House prices to stagnate for 'years'

[Bronte]

There is only two types of money problems...
Not having enough or having too much.
We have experienced both.

 

[Bronte]

Active members here at ASF,that have no money are well on their way to learning how to make some.
Just by posting questions / reading and learning from others.
There is some great information here.

 

[tech/a]

Bronte

I totally agree with Juddy's comments. You know very well that a lot of members of this forum are just starting out and your gratuitous "complaining" about having too much money seems pretty insensitive to me.

Julia

Julia

He with Biggest mouth has shallowest pockets.

Pretentiousness is UGLY

 

[wayneL]

Another saying comes to mind:

When trying to get out of a hole, it pays to stop digging.

 

[Smurf1976]

Wayne.

I get lost with some of this stuff.
A mate of mine in Tampa FL owns half a suburb,he locked ALL loans at 2.5% PA over 30 yrs!!!!!So he couldnt give a rats how high interest rates go.

So he/she isn't at all concerned about the capital value of their properties then? I suppose I could argue that some dot.com stock bought for $10 in 2000 is still a good investment, even though it's now practically worthless, as long as I hadn't sold it because it might turn out OK in 20 years time. A loss IS A LOSS whether you sell or not - it's still a loss.

Whether choosing to buy/hold that asset AFTER the value has fallen makes sense is another matter, but buying BEFORE the fall is rarely the best strategy (unless yield is high, which in RE it generally isn't at the moment). At best you've suffered a huge opportunity cost waiting out the fall and subesequent climb back to square one.

Rising interest rates would seem likely to be negative for the capital value of real estate, at least compared to other assets, for pretty obvious reasons.

God Bless America wish I could do it here and Id hold indefinately as well!!

Wish you could do it here? I seem to recall you being against fixed rate loans on the basis that, on average over the life of the loan, they are more expensive than variable rate?

 

[wayneL]

Wayne.

I get lost with some of this stuff.
A mate of mine in Tampa FL owns half a suburb,he locked ALL loans at 2.5% PA over 30 yrs!!!!!So he couldnt give a rats how high interest rates go.
H'es not alone all holders of multiple investment properties in the US I know both domestic and commercial have done the same thing.

2.5%?

I suggest your mate is spinning you a porky. Here is the history of adjustable rate mortgages... fixed rates would not have varied substantially and at most times, are higher than AR.

http://mortgage-x.com/general/indexes/prime.asp

God Bless America wish I could do it here and Id hold indefinately as well!!

Indeed!

America, the worlds newest dictatorship, needs Gods help right now.

 

[Bronte]

2.5%?
I suggest your mate is spinning you a porky. Here is the history orm ARM mortgage rates... fixed rates would not have varied substantially and at most times, are higher than AR.

Agreed

 

[tech/a]

Wayne.

I had the rate wrong I gave him a call and its 6.75%
But it is fixed for 30 yrs.The downside is that if rates are lower than the fixed rates then the penalty to get out is massive.
But he feels rates will in the majority will be above the rate fixed.
Which from your table Wayne is pretty right.

SMURF
Yes and I still am as we can only lock for 5 yrs generally.
Smurf he has a sizable chunk which is his so he is well in the positive territory.It is cashflow for him.They are larger apartment blocks--30-50 in each.
He has 2 sets.
And a Car wash.

 

[krisbarry]

Now we have a problem....
A very large sum of money will be deposited into our account early November
The problem is .......we have to reinvest most of it.
Hope the market crashes between now and then

I hope it doesn't crash

You have had your time making serious money from the housing market (how much more wealth do you need?)...now it is my turn to make serious cash from the stock market

I have 100% of my superannuation in Australian shares and geared at 50%, so I need to make squillions!

Please don't spoil it for the rest by wishing us bad luck...remember the Karma theory :

 

[wayneL]

This article is UK based, but identical conditions exist here.

Economists have a blind spot for finance

A collapse in asset prices can occur, regardless of the economic laws of supply and demand.
Ann Pettifor

October 10, 2006 11:15 AM | Printable version

To the irritation of some I warned in August of the grave threat to British homeowners and to the global economy posed by the upheaval looming in the housing markets of Florida and California. Two months on, the slump in US housing sales is obvious to all but the most blinkered. And still many don't get it. The FTSE, the Dow Jones and the Nasdaq are still rising to delirious heights. Traders seem confident that the housing slump is just grit in the pistons of the engine driving globalisation forward.More.............

