House prices to stagnate for 'years'
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Some more facts and figures...
Home loans drop on slowdown
By staff writers with AAP
10oct05
THE number of loans for houses dropped 0.2 per cent in August as investors fled the property market, figures released today show.
The Australian Bureau of Statistics said the total number of dwelling financial commitments in August slipped to 54,709.
It was the fourth fall in the past five months. The total value of financial commitments dropped one per cent to $16.9 billion.
This fall in the value of home loans was led by a 4.5 per cent drop in loans for investment housing, which fell to $5.1 billion.
Investors have fled the property market as housing prices fall in Australia's larger cities.
The value of loans for owner-occupied housing rose 0.5 per cent to $11.8 billion.
There was a 0.7 per cent increase in loans for the construction of owner-occupied housing, a 5.1 per cent lift in the number of loans for new homes, but a 0.5 per cent drop in loans for established homes.
"These data suggest that the residential property sector continues to slow," RBC Capital Markets senior economist Michael Every said.
"Although we note that volatile number of new home purchase loans jumped 5.1 per cent, with petrol prices high and – crucially – investors finally seeing that the sector has already had its best days, we expect this overall downtrend to continue."
Across the states, there was falls in total home loans for houses in Victoria (down 2.2 per cent), New South Wales (1.1 per cent) and Tasmania (down 5.1 per cent).
However they were up in Western Australia (4.2 per cent), South Australia (3.6 per cent), the Northern Territory (7.3 per cent), the ACT (3.5 per cent) and Queensland (four per cent).
First home buyer commitments as a percentage of total commitments rose to 17.3 per cent in August 2005.
The housing market has been slowing since the central bank raised interest rates in March to 5.50 per cent, their highest level in four years. The percentage of commitments at a fixed rate of interest (for at least two years) decreased for the fifth successive month, from 9.5 per cent in July to 9.1 per cent in August.
Source:
http://www.theadvertiser.news.com.au/common/story_page/0,5936,16869791%5E1702,00.html
Home loans drop on slowdown
By staff writers with AAP
10oct05
THE number of loans for houses dropped 0.2 per cent in August as investors fled the property market, figures released today show.
The Australian Bureau of Statistics said the total number of dwelling financial commitments in August slipped to 54,709.
It was the fourth fall in the past five months. The total value of financial commitments dropped one per cent to $16.9 billion.
This fall in the value of home loans was led by a 4.5 per cent drop in loans for investment housing, which fell to $5.1 billion.
Investors have fled the property market as housing prices fall in Australia's larger cities.
The value of loans for owner-occupied housing rose 0.5 per cent to $11.8 billion.
There was a 0.7 per cent increase in loans for the construction of owner-occupied housing, a 5.1 per cent lift in the number of loans for new homes, but a 0.5 per cent drop in loans for established homes.
"These data suggest that the residential property sector continues to slow," RBC Capital Markets senior economist Michael Every said.
"Although we note that volatile number of new home purchase loans jumped 5.1 per cent, with petrol prices high and – crucially – investors finally seeing that the sector has already had its best days, we expect this overall downtrend to continue."
Across the states, there was falls in total home loans for houses in Victoria (down 2.2 per cent), New South Wales (1.1 per cent) and Tasmania (down 5.1 per cent).
However they were up in Western Australia (4.2 per cent), South Australia (3.6 per cent), the Northern Territory (7.3 per cent), the ACT (3.5 per cent) and Queensland (four per cent).
First home buyer commitments as a percentage of total commitments rose to 17.3 per cent in August 2005.
The housing market has been slowing since the central bank raised interest rates in March to 5.50 per cent, their highest level in four years. The percentage of commitments at a fixed rate of interest (for at least two years) decreased for the fifth successive month, from 9.5 per cent in July to 9.1 per cent in August.
Source:
http://www.theadvertiser.news.com.au/common/story_page/0,5936,16869791%5E1702,00.html
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Yes I agree, media hype I guess.
Kauri
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tech/a
No Ordinary Duck
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The problem is producing the work.
We can sign any amount of work.
We simply dont have enough qualified and cant get qualified personel.
This is despite a continuous ad running in the Advertiser Wed-Sat for the last 2 months.
