share of bank lending has also soared comparative to non-bank lenders, back to the levels when mortgage deregulation was introduced in the mid-90's. This is probably not a good thing for borrowers in the long run, as mortage rates creep further and further above the RBA cash rate. Less competition is not good for borrowers, although maybe less sharks out there.

Also on property - another segment with another "expert" predicting a 20-30% fall in property prices to the longer term trend line as per US and UK. When they're up on the website I will post them up. Probably nothing anybody hasn't heard before however.

I think this whole area south of palm beach is the best part of the coast, and is a really good spot to live, also think that the property in the area will be some of the hottest on the coast in the future

I think so too, even if it doesn't stack up in my head the local demographics compared to the values.. It's amazing what you can find compared to the rest of Australia, where similar (and less quality beaches) sell for $1M+. With the airport right here (of which is silent, and I am about 5 mins walk), it's also attractive for wealthier interstater's to fly in for a holiday house. I mean the difference what you'd pay in melb or sydney, you could spend on an airfare each week and still be in front. I'm still considering, when the time comes to buy an IP, whether here or Brisbane would work out better... Guess I have to look at growth/yield/quality tenants equation. I think it would suffer on the later two.

heres a 5 min commentary you may be interested in,

Some valuable advice in there. I've got an open mind to any positive or negative thoughts really.

Robots: Brother just bought another house in Brunswick yesterday, maybe that was your 3% increase in clearance?

 

[kitehigh]

That's a fairly harsh comment. It looks like some landlords must be really under the pump. Have you thought about selling?

No doing just fine thanks, no intention of selling a inner city character house that is in high demand from both renters and owners.

 

[kitehigh]

I agree, leaving a property in a mess is never justified, but I wouldnt have any sympathy for the land lords in those few cases that I mentioned. Even with my bad experiences with the place I'm currently moving out of, I guarantee you that come inspection time next week, that place will be spotless and squeeky clean. Just because I get treated bad, does not mean I would lower myself and do the same. I was brought up better than that.

Good to hear, I know that 90% of people are good and its normally the 10% that cause the grief for the rest.

And as for your comment about the amount of opportunities we have in this country, I totally agree. I served in the Army for 4yrs and was deployed overseas. Some of the things I have seen, I will never ever share with another person. It breaks my heart to see the world that these ppl have to live in.

I was in the army for 12 years and got the pleasure to serve in some of the worst countries on the planet. You should share your experiences with others especially those that have never had the options to travel and experience extreme poverty and destitution. I am still living and working in these poor countries and am exposed to extreme poverty every day of my life.
What annoys me though is to hear Australians who have limited exposure to the other world that these people live in, than complaining constantly how tough they have it. Most Australians are rich beyond these poor peoples wildest dreams, even our so called poor have it damn good.

If I have offended anyone with any of my comments, that was not my intent, and I dont want this topic locked. I was just bringing to light some of my personal experiences, and the experiences of those around me - because often Land Lords have no contact with tennants, they just go through the real estate agent. Which means they have no idea of the tennants side. I would hate to hear of a someones property being left like a dump, the whole point of this was to let Land Lords know that if they have good tennants, then treat them well because there are alot of bad ones out there.

My tenants actually get a good deal, they are currently paying below market rent because they have been there for awhile now, take good care of the property and always pay there rent on time. Also because I self manage my property and know my tenants personally I always struggle to put up the rent. I will be putting up the rent again soon, but still it will be below the market rent by a substantial amount.

Robots, CamKawa, thanks for your kind comments. Robots, I rent near the area you spoke of in your post, properties getting trashed around here arent uncommon. Im currently on 35K per yr, but I no longer go wasting my money on cars, alcohol, etc like my mates, and can budget which means I can pay all my bills, and put a little away most weeks, which is better than alot of ppl who are renting. I only recently began investing in shares, hopefully one day I'll have enough to own a house myself

Good to hear you have you head screwed on right and are trying to get ahead. I would seriously be looking at finding a way to increase your income though, especially in this current economic cycle that Australia is going through. I know in WA, there are kids leaving school and going to work in the mines, where the starting wage is around 80k per yr and thats without any trade etc. Good luck in your endeavors.

 

[Mofra]

Maybe this sparked your thinking, but there was a segment on Inside Business this morning, stating that the share of mortgage brokers is dropping rapidly, and also commissions are plunging, and layoffs are occurring. The share of bank lending has also soared comparative to non-bank lenders, back to the levels when mortgage deregulation was introduced in the mid-90's. This is probably not a good thing for borrowers in the long run, as mortage rates creep further and further above the RBA cash rate. Less competition is not good for borrowers, although maybe less sharks out there.

Cheers gfresh, the dropoff in non-bank lending is obviously a direct result of sentiment over the credit crunch as NBLs (RAMs & Macquarie being two major culprits) and non-conformers (Bluestone) raise rates independantly of the RBA at a much faster rate than the majors.
Regardless of what happens in the future, bridges have been burnt & relationships damaged so brokers are sending the bulk of their work to deposit holding institutions. That in itself is fuelling a rise in the banks dominating the sector, who have largely halted branch closures as they are now seen as one stop shops for a variety of financial products.

Put simply, industry polling shows Joe Average doesn't want to visit a seperate Financial Planner, Bank Manager, Consumer Lender, Business Lender & Insurance Broker anymore. Aggregators know this and the sector consolidation is gathering pace. Relationship packages are now obtainable at average mortgage sizes.

 

[Mofra]

figures that blanket whole cities and different classes of property are next to useless.

Agree 100%, although there seem to be a number of posts on this thread (going waaaay back to the beginning) that have been happy to suggest otherwise.

