House prices to stagnate for 'years'

[robots]

hello,

no crisis NC,

people always putting their hand out, you're probably in the line, ownership rates are around the same as 10 yrs ago

maybe people are buying established homes?

what is wrong at the moment?

thankyou

robots

 

[wayneL]

Hi Happytrader

Are you asking me where is there stressed selling by owner occupiers ? So you can potentially grab a bargain from there misfortune and bad investment choices/money management etc??

Im not sure that even a small percentage of these owner occupiers realise how bad there homes are performing from a purely financial standpoint.

Its actually big business in the US atm, agents specialising in RE in various stages of distressed selling.

Im not in the business but i would suggest contacting your local estate agent as a reasonble place to start.

Hope this helps.

It's how Robert Quackysaki allegedly got started. Bought distressed sellers in Phoenix Arizona.

i.e. He bought at value or better. Leaving the ethical argument aside for the moment, that's what makes the most financial sense.

 

[numbercruncher]

Good read on the concept of Peak Debt

Australia is fast approaching peak debt. By 2016 we will spend so much of our discretionary income on mortgages there will be nothing left for putting food on the table. We will be paying 15 times our yearly income to buy a home, if wages, debt and house prices keep growing at the present rate. That's what I call really living beyond your means.

http://www.domain.com.au/Public/Article.aspx?id=1183351260524&index=NationalIndex

Next Government/s have their work cut out for them for sure

 

[numbercruncher]

hello,

no crisis NC,

people always putting their hand out, you're probably in the line, ownership rates are around the same as 10 yrs ago

maybe people are buying established homes?

what is wrong at the moment?

thankyou

robots

Some 85 percent of Australians don't trust real estate agents, according to a survey by a home lending group

http://money.ninemsn.com.au/article.aspx?id=291207

What can I say, for once Im just part of the majority.

 

[numbercruncher]

It's how Robert Quackysaki allegedly got started. Bought distressed sellers in Phoenix Arizona.

i.e. He bought at value or better. Leaving the ethical argument aside for the moment, that's what makes the most financial sense.

As per usual Wayne you are spot on

 

[tech/a]

It's how Robert Quackysaki allegedly got started. Bought distressed sellers in Phoenix Arizona.

i.e. He bought at value or better. Leaving the ethical argument aside for the moment, that's what makes the most financial sense.

Wayne.

a bit different here.

The majority will have been caught in the lo doc trap.So they will have Mortgage insurance which will pick up any varience between the mortgage price and the buy price.
If your connected enough to take part in mortgagee sales pre listing then you can do well IF YOU HAVE CASH.
If they go to agent then chances are the property is trashed,and the Financier is willing to accept subject to's,that will and does come at a premium.Prices are suprisingly very good and often more than the debt being recovered and in line with retail.

Sounds good in theory but rarely happens in practice.

 

[theasxgorilla]

You all coming here quoting price gains of individual suburbs and hoping to fool us that they are representive of the over all market are cracking me up, its like me coming here and Quoting some stock thats increased 200pc and thinking people will see that as a refelection of the overall sharemarket.

Numbercruncher, you crack me up. I once heard that a study was done into the incidence of bad news stories and their correlation with the actual state of the economy. Admittedly I'm making up the stats but it was something like even during really good times the newspapers sampled ran an average of 4 bad news stories. And when it was bad times the average increased to 7. Moral of the story...you're never going to struggle to find URLs to support your attitude (pitiful as it might appear to on-lookers). BUT, finding opportunities like the suburbs and individual houses that still went up in spite of the hopelessness of it all, well, this might be a little tougher to do just sitting in front of your computer screen. At the very least you're gonna have to scratch away the black paint from those basement windows and look out at the real world. Don't be scared now...it's much, MUCH nicer than think

 

[Mofra]

The majority will have been caught in the lo doc trap.So they will have Mortgage insurance which will pick up any varience between the mortgage price and the buy price.

Tech,

Mortgage Insurance protects the lender not the mortgagor, so if there is any shortfall the MI provider will pay the lender, then pursue the defaulting party for the shortfall + "costs".
Most mortgagee sales are passed through RE agents anyway, so unless you are a NSW gazette subscriber (not sure if they still list default auctions) or know someone within delinquencies, it is difficult to pick up the same sort of bargain in Australia

 

[numbercruncher]

Thanks for your words of wisdom theasxgorilla


I sincerely hope that you too are having a profitable stay on the RE investment scene.

My debate isnt against you individual Investors/Speculators/Flippers its about the overall health of the RE market.

But im glad I crack you up, its good for your health Youd soon become suicidal if everyone just agreed with you, wouldnt you? oh nm ...

 

[wayneL]

Wayne.

a bit different here.

The majority will have been caught in the lo doc trap.So they will have Mortgage insurance which will pick up any varience between the mortgage price and the buy price.
If your connected enough to take part in mortgagee sales pre listing then you can do well IF YOU HAVE CASH.
If they go to agent then chances are the property is trashed,and the Financier is willing to accept subject to's,that will and does come at a premium.Prices are suprisingly very good and often more than the debt being recovered and in line with retail.

Sounds good in theory but rarely happens in practice.

There have still been times in Oz in the last 20 years when RE has been good to excellent value without going the mortgagee sale route. I have reeled off examples on this thread before.

As ever, my argument is that value in todays market is rare and that there is a cycle at play... and that value will eventually return.

In the meantime, capital can be placed in other ventures with an emphasis on liquidity.

 

[theasxgorilla]

My debate isnt against you individual Investors/Speculators/Flippers its about the overall health of the RE market.