 

[Bronte]

Well our bank is allowing us to sell one property without effecting the existing mortgage (fixed at 6.47%) ......nice of them.
We think our South Perth apartment close to the Swan River will have to be sacrificed

Just an update. We certainly are bearish property
We have now sold this South Perth apartment
and also our two houses in England.
We expected them to double in seven to ten years,
they actually almost tripled in six years.
We thought this was a very good reason to sell
Also thanks to ASF member for advice in this thread.

 

[YChromozome]

West's housing boom finally slowing down

Median prices in the West Australian capital are now unlikely to overtake Sydney by the end of the year, as one researcher had forecast.

House price growth in Perth eased to 6 per cent in the three months to September, down from 11 per cent in the three months to June, according to the Real Estate Institute of Western Australia.

Listings surged by 20 per cent in the same period, caused largely by investors seeking to crystallise massive gains made during the boom.

Umm, maybe the end is near? Quiet - Did you hear that? POP!

 

[Smurf1976]

Listings surged by 20 per cent in the same period, caused largely by investors seeking to crystallise massive gains made during the boom. [/COLOR]

Another way of saying that investors are getting out of the market. Smart investors that is.

 

[Bronte]

Just an update. We certainly are bearish property
We have now sold this South Perth apartment
and also our two houses in England.
We expected them to double in seven to ten years,
they actually almost tripled in six years.
We thought this was a very good reason to sell
Also thanks to ASF member for advice in this thread.

This may be of interest to some members:
http://www.theage.com.au/news/business/wa-house-prices-come-off-boil/2006/12/08/1165081153014.html

 

[wayneL]

This may be of interest to some members:
http://www.theage.com.au/news/business/wa-house-prices-come-off-boil/2006/12/08/1165081153014.html

Mrs & I have noticed that up here in the world class, exciting tourist mecca of Geraldton as well.

Houses are staring to stick... and lots of year old SS commodores and Tickford Fords for sale on the side of the road.

Still buckets of money up here, but folks are overcommitted and prices lost touch with reality some time ago.

 

[BREND]

Home prices may not remain stagnant for years.

I had done some research in my blogs. There is an inversed relationship between mortgage rate and housing starts, due to the simple reason, low mortgage rate makes housing more affordable. Housing starts have fallen sharply while mortgage rate has remained low. As long as mortgage rate continues to remain low in 2007, housing starts is likely to recover.

And unemployment rate in US stays at 4.5%. US employment market is still strong and healthy.

Details inside:
http://basemetal-trading.blogspot.com/2006/12/us-will-not-have-recession.html

 

[robots]

hello,

this thread started on the 19/09/05 and guess what house prices are still going up

I know my place has

even three interest rate rises havent stopped it

the price hasnt crashed and burned, and with rents increasing the way they are in inner city Melburn I expect the price to go up further

thankyou
robots

 

[Smurf1976]

hello,

this thread started on the 19/09/05 and guess what house prices are still going up

I know my place has

even three interest rate rises havent stopped it

Not so down here in Tassie. I could now buy a nice 3 bed brick house with pool for the same money that would have bought a smaller weatherboard house on less land (in the same area) 3 years ago. Or alternatively I could just buy the same house and pay roughly 20% LESS for it.

Even cash in the bank has massively outperformed property in recent times. And that's without even mentioning that you'll earn even less on property once depreciation, rates, insurance and so on are included.

That said, at some point getting out of cash and into anything of permanent value (like property) is going to make a lot of sense. But we're not seeing a credible threat of rapidly escalating inflation from the central banks YET. Inflation certainly, but not at a sufficiently increasing rate that would justify current property values. At least not so far.

 

[Realist]

hello,

this thread started on the 19/09/05 and guess what house prices are still going up

I know my place has

They've been going down and down in Sydney for 3 years mate.

And Sydney was where the boom started, the rest of the country follows.

Where do you live?

 

[robots]

hello,

what a load of rubbish

I live in Melbourne

uncle's place in Stanmore sold just recently and he came out tops, previously he was in St Ives and I would imagine there are plenty more stories like that

where there is demand the prices are solid as

probably all the crap is going down, buy inner city is good

thankyou
robots