House prices to stagnate for 'years'

[WaySolid]

Have been pleasantly surprised by the strength of the SEQ market again this week, it's very impressive the strength being shown on the ground in terms of real $$ rather than economic speculation.

All the feedback I'm getting shows that the 2007 'mini boom' is still going strong.

Wonderful stuff for a property investor Probably not quite as wonderful as the weird and unsustainable situation we had in 2000 and 2001 when you could positively gear so much wonderful stuff.

Rock on!

 

[WaySolid]

hello,

great that people can highlight all the NOISE that surrounds RE, but NC find me 10 blue chip properties that have decreased in value, you will come up with nothing

even the apartments in docklands that people bought of the plan are thriving

and in 5-yrs time in the US the same will happen

82% clearance rate in Melb yesterday, with some 360 more auctions than this time last year

goodluck

thankyou

robots

It's a funny game of ping pong to watch Robots, it's like you and your opponents have great technique and style but are playing on different tables

Simple fact is this market is very robust at the moment in Bris, don't follow Sydney or Melbourne that closely but I also understand Melbourne is surprising a lot of people on the upside.

The auctions and open houses in my area are smoking. The simplest explanation I can come up with is that demand is strong and supply is not keeping up.

It's probably quite a painful time to be not owning property at the moment if you are waiting for some pullback to buy, though I'm not a believer in the housing affordability crisis either.. You can still get stuff for 200k or so near Brisbane if you are prepared to start somewhere. Of course that somewhere will not be a McMansion, close to CBD and coffee shops, or your dream house.. but if you are earning any sort of half decent salary it's a way to start.

 

[tech/a]

No different in Adelaide.

Those buying cant possibly be those who have been waiting for prices to "Crash"----can they?

 

[WaySolid]

Thought I would include monthly changes in Brisbane house prices since this thread was started. Total increase of 20.95%, you add the yield you would be getting as an investor on top of this like a fine sauce on a dish to create an excellent meal.

Residex House Trading Data for Brisbane since September 05. Monthly changes

2.04%
-1.06%
0.24%
0.12%
1.13%
0.45%
0.29%
0.40%
0.75%
0.73%
0.75%
0.88%
0.47%
1.14%
0.28%
0.87%
0.89%
0.11%
0.46%
1.35%
3.05%
0.13%
2.78%
2.46%
0.24%

This is more or less closely tracking the sales data I have go back 100+ years in terms of nominal appreciation.

 

[Kathmandu]

Thought I would include monthly changes in Brisbane house prices since this thread was started. Total increase of 20.95%, you add the yield you would be getting as an investor on top of this like a fine sauce on a dish to create an excellent meal.

Residex House Trading Data for Brisbane since September 05. Monthly changes


This is more or less closely tracking the sales data I have go back 100+ years in terms of nominal appreciation.

Yep, My House Price Crashed.........................Through the roof

Dave

 

[wayneL]

From the New York Times

 

[Kathmandu]

Yep, there is always Bust with Boom, be it property or stocks.

If you believe otherwise then you are a fool.

I'm fine with that, and have prepared accordingly,

But when will it happen here ?

And by how much will it drop?

Is 20% off a bust, or just part of the cycle?

And in which areas will it drop?

Like everything , stock included (even more so, think margin call) if you buy at the top it can hurt if val's wash off 20% and you are forced to sell.

If you purchased lower down the price scale, probably not an issue.

Dave

 

[caleb2003]

I think the real estate agents are drumming it up much more than it is, for instance here in Noosa, the EAs would have you believe every house is going straight away and at full price and over, they're in the papers every day about it, but we've been to see dozens of houses recently that have been on the markets 6 months+ and they are still trying to keep the overinflated price the EAs have put on them.

Most people think they are 'losing' money if they drop the price of their house but its the pride thats making them wait.

For me, I'm just going to put offers in $100k less on some houses, someone is bound to crack!

 

[robots]

hello,

article out today by ABS and others showing housing is not meeting demand,

looks like things are going well for existing RE still,

anybody spotted any bears running for cover again,

gearing up for the weekend action

thankyou

robots

 

[Kimosabi]

hello,

article out today by ABS and others showing housing is not meeting demand,

looks like things are going well for existing RE still,

anybody spotted any bears running for cover again,

gearing up for the weekend action

thankyou

robots

Is there a Troll Festival this weekend???

 

[kyme]

HOUSING SHORTAGE?
Read an article today stating that according to recent statistics there are currently 7.5 million unoccupied dwellings in Australia being made up of holiday homes, city pads and second homes. That is enough dwellings to house the entire Australian population at just under 3 people per house. Stated that if just 3% of them came on to the market it would solve existing demand. Those numbers seem incredible to me although I know my mate has 4 houses and at moment his family only living in 1 with others vacant, not my idea of financial sense. I have confidence in article source but can't help wondering whether he's misread those stats. Any housing stat gurus out there clarify this.? If correct, surely would mean downward pressure on future house prices in event of eventual economic downturn.

