House prices to stagnate for 'years'

[numbercruncher]

Thats a flawed stat Robots and you know it, on average " home Owners " are older and higher Incomes, Renters are younger, apprentices, students , etc etc etc. Ofcourse a 40 year old earning 100k p/a owning a home is going to have more assets that a 20 year old renter apprentice.

Please lets stop the Union Member Labourer thing its gone on for two pages now lol, yes seems they earn good cash, your not interested in the point I was making regarding affordability, but thats cool!

How much of an interest rate rise are you hoping for tomorrow ?

 

[Tysonboss1]

That means Sydney is going to have one hell of a year, In 1890, the average Sydney home price was $1,446 (£723). If property really does double every seven years then, in 2009, the average Sydney home will be worth $189,530,112.00.

Think of where those houses would have been,... most likly sydney cbd.

As crazy as that number may sound,

I know of a building that is valued at $650,000,000.00 in sydney cbd.

Infact a 1/4 arce block on the fringe of parramatta was probally worth $5.00... 130 years ago,... what would the growth rate on that be to todays level

 

[numbercruncher]

No NC... only during the duration of this thread :

lol Mofra Great call

 

[Tysonboss1]

Yes Yes, I know he can afford the House, my point is he fits the offical designation of Mortgage stress, and its the cheapest Suburb in Melbourne.

I checked out these pay rates and your correct Robots, BUT you need to work Saturdays to obtain the 60k

CBA classes 40% of wage as a manageable loan,....

while all the what if's are flying around did we mention thw labourers wife working part time. she will also help the mortage along.

 

[robots]

hello,

what if the union labourer had a 40k, 50k or 60k deposit NC?

that changes the affodability issue as well,

in relation to the stat, no I dont believe it is flawed at all, it is reality

I have many friends in the mid thirties who have rented for many years and the situation is exactly as the ABS describes it

thankyou

robots

 

[numbercruncher]

CBA classes 40% of wage as a manageable loan,....

while all the what if's are flying around did we mention thw labourers wife working part time. she will also help the mortage along.

So your average Income earner, Labourer or whatever, is clearing after tax $1000 per week, according to CBA website 200k Mortgage will be $391 per week or 39.1 p/c.

Wow seems anyone can buy in Melbournes cheapest suburb!

BUT you can rent this house for 180 p/w or Rent the Money for this house for 391 p/w, maybe we should allow for 1pc rise in rates this year as well ? Rates ? Insurance ? so say 450p/w vrs 180 ......

Anyway, you guys have proved your point, its affordable for anyone who wants a piece of Realestate pie.

Next on the agenda ... Housing Industry Association Report ....

New home sales fell in the final month of 2007, the second consecutive decline, as higher interest rates and further pressure on house prices bit into the new home building industry.

HIA’s New Home Sales figures released today for December 2007 show a 1.3 per cent fall in the sale of new homes and units among Australia’s largest builders and developers. A 2.9 per cent drop in the sale of detached houses outweighed a 5.1 per cent rise in apartment sales.

New home sales declined by a further 0.3 per cent in 2007, the fourth weak year in a row.

http://hia.com.au/hia/news/article/MR/National/EC/Interest%20Rates%20Up%20Sales%20Down.aspx


If demand is so great, why is Home construction continually falling?

News Houses really arnt that expensive to build, 130k gets you a perfectly functional Family Home.

 

[Tysonboss1]

http://hia.com.au/hia/news/article/MR/National/EC/Interest%20Rates%20Up%20Sales%20Down.aspx

If demand is so great, why is Home construction continually falling?

News Houses really arnt that expensive to build, 130k gets you a perfectly functional Family Home.

This is an example of the debate we were having earlier where I was saying less developments will get to market as interest rates increase.

But even though the short term demand drops back a bit, it won't stop the underlying fundamentals of population growth,.... I mean even though less house get to market every month more people get to the age where they will want to move away from home,... more planes land with migrants wanting to live in the lucky country and all this under lying demand just builds and puts more pressure on rents to rise.

And when the market hits that crux point new building explodes.

 

[numbercruncher]

I find that hard to digest especially seen as its the fourth year in a row.

Its roughly equivalent price wise to build new as buy second hand.

As the article states 5pc rise in apartment building, but offset by falling volume of Houses built, I would summise that there is already enough houses to meet demand and a swing towards apartment living happening.

I read our population is increasing 300k per year, HIA says 150k dwellings are being build per year, Government says there is a average 2.57 persons per household - it seems supply is keeping up with demand ! Crunching those numbers it appears plenty of stock being built, extra even.

I think unit demand will continue to grow as shown by the HIA, people downsizing or choosing not to have familys etc.

