The future of Australian property prices

[robots]

hello,

plenty of vegies for me and the possums buckfont,

plus the birds, the flora, possums and nature in all its glory helps my schizophrenia, bi-polar, manic depressive behaviour and alzbergers

it keeps me as high as high man, the euphoria that spreads through my body as i put out a carrot or apple to the crew here in st kilda is amazing

thankyou
associate professor robots

 

[drsmith]

Possum seen heading to robots house.

It did well to get to the USA.

 

[jbocker]

Possum seen heading to robots house.

Still waiting for this earth shattering 20% plus similar to the Japanese and USA freefall in housing industry that the naysayers are predicting. Meanwhile speculation RBA tipped to drop rates as economy shows signs of weakening and rental income increasing in certain areas. GOSH ... all doom and gloom ! LOLOLOL.

I have a couple of friends in retail (computers, software etc), and they have been telling me they aint selling much, especially in June when you expect 'tax deductible items' to be selling well. That suggests to me that the economy is slowing up and/or people already have enough tax write-offs by way of losses.
Interested to hear others views, do you think housing and other markets have cooled significantly?

Absolutely love that picture too trainspotter one of my all time favourites - I recall it being winner of the "Not My Job" award.

 

[MR.]

this chart is generated using data from
http://www.rba.gov.au/statistics/tables/index.html
current till May.

https://www.aussiestockforums.com/forums/attachment.php?attachmentid=37741&d=1277975228

I generated the chart from the RBA provided spreadsheet "Bank lending classified by sector" columns E and F, data current till May-10

Looking at that data from columns E and F, lending reversed once in May 2007. Right through the GFC lending increased at approx' the same rate as usual. Does this seem questionable? It might be right it just seems a little questionable to me! In the last year loans have increased 119 billion in housing?


The following is from the ABS:
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5609.0Main+Features1Apr 2010?OpenDocument

From the "summary of findings" from the above link:

The total value of owner occupied housing commitments (trend) fell 2.4% (down $327m) in April 2010, following a decrease of 3.3% in March 2010. Decreases were recorded in commitments for the purchase of established dwellings (down $249m, 2.1%), the construction of dwellings (down $70m, 4.7%) and the purchase of new dwellings (down $8m, 1.2%). The seasonally adjusted series for the value of owner occupied commitments rose 0.6% in April 2010, after falling in each of the previous six months.

The data from APRA heads only in one direction. ???

Perhaps the APRA figure is the total of loans when the ABS is monthly figures only and a decrease is just a decrease from the last month but total loans still increased? So why would the APRA figures increase 119 billion in one year when if the ABS figures were totalled at over 20 billion per month the total would be 240 billion +. Perhaps the APRA figures have deducted repaid loans?

Hmmm MR. just nod and smile!

Those APRA figures only point to doom......

Updated the chart.

View attachment 37664

 

[trainspotter]

It did well to get to the USA.

It was immigrating from the USA to get to robots vegetable garden. Just quite did not make it. Still believe the doomsday cult people have over exaggerated the property market. A slowing of the cycle is all we are seeing.

Agree with jbocker. With so little money being spent in the local economy, business and retailers are bearing the brunt of the cut back in spending. This is likely to result in jobs loses as the crisis continues to deepen, only exacerbating the problem

Interesting articles abound here:- http://www.whocrashedtheeconomy.com/blog/?p=1061

My favourite paragraph "The study conducted by the University of Western Sydney and supported by the Reserve Bank of Australia interviewed people suffering mortgage stress. It found “people are literally eating the bare minimum - just rice - obviously looking after their children, but putting the repayment of the mortgage above every other thing that they could possibly devote an expenditure to” according to Professor Phillip O’Neill from the University of Western Sydney. He points out this is not just in the past tense - it is still happening."

