House prices to stagnate for 'years'

[Kimosabi]

hello,

employer puts money into super thats the idea of it, a style of compulsory savings which is showing clear signs of being a great thing

not sure what super has to do with anything

quality RE assets are sound and thats my view all along in this thread, they havent stagnated, they have increased

within 10-15km of syd, melb, adel and perth things are sound as

stop reading the rubbish in the media and thinking you r an expert in monetary policy, send your resume to the RBA or the Fed's

I havent forecast anything!

thankyou

robots

The point I am making is the sentiment expressed by those that see many peoples financials.

Here is another analysis

Interest on a $200,000 home loan = $233,684

compared to

Interest on a $300,000 home loan = $350,526

So if properties drop by 1/3rd (which is happening in the US as we speak) you could wind up saving a cool $116,842.

Wow, thats a pretty big saving. Who wouldn't want to save $116,000 buying a house, I feel sorry for the poor sucker who bought at the top of the boom thinking they were going to miss out on owning a home and will never be able to afford to buy a house.

Oh, and lets not forget about the banks who lent the money to the poor person to buy (what they know is) overpriced property

Me, I'll be buying in the bust with WayneL, thankyou

 

[wayneL]

stop reading the rubbish in the media and thinking you r an expert in monetary policy, send your resume to the RBA or the Fed's

It is accepted that central banks have painted themselves into a corner, even by the bakers themselves. There remit is to administer monetary policy according to the government of the days guideline and are not "truly" independent.

There objectives are different to the individual investor. The investors job is to invest according to the future circumstances as he.she sees them

For this reason your above comment is total rubbish and contains a logical fallacy for which I'm sure there is a neat Latin name for.

Past performance is not a guarantee of future performance.

 

[wayneL]

Via Barry Ritholtz

 

[Kimosabi]

hello,

stop reading the rubbish in the media and thinking you r an expert in monetary policy, send your resume to the RBA or the Fed's

ROBOTS = Glenn Stevens

Could it be???

 

[Kimosabi]

House price dip a 'correction'

PRIME Minister John Howard says a fall in house prices in some cities was a natural correction to an overheating market but was silent today on higher interest rates.

House prices have fallen in Sydney with higher interest rates but risen dramatically in Perth as the West Australian economy powers along on a resources boom.

Being stung by higher interest rates? Have your say in our survey.

"The housing market in sections of the country did get overheated and there did need to be some correction," Mr Howard told CNBC television.

"I think that's occurred without big damage being done to borrowers and big damage being done to the industry and that's beginning to come back."

Mr Howard refused to comment on speculation the Reserve Bank will lift interest rates next month.

"As for speculation about interest rates, I won't engage in that. That's a matter for the central bank to determine," he said.

The central bank raised interest rates three times last year, with November's rate rise of 25 basis points taking official interest rates to a 6-year high.

People on lower incomes and Australians over their heads in debt would be hit hard by another rate rise.

Bank repossessions of properties are rising around Australia, particularly in the outer suburban areas of Sydney and Melbourne, as some people fall behind on debt repayments.

Property investors who also bought at the peak of the boom of 2003 have also been stung by higher interest rates and some home owners are now in a position where their mortgage is worth more than their home, or in a position where they hold "negative equity".

http://www.news.com.au/business/story/0,23636,21446419-462,00.html

 

[chops_a_must]

it is all talk, just get out and have a look for yourself before jumping down my throat

thankyou

robots

The Real Estate Institute of WA has reported the number of homes in the market has ballooned to almost 13,000 mid Feb, twice the number of the same time last year. Initial assessment by REIWA reveals that total house sales has dropped by some 40% below March 2006 and 33% below March 2005 respectively.

Add that rates could also be on the rise. Interesting times ahead.

Yep. When driving to work and back on Saturday, there were more home opens than I can ever remember seeing in my entire life. At least two or three signs on every suburban street I drove past. It was... rather strange...

And interestingly, there were no traffic problems around these areas like usual... Quality areas as well...

 

[stock_man]

I would tend to think that properties are more likely to stagnate for a long time rather than fall in enough value to call it a bust. (further modest falls can be expected). Logically, with the way rents are going now, if properties were to drop 20-30% in value, we would have an abundance of potential positively geared properties (thats even when 100% is borrowed). With a 40% drop, you could expect that every single house in this country would fit into this equation.