 

[stock_man]

If demand is so great, why is Home construction continually falling?

News Houses really arnt that expensive to build, 130k gets you a perfectly functional Family Home.

I agree that new houses arn't too expensive to build (compaired to buying an existing house in the same suburb), but $130K is a joke.

I have done this twice myself, and by the time you add on BASIX requirements (water tank etc), block levelling, bush fire protection, floor coverings, landscaping you are up at $175-$190K. And that is only very basic inclusions. No a/c, limited lighting etc.
Plus the interest payments made during the 40 weeks it takes to build.

But, back on the argument, doing this has allowed us to build and live in suburbs that we would not be willing to otherwise afford.

 

[wayneL]

This was on prime time TV (BBC1)here in The Old Dart

Bursting the House Price Bubble
Panorama exposes a sharp practice in the housing market keeping house prices artificially high and plunging some homeowners into negative equity.

Click on the "Watch Now" button at this link.

 

[numbercruncher]

Property Bulls,

So retail variable mortgage rates will now get to 9pc, Your average 400k property renting for $400 a week, must surely by now be looking a little dicey, what happens at 10,11,12 p/c , just keep passing it onto the tenants until they become squatters ? What happens when we get to 12pc and your property sits vacant with 1000 pw interest bill ?

 

[ROE]

I hope people know there are laws that protect existing tenant.
IE you can increase a maximum of 15% on rental price on existing tenant
but most people wont get the full 15% more like between 5%-10% if they lucky.

 

[robots]

hello,

any property bulls got a comment?

thankyou

robots

 

[explod]

Property Bulls,

So retail variable mortgage rates will now get to 9pc, Your average 400k property renting for $400 a week, must surely by now be looking a little dicey, what happens at 10,11,12 p/c , just keep passing it onto the tenants until they become squatters ? What happens when we get to 12pc and your property sits vacant with 1000 pw interest bill ?

The property value sinks and the renters who have been doing so deliberately start to buy back in. Just follow the financial cycle wheel and no probs. But I feel for those starting out.

As a kid in the early fifties some families lived with Grandparents. Remember one of my school mates with fifteen in a three bedroom. Back shed and lounge served many of them. Go to Europe and you will still find 4 generations all pitched together.

We have been spoilt in Australia. Welcome to sharing and reality. And in that way we will survive. Many people in the world eat 25% of what we do and they are lucky ones with sufficient.

 

[robots]

The property value sinks and the renters who have been doing so deliberately start to buy back in. Just follow the financial cycle wheel and no probs. But I feel for those starting out.

As a kid in the early fifties some families lived with Grandparents. Remember one of my school mates with fifteen in a three bedroom. Back shed and lounge served many of them. Go to Europe and you will still find 4 generations all pitched together.

We have been spoilt in Australia. Welcome to sharing and reality. And in that way we will survive. Many people in the world eat 25% of what we do and they are lucky ones with sufficient.

hello,

spot on explod,

all 4 gen's in an apartment too,

thankyou

robots

 

[numbercruncher]

hello,

spot on explod,

all 4 gen's in an apartment too,

thankyou

robots

Youll need to arrange for 30 million or so immigrants to get that happening here Still plenty of room to consolidate from the current 2.57 people per Australian Household

 

[wayneL]

hello,

spot on explod,

all 4 gen's in an apartment too,

thankyou

robots

Maybe Romanian sheep herders, but not in the UK at least.

According to the 2001 census, there are 2.4 persons per household, with the vast majority being single family/single person households.

http://www.statistics.gov.uk/census2001/profiles/uk.asp

Most of western Europe would be similar (without having the stats to back that up)

Interestingly, there are 840,000 empty household spaces in the UK, making a mockery of the undersupply theory.

 

[robots]

hello,

actually you only have to go to local jewish area, chinese area, vietnamese area in most countries to see the benefit of shared living,

thankyou

robots

 

[numbercruncher]

Interesting story on ACA tonight called " Interest Rate Gurus "

Usual suspects, at end of article they summarise with 5 major points, one of which is " Dont Lock into a Fixed Rate "

Same advice they where giving 10 interest rate rises ago, maybe theyll be right this time

The media and the men that pay their wages are not your friend

http://aca.ninemsn.com.au/

 

[explod]

hello,

actually you only have to go to local jewish area, chinese area, vietnamese area in most countries to see the benefit of shared living,

thankyou

robots

Strewth Robo, I do not suggest that way as a benefit, just pointing out that we could stretch the other way a bit if required and do have more room perhaps than we need.

As the crunch bites property prices will drop and life will keep going. As Sir Les Patterson says, "noooo worries paal"