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The future of Australian property prices

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UBIQUITOUS said:
Can anybody tell me which month we are in now? Are we still in March? Must be that perspective thingy again!!
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LOLOL ... so now we are in June statistics and the headlines are that numbers are falling for home loans in JUNE. BUT in March the gains were over 20% capital growth !! Now let me see ........ the title of the thread is what again?

Oh yeah .. that's right "prices" and not "loans", SO if we take off the 1.9% off the 20% figures for March the answer is? ( insert answer here )

Amazing what a quarter will do to a persons perspective isn't it?

Now come up with a rational answer as to WHY home loans have dropped and we can probably have a conversation Ubi ! I have placed forward my edict. I am still waiting for yours BTW.
 


Oh, you must of missed the video on the same linked article that details the price drops on some homes.
 
electronicmaster said:
Oh, you must of missed the video on the same linked article that details the price drops on some homes.
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Oh, you must have missed my post where I agreed that the prices have dropped 0.7% nationally over a 17 month period and that parts of Melbourne have dropped 2.5% on "some" homes.

You must have missed my earlier post that said this as well ... "Some will drop prices to sell once again pulling the median average down a further 0.7% over the period of 20 months to a staggering 1.4% drop overall nationally."

Did you notice that Tasmania has bucked the trend and has risen 1.1% for the June quarter? Huh ?

What do you think the stockmarket is going to do today? How much did it fall yesterday? This is on a daily basis.

The beauty of property is it is steady. But then again you knew all of this?
 

Trainspotter, you seem to be taking any negative views on property as an investment very personally.

Don't worry about what the stockmarket is doing. This is not an 'us vs them' debate. It's simply about the future of property prices.
 
trainspotter said:
Did you notice that Tasmania has bucked the trend and has risen 1.1% for the June quarter? Huh ?
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Financially challenged baby boomers sliding down the scale, property arb is one of the few avenues left to them if they have blown themselves up in other ventures. After the GFC this is not an uncommon story, I know of quite a few Sydney siders that have made that leap when they find themselves surplus to requirements or worse still their small business splutters its last breath. Anyway, I would guess that is a major factor in Tassie beating the odd's, it is a certainly dominant theme among the people I know of. LOL either that or they move to the country and buy acreage for "the dream" only to sell two years later because they cannot deal with the work! The amazing thing is they never seem to learn from each others mistakes... Me I am taking notes
 
UBIQUITOUS said:
Trainspotter, you seem to be taking any negative views on property as an investment very personally.

Don't worry about what the stockmarket is doing. This is not an 'us vs them' debate. It's simply about the future of property prices.
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Not at all UBI ..... not at all. I am trying to balance the naysayers in this thread. You guys are saying it is falling and loans have fallen to the lowest in 9 years.

I have agreed with these statements of FACT in my previous posts and evidenced the actual amounts they have fallen by. I have asked you to explain to me as to WHY has housing loans fallen away seeing as you bought the subject matter up.

I am not after an "us vs them" debate at all UBI. As you have so eloquently put "It's simply about the future of property prices." SO therefore I am putting up the FACTS of the "property prices" and not the "housing loans" nor the "auction clearance" rates.

If you note all I have done is reponded to you guys in exactly the same manner as to what you have posted. Kinda like a chameleon style but you think I am taking it personally? Now it is my turn to be
 
I still don't get how you can focus on price alone. By all means the other numbers can be indicative of a number of conditions but they are none the less real and reflecting potential price influencing realties. Its my belief we are way to dependent on foreign money at the moment, both directly and indirectly. The danger here being that the situation can turn on a dime and if it does we don't appear to have enough domestically sourced money or buyers at these prices to fill the void. Price moves at the margin, it actually does not take a big change in % terms to swing this thing around.

The other thing is given what has happened around the world we'd need to build a very strong case that we should legitimately be the exception. After all we have traveled the same path as the UK, US, Ireland etc in terms of debt levels and loose lending. How we get out of it without some damage is beyond me, I do think we have mitigating factors but I suspect that in the end they will only really count in some areas of Oz.... basically not the SE corner so much. Anyway, I see us a better off but not miraculously so as it appears to have been so far.

We will see in the next few years!
 
Mr Z said:
This is key IMO...
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Please read post #2344 where I wrote this "Anyone considered that the Govt borrowing 100 million a day from overseas is not helping this drying up of credit from the banks. Plenty of people still want to buy but the banks have tightened to a point whereby it is nigh impossible to get money from them. 80% LVR, 2.5 times income with residual debt DSR's, zero tolerance for CRAA. If the Govt is out there borrowing money in competition to the banks (Govt gets better rate due to AAA rating) then the banks are surely going to pass on the higher costs of funding to the nupties. As the banks have less access to wholesale funds then they can be picky and choosy on who they lend to.

And now from Mr Z's article http://www.theage.com.au/money/rules-of-the-game-20100810-11xfi.html

"The Reserve Bank left interest rates unchanged last week but it is only a matter of time before rates rise again. The banks are making noises again about how much they have to pay for funds that are sourced from overseas. The banks are probably waiting until the election is over to lift their mortgage rates independent of any increases in the official cash rate"

GREAT !! So what will this do to prices of homes you ask? Go and read post #2372 again where I also said this amazing bit of crystal balling ....

"Experts suggest the market also backs off during election campaigns."
 

What's your point?

That you know everything that is going to happen in the future and everything that everybody writes, here and in the media, must be incorrect if it doesn't agree with your view of endless price rises?

