House prices to keep rising for years

[Pommiegranite]

From an article in a local Property guide.

" A MILLION NEW HOMES REQUIRED IN 5 YEARS"

"New research from Housing Industry confirms a requirement for almost a million new homes to meet Australia's growing population. The research considers Australia's permanent and short term immigration intake,household formation trends and demolition activity."

Thanks for sparing us a link to the report from an organization with a vested interest in property.

I bet nowhere in their report is any consideration that there could be fall in immigration.

Also, it doesn't matter how many houses are needed if people simply can't afford them!

 

[Pommiegranite]

I've also just been chatting to the REA who sold my home. He was stood outside a house in Sanctuary Lakes (one of the best performing Melbourne suburbs in Q108).

He has had only 2 attendees at 8 opens today. He can't remember such a poor attendance for a day with such good viewing weather.

 

[CamKawa]

He has had only 2 attendees at 8 opens today.

I'm having trouble getting my head around that figure. Just to clarify, are you saying the REA had only 2 people through 8 houses open for inspection today?

 

[Pommiegranite]

I'm having trouble getting my head around that figure. Just to clarify, are you saying the REA had only 2 people through 8 houses open for inspection today?

That is correct.

Obviously, other factors need to be taken into account eg the houses could all be very prohibitively overpriced in comparison to others in the area.

However, there are various indicators in the area which point to a marked slowdown. It will be interesting to see the Q2 figures.

 

[YChromozome]

He has had only 2 attendees at 8 opens today.

Did the agent say the 2 attendees were serious buyers, or just sticky beak neighbours?

I was inspecting some rentals in Sydney last week amidst the worst rental crisis where vacancies were 0.9%. The only other person inspecting was down from an apartment a couple floors up having a sticky beak.

 

[CamKawa]

That is correct. .

Wow, I thought the market was soft but not that soft. How's the REA think he's going to sell a house if nobodies even looking at them, let alone making an offer?

However, there are various indicators in the area which point to a marked slowdown. It will be interesting to see the Q2 figures.

Are you talking about REIV figures? Do you know when they will come out?

 

[Pommiegranite]

Did the agent say the 2 attendees were serious buyers, or just sticky beak neighbours?

I was inspecting some rentals in Sydney last week amidst the worst rental crisis where vacancies were 0.9%. The only other person inspecting was down from an apartment a couple floors up having a sticky beak.

He didn't say. I'm assuming that they aren't neighbours as the homes have been on for a while, and usually neighbours do their viewings as soon as a property is listed.

However, that doesn't mean that they are genuine buyers. When we sold ours, we had viewings by people who weren't even sure about what suburb they wanted to live in! Others were pushed to attend by the REA (we know because we bugged our house during the 'open for inspection')

 

[Pommiegranite]

Wow, I thought the market was soft but not that soft. How's the REA think he's going to sell a house if nobodies even looking at them, let alone making an offer?

Obviously, one day's viewings doesn't set a trend in itself. This REA will be okay I think. Afterall, he managed to talk someone into buying mine!

Are you talking about REIV figures? Do you know when they will come out?

Yes, I believe they should be out at the end of this month. Maybe someone can correct me though.

 

[gfresh]

I think you can find some fairly self-explanatory information on the way things are going.. as at April 2008. Best of all, it's (pretty much) independent..

http://www.abs.gov.au/AUSSTATS/abs@...mmary&prodno=5609.0&issue=Apr 2008&num=&view=

Purchase of new dwellings falling rapidly since late 2007 (wouldn't want to be a developer right now), and number of owner-occupied financed has been falling for 10 months.

New ABS figures for May out this Wednesday, which should paint maybe a clearer picture.

Here is what happened in the US.. although obviously many differences to our market, it's worth a look. Ignoring the y-scale, but as a general trend indication. New property construction plunged pretty much off a cliff, number for sale increased rapidly, then sure enough, number for sale plunged, and median prices pretty have pretty much tracked this as well.

 

[Bronte]

Home prices to explode, ANZ Bank predicts
By Craig Binnie July 03, 2008 08:14am

"Mother of all" housing booms coming, says ANZ

Chronic housing shortage will push up prices
THE ANZ Bank says the growing housing shortage is setting Australia up for the "mother of all" housing booms.

New home building figures showing slumping building approvals have sparked fears of a price and rent explosion that will price even more prospective buyers out of the market.

The ANZ's senior economist, Paul Braddick, said yesterday Australia faced a critical and potentially chronic shortage of housing.

"A growing housing shortage is setting the scene for the mother of all housing booms," Mr Braddick said.

"Demand has accelerated and rising immigration, both permanent and temporary, shows no sign of abating. Meanwhile, rising interest rates continue to stymie any building recovery.

"Underlying housing demand is already outstripping new supply, and the gap is set to widen sharply, driving pent-up housing demand to record levels," he said.