Thats largely my point...there almost isn't such a measurable thing as the 'overall health of the RE market'. There is no market index, even if there were I have no idea how it would work because housing, unlike company shares, isn't all that homogenous. For this reason the article writers can play smoke and mirrors with the stats and sell news with fear. I'm sure you're familiar with this concept? Make the reader think they need to keep abreast of what is going on in the news otherwise they might miss the moment their house dropped 20% in value overnight??

 

[theasxgorilla]

In the meantime, capital can be placed in other ventures with an emphasis on liquidity.

Thats the risk in this market...housing ain't liquid, and if you're the greatest fool when the 5th of the 5th arrives Can we use Elliott Wave on housing?

 

[numbercruncher]

Thats the risk in this market...housing ain't liquid, and if you're the greatest fool when the 5th of the 5th arrives Can we use Elliott Wave on housing?

Probably not but you can see whos swimming naked when the tide gos out with housing

 

[numbercruncher]

The housing affordability crisis continues to wreak havoc upon the Australian construction industry, contributing to a further deterioration in activity last month, new figures show.

Although the Reserve Bank of Australia kept interest rates on hold this month at 6.50 per cent, nine interest rate rises since May 2002, including one in August, are continuing to hamper growth in the construction industry.

Activity in the construction industry has deteriorated for the second consecutive month in August, with the Australian Industry Group-Housing Industry Association Performance of Construction Index (PCI) falling 0.4 points to 48.4.

The fall in activity meant the index remained below the key 50 point level that separates expansion from contraction.

http://www.smh.com.au/news/Business/Housing-affordability-slows-construction/2007/09/07/1188783465252.html


These are the sort of effects you get when society reaches Peak Debt.

Our population is growing quickly, its publicly stated that there is a shortage of housing stock yet residential construction is shrinking, its a warning for the New Government to act, and act fast.

I have a loose prediction that they will eventually have to release swathes of land at massive knock down prices which would stimulate a building boom. Im thinking Government backed estates that have a building convenant with Enviromentally friendly / energy efficant / water wise bias will have to be considered.

 

[numbercruncher]

Thats largely my point...there almost isn't such a measurable thing as the 'overall health of the RE market'. There is no market index, even if there were I have no idea how it would work because housing, unlike company shares, isn't all that homogenous. For this reason the article writers can play smoke and mirrors with the stats and sell news with fear. I'm sure you're familiar with this concept? Make the reader think they need to keep abreast of what is going on in the news otherwise they might miss the moment their house dropped 20% in value overnight??

Anyway Gorilla besides having swipes at me im not sure what your point in this thread is.

I think weve agreed that some localised RE markets will do well.

But whats your overall opinion, I mean the average House price in Melbourne is 420k which already isnt servicable by the average income, so how much further do you think the boom has to go, how rich can you guys get out of Realestate before it hits an ultimate peak. You know everything has a peak, youd only pay so much for a car, a holiday, a house or anything for the matter, there must be a ceiling.

I think I effectively demonstrated using average price increases over 5 years to show its been a bad investment.

I mean if you buy the average 420k home now you will need to get atleast 600k for it to break even in 5 years (as an owner occupier), wheres the potential in this equation, I mean if an average Policeman or Nurse or Carpenter cant afford this home now, do you perhaps think there wages may increase massively over the next 5 years to be able to afford it at 600k?

Im interested in a logical explanation how it can continue. Because i cant for the life of me see how it can.

 

[happytrader]

As a point of interest, up here in the North, its actually 'the average, Policeman, Nurse and Carpenter' doing the buying.

Cheers
Happytrader

 

[numbercruncher]

As a point of interest, up here in the North, its actually 'the average, Policeman, Nurse and Carpenter' doing the buying.

Cheers
Happytrader

Hello Happytrader,

Thats nice.

You must be in the Business of selling realestate to know the professions of the clients ? Are your Police and Nurse clients paying cash or hooking up with Jumbo mortgages usually ?

So what sort of prices are you getting, I saw you mention 20pc gains in weeks and months, are we talking 400k home becoming 480k a month later ?

Be interesting to know.


Cheers.

 

[happytrader]

Hi Numbercruncher

I am in the healthcare industry, and I also have family and friends in the building and real estate business. No one pays cash. If any profession has the character and financial ability to service debt its members of the emergency and healthcare industry, from the orderly to the anaethetist.
Keeping a fulltime position as well as working a couple of agency shifts to finance investments is a common practice around here.

Yes that +20pc since the beginning of the year is a fact whether its just been built or its existing.

Cheers
Happytrader

 

[theasxgorilla]

Im interested in a logical explanation how it can continue. Because i cant for the life of me see how it can.

Hehe, forget logic. Just observe what is and wonder, in ernest, how on earth can this be? I bet if you let you let your imagination go and tried to play devils advocate you could come up with a logical explanation. My hunch is that any answer must involve China, resources and debt. If you put interest rates into your explanation, look at it from the opposite angle...high interest rates coupled with high relative debt levels means much more leeway for the RBA to ease, stabilise and re-ignite, if it comes to that. The BoE did this in the UK during the last few years. And if you want to know how really out of hand and illogical things can get, take a look at Ireland.

 

[numbercruncher]

Hi Numbercruncher

I am in the healthcare industry, and I also have family and friends in the building and real estate business. No one pays cash. If any profession has the character and financial ability to service debt its members of the emergency and healthcare industry, from the orderly to the anaethetist.
Keeping a fulltime position as well as working a couple of agency shifts to finance investments is a common practice around here.

Yes that +20pc since the beginning of the year is a fact whether its just been built or its existing.

Cheers
Happytrader

Thanks Happytrader,


Ahh excellent, thats 20pc over this year !


What NQ Town are you from ?