Plenty of unskilled---.
We can sign any amount of work.
We simply dont have enough qualified and cant get qualified personel.
This is despite a continuous ad running in the Advertiser Wed-Sat for the last 2 months.
Plenty of unskilled---.
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Was out on a fishing trip a few weeks ago and the topic of house prices was raised, not by me. It was quite amazing the comments I heard...middle age people saying...."I feel so sorry for the younger generations", "how are they ever going to be able to afford a house", " There is no way I could re-buy back into the market at current prices" etc etc.
So it seems that older generations are now realizing that there are going to be real problems in the future, if something doesn't give, and give soon.
So it seems that older generations are now realizing that there are going to be real problems in the future, if something doesn't give, and give soon.
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Here is some good news on the housing market within Adelaide, not for sellers but for buyers...
Bargains for homebuyers
16oct05
IT'S a buyers' market and the bargains are only getting better, real estate experts say.
While average Adelaide home prices fell 1 per cent last quarter, in some suburbs prices slipped by more than 20 per cent.
And the northern suburbs were worst hit by declining values.
"It's definitely a buyers' market now and the environment will get better as more properties come on the market this spring," Louis Christopher, spokesman for real estate research firm Home Price Guide, said.
"It's a case of supply and demand and there are more vendors than buyers, which means vendors have to review their price expectations."
This was reflected by falling advertised prices, homes being on the market longer and auction clearance rates falling well below figures recorded during the real estate boom of 2000 to 2004, Mr Christopher said.
Last month there were at least 12 examples of houses advertised for as much 20 per cent less then when they were first put up for sale, Home Price Guide records show.
Latest sales figures from the Valuer-General also show big price falls across a number of suburbs, with Blakeview in the north hit hardest.
More than 50 homes were sold in Blakeview between April and September and the average price fell from $237,500 to $187,000, or 21 per cent.
Other northern suburbs with sales numbers which also fell significantly included Prospect (14 per cent), Hope Valley and Modbury Heights (10 per cent), Greenwith (9 per cent) and Golden Grove (6 per cent).
Anthony Toop, of Toop and Toop Real Estate, said the northern suburbs were experiencing a price correction.
"Those suburbs experienced a relatively large rise in the boom and now they are being realigned with their historic values," he said.
"For example, Golden Grove got up a head of steam during the boom times and these price falls are just a correction."
Mr Toop said vendors could no longer be greedy.
"No longer are vendors having prices reach their expectations," he said.
And with the onset of the spring selling season, vendors had to be realistic to achieve sales.
"Spring sales haven't hit the market yet, but if they flood in around November, as expected, it won't be good for those who are selling," Mr Toop said.
New Real Estate Industry Association of SA president Mark Sanderson said now was the time to buy.
But he said buyers should not delay their purchases.
"People shouldn't expect prices to fall," he said.
"Yes, there will be more stock on the market (in spring), but also more buyers."
Source:
http://www.theadvertiser.news.com.au/common/story_page/0,5936,16932043%5E2682,00.html
Bargains for homebuyers
16oct05
IT'S a buyers' market and the bargains are only getting better, real estate experts say.
While average Adelaide home prices fell 1 per cent last quarter, in some suburbs prices slipped by more than 20 per cent.
And the northern suburbs were worst hit by declining values.
"It's definitely a buyers' market now and the environment will get better as more properties come on the market this spring," Louis Christopher, spokesman for real estate research firm Home Price Guide, said.
"It's a case of supply and demand and there are more vendors than buyers, which means vendors have to review their price expectations."
This was reflected by falling advertised prices, homes being on the market longer and auction clearance rates falling well below figures recorded during the real estate boom of 2000 to 2004, Mr Christopher said.
Last month there were at least 12 examples of houses advertised for as much 20 per cent less then when they were first put up for sale, Home Price Guide records show.
Latest sales figures from the Valuer-General also show big price falls across a number of suburbs, with Blakeview in the north hit hardest.
More than 50 homes were sold in Blakeview between April and September and the average price fell from $237,500 to $187,000, or 21 per cent.