 

[tech/a]

HOUSING SHORTAGE?
Read an article today stating that according to recent statistics there are currently 7.5 million unoccupied dwellings in Australia being made up of holiday homes, city pads and second homes. That is enough dwellings to house the entire Australian population at just under 3 people per house. Stated that if just 3% of them came on to the market it would solve existing demand. Those numbers seem incredible to me although I know my mate has 4 houses and at moment his family only living in 1 with others vacant, not my idea of financial sense. I have confidence in article source but can't help wondering whether he's misread those stats. Any housing stat gurus out there clarify this.? If correct, surely would mean downward pressure on future house prices in event of eventual economic downturn.

Sounds more rumor than fact.
If your in the position to buy IP's your also smart enough not to have them sitting doing zip.

With a population of 22 million 7.5 million houses seems like the total number of dwellings in Australia.Infact I doubt there are 7.5 million houses/apartments/units in total.

Found the stats. Definately badly informed.

 

[kyme]

Thanks for those stats tech/a.
On those census figures looks like about 800,000 unoccupied private dwellings. Sounds more reasonable but still seems like a lot, maybe taking up squatting the way to go.

 

[robots]

hello,

http://www.theage.com.au/news/business/housing-crisis-set-to-worsen/2007/10/26/1192941321711.html

wow, some good increases,

vic, qld & sa going well, sydney slow and steady

anything on the ptc route around melb is hot as, tram lines in particular with walk up conditions

thankyou

robots

 

[trendsta]

yup thats rite house prices keep on going up ...
melb, brisbane, adel have finally caught up .. are there any other 'undervalued' areas we can hunt for?? ... there are few outlying islands with a yield of 5% ...

forget about inflation and IR .. we have record unemployment and uncle China is always going to be there providing growth to our economy, esp with inflation also rising there and stock market having gone up 500% in a year ..

oo wait a minute gold has tripled since 03, and oil similar, coal, iron, metals, hmmm .. something fishy here ... so houses have increased respective to paper with george washinton's head, but has actually dropped based on other "commodities" that our paper currency was linked to

such merry times we live in ..

 

[Kimosabi]

An interesting article from the The Daily Reckoning today:

Why Real Estate a Consumer Item, Not an Investment

We keep saying: housing is not an investment; it’s a consumer item. Here comes an old friend with new evidence:

“The idea that housing doesn’t go down turns on its head when you actually calculate in the real-world costs of interest, taxes, insurance, etc. For instance, before those costs are counted, it looks like 16 out of the 17 top real estate markets in the 1990s were in the black. Once you add them in, however, it turns out that not one of the top property markets went up. They were all negative.

“In the 2000s, up to May 2007, you get something similar…three markets that, in unrealistic terms supposedly shot up 18%, 33%, and 36% during that period, are all actually net losers…down 10.5%, 13.4%, and 28.2%. As in negative. The gains were phantom stats from the fantasy world of no-cost property ownership.

“Running through the rest of the list, the other major markets did still make money. But instead of the astounding triple-digit gains property owners love to point to as proof that this bubble was the real deal, you find out that only two of the markets – net of costs – actually crossed the 100%-gain mark (instead of 10 markets). And annualised, only two markets were even a little above 10% gains in property values.

“Not bad, but not a miracle by any stretch.

“Two more of those top markets just barely squeaked past the annualised 8.5% gains in the S&P 500 for the same period. All the rest of the top 17 markets looked at in this article did worse than the S&P. During what was supposed to be the biggest property boom of all time.

“Again, this isn’t to say there wasn’t a bubble. Just that it truly was an event completely devoid of sanity.”

Bill Bonner

http://www.dailyreckoning.com.au/real-estate-a-consumer-item/2007/10/26/

 

[robots]

hello,

no problem trendsta, 5% yield and 18% growth on a leveraged buy I will have that any day,

just a shame those text books get it a bit wobbly,

so on a medium house of say 420k in melb, an 18% rise gives me roughly 74k for the year, i dont think many would be to worried about inflation, the greenback, etc

thankyou

robots

 

[BentRod]

5% yield?

Any Links????

 

[wayneL]

5% yield?

Any Links????

I find that hard to believe too.

 

[tech/a]

Could do it on a Commercial of Industrial property but not on a house unless----You built 3 sold 2 to cover costs or the larger majority and kept one.
Or 4 and kept one.
Can be done but not a straight out buy on 20% down.
Unless rents in Melbourne are $1000/week.on a $400K property.

If so I'm on my way over.
I'll see you there Wayne for that beer!