The future of Australian property prices

[trainspotter]

Ha Ha Ha, So when I and others have chosen not to invest in any investment properties should we just simply move on then? However this tread is the “Future of Australian property prices”. I’m interested in the future prices as I’m betting it’s not going to move upwards by much.

What’s the recent talk all about when referring to a crash? My logo there on the left even shows a picture of a young man waiting for the property boom. No crash referred to! A neighbour used to talk about this picture of the old man who on the original before I butchered it read “The young man who waited for property to come down” My joke, but if you think it’s going to be too late by the time I want to buy something thanks for the warning!

In the mean time I have rolled the extra money over into even larger machinery instead of property. Making something seems far more productive than betting on continued property price increases!

But the banks or all those financing for investment properties can't be wrong hey!

ps: The botman's recent purchase is me measuring stick....

I concur with the statement of my learned colleague MR. when he stated thusly "I’m betting it’s not going to move upwards by much. " Much has been written and agreed to in regards to this fact. It has been written by people far wiser than me that interest rates have stifled the market, growth has slowed according to the ABS by 0.7% and other such like nuances.

It has been written by the sages of this thread that property is faltering and is not the idylic paradise of money printing it used to be and not possible to be spruiked by the naysayers any further.

Well done you and your Massey Ferguson type machinery that is larger than property. There are plenty of opportunities out there to manhandle into a winning formula. I am looking into carbon credits myself and how I can offset the pollution I am currenly offing into the market place.

I wish the banks the best of luck when the ferryman asks for his toll. I will be long gone and onto another venture and ride the next wave of propsperity.

