The future of Australian property prices

[UBIQUITOUS]

hello,

good afternoon brothers,

I like this one, why did all the Storm people get squashed then, they were in the share market, on the ride to GREATER wealth apparently

if its so easy why didnt they just ride it out, oops, thats rights the banks only loan 60-70% LVR's because of RISK

RISK of the great unknown, management, boards, regulations, governments, competition, people stealing money

oh yeah, great day

thankyou
robots

Risk? You can say that again Robots. Did you hear about that unfortunate group of people who bought homes in Lyndhurst only to find out that a landfill site is being planned for there, and the banks still lent to them. I guess they are the real estate equivelent of Storm Financial investors!

http://www.epa.vic.gov.au/waste/lyndhurst_landfill.asp

There's risk everywhere, but if you look carefully at the stock market you can find stocks which are pretty much derisked and have an upside that NO property investment can give. Only for the learned though Robots!

 

[UBIQUITOUS]

It's just a pity Nun that these self professed property experts rely so much on the fabrication of the media and the views of those with vested interest rather than basing their argument on fact...



$480K - REIV 3rd qtr median
$413K - Valuer-General 3rd qtr median

hmmmm....

Thanks for that link Singlefished. It just goes to show what many of us knew all along i.e the data is nothing but a con scheme to whip up some more froth on this bubble.

 

[jbocker]

The Henry review apparently expores the possiblility of a land tax that will very likely tax the family home. Apparently it will replace the state based stamp duties. Didnt I read that same argument when the GST was introduced.
Should make for some interesting debate.
But I dont think Rudd and Swan would want to implement such a political timebomb in an election year.

There is also talk of a congestion tax for vehicles driven in overcrowded city centres. Interested to know how they implement that. Makes for increases on property values close to public transport.

 

[robots]

Thanks for that link Singlefished. It just goes to show what many of us knew all along i.e the data is nothing but a con scheme to whip up some more froth on this bubble.

hello,

since you like the valuer's general data could someone please post the table up,


thankyou
robots

 

[UBIQUITOUS]

hello,

since you like the valuer's general data could someone please post the table up,


thankyou
robots

I don't like them Mr Bot. Those valuations are still way over the mark. Poor Joe Public

 

[Dowdy]

hello,

fantastic data singlefished,

so, through the GREATEST financial event since 1929 the world has ever seen the median dropped just over 5%, and is now back over the previous figure prior to GREATEST financial event since 1929

and the all ords?

great post Bill M

thankyou
robots

the market didn't bottom in 1929. It rebounded after the 29 crash and bottomed in 32 but the depression lasted way after WW2 ended.




The problem with hosing investors is that they don't look at the big picture. You may of doubled your money in 10years but that money hasn't gained value. Your money that you think you made a profit still only buys you the same amount of land/house 10years later.

 

[wayneL]

The problem with hosing investors is that they don't look at the big picture. You may of doubled your money in 10years but that money hasn't gained value. Your money that you think you made a profit still only buys you the same amount of land/house 10years later.

Only if you paid cash.

If you levered it and didn't have to chuck in too much over your deposit, you're quids in.

In very basic terms.

1/

You've got 100k and buy one house for cash, it doubles over 10 years.

You've got $200,000 equity plus the income received.

2/

You buy two 100k houses with $50k deposit each and the rents cover the mortgages and costs, they both double over the ten years.

Now you've got $300,000 equity plus any principal paid off and income coming in due to rent increases.

Inflation works for you when levered. The only caution is not to become over committed.

 

[Mofra]

Kincella, the Valuer-General (Victoria) figures are not selective, the REIV figures are selective.

The figures in the article refer to the whole state of Victoria, so the question is not about regional Victoria dragging down the average/median house prices but rather the inaccuracy of the REIV figures.

Is it an "agenda" to want to know the truth?

The point is moot if the valuer general figures are also showing returns above the inflation rate - the question is are we comparing like with like?

 

[joeyr46]

the market didn't bottom in 1929. It rebounded after the 29 crash and bottomed in 32 but the depression lasted way after WW2 ended.




The problem with hosing investors is that they don't look at the big picture. You may of doubled your money in 10years but that money hasn't gained value. Your money that you think you made a profit still only buys you the same amount of land/house 10years later.

Your right but that was only the stockmarket real estate continued down till around the 40's depending on location and some properties never regained were they were in 29/30 till 68 but thats history and it can't happen again (we can control it), or is it "this time it's different"
Trouble with all the property bulls they say were wrong because it's gone up I don't know about anyone else but I'd say you have to allow a 5 year time frame at least for a correction anything else is just a correction of last couple of years not of the movement since 1972.

 

[So_Cynical]

Oh dear....anecdotal evidence? YAWN!!!

