House prices to keep rising for years
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Yeah I see what you mean, But I guess it's no different to share investors using margin loans, I would dare say most margin loan facilities are not presently positivly geared, investors would be investing in share paying 5% or 6% while paying 10.25% interest.
the government wants a steady flow of development projects to help keep up supply of rental accomadation, and without investors buying the end product the amount of developments being completed would be servely reduced,
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No doubt Macquack was being facetious - despite the hype about the current volatile housing market, there will always be ridiculously overpriced shacks available.
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Home buyers struggling with mortgages should sell now
HOMEOWNERS already struggling with mortgage repayments need to cut their losses and sell up before it is too late, an industry insider has warned.
Those homeowners feeling the pinch from rising interest rates and living costs need to put their house on the market now because things are about to get much worse, Wizard Home Loans founder Mark Bouris said
...
The Reserve Bank board holds its monthly meeting on interest rates today, but most economists predict rates will remain steady.
But despite that slight reprieve, Mr Bouris said there was a "major problem looming" for struggling homeowners over the next few years. "I know this because of what I hear in the industry and what my customers are telling me every day.
"Interest rates have gone so high in the last few years that ... homeowners really are battling. And there's worse to come. Much worse."
Mr Bouris said people who singed up for a fixed loan three or four years ago - before rates shot up - are about to get a shock. These homeowners will soon be switched from their introductory fixed rate to a much higher loan.
"They have no idea what is about to hit them," he said.
He also said that interest rates have risen so much in recent years that the calculations once applied to assess someone's capability to pay back a loan "are now nonsense".
"Mums and dads need to take their heads out of the sand and start looking at the next six months, because these high interest rates could last for another year or so. There's only so long some people can hang on."
HOMEOWNERS already struggling with mortgage repayments need to cut their losses and sell up before it is too late, an industry insider has warned.
Those homeowners feeling the pinch from rising interest rates and living costs need to put their house on the market now because things are about to get much worse, Wizard Home Loans founder Mark Bouris said
...
The Reserve Bank board holds its monthly meeting on interest rates today, but most economists predict rates will remain steady.
But despite that slight reprieve, Mr Bouris said there was a "major problem looming" for struggling homeowners over the next few years. "I know this because of what I hear in the industry and what my customers are telling me every day.
"Interest rates have gone so high in the last few years that ... homeowners really are battling. And there's worse to come. Much worse."
Mr Bouris said people who singed up for a fixed loan three or four years ago - before rates shot up - are about to get a shock. These homeowners will soon be switched from their introductory fixed rate to a much higher loan.
"They have no idea what is about to hit them," he said.
He also said that interest rates have risen so much in recent years that the calculations once applied to assess someone's capability to pay back a loan "are now nonsense".
"Mums and dads need to take their heads out of the sand and start looking at the next six months, because these high interest rates could last for another year or so. There's only so long some people can hang on."
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I was reading the public comments in that article and I have to tell you that there is flame just about every one of them! 
The only thing I don't get is why would the founder of Wizards Home Loan would say something like this?? What is his true intention? As true as what he is advising to people, how "genuine" is he in making the comments? Doesn't his company earn money through lending money out for the long term? By telling people to sell, he is essentially trying to reduce his company's business. Or is he trying to protect his business to urge those who are struggling to get out first in good terms because being foreclosed and get sold in fire sale prices. Which would essentially means Wizards Home Loan might get less if it is a negative equity and more people "default" on their loan.
The only thing I don't get is why would the founder of Wizards Home Loan would say something like this?? What is his true intention? As true as what he is advising to people, how "genuine" is he in making the comments? Doesn't his company earn money through lending money out for the long term? By telling people to sell, he is essentially trying to reduce his company's business. Or is he trying to protect his business to urge those who are struggling to get out first in good terms because being foreclosed and get sold in fire sale prices. Which would essentially means Wizards Home Loan might get less if it is a negative equity and more people "default" on their loan.
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If things keep at this rate I can see a worst case scenario for owners as affordability fallings back 1980s and 1990s levels.
The only thing stopping it are the last remnants of the property overvaluers/over bidders, who see 80s and 90s affordability type prices as just too cheap, and 80s and 90s as the ignorant dark ages from a property valuation point of view.
There are plenty of properties for sale so its not a supply issue ala dubai or something.
As an aside I had this exchange starting from the bottom on the "2.8m" almost finished project ... 3 storeys, 350m2 double brick with huge ocean views, which has dropped from 2.2 to 1.3 in 2 months!!!!!! 300k to finish internally tops. He later called and I said name your price or forget it again .... I havent seen this RE Agent desperation this decade at least.