Now me personally, if this were the case, I would be buying everything I could get my hands on. Even if the value dropped further, as long as the rent was outpacing the repayments (inflation helps here), and you held long enough to own them outright, the new situation is money in pocket every week, plus 1 heck of a super at the end (assuming properties don't fall 100%....)

Given the amount of people that have purchased investment properties purely for gearing (mostly negative), I would bet anything that if properties started showing up everywhere with repayments cheaper than the rent, these people would snap them up as they are already confident with property investments. Bit like when a stock goes down, and you hold and like the company, you top up to decreae your overall average value.

Now if this happens, stock dries up, and prices move again.

Could the future of real estate prices be channeling? (hope so!!!)

 

[Smurf1976]

It is accepted that central banks have painted themselves into a corner, even by the bakers themselves.

And what a truly rotten cake they've baked...

 

[wayneL]

And what a truly rotten cake they've baked...

LOL oops

**************

US housing numbers stink:

http://www.marketwatch.com/news/sto...x?guid={A1D8CD82-1EB9-4E46-BDF5-DB0BA246F1DE}

USD and Dow whacked

 

[Kimosabi]

LOL oops

**************

US housing numbers stink:

http://www.marketwatch.com/news/sto...x?guid={A1D8CD82-1EB9-4E46-BDF5-DB0BA246F1DE}

USD and Dow whacked

We seem to have very mixed signals from the US, one minute housing is going up, the next down.

I guess it depend on who writes the articles, the ones based on facts or the ones from the Real Estate industry...

 

[wayneL]

I guess it depend on who writes the articles, the ones based on facts or the ones from the Real Estate industry...

Hehe Exactly

Did anyone watch "Difference of Opinion" tonight on house prices?

LOLOLOL

 

[Kimosabi]

Hehe Exactly

Did anyone watch "Difference of Opinion" tonight on house prices?

LOLOLOL

Missed it, but it can be watched bere ==> http://www.abc.net.au/tv/differenceofopinion/

Whats most funny, is how sh1tty people get when you tell them the price of property is going to start going down, especially the 'property never goes down brigade'...

 

[Kimosabi]

Trump on San Francisco/Bad Property Markets

 

[wayneL]

An excellent lecture from Michael Hudson:

http://www.michael-hudson.com/audio/061208HudsonRealEstates.mp3

*an interesting point about 3/4 the way through is how the housing indices can go up while real prices are actually going down.

 

[noirua]

An excellent lecture from Michael Hudson:

http://www.michael-hudson.com/audio/061208HudsonRealEstates.mp3

*an interesting point about 3/4 the way through is how the housing indices can go up while real prices are actually going down.

Hi, I haven't managed to get 3/4 of the way through yet but will manage it sometime.

The point on capital gains tax on properties is quite interesting and being allowed to depreciate value on an asset, by any amount, when it is increasing in value, looks very dangerous in America. A very good point on the Asset value increasing whilst making a loss on the rent.

So much bearish news and opinion here: http://patrick.net/housing/crash.html

The UK hasn't crashed yet and continues to boom on and one reason is, that capital gains tax at 40% is much higher than America. People and companies are just not selling their investment properties. As more money piles into the stockmarket there will be less interest in property and at some point, as in the late 1980's, the slide will begin.

 

[theasxgorilla]

An excellent lecture from Michael Hudson:

http://www.michael-hudson.com/audio/061208HudsonRealEstates.mp3

*an interesting point about 3/4 the way through is how the housing indices can go up while real prices are actually going down.

Wayne...that lecture is GOLD, and timely too.

It's good to be reminded of how the system works in terms of the big picture, lest you're still riding the debt/bubble escalator when it reaches it's conclusion and lemmings you over the edge like the rest of the lower 90% he refers to.

 

[Kimosabi]

Wayne...that lecture is GOLD, and timely too.

It's good to be reminded of how the system works in terms of the big picture, lest you're still riding the debt/bubble escalator when it reaches it's conclusion and lemmings you over the edge like the rest of the lower 90% he refers to.

x2

That's a fantastic lecture.

I think the more educated one can become on how the 'real' money/banking systems work, the better positioned one will be to become really wealthy in the next 10 - 20 years.

I have this nasty little feeling that Interest Rates are going to go through the roof in the next couple of years.

 

[robots]

hello,

fantastic stuff

goodluck

robots

 

[numbercruncher]

What does Divine Brown and the Realestate market have in common ??

 

[waz]

Is the answer that they are both overpriced?