Some more anecdotal evidence...my mums been trying to sell her house for 9 months now, i was on the phone with her this afternoon and she's going to drop the price again this month for the last time, the price has come down about 15% from the first list price.

Keep in mind my mum has made millions buying and sell and sometimes developing real estate...she's had prob 20 houses over the last 30 years, and she has never had any trouble like this selling a house..she's a little dumbfounded by it all.

 

[joeyr46]

Some more anecdotal evidence...my mums been trying to sell her house for 9 months now, i was on the phone with her this afternoon and she's going to drop the price again this month for the last time, the price has come down about 15% from the first list price.

Keep in mind my mum has made millions buying and sell and sometimes developing real estate...she's had prob 20 houses over the last 30 years, and she has never had any trouble like this selling a house..she's a little dumbfounded by it all.

Move it to Melbourne

 

[So_Cynical]

Move it to Melbourne

She reckons Melb is real estate hell...who the hell would pay good money to live there.

 

[Glen48]

Your Mum has to realise the R E market has nothing to do with is going on at present she is trying to sell a consumable item in credit bubble that just about to pop.. Tell he to sell at any cost not follow the market down .

 

[Bill M]

Keep in mind my mum has made millions buying and sell and sometimes developing real estate...she's had prob 20 houses over the last 30 years, and she has never had any trouble like this selling a house..she's a little dumbfounded by it all.

Something doesn't sound right here, what suburb and what price is the house? Is it on the market at a fair price or is she aiming a bit high? Has it got stale? This can happen too. I'm sure your Mum has the real answers, can you share them with us?

It also happened to a mate of mine when the GFC was in full fling but he just ended up renting it out and got very good rent for it. Since then the agents have been hounding him to put it back on the market but he is content renting it out for the time being.

 

[wayneL]

Some more anecdotal evidence...my mums been trying to sell her house for 9 months now, i was on the phone with her this afternoon and she's going to drop the price again this month for the last time, the price has come down about 15% from the first list price.

Keep in mind my mum has made millions buying and sell and sometimes developing real estate...she's had prob 20 houses over the last 30 years, and she has never had any trouble like this selling a house..she's a little dumbfounded by it all.

From possibly the hottest real estate agent in the world.

Why won't my house sell

Houses go stale.

 

[So_Cynical]

Something doesn't sound right here, what suburb and what price is the house? Is it on the market at a fair price or is she aiming a bit high? Has it got stale? This can happen too. I'm sure your Mum has the real answers, can you share them with us?

It also happened to a mate of mine when the GFC was in full fling but he just ended up renting it out and got very good rent for it. Since then the agents have been hounding him to put it back on the market but he is content renting it out for the time being.

House is one street back from the beach, has no ocean views but has super easy access to the beach, its in a Mid sized beach town in WA, POP over 10.000 (Rio and i believe FMG do FIFO from this town...so there's plenty of money about) there's a boat ramp, pub and very small shopping centre within 170 meters...house is about 3 years old, 4 bedroom, central Aircon, double garage, in a cul de sac with in-ground solar heated pool, large shed, its got everything....its a Gorgeous house.


I think its a little over priced for the market and that's because that's the way mums sold all her houses over the last 30 years....The GFC hasn't affected her and so is sorta irrelevant in her thinking, she's never seen a real estate bear market, she didn't even link the mining boom and real estate prices a few years ago and still struggles to see the link.

The last time i looked at the house online there was 3 or 4 pages of listings in her price range so plenty of competition...lots of sellers and no buyers, anyway she's going to Nth America for a 8 week holiday next year and then straight back up north for 4 months in Broome etc so she will rent it if it hasn't sold by February.

From possibly the hottest real estate agent in the world.

Why won't my house sell

Houses go stale.

After 20 odd houses its a given she knows how to sell a house, the house has been on and off the market in between agents....over the years she's built many spec houses and always builds her own houses....my mums no real estate nub.

 

[wayneL]

After 20 odd houses its a given she knows how to sell a house, the house has been on and off the market in between agents....over the years she's built many spec houses and always builds her own houses....my mums no real estate nub.

Not suggesting she's a noob, but given the market conditions, there is still only 3 reasons a house won't sell.

If it's a little overpriced, there's the answer.

Simples.

 

[Bill M]

House is one street back from the beach, has no ocean views but has super easy access to the beach, its in a Mid sized beach town in WA, POP over 10.000 (Rio and i believe FMG do FIFO from this town...so there's plenty of money about) there's a boat ramp, pub and very small shopping centre within 170 meters...house is about 3 years old, 4 bedroom, central Aircon, double garage, in a cul de sac with in-ground solar heated pool, large shed, its got everything....its a Gorgeous house.