Weird
 
You are right in that governments compete for funding and can dry up private sector funding. What is not as clear is on what terms this money would be available to the private sector, i.e. price and quantity if it where not for the various governments in the market. The banks are telling us clearly that they want no weak hands on their books, their actions tell us that they fully expect the market to be tested. This is exactly to course of action I would take, along with securitising and selling any weaker mortgages I owned. Off loading them in any fashion I could really! I don't know what the big 4 are up to in this regard but it seems logical given their other actions which scream lack of confidence in RE to me.
 
trainspotter said:
GREAT !! So what will this do to prices of homes you ask? Go and read post #2372 again where I also said this amazing bit of crystal balling ....

"Experts suggest the market also backs off during election campaigns."
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but in all likelihood this will come to bear post election and just further restrict the amount being loaned, assuming that there is no loosening of criteria. As I mentioned before it is the US bond market that will drag the RBA higher come the time. Given the length of the US bond bull (I dunno, what is it now 30 years?) it is due for a major bear market. All the fundamentals are aligned behind that idea and most market players seem to be pause for the when fully understanding the why. When this game ends it can easily result in a quantum shift in a short period of time, for the moment it supports most players but given the right catalyst that can change rapidly. (game theory, stable disequilibrium) This looks primed for a fast move IMO and given the nature of RE one that could be impossible to duck by liquidating in a hurry. It truly seems to be a question of when not if, until then many property bears will seem foolish.... I can live with that. LOL I bought gold @ 270 so I am used to being called daft, funnily it doesn't happen so often anymore
 
UBIQUITOUS said:
What's your point?

That you know everything that is going to happen in the future and everything that everybody writes, here and in the media, must be incorrect if it doesn't agree with your view of endless price rises?

Weird
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PMSL UBI ! So when I write that I agree with you that prices have fallen and yes they will keep falling and yes interest rates will rise and yes there is a softening in the market somehow make me incorrect because I agree with you ??

Oh deary deary me UBI ... You are the one that went off on the tangent asking for anyones opinion as to what will happen when spring comes around and there is a flood of homes on the market. I answered this for you.

You then come out with home loans at there lowest level for 9 years and I explained to you my opinion as to WHY I thought this was the case with interest rates rising and how the process works with the banks. I then asked for your opinion which has not been forthcoming.

You then went onto some weird German slant about "NINE NEIN" we are in denial and must be paying with cash ?? YOU UBI ... not me. And you reckon I am weird ??

I have answered your posts with rational responses that have been backed up with links and hard FACTS (ABS STATISTICS) Your posts are more of what you have found on the internet from the naysayers like Keen & Co. (who lost the bet btw and had to walk to Mt Kosciusko) rather than an actual opinion from yourself.

What actual experience do you have on this subject matter UBI ?? Huh??
 
hello,

bit hypocritical there Ubi, you where bringing up the stock market just the other week with some fine example about if you bought property today vs shares

maybe play that one with the share market for the last couple of weeks (down 5% is it)

and hopefully the government can introduce the same stamp duty rates as per RE for shares transactions, think Julia should run with that

or cut it out on all assets, oh well, well picked Kincella on the interest rates

what a surprise we have a poster who bought some gold with A CBA money box

thankyou
robots
 
LOL... a touch more than a CBA money box old chap, but whatever, keep the attitude to yourself! It has killed any property investment from around the same period. If you can use a calculator that should be apparent & we look like we are revving up for another decent run in gold heading into early next year.

Is that all you have?

Looking forward to these listed property vehicles, LOL then I can short property
 
Here is a good article written by Rory Robertson who is an economist at Macquarie Bank. He touches on WHY prices will not drop 30% and also WHY the price to income ratio is structural and not cyclical. Also answers the question about over gearing. Might not be relevant to some as it was written on the 17th July 2010. 26 days is a loooong time in property.

"DOOMSDAY" economist Steve Keen had to leg it 230km from Canberra to the top of Kosciuszko, after losing a bet on Australian house prices.

Awkwardly for him, average house prices went up rather than down 40 per cent, after the Reserve Bank -- fearing a big recession in 2009 -- collapsed mortgage rates from 9% to 5%.

http://www.theaustralian.com.au/bus...inue-to-be-wrong/story-e6frg9if-1225892981265
 
hello,

oh yeah, another gold bug brothers, how's that hey Kincella, maybe a couple of money boxes then, sorry

have all come before and will fall like Rome as usual,

well done on the interest rates brothers, looking good, just helps knock the principal and interest loan down

what a fantastic day 50mm overnight in Ballarat just great

thankyou
associate professor robots
 
I love the ignorant souls who use the term goldbug! Anyway, what are we in? Year nine or so of the gold bull with not one down year yet. Compounding at around 17% and yet we still have ignorant detractors who can't tell a bug from and investor.... all in all a good sign!

Pls don't try and belittle me Robot's, you'd poop if you new the truth.... LOL and I made my initial stake in property, which makes it all the more amusing to me.
 
These downshifts in inflation and interest rates are structural rather than cyclical. So don't expect the price-to-income ratio ever to return to three times, a level typical in Australia's long gone, bad old days of high inflation.
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That is just BS, plain and simple! Major inflation is on its way, that much is unavoidable with what has happened globally across the last decade. This guy is living in a bubble if he truly believes that! Its about the only thing that will save the nominal price of housing if it takes hold rapidly enough. I suspect it will not but that is another story, anyway I am interested in the real price of housing so its the relative appreciation of other assets and wages that interests me.

Sounds like a this time its different argument! You know they thought the same way in Ireland, they now have empty suburbs! Not that I think we are going to be hit that hard but they used many of the same arguments presented here.

LOL... in terms of gold its falling, that I like
 
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