Hi
If you’re interested please forward best offer
At the level you’re willing to buy property.
And fax letter back to
Hi,
I have the money in a term deposit maturing in 2 weeks.
I am very happy to purchase the property for around 1.3 if they wish to directly negotiate with me.
However I dont want to get involved in tenders or dutch auctions.
Regards
Hi
The trustee contacted me today
Please submit your best offer
They will submit it to St George Bank
Regards
The only thing stopping it are the last remnants of the property overvaluers/over bidders, who see 80s and 90s affordability type prices as just too cheap, and 80s and 90s as the ignorant dark ages from a property valuation point of view.
There are plenty of properties for sale so its not a supply issue ala dubai or something.
As an aside I had this exchange starting from the bottom on the "2.8m" almost finished project ... 3 storeys, 350m2 double brick with huge ocean views, which has dropped from 2.2 to 1.3 in 2 months!!!!!! 300k to finish internally tops. He later called and I said name your price or forget it again .... I havent seen this RE Agent desperation this decade at least.
Hi
If you’re interested please forward best offer
At the level you’re willing to buy property.
And fax letter back to
Hi,
I have the money in a term deposit maturing in 2 weeks.
I am very happy to purchase the property for around 1.3 if they wish to directly negotiate with me.
However I dont want to get involved in tenders or dutch auctions.
Regards
Hi
The trustee contacted me today
Please submit your best offer
They will submit it to St George Bank
Regards
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I saw a house on Saturday in inner eastern Melbourne that had fallen from 1.2m to 1.0m in seven weeks and the REA still can't find a buyer. Your price pullback beats mine though.
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Ive heard EXACTLY the same thing mentioned by one of these companies on the business channel a few months back. And its so true.
Imagine locking in your interest for sya 3-5 yrs...all of a sudden your about to be paying something like 10% interest.
bring it on I say.
As someone who is working hard to save a deposit, its like your forever trying to keep up with rising prices.
A nice little burst of this house price increase will suit me fine
I know what it is. As I stated, I'm an investor myself. I'd still like to see the laws changed to prevent the rich getting richer by buying up cheap housing.
OMG..is it??
Gee what % of income does the rest of the world pay for rent?
Again, maybe I don't know enough about economics, but living here in Brisbane I don't see how people will continue to afford the skyrocketing rents.
Keep in mind the so called bs average income in this country is what..about $58K?
Seems I know alot of below average people
How much has your property increased in value this month robots or should i say decreased
:hello,
wouldnt have a clue,
but I gladly reported that my suburb St Kilda had dropped by 1.2% for the last figures (which I think were March)
given Melbourne is reportedly down 0.02% this quarter i will look forward to the new figures,
whether the numbers go up or down my costs are decreasing while the costs for the guy & girl next door renting are going up, sure its taken 7 yrs
but abs stats indicate the prop owner comes out 5x better than the renter ( not everyone)
thankyou
robots
wouldnt have a clue,
but I gladly reported that my suburb St Kilda had dropped by 1.2% for the last figures (which I think were March)
given Melbourne is reportedly down 0.02% this quarter i will look forward to the new figures,
whether the numbers go up or down my costs are decreasing while the costs for the guy & girl next door renting are going up, sure its taken 7 yrs
but abs stats indicate the prop owner comes out 5x better than the renter ( not everyone)
thankyou
robots
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What are you smoking???
More fun to contemplate for the future:
http://www.bloomberg.com/apps/news?pid=20601087&sid=azTY5tt691sM&refer=home
U.K. house prices fell in June by the most since the end of the last recession
The price of an average home declined 6.3 percent from a year earlier to 172,415 pounds (US$343,278), the biggest drop since November 1992, Britain's fourth-biggest mortgage lender said today in a statement. Prices dropped 0.9 percent from May. (annualise that!!!!)
------
What is the average cost price of an Australian residence?
How many people live here? How much space do we have?
Who is lining-up to pay almost double the average UK price to live in the outer suburbs of Sydney in a no jobs zone 30kms from the city with interest rates 40% higher than the UK?
People about to go broke I would assume.
Robots, you are pulling your pud
I'm a renter at the moment, got lots of spare money each week.. However if I was a property owner right now I would probably be suffering under rising food prices, interest rates, petrol prices and everything else that everybody is whingeing about. I can easily cop another 30% rise in rent and still be much better off than my property owning friends. Some are already taking out their frustration at times "but you've got heaps of money, we've got a mortgage!".. hmm !