I think its a little over priced for the market and that's because that's the way mums sold all her houses over the last 30 years....The GFC hasn't affected her and so is sorta irrelevant in her thinking, she's never seen a real estate bear market, she didn't even link the mining boom and real estate prices a few years ago and still struggles to see the link.

The last time i looked at the house online there was 3 or 4 pages of listings in her price range so plenty of competition...lots of sellers and no buyers, anyway she's going to Nth America for a 8 week holiday next year and then straight back up north for 4 months in Broome etc so she will rent it if it hasn't sold by February.

Thanks for the response, sounds nice. I can't add anything but I'm sure she will play out the game to her satisfaction in the end, good luck.

 

[awg]

And further to add all it not what it seems and property can be just as speculative as shares.

http://www.smh.com.au/national/tenants-are-being-made-homeless-as-investors-default-on-mortgages-20091207-kffj.html


Wow that is a hair cut.

Satanopera

...Newcastle is a long way from Melb and a whole lot different...
population of less than 500,000...or 10% of the size, compared to Melb of almost 5 million...its also a working class area...it has its problems with infrastructure....and other problems, relative to the mining industry..
I looked up Nelson Bay as an exercise...
median price for the suburb is 382,000 and for the region its 325,000...
so there appears to have been some 'fun and games' going on, with selling units for 900,000....believe there is more to that story than the article provides...
they were not locals but investors...so a 'pig might fly' in there somewhere..
in relation to the fancy prices...
I dont have the time nor the inclination to research Newcastle....but I recall they are having some large problems....with bottlenecks at the ports, damns, and of course they have the nsw labor party to contend with, and related union problems..
http://www.domain.com.au/Public/SuburbProfile.aspx?mode=buy&suburb=NELSON BAY&postcode=2315

Nelson Bay area is somewhat of an anomaly, in that many of the rentals are holiday units, in fact, there was an oversupply of older units and prices had been very soft for at least 5 years ( for older units).

Then a glut of new glitzy higher rise units hit the market all at once, just before GFC. A very brief bubble occured... it has now popped, as the oversupply of older units is still not fully cleared, holiday rentals are only good for short times and the local fulltime rents are relativly low. Many retirees live there.

Its no surprise that some firesales are taking place at the top end of the unit market, as cashflows could not cover costs.

Dont think there has been any problems in the free standing house sector

 

[kincella]

FHB's Area a lot more savvy than the average Bear

I say congratulations to all these savvy FHB's, they are not falling into a trap, their are actually a lot smarter than most bears gave them credit for...

buying lower valued properties, toning down their lifestyle, putting money aside....they will not be caught out, or a default risk....

in fact they are doing the exact opposite, to the bears scenario's on here past 2-3 years or more....

I would like to think some of them followed my advice, since this is exactly the advice I suggested...except for the low number of viewers on this forum...
so there must be a lot of mums and dads out there, who gave them similar advice....

...........................................

Canny first buyers want a home rather than a statement
From: AAP December 23, 2009 4:07AM

POTENTIAL home buyers have become more canny with their money because of the economic downturn, searching for cheaper and smaller homes further from city centres, a new survey has found.

Research by Bankwest-Mortgage and Finance Association of Australia (MFAA) found that nearly half (47.9 per cent) of first time buyers are now looking to purchase a cheaper property than they originally intended to break into the housing market.

"The financial crisis has changed the aspirations of home buyers, effectively downsizing the great Australian dream,'' MFAA CEO Phil Naylor said, releasing the findings today.

About a third (32.3 per cent) of the 850 people surveyed said they were looking for a smaller property, while 24 per cent were seeking out an older property rather than moving to a new home, and 31.3 per cent said they were looking for properties further from city centres.

"While Australia has the largest new home sizes, it seems first time buyers are turning their back on the McMansion dream,'' Mr Naylor said.
"(They) are looking at buying a home instead of a super-sized property that makes a statement about their lifestyle or prestige.''

The survey also found 43.8 per cent of first time buyers are toning down their lifestyle and putting money aside in case the economy deteriorates.

"In contrast to claims that first time buyers are likely to default on their loans as interest rates increase, these figures suggest ... people are more strategic than they are given credit for,'' Bankwest head of mortgages Dean Gillespie said.

Just over two thirds (67.2 per cent) of renters say renting is too expensive and 40.3 per cent they feel stuck in a rental rut.

Only one in five renters said they were happy to keep renting so they could maintain their current lifestyle and avoid sacrificing home size, location and proximity.

"Some renters seem perfectly happy to continue renting, but they are clearly still in the minority,'' Mr Gillespie said.

http://www.news.com.au/national/can...than-a-statement/story-e6frfkvr-1225812976793