 

[kincella]

am really looking forward to the big drop in interest rates that will come again....
just 2 days out from the year end, and all those horrid figures coming out so soon...just wait for all the worst figures to be reported in the next 3 months
retail spending is the worst in 25 years....etc

those 6 rate hikes in as many months cruelled the economy....Swan and Rudd had no idea, so with all the pressure from them the RBA kept upping the rates...in order to substantiate Swan and Rudds foolish lies, that the economy was strong under their leadership....

am afraid Gen Y has finally succumbed to the reality that they are not affected by the GFC.....notice a large number of shops in Chapel st have closed their doors....so the kids have stopped spending

the banks have tightened lending, so it will be harder for the kids....
they will have a chance again with the coming lower interest rates, but they need to get out of the inner suburbs, and buy affordable houses in the outer suburbs......just an easy half hour drive on our great freeways....

due to the political fiasco of the past 2 years, and now the looming elections, investors have held tight.....hence the low building approval numbers...means less housing available in the future...
with a federal election in the coming months, most investors will probably wait for the result before making a move....
but others will be gearing up, ready to pounce with the lower rates....and the prime house sales period of Spring should surprise the average punter....

the kids who took advantage of the low rates in 2008, and ignored the doomsdayers warning, are feeling pretty smug now, with average 20% gains..those who missed it last time, will not miss it this time.....

just another window of opportunity.....all other developed economies have not raised their rates after dropping them in 2007.....australia was the only mug country to raise rates.....we can blame the gang of 4 for that disaster...
so whilst the GFC phrase 2 plays out for another year or two, astute investors will be preparing for the next bonanza, as the world recovers from the GFC.....
there will be some stunning opportunites for the smarter ones, who are cashed up and can obtain finance.....
the small superfund investors have started buying commercial properties again...and the asians are in on this too....spending 23 million in just a day or so...
http://www.theaustralian.com.au/bus...s-shopping-again/story-e6frg9gx-1225886373571

ps... that fiasco with the mining tax yesterday is not a done deal....just more smoke and mirrors to suck in the voters.....watch out for the angst from the small miners, and the backlash on that front.....it will not be good for the stock market....

 

[kincella]

these property forums are a prime example of why the worlds wealth is in the hands of 10% or less of the population......the other 90% have no idea, or the wrong strategies for accumulating wealth....
note the majority here are waiting for a crash or some other 'out of the blue' lightning bolt to help them to get into the market......

 

[CamKawa]

these property forums are a prime example of why the worlds wealth is in the hands of 10% or less of the population......the other 90% have no idea, or the wrong strategies for accumulating wealth....
note the majority here are waiting for a crash or some other 'out of the blue' lightning bolt to help them to get into the market......

lol

Which property spruiking seminar told you that?

 

[UBIQUITOUS]

am really looking forward to the big drop in interest rates that will come again....

I bet you are!

But the cash rate is only 4.5%, why the clamouring so early?

 

[drsmith]

A significant fall in interest rates in the present environment would signifiy renewed fears of deflation.

That would be bad for both shares and property.

 

[robots]

hello,

good evening, great day

how's this:

http://www.reiv.com.au/home/inside.asp?ID=162&nav1=1226&nav2=162

clearance rate of 67%, RBA will like this, down they go Kincella

awesome, oh yeah buying at the top (top of the interest rate cycle by the looks of it), hahahahahaha

thankyou
associate professor robots

 

[MR.]

hello,

good evening, great day

how's this:

http://www.reiv.com.au/home/inside.asp?ID=162&nav1=1226&nav2=162

clearance rate of 67%, RBA will like this, down they go Kincella

awesome, oh yeah buying at the top (top of the interest rate cycle by the looks of it), hahahahahaha

thankyou
associate professor robots

Bots,
What 60’s again....? Where are the 80’s from last year week after week?

“RBA will like this”..... Yep, agree with you there, businesses too!

“Down they go”? Ha, for a second there I thought you meant interest rates!
You must mean ....... property prices?

As if interest rates are going to come down because of property clearance rates!
No chance....

The RBA will be more careful before venturing back there again, even with a slight fall in the economy. Maybe a hold on interest rates, for sometime at best!

So you remember that chant of Kincella’s!
Would it help if we all chanted it together?