Other northern suburbs with sales numbers which also fell significantly included Prospect (14 per cent), Hope Valley and Modbury Heights (10 per cent), Greenwith (9 per cent) and Golden Grove (6 per cent).
Anthony Toop, of Toop and Toop Real Estate, said the northern suburbs were experiencing a price correction.
"Those suburbs experienced a relatively large rise in the boom and now they are being realigned with their historic values," he said.
"For example, Golden Grove got up a head of steam during the boom times and these price falls are just a correction."
Mr Toop said vendors could no longer be greedy.
"No longer are vendors having prices reach their expectations," he said.
And with the onset of the spring selling season, vendors had to be realistic to achieve sales.
"Spring sales haven't hit the market yet, but if they flood in around November, as expected, it won't be good for those who are selling," Mr Toop said.
New Real Estate Industry Association of SA president Mark Sanderson said now was the time to buy.
But he said buyers should not delay their purchases.
"People shouldn't expect prices to fall," he said.
"Yes, there will be more stock on the market (in spring), but also more buyers."
Source:
http://www.theadvertiser.news.com.au/common/story_page/0,5936,16932043%5E2682,00.html
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Ah yes... People shouldn't expect prices to fall even though they already are.krisbarry said:
A bit like you shouldn't expect a hot day when there's clear blue sky, a northerly wind and it's 30 degrees at 9AM.
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Smurf1976 said:Ah yes... People shouldn't expect prices to fall even though they already are.
A bit like you shouldn't expect a hot day when there's clear blue sky, a northerly wind and it's 30 degrees at 9AM.
True, but equally their is a 50% chance that they could continue to fall.
My guess is 4 years of decline at approx. 5% per year.
That still gives existsing home owners an 80% profit margin for a 4 year investment, not bad, not bad at all.
Who would have thought that we would have had 4 years at 25% per year growth, now that is very concerning, and equally unsustainable.
What we need now is a slight decline in prices, a small interest rate rise and wage levels to catch up, b4 affordability levels will be restored, to a more sustainable level.
The above scenario is more likely.
RichKid
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krisbarry said:
There is always the perception of bias when someone in the industry tells you something which is in their interests, it normally follows that one should be skeptical about the assertion- for good reason.
tech/a
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krisbarry said:
Well again I dont think your right---certaintly here in SA.
Infact a 20% fall in any SA metro area over the next 4 yrs simply wont happen.
A 20% rise in 4 yrs in SOME areas is pretty well a certainty.
Seaford Meadows is the next real estate boom area here.
The south is set to grow once again with 5000 lots approved for developement. Better infrastructure and sought after lifestyle will see demand here grow.
Investors from the EAST will flood here as pricing will be way more attractive than in their states.
The best times to have bought Realestate were--------
1998,1999,2000,2001,2002,2003,2004,2005.
The best times in the FUTURE are,
2005,2006,2007,2008,2009--------
Start thinking like an investor and you'll see opportunity.
Bronte
Trading The SPI for 20+ years
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Yes, well put tech/a
As previously posted; WA is also on a strong growth curve.
Battman has just returned from Europe and he says in comparison
"Australia real esate is still very very cheap."
As previously posted; WA is also on a strong growth curve.
Battman has just returned from Europe and he says in comparison
"Australia real esate is still very very cheap."
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Think you might have to be careful though. Many thousands of jobs have been lost in the south of Adelaide, due to the closure of many large business' such as the Pt. Stanvac Oil Refinery, Mitsubishi Engine plant at Lonsdale etc etc.
High unemployment areas surround the location you have mentioned, which will keep a lid on house price increases.
High crime rates and welfare depedancy suburbs lie closely to the one you have mentioned.
Think you will find that the migration of population within Australia is heading North up to Queensland and not so much into SA.
I would bet my life on it that the location you are talking about will be one of the first to drop, following the National downward trend in the housing market.
Seaford Meadows, is a large distance from the CBD of Adelaide, and hence more prone to a fall in the housing market than many inner city suburbs.
Good luck down their mate, but I STRONGLY think your dreaming of getting a 20% return, in 4 years
Have you factored in a couple of interest rate rises in this 20%?
Have you also factored in an increase in unemployment levels?