 

[Macquack]

I no longer go wasting my money on cars, alcohol, etc like my mates.

It's official. Australia is in a recession - when a hard working bloke with two jobs cant even enjoy a cold VB and a drive in his V8.

I only recently began investing in shares, hopefully one day I'll have enough to own a house myself

And the last straw, a long shot akin to buying a lottery ticket.

 

[robots]

hello,

top effort gav, keep putting it away

thankyou

robots

 

[theasxgorilla]

It's official. Australia is in a recession - when a hard working bloke with two jobs cant even enjoy a cold VB and a drive in his V8.

I think you'll find drink driving laws put a stop to that, not economic conditions.

 

[Pommiegranite]

Surely this whole thread comes down to one theory: Decoupling

So why not just have a discussion about that rather than "Theres a lot more 'For Sale' boards on my street than this time last year"

OR

"Property always goes up"

 

[gav]

It's official. Australia is in a recession - when a hard working bloke with two jobs cant even enjoy a cold VB and a drive in his V8.

And the last straw, a long shot akin to buying a lottery ticket.

I got rid of the V8 over a year ago, now drive a Hyundai Accent. It hurt the pride at first, but it was the right decision. Also, I have a rather expensive hobbie (bodybuilding) which requires alot of food, vitamins, supplements. It was either give up the car or give up bodybuilding. I am lucky that I am sponsored, so I get some stuff for free, and the rest I only pay wholesale. If I did not have a set budget, I would not be able to afford my bodybuilding as well.

No way I'd buy a lotto ticket, I see my boss waste nearly $50 every week on that. I'd prefer to put that money away each week. It will take alot of time and hard work before I'll ever own a house, just have to be disciplined and patient, I know I'll get there.

Started in shares 6 weeks ago, and so far im up 29%, which is equal to about 2 months savings for me. I did alot of research before investing, but I have been very lucky also. Sorry, gone off topic a bit here...

 

[nomore4s]

I got rid of the V8 over a year ago, now drive a Hyundai Accent.

A bodybuilder driving a Hyundai Accent after selling his V8 - that's just wrong, what's the world coming to, damn oil prices:

 

[gav]

LOL i see the irony, but thats how it goes... I see ur in Darwin. I was posted there for 3yrs, its where I bought the V8 too

 

[robots]

hello,

http://business.theage.com.au/higher-rentals-seen-as-spur-for-investment-20080629-2yu8.html?page=2

very clean honest article about where things area at in melb, and probably aus in general

wow, house in sunshine for 265k! is that an error must send that info to Mr Imber at vcoss

thankyou

robots

 

[gav]

hello,

http://business.theage.com.au/higher-rentals-seen-as-spur-for-investment-20080629-2yu8.html?page=2

very clean honest article about where things area at in melb, and probably aus in general

wow, house in sunshine for 265k! is that an error must send that info to Mr Imber at vcoss

thankyou

robots

I used to live over that side of town. I doubt that would be an error, that place makes Frankston look like Brighton

 

[gfresh]

Worth a read for QLD'ers..

http://www.localgovernment.qld.gov....ections2007/population-projections-part-1.pdf

 

[pepperoni]

Continuing my program of bold and inflamatory statements, there is no "housing shortage crisis" unless:

- the 1000s of high density unit developments are cardboard cut outs
- they have leveled the 1000s of uninhabited properties and
- somone has hidden the millions that are now forced to live under bridges.

The greater issue, which IS pushing prices down, is the Affordability crises, and inflation, rates, and economic conditions generally.

My past weeks experience from sydneys north (where the whole riduculous boom/craze more or less started):

- near to city prices are dipping in almost all cases; and
- the blue chip northern beaches has unofficially crashed at the top and middle of the housing market (you heard it here first) ... for sale prices dropping materially, very little selling, agents chasing and begging, and no idea when the prices will stop dropping.

But Im sure the auction clearance rate is 100% as people are in almost all cases opting for long for sale campaigns.

Anyway here are some more official, but lagging, figures on the falls and reasons for these and possibly further falls ....


http://business.smh.com.au/steam-is-out-of-credit-growth-20080630-2z5x.html


http://business.smh.com.au/lending-inflation-rise-20080630-2z46.html


My hot tips are (1) ignore the last ditch "increasing yeild" propaganda which becomes more ridiculous as inflation and rate risks increase (2) hold on tight, and (3) dont give any RE agents your real number as they will wear your phone out with ever increasing call backs :

 

[explod]

Continuing my program of bold and inflamatory statements, there is no "housing shortage crisis" unless:

:

Agree with everything you say pepper..

Remember that best selling book a few years ago "101 Properties in a coupla years or somthin" Well they all got into it everywhere on the good ole low doc and now they are all realising the ballance sheet looks bad and the margin calls are wisperin.

And I see ominous signs for the Ole Wizard Home Loans with GE wanting to unload the agencies to the Banks and package up the debt to some other mug, if there are any left with money of course .

Yep, have to agree I'm afraid Pepper

 

[robots]

Continuing my program of bold and inflamatory statements, there is no "housing shortage crisis" unless:

- the 1000s of high density unit developments are cardboard cut outs
- they have leveled the 1000s of uninhabited properties and
- somone has hidden the millions that are now forced to live under bridges

hello,

this is the thing that really bugs me about all the "affordability" crew,

whats it to YOU/OR ANYBODY else if someone has a house/unit left empty for 1 day, 1 month, 1 years or 10 years,

i would be homeless too if didnt get up and go to work each day but these guys/girls just expect to get everything, they arent forced

oh yeah i go to work just so I can hand the chap out the front of Prahran coles a $1 so he can hop of to get a cap, get out of here

thankyou

robots