House prices to stagnate for 'years'

[tech/a]

When the crash comes, they'll be happy to foreclose on the people they mislead.

I don't mind argument but when its just not supported with anything but emotional bias----???

Other parts of the world simply don't have the economic in balances we have and have in balances in areas which support your view.

Get some balance in argument if you wish to be taken seriously.

You know why? Because they have a vested interest in lending money, and they'll be upbeat as long as they can.

Every business has a profit agenda so we disregard all expert advice unless it comes from a charitable institution!
Its a conspiracy I tell you!!!

Bah humbug!

 

[xoa]

In the history of the world, I don't think any bank or real estate agent has predicted a single real estate crash. They only concede this kind of event after the fact.

It's okay to consult the advice of commercial entities, so long as they're independent. That's where fee-for-service financial advisors play a role.

I don't think Australia is particularly different from those nations which have already entered a property bear market. Canada and the US and UK and NZ also get many immigrants. They all also have low unemployment rates. They also (with the exception of the US) have historically low rental vacancies. Heck, Japan has exhibited low vacancies since 1991, and that hasn't helped boost their prices one iota. And though Australia is shipping alot of rock to China, we're not setting any world records for economic expansion.

 

[numbercruncher]

This debate can be put to bed with current statistics.

Its JUST NOT HAPPENING it
Its JUST NOT GOING TO HAPPEN.

There is massive demand and no satisfaction of that demand here in Australia in sight.

There is severe rental shortage and no decrease of demand in sight.

Rent rates are increasing and there is no abatement in these increases in sight.

Property leads/has lead and will continue to lead investment return for many many years to come.

These are FACTS not theory.

Every state is on the move again.
The dip or correction those here were looking for has been and now gone.
Those who still wait will be left once more waiting for something that WONT eventuate in THIS country.

Full and comprehensive details here.
http://www.anz.com/documents/economics/Property Outlook January 2008.pdf

I dont buy it -

June 06 to June 07 , there was a population increase of 315k (138k of these natural)

HIA says we are building 150k NEW dwellings a year, so last year roughly was one dwelling built per 2 people new people.

There is no shortage of rentals except for specific pockets, take a look at realestate.com.au, millions of places for rent, just to many people want to live in same area, which is fine, you just have to pay the premium.

Australia average household size is approx 2.6 and expected to decline!

 

[robots]

hello,

look at the risk adjusted return numpty,

awesome stuff, stirs such emotion property I dont know why amazing

thankyou

robots

 

[Mofra]

hello,

and pensioners arent rubbing their hands together when their creaming it with the old bhp or cba they have had for many many years,

i wonder if you could post the "requirements" to be able to receive the pension mofra,

or sitting on a nice workers cottage in Port Melbourne now valued at well over a mil

you are right it is a zero game, irrelevant,

do you think along the way the pensioner in his port melbourne workers cottage would give two hoots about inflation,

thankyou

robots

Absolutely 100% would they care about inflation - you're assumption that pensioners are so stupid they don't understand a basic financial concept is contemptable. Many pensioners who have accumulated a reasonable pool of assets would employ the services of a financial adviser who would explain any concepts they don't understand anyway.

I doubt any pensioner would be happy drawing their super down at $600pw for life, considering in 20 years inflation will turn the spending power of that $600 into $332.21* in todays dollars

* Assuming an inflation rate of 3% pa

 

[Mofra]

I don't think Australia is particularly different from those nations which have already entered a property bear market. Canada and the US and UK and NZ also get many immigrants. They all also have low unemployment rates. They also (with the exception of the US) have historically low rental vacancies. Heck, Japan has exhibited low vacancies since 1991, and that hasn't helped boost their prices one iota. And though Australia is shipping alot of rock to China, we're not setting any world records for economic expansion.

I believe there to be some significant differnces between Australia & the US markets:

a. Building approvals in the us for the 2006 full year were enough to house almost 50% of their then population
b. Australia has much more stringent lending criteria & a more conservative product market than US lenders (no NINJA loans, 30 yr loan terms etc)

If anything, I would expect (as the thread title suggests) a period of stagnation in real, after tax terms rather than a crash.

 

[robots]

Absolutely 100% would they care about inflation - you're assumption that pensioners are so stupid they don't understand a basic financial concept is contemptable. Many pensioners who have accumulated a reasonable pool of assets would employ the services of a financial adviser who would explain any concepts they don't understand anyway.