Have you also factored in a high proportion of buyers in this location will be first home-buyers more prone to default/bankrupcy?
Have you also factored in the lack of employment in surrounding suburbs?
Have you also factored in the rising cost of fuel?
and so on and so forth...
PS....ARE YOU TRYING TO SPRUKE ON THIS SITE FOR YOUR UP-COMING DEVELOPMENTS? Just curious?
High unemployment areas surround the location you have mentioned, which will keep a lid on house price increases.
High crime rates and welfare depedancy suburbs lie closely to the one you have mentioned.
Think you will find that the migration of population within Australia is heading North up to Queensland and not so much into SA.
I would bet my life on it that the location you are talking about will be one of the first to drop, following the National downward trend in the housing market.
Seaford Meadows, is a large distance from the CBD of Adelaide, and hence more prone to a fall in the housing market than many inner city suburbs.
Good luck down their mate, but I STRONGLY think your dreaming of getting a 20% return, in 4 years
Have you factored in a couple of interest rate rises in this 20%?
Have you also factored in an increase in unemployment levels?
Have you also factored in a high proportion of buyers in this location will be first home-buyers more prone to default/bankrupcy?
Have you also factored in the lack of employment in surrounding suburbs?
Have you also factored in the rising cost of fuel?
and so on and so forth...
PS....ARE YOU TRYING TO SPRUKE ON THIS SITE FOR YOUR UP-COMING DEVELOPMENTS? Just curious?
wayneL
VIVA LA LIBERTAD, CARAJO!
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Bronte said:
Sorry, but battman hasn't a clue what he's talking about.
One must look at wages/ price ratio. Oz is expensive.
Start thinking like a value investor and you'll see little opportunity. (You'll have to go looking)
We're in a Wave 5 blow off top folks.
Julia
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Re: "Buyers heading north into Queensland"
Yes, so true. Qld's population has been growing exponentially.
However, in today's Sunday paper the Premier is suggesting an "arrival tax" may be imposed on new residents from other States. His rationale for this (and I suspect it will receive substantial support from existing taxpayers) is that the influx of new residents is placing unsupportable demands on Qld's infrastructure (eg the water supply and the ailing health system) and it is only fair that if new residents want to come here they should make a contribution towards these increasing costs.
My suggestion to intending new residents to Queensland: make sure you have good private health insurance!
Julia
Yes, so true. Qld's population has been growing exponentially.
However, in today's Sunday paper the Premier is suggesting an "arrival tax" may be imposed on new residents from other States. His rationale for this (and I suspect it will receive substantial support from existing taxpayers) is that the influx of new residents is placing unsupportable demands on Qld's infrastructure (eg the water supply and the ailing health system) and it is only fair that if new residents want to come here they should make a contribution towards these increasing costs.
My suggestion to intending new residents to Queensland: make sure you have good private health insurance!
Julia
tech/a
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wayneL said:
Wow there is so much here to reply to.So many veiws,so much diversity.
But I like Waynes for its short and simple message.
How very true that we all look at what we do and how we percieve and implement it differently.
We are now qualifying the way we look at property investment.
So I'll qualify my bent as "Opportunity" Investment.
In general terms I'll agree with Wayne.
In specific terms I'll stick to my research---as part of our business.
Like everything one should do in business OR investment--in my view-- the most important is to define DEMAND---no demand no opportunity.
A blow off is happening in some areas of realestate but those who take part in developement as a living simply move to another area of demand and opportunity.
This leads me to Kris's reply.
To the Have I considered points.
A resounding YES on all counts!!
These people need somewhere to live.Gone are the low price housing both in Singular dwellings and High density.
This is recognised by both the very large developers.
Land S.A (Gordon Pickard) and the S.A Govt---who are now looking at infrasructure for the new area.(Extending the Trainline---Schools---roads etc).Small guys like myself are doing the numbers on high density community title "Flat" style developements---.With the veiw of having units available for under $150K and or rent for under $200 this is what I and a few others see as the up and coming DEMAND.--- (For those in S.A Think Seaford Mews--Think Gawler with demand from workers in the shipping industry)
There is also the HUGE market of Baby boomers who have 2-3 Ip's and are selling these have Cash to burn and are builing a lifestyle---another opportunity and another market (For those in S.A think Ladybay---Port Adelaide Docks---Mawson Lakes.)
