House prices to stagnate for 'years'

[explod]

Are you one of them ?

Dave

Working on it Dave but not consistent enough at this stage. Maybe we should question some of the hig flyer traders

 

[Smurf1976]

[Realestate industry virtually needs a Royal enquiry IMHO.

Just imagine if food, petrol, power, car rego or anything else essential to most Australians had gone up in price to the extent that houses have in the past few years.

Petrol goes up 10% and its headline news. I once remember a huge fuss about literally 2 cents per litre.

Power goes up a few % and we hear talk of changing governments, utlilities ripping off consumers and so on.

Houses go up well over 100% and hardly a word is said for years.

And let's face it, 10% extra for a house is going to cost (with interest) far more in actual $ terms than 10% on petrol, food or power anyway.

 

[theasxgorilla]

Petrol goes up 10% and its headline news. I once remember a huge fuss about literally 2 cents per litre.

I'm paying $2.10+ for a litre of 95-octane over here...Aust has plenty of buffer space to downsize cars and use more public transport...although I do pity the poor b@stards in Melbourne with what they're passing off as a world-class public transport system.

 

[theasxgorilla]

The dominoes are starting to fall.

Tell me about it...every man and his dog starting a blog, sheesh, I dunno

 

[theasxgorilla]

They say its the Flippers who get burnt the hardest in the Squeezes, up to there eyeballs at the turn of the tide and no one to catch the hot potato.

Who are 'they' anyway?

Want to flip and protect yourself in a downturn? Buy in an upmarket suburb. Booms tend to contract inward, toward where the rich live. The booms also tend to emanate out from these areas so if the rich areas are affected at all they'll be affected for the least amount of time, so IF you're left holding the bag its for a shorter period.

ASX.G

 

[Mofra]

hello,

just got back from signing up new vendor

vendor has set reserve at 675k, so going to advertise at 500k plus

auction in 4 weeks, will be good

thankyou

robots

Gee, those nice, trustworthy agents never underquote, do they...

... and guess which agent will feign surprise when the property goes for "30% above the quoted price"

Their complaints about an "image problem" make me laugh :

 

[theasxgorilla]

Gee, those nice, trustworthy agents never underquote, do they...

Ah, not when they want to list your house, no, those situations are few and far between

 

[numbercruncher]

Loan defaults up almost 30%
September 14, 2007 - 11:49AM



Loan defaults rose by almost 30 per cent in the last financial year with failures to pay the bills on time up in every Australian state and territory, figures from the nation's biggest credit check firm have revealed.

And economists say consumers who haven't experienced a recession are upping their borrowing to levels more than double their income because they are confident the good economic times will continue.

The Australian Law Reform Commission (ALRC) has recommended credit check companies be allowed to tell the banks more about consumer credit files in a bid to stop lenders giving people loans they can't afford.

Veda Advantage has revealed that defaults - where bills are not paid for 60 days - went up by 28.6 per cent in the 2006/07 financial year.

Veda's head of external affairs Chris Gration said the data showed consumers were increasingly facing debt stress.

Veda declined to release the actual number of new defaults in the past financial year but 12.4 per cent of its 14.5 million credit files across Australia have a list of defaults or personal bankruptcies.

That translates into 1.8 million struggling consumers - about the population of Brisbane

http://www.theage.com.au/news/Business/Loan-defaults-up-almost-30/2007/09/14/1189276948189.html


A staggering amount of consumers in the woods, and during the Greatest economic boom in history?

 

[happytrader]

http://www.theage.com.au/news/Business/Loan-defaults-up-almost-30/2007/09/14/1189276948189.html


A staggering amount of consumers in the woods, and during the Greatest economic boom in history?

There are a lot of kids in adult bodies out there.

With this in mind, when it comes to priorities, spending on the mobile phone and the credit card come way before paying that pesky mortgage payment.

The housing commission up here automatically deducts the rent from clients bank accounts. Its probably saved a lot of them from further homelessness.


Cheers
Happytrader

 

[numbercruncher]

I just find the figure amazing, I read there is 4.5m under 16 so we would assume they dont have credit, that leaves 16m to get the 1.8m defaults from.

Wonder how this compares to other countries, its surely got to be one of the highest default rates in the world.

 

[Flying Fish]

111000 $ is not that much

 

[robots]

hello,

great stuff NC,

are you going to any open for inspections or auctions this weekend? hope you can get an observation of the "real" market out there at the moment

the state revenue office has the figures that count, and thats the prices which prop is sold for everything else is the chase, just like when you plonk BHP on the market at SELL for X

thankyou

robtos

 

[Kimosabi]

hello,

great stuff NC,

are you going to any open for inspections or auctions this weekend? hope you can get an observation of the "real" market out there at the moment

the state revenue office has the figures that count, and thats the prices which prop is sold for everything else is the chase, just like when you plonk BHP on the market at SELL for X

thankyou

robtos

THE DEFINITION OF A GOOD DEAL


A good home or a good price? Both, if possible.

by Neil Jenman

If I were a spruiker, I'd charge several thousand dollars for the information that's about to follow.