 

[sinner]

the kids who took advantage of the low rates in 2008, and ignored the doomsdayers warning, are feeling pretty smug now, with average 20% gains..those who missed it last time, will not miss it this time.....

Property "investors" believe in 20% gains in two years as sustainable and fundamentally rational...

australia was the only mug country to raise rates.....we can blame the gang of 4 for that disaster...

Actually, we have what is called an "Independent Central Bank"...do you know what that means?

ps... that fiasco with the mining tax yesterday is not a done deal....just more smoke and mirrors to suck in the voters.....watch out for the angst from the small miners, and the backlash on that front.....it will not be good for the stock market....

Property "investors" give "advice" on the stockmarket. I thought it was a casino, kincella?

 

[medicowallet]

the kids who took advantage of the low rates in 2008, and ignored the doomsdayers warning, are feeling pretty smug now, with average 20% gains..those who missed it last time, will not miss it this time.....

I think you are deluding yourself.

They probably had 10% deposit, so the return on their investment is MUCH higher than 20%.

However, perhaps if you realised that Australia is not confined to the optimum, you would realise a lot of these kids have experienced zero capital growth, have paid far more than they would have for rent, and are possibly staring towards GFC2.

I sincerely hope that the kids are prepared for the banks knocking on their door, and hope they blame the government for bribing them into purchasing into a bubble.

 

[robots]

hello,

oh yeah, the banks are going to close people up and keep their money in term deposits

thankyou
professor robots

 

[explod]

hello,

oh yeah, the banks are going to close people up and keep their money in term deposits

thankyou
professor robots

Do you mean the banks money?

The banks do not have any money. The money they have comes from depositors which they then lend out to borrowers. If everyone paid the debts and withdrew deposits the banks theoretically would have no money.

Thats why banks hate gold holders. It is why they encourage reverse mortgages to the elderly. Lend say for example at 8% and pay depositors 5%

 

[robots]

Do you mean the banks money?

The banks do not have any money. The money they have comes from depositors which they then lend out to borrowers. If everyone paid the debts and withdrew deposits the banks theoretically would have no money.

Thats why banks hate gold holders. It is why they encourage reverse mortgages to the elderly. Lend say for example at 8% and pay depositors 5%

hello,

just cannot believe how many bankers we have here at ASF, amazing

fantastic they all find time to post here and at GPHC and all the other forums

thankyou
professor robots

 

[Quincy]

am really looking forward to the big drop in interest rates that will come again....

the banks have tightened lending, so it will be harder for the kids....
they will have a chance again with the coming lower interest rates, but they need to get out of the inner suburbs, and buy affordable houses in the outer suburbs......

Based on the below referenced article published today, it might be a while before interest rates start heading south again.

Inflation risks building: survey

AN indicator of inflation in Australia rose for the eighth straight month in June, supporting the view that price pressures are building.

It also bolsters the view that higher interest rates will be needed to offset the pressures.

The TD Securities-Melbourne Institute Monthly Inflation Gauge for June, issued today, rose 0.3 per cent, following a 0.5 per cent rise in May.

In the 12 months to June, the monthly inflation gauge is up 3.6 per cent, well above the upper limit of the Reserve Bank of Australia's 2-3 per cent inflation target range.

http://www.theaustralian.com.au/bus...-building-survey/story-e6frg926-1225887932391

 

[UBIQUITOUS]

Based on the below referenced article published today, it might be a while before interest rates start heading south again.

Awww... and it was only yesterday that one or two on here were partying over lower interest rates. Oh well, it looks as though rice is going to be on the menu for quite a while!!

 

[Quincy]

Based on the below referenced article published today, it might be a while before interest rates start heading south again.

http://www.theaustralian.com.au/busi...-1225887932391

Another news item out today to support the view that interest rates may not be going down any time soon.

Banks under pressure to raise interest rates independent of RBA hikes

Enda Curran From: Dow Jones Newswires July 05, 2010 3:14PM

http://www.theaustralian.com.au/bus...ent-of-rba-hikes/story-e6frg926-1225888113241