Was it on the 4corners segment? but I remember, somebody who helps those in financial hardship, said the biggest problem is that people try and hang on too long. If they tackled it earlier, they would be able to get out with some equity left. Instead they keep going and going, until they owe more than they own, which often leads to major problems, and then bankruptcy. That's probably when the lender takes a hit. So I think it's definitely in a non-bank lenders best interests like Wizard to not have defaulters on their books.
Massive number of properties listed in a Brisbane area I looked at even just 4 weeks ago, which had very few listed. Amazing how new supply can suddenly appear. Unless buyers are going to come surging forward in the next 6 months, these people if they want a sale are going to have to drop the price. Should be some good bargains there in 6-12 months. Not quite yet, but they will come.
Must be a few that are pretty wet behind the ears as well. Have noticed so many smaller agencies spring up over the years, as wealthier agents have splintered off from older agencies. Surely many will not survive a sustained downturn.
temjin said:
Was it on the 4corners segment? but I remember, somebody who helps those in financial hardship, said the biggest problem is that people try and hang on too long. If they tackled it earlier, they would be able to get out with some equity left. Instead they keep going and going, until they owe more than they own, which often leads to major problems, and then bankruptcy. That's probably when the lender takes a hit. So I think it's definitely in a non-bank lenders best interests like Wizard to not have defaulters on their books.
Massive number of properties listed in a Brisbane area I looked at even just 4 weeks ago, which had very few listed. Amazing how new supply can suddenly appear. Unless buyers are going to come surging forward in the next 6 months, these people if they want a sale are going to have to drop the price. Should be some good bargains there in 6-12 months. Not quite yet, but they will come.
pepperoni said:
Must be a few that are pretty wet behind the ears as well. Have noticed so many smaller agencies spring up over the years, as wealthier agents have splintered off from older agencies. Surely many will not survive a sustained downturn.
This was talked about a few pages back, but it will definitely be a cause for further hardship for many. Woman at work the other day was in tears on the phone because the bank was being a hard-ass not giving them any special treatment when negotiating their 9.x% rate, up from 7.x% or so from 3 years ago. Absolutely no sympathy from the bank, nor special treatment.
This could be $100/wk+ switch for many. Hard to just come up with that much extra overnight.
hello,
couldnt agree more there bro, most people renting will be getting a letter every year from now on i think, definitely different from 01-04,
great for people on good incomes, low mortgages etc who have done the hard yards like our mothers and fathers before us
thankyou
robots
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explod
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Trouble is, no more low mortgages or good incomes, and the letter every year will mean more moving in with Mom and Dad or shacking up with whoever just to cut down the pain. Sorry but us landlords are in for tough times. Think I should get rid of everything and rent in Fiji for awhile
Thought I'd chime in here.... (long time lurker...)
At least compare apples with apples! The UK is a BIG country also (without the 80% dessert/arid that Oz has), and MOST houses are not within 30kms of the centre of London! In fact, try buying any house within 30kms of London central and be prepared for Sydney to look VERY cheap!
Re houses 30kms from Sydney CBD - well, that's area's like Hornsby, Paramatta, Hills District, and "The Shire" - none of which are "no jobs" zones, and are actually pretty solid areas socio-economically speaking, also with mostly good public transport, and other established area infrastructure. If you go further out to the S/W and outer West of Sydney, a decent 3 bedroom house can be bought for $250k-$300k - and that seems like pretty good value to me - can't see them getting much cheaper....
So the answer to your question is that in fact no-one is lining up to pay double UK average prices for average houses in no-jobs areas in outer Sydney at all.
Cheers,
Beej
Nonsense. House prices will always go up. Us Aussies can afford to spend 101% of our incomes on rent/mortgages, we're the lucky country. And unlike the rest of the world, we have a shortage of land and stuff. In comparison to Europe or Asia, we're practically packed in like sardines.
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Seriously robots, have you EVER considered once that the rapid rise in property prices over the past 5 years was an extraordinary event brought by the greatest credit boom the world has ever seen since the past several decades? And this is not caused by a simple "supply and demand" thing or a simple "cyclical" event?
Or you don't believe that the credit boom ever existed? Or you don't believe that the level of debt that an average Australian carry has NOT INCREASED RAPIDLY over the past several years?
You should be more aware of your recency cognitive bias. Everyone suffers from it. It's not just property alone, even uni kids these days think the share market should rise by 30% every year because it has done so for the past 3-4 years. And when you tell them that they should "realistically" expect no more than 9% p.a., they would think it's unrealistic.
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