I'd write a multi-page screed peppered with metaphoric drum rolls and trumpets about how this "secret information" is only available to a "limited few" but it can be yours if you pay me a mere fraction of what I can make for you.

I'd use the most common sales closing technique of spruikers. "If I guarantee to make you mega-thousands then it's great value if you pay me a few thousand."

You'd pay me, say, $5,000 and I'd put (or make sure you keep) an extra $50,000 in your pocket.

The thing that makes me cross about spruikers is that the information they sell is readily available at a fraction of the price from a legion of more honest sources.

So, when a dishonest spruiker "sells" a good idea to a naive consumer, the consumer usually defends the spruiker - not realising, of course, that the information that cost several thousand dollars was probably available in a book for just a few dollars - or even for free on the Internet.

The thing that makes me cross about consumers is that many of them don't take the time to do just a little bit of basic research which would show them how to save heaps when they buy, sell or invest in real estate.

Think about how hard the average wage-earner works to earn say $50,000. Or, take it a step further and think about how long it takes the average wage-earner to save $50,000. Five years? Ten?

But the average wage-earner - and especially the average first-home buyer - heads off into the real estate market-place without the faintest idea of what to do or how to do it.

Take the case of Bob and Vicki.

For months they have been looking for a home in Melbourne.

Now, anyone who has been following the Melbourne market will know that it's hectic. [Many suburbs are experiencing an 'Indian Summer Boom' - more on that in another article on another day].

Bob and Vicki have been trudging from home to home among crowds of other home-seekers. They have been quoted false price after false price. Buyers galore facing liars galore.

It was driving them to despair.

They'd see a home they love, ask the agent how much it would sell for and then, based on the agent's "quote", they'd spend hundreds of dollars on inspection reports, get their hopes up and then, come the day of the auction, the home would sell for a motza more than they were quoted.

The agents - in typical lying-scoundrel-fashion - would shrug and say, "That's the market."

So Bob (whom I had met a couple of times) called me. He said he was "sick to death of auctions. "

Like most inexperienced buyers, Bob didn't realise that auctions are a game. The rules of the game are set by the agents.

It's a simple game, however, and agents are mostly simple people. Cunning, unethical, but simple nevertheless.

"Agents, especially those who use auctions, are not very smart," I told Bob. "The average buyer is much smarter than the average agent. You're a lot smarter than these agents, so why don't I tell you how to play the game?"

"Great," he said. "You tell me what to do and I'll do it."

I began by asking Bob how much he could afford to pay.

"$400,000," he said.

That struck me as a bit low. Bob's a young lawyer with a great future. Although he's still in his 20s, ten years from now, he'll be earning a huge income.

So, surely he could afford more. Yes, he agreed he could easily handle $450,000. Straight away he felt better.

I also told him that, when they found the home that he and Vicki loved, they should be prepared to pay more than its market price.

He was shocked. Like most of us he wanted a good deal.

But what is a "good deal"?

Is it a good price or a good home?

"Look, if you absolutely love the home and you can easily handle the repayments - with no strain and no pain - and you intend to live in it for many years, don't worry about paying more than the 'market price'. In ten or twenty years, it won't matter.

"And, today, if you're prepared to pay more than the 'market price' you'll automatically be ahead of other competing buyers, many of whom are focused on 'getting a good monetary deal".

Surely, when you are buying a family home, the definition of a "good deal" should be "a home you love at a price you can afford"?

If "your price" is higher than the market price, then you have an excellent chance of getting the home you want.

Bob agreed.

I told him to read the chapter from my book, 'Don't Sign Anything!' on the auction system. "It'll take you less than 60 minutes to know the rules of auctions. And I'll bet, once you know the rules, you'll be running to the next auction. That's how excited you'll be."

I also offered to get a friend (an agent called Andrew) to help him bid at an auction. Andrew is young, smart and knows the auction game inside out. He's also a great bloke (who would never auction a home for his sellers).

I'll let Bob tell you what happened on the weekend.

"Neil, We got a house! And we got it for $53,000 under our limit. Thanks to each of you for your great advice and guidance. Andrew was cool as a cucumber (bidding at the auction).

I think ours was a classic case why the auction system is doomed for the vendor.

This house ticked a lot of boxes for my wife and I so we were prepared to spend over the real market value.

If the agent had done his research he'd have known that we previously bid $416,500 for a similar house auctioned by his agency.

I indicated that we'd be prepared to make an offer before the auction, but the agent told me not to waste my time as it will waste everyone's time and everyone will just get annoyed and it will end up going to auction any way.

At auction we set our limit at $413,000, but we got it for $360,000.

Fantastic result for us the purchaser."

The reserve price on the home was $330,000 which means the auction agent is probably bragging that he "got $30,000 above reserve."

This is exactly what I mean about agents - especially those who push auctions - not being very smart.

It's nice to help homebuyers, especially first homebuyers. It's really nice to help them get a double good deal - a good home for them at a good price for them.

If I were a spruiker, I'd have charged Bob and Vicki at least $10,000 for my "secrets".

But what a rip-off that would be.

I am sick of hearing spruikers say, "I do this because I like to help people." Liars. They do it for the money. If they really did it because they liked to help people, they'd do it for nothing - or, at least, for a reasonable fee in relation to what it cost them.

So, if you're a genuine homebuyer and you need a helping hand, we'll give it to you. With no spruiking fees.

And, of course, the same applies to genuine homesellers - especially those poor souls who have been persuaded to sell their homes by auction.

If that's you, then you'd better contact us - fast.

http://www.jenman.com.au/news_article.php?id=217

 

[numbercruncher]

hello,

great stuff NC,

are you going to any open for inspections or auctions this weekend? hope you can get an observation of the "real" market out there at the moment

the state revenue office has the figures that count, and thats the prices which prop is sold for everything else is the chase, just like when you plonk BHP on the market at SELL for X

thankyou

robtos

Hello Robotics,


No i wont be wasting any precious time at Auctions this weekend ! Especially when your Investor clients are queing up to rent these places out for a 3pc return.

BHP has oodles more potential than Suburban realestate in my humble opinion, so ill stick with shares and other misadventures and leave you experts to your untold realestate wealth.

Dont you get tired of having to work weekends ? Does your boss give you penalty rates ? Oh wait i think Johnny abolished that sort of stuff ...


Ive seen some articles of price rises lately, looks like you guys might even beat Inflation this year ?

 

[Smurf1976]

Real estate agents? Don't give me no damn real estate agents!

Just spent 2 hours driving around one suburb looking for a house. No, I don't mean looking at houses and finding one that looks OK from the outside. I mean looking for one specific house because the agent's office either doesn't know where it is (only listed today!) or for some stupid reason have decided not to tell me.

I'd be outright furious if I were the vendor of that house. A cash buyer able to pay 100% of the asking price (if it's worth it) can't find the damn place.

 

[wayneL]

Don't feed the troll.

 

[robots]

hello,

great story Kimo, its all stories though

but the state revenue office has the facts, what properties are actually selling for,

just like second hand cars, washing machines or shares, property is bought and sold on the open market,

good weekend coming up though, inner city is going extremely well in Vic still

hope I get a reply

thankyou

robots

 

[numbercruncher]

Found this article interesting !!

If i lived in the US id be tempted to grab one

Nearly 700 homes in the Detroit area will be auctioned on Sept. 21 through Sept. 23, one of the biggest home auctions ever

The properties come with clear titles; there are no liens or encumbrances, such as back taxes on them. There's also a wide range of houses available with pre-auction prices running from about $5,000 to a bit more than $600,000.

"[In some cases] the sellers have indicated that any bid will be OK," said Webb. "It's costing them too much. Even if a house brings just $100, they'll still have to sell it."

http://money.cnn.com/2007/09/10/real_estate/biggest_motown_auction/index.htm?postversion=2007091117

Now detroit is the Literal definition of a Real Estate crash ....

 

[Kathmandu]

http://www.jenman.com.au/news_article.php?id=217

And why does Jenman do it???

And what does it prove, that as a buyer you should do due dilligence, grow a brain and try and get a better deal, or maybe even get a "buyers agent", but hold on, they cost a motza as well.

And as a seller, who will you want, the agent who sell's the house short? or the one who get's max price?


If you cant negotiate, and don't know how the rules work, well don't play the game, keep renting, and certainly don't try and shift the blame if you paid too much.

After all that's what the seller pay's the agent for, to get the maximum price, not to do the buyer a favour.

Just had all property revaled, and for this they use previous sales as proof of valuation

Very impressive thank's.

Now where was that small island nation that I wanted to buy again

Dave

 

[tech/a]

I keep reading this thread its amazing.

Most will never buy a house infact if you own one your a nutter.
If your thinking of buying one your ready for committing.

Ive searched high and low and I cant find a thread that in 1997 was urging people to BUY BUY BUY realestate.
Plenty of doom and gloom about both Realestate AND the stock market.

Everyone seems to know what and how to avoid disaster but havent seen much on taking advantage of the endless opportunities out there.

You all sound like a group of poms at the last test match.
Moaning and whinging.