This also goes back to Wayne's wages price ratio.
As for spruking---what I do is small fry and my selection of marketing wouldnt be a stock forum.
Finally my posts on the optimistic side of property are seen by many as just that--optimistic.
What I'm trying to do is get people to look beyond the "accepted" thinking and think for themselves.
Be the Shepherd not the Sheep.
Even better own the station.
There is Opportunity EVERYWHERE but unless you know the 3 things to do it will ALWAYS pass you by.
(1) Recognise opportunity.
(2) Understand how to benifit from this opportunity---(DO THE NUMBERS)
(3) Take advantage of the Opportunity--- (DO IT).
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I can agree with you on the Port Adelaide front...This area has massive potential.
I think the best buys will be in the surrounding streets around the Port Adelaide area, and no so much the water front properties. They are already way over-priced and way too hyped up.
I spend most of yesterday down at Port Adelaide, on the dolphin cruises etc. Although much of it is just ugly industrial waste land their is much potential.
Some of this land may be re-zoned residential at some point.
Plenty of vacant old rundown storge sheds sitting on docks, that can be converted into warehouse appartments.
But I am more of a 'South Boy' I grew up in the south of Adelaide, and have spent most of my time on that side of the city, until recently. I find the views in the south much more appealing. Closer to the beach and the hills. The terrain is more rugged, unlike the north which flat, hot and full of ugly scrubby saltbush.
I think the best buys will be in the surrounding streets around the Port Adelaide area, and no so much the water front properties. They are already way over-priced and way too hyped up.
I spend most of yesterday down at Port Adelaide, on the dolphin cruises etc. Although much of it is just ugly industrial waste land their is much potential.
Some of this land may be re-zoned residential at some point.
Plenty of vacant old rundown storge sheds sitting on docks, that can be converted into warehouse appartments.
But I am more of a 'South Boy' I grew up in the south of Adelaide, and have spent most of my time on that side of the city, until recently. I find the views in the south much more appealing. Closer to the beach and the hills. The terrain is more rugged, unlike the north which flat, hot and full of ugly scrubby saltbush.
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Julia said:
Yes, my sister is a doctor in Queensland and she is forced to work 60-70 hour weeks, and is often refused holidays, due to the demand. Queensland in general is heading for a crisis on all fronts if some measures of population control are not implemented, and soon.
kris... my olds were on the dolphin cruise on Sunday... they did say they noticed some guy standing with a placard on the boat.. DOWN WITH HOUSE PRICES...!!!
HAHA... just jokes...
Actually, i think the south is a beautiful area, but I do think you are right when you say areas too far out of the city will be the first to fall... not to mention the social problems in the area.
As a general rule of within 8kms of town always seems to hold sway... and in Adelaides case, the east west corridor bounded by the hills and the water!
i am not surprised by the falls in some of the prices in the northern suburbs... people were asking for some rediculous prices there
As for queensland... i am not surpised at the population boom there, the weather is sensational... i really should have purchased there when i had the chance a couple of years ago.
Regardless, I think queensland is not alone in being under pressure due to population migration and lack of infrastructure... coastlines towns all over australia are being wrecked because of the 'sea-change'... i really think the people moving in there should be made to pay for the lifestyle they wish to enjoy!
HAHA... just jokes...
Actually, i think the south is a beautiful area, but I do think you are right when you say areas too far out of the city will be the first to fall... not to mention the social problems in the area.
As a general rule of within 8kms of town always seems to hold sway... and in Adelaides case, the east west corridor bounded by the hills and the water!
i am not surprised by the falls in some of the prices in the northern suburbs... people were asking for some rediculous prices there
As for queensland... i am not surpised at the population boom there, the weather is sensational... i really should have purchased there when i had the chance a couple of years ago.
Regardless, I think queensland is not alone in being under pressure due to population migration and lack of infrastructure... coastlines towns all over australia are being wrecked because of the 'sea-change'... i really think the people moving in there should be made to pay for the lifestyle they wish to enjoy!
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