I doubt any pensioner would be happy drawing their super down at $600pw for life, considering in 20 years inflation will turn the spending power of that $600 into $332.21* in todays dollars

* Assuming an inflation rate of 3% pa

hello,

never said that,

thankyou

robots

 

[wayneL]

I believe there to be some significant differnces between Australia & the US markets:

a. Building approvals in the us for the 2006 full year were enough to house almost 50% of their then population
b. Australia has much more stringent lending criteria & a more conservative product market than US lenders (no NINJA loans, 30 yr loan terms etc)

If anything, I would expect (as the thread title suggests) a period of stagnation in real, after tax terms rather than a crash.

Looking down the road 5 years; that would make Oz real estate the most expensive in the world BY FAR (by valuation vectors).

Justified?

 

[robots]

hello,

yes

thankyou

robots

 

[wayneL]

hello,

yes

thankyou

robots

hello

why?

thankyou

 

[Mofra]

Looking down the road 5 years; that would make Oz real estate the most expensive in the world BY FAR (by valuation vectors).

Justified?

That would be 5 years of 0% real returns.. which would effectively make it cheaper than it is now, given wages growth often exceeds the RBA inflation targets.

 

[xoa]

If anything, I would expect (as the thread title suggests) a period of stagnation in real, after tax terms rather than a crash.

I'm not going to discount the possibility of that (or even moderate 3%-4% growth over the medium term). I just think that a crash is more likely than a continuation of the boom, unless home buyers start using their kidneys as deposit.

Australian property is said to be the most unaffordable in the world, which is absurd for such a sparcely populated continent. With the rest of the world correcting, I wouldn't bet on Australia getting even more unaffordable.

 

[wayneL]

That would be 5 years of 0% real returns.. which would effectively make it cheaper than it is now, given wages growth often exceeds the RBA inflation targets.

But if overseas markets continue to deflate at the rate they are now, Aus will be comparatively ludicrous. (Wage/house price ratios etc)

This I cannot justify.

 

[robots]

hello,

dont know just an opinion,

home buyers should start by saving money and 20-30% of the gross wage would be a good start

thankyou

robots

 

[Mofra]

But if overseas markets continue to deflate at the rate they are now, Aus will be comparatively ludicrous. (Wage/house price ratios etc)

This I cannot justify.

That is a very fair point, although the domestic residential market tends to be fairly insular in comparative valuations and there is nothing in the US to suggest wages wont decline rather than grow in the next couple of years considering Bush is now throwing money at people (over 90m!) hoping they spend the money to stimulate the (consumer) economy rather than save it.

 

[numbercruncher]

hello,

look at the risk adjusted return numpty,

awesome stuff, stirs such emotion property I dont know why amazing

thankyou

robots

no emotion drugbot,

just contributing to the debate.

thankyou.

 

[Judd]

do you think along the way the pensioner in his port melbourne workers [valued at $1M according to robots] cottage would give two hoots about inflation

I have this delightful vision of a pensioner now in the later stages of his life who, buying into Port Melbourne when it was a slum and no one wanted to live there (and I know as I was born in South Melbourne and it was even slummier), is now sitting in his magnificent palace worth $1m while trying to survive on $272 per week, thinking "Gee, ain't this grand. After all these years I'm worth $1M."

Next will be the sales agent, be it real estate or bank, suggesting a reverse mortgage "To use that equity in your house" - which essentially means transfer ownership to the lender so the nice sales agent will take a useful commission. And, surrounded by his also financially illiterate children, the pensioner will appear on ACA, saying "Gee, ain't this grand. I no longer have a pension but I now have $200,000 and the bank now owns my home."

Cut to smiling pensioner and similarly smiling children of same pensioner who "Agree that Dad (being totally uneducated else why would he be a pensioner?) has made a good decision." Pan to loan originator and sales agent who have even bigger grins on their faces.

 

[robots]

hello,

and what does all that have to do with inflation?

and what about the other 600k in assets "pensioners" can have,

thankyou

robots

 

[robots]

no emotion drugbot,

just contributing to the debate.

thankyou.

hello,

thanks numpty,

78% clearance rate on the weekend for melbourne, so still a pretty good weekend considering the turmoil, oh and the credit crunch

doesnt seem to be having much of an affect on RE the credit crunch as much as it is hitting those companies on the stock exchange

thankyou

robots

 

[Judd]

hello,

and what about the other 600k in assets "pensioners" can have,

thankyou

robots

Excuse me, I worked in this area. Less than 1% of the pensioner population had anywhere near such assets. Stop believing your own propaganda.