The Australian Bureau of Statistics said yesterday new apartment approvals fell 18.2 per cent in May and were down 4.2 per cent over the past 12 months.

New house approvals fell 1.2 per cent and were down 1.7 per cent over the year. In Victoria total building approvals were up 2.8 per cent.

Commonwealth Securities chief equities economist Craig James said buyers had fled the property market because of high interest rates.

"With population growing at the fastest rate in 18 years, we simply should be building more homes, not less," he said.

"Interest rate hikes have spooked investors and budding owner-occupiers.

"Investors are putting their money in the bank and people are staying in the rental market longer. But the situation is unsustainable."

Mr James said rents and house prices would be forced up because of the tight conditions, which would eventually attract more investors and lead to more building.

"The latest slump in new dwelling approvals is clearly bad news for those renting," he said.

"The supply of apartments isn't rising but the number of people wanting to rent certainly is."

Victorian rents are at record highs and housing affordability is close to record lows.

The Commonwealth Bank's senior economist, Michael Workman, said interest rates would need to start falling and buyers would need to believe prices were rising before they would re-enter the market.

The building approval slump has cut the odds of another interest rate increase from the Reserve Bank.

A very interesting article.
A million new homes required:
http://www.news.com.au:80/business/money/story/0,25479,23944631-5013951,00.html

 

[Pommiegranite]

Home prices to explode, ANZ Bank hope

 

[numbercruncher]

Hello,


Just checking in, RE crash seems to be unfolding as predicted, absolutely MASSIVE rise in unsold inventory .....


Yes we know what happens next !


Thankyou !

 

[robots]

hello,

you may be able to answer my question number, the others today couldnt

am I able to pick up a front row block for lets say half price yet?

anywhere? anybody?

even pepporini couldnt send the link about the house in syd he/she has been spruiking has dropped from 2m to 1.3m

or is it still wait wait wait, have a great evening

thankyou

robots

 

[wayneL]

hello,

you may be able to answer my question number, the others today couldnt

am I able to pick up a front row block for lets say half price yet?

anywhere? anybody?

even pepporini couldnt send the link about the house in syd he/she has been spruiking has dropped from 2m to 1.3m

or is it still wait wait wait, have a great evening

thankyou

robots

Patience, Grasshopper.

 

[Warren Buffet II]

This image makes a really good point of what is happening

Non-banks

The number of owner occupied dwellings financed by non-banks (seasonally adjusted) decreased by 8.7% in April 2008 compared with March 2008, after a revised decrease of 11.6% in March 2008. The trend series in the number of owner occupied dwellings financed by non-banks decreased by 5.1% in April 2008, the eleventh consecutive monthly decrease. The number of commitments for owner occupied dwellings financed by wholesale lenders n.e.c. (seasonally adjusted) increased 2.3% while the trend series has continued to decline (down 5.0%).

WBII

 

[Warren Buffet II]

Another jewel:

http://www.news.com.au/couriermail/story/0,23739,23968923-3102,00.html

No words needed.

WBII

 

[robots]

hello,

great news in melbourne, auction clearance rate rocketed again yesterday to 66%, fantastic

looks as though things are just rolling along nicely, anybody do any firsthand research yesterday?

landlord's maybe interested to know Harvey's joint has been re-stocked with bunk bed's so get'em while they are available

thankyou
robots

 

[Aussiejeff]

Another jewel:

http://www.news.com.au/couriermail/story/0,23739,23968923-3102,00.html

No words needed.

WBII

Shhhh!!!

The REAL Estate people are trying to keep all this SECRET!!

And what if Melbourne catches on to this horror?

WHAT IF ROBOTS' FANATICAL ENTHUSIASM FOR REAL ESTATE suffers a blow??? GOD HELP US ALL THEN :hide:

 

[Aussiejeff]

hello,

great news in melbourne, auction clearance rate rocketed again yesterday to 66%, fantastic

looks as though things are just rolling along nicely, anybody do any firsthand research yesterday?

landlord's maybe interested to know Harvey's joint has been re-stocked with bunk bed's so get'em while they are available

thankyou
robots

robots

are you really a top exec in the ANZ home loans and auctions branch?

pity about the tiny 44% fraction who couldn't clear at auction....

chiz
aj

 

[Pommiegranite]

hello,

great news in melbourne, auction clearance rate rocketed again yesterday to 66%, fantastic

looks as though things are just rolling along nicely, anybody do any firsthand research yesterday?

landlord's maybe interested to know Harvey's joint has been re-stocked with bunk bed's so get'em while they are available

thankyou
robots

• Most properties aren't available for purchase at auction, so auction clearance rates don't mean much without sale prices.
• I expect auction clearance rates to remain stable due to vendors lowering their reserves substantially, thereby sucking in buyers who think they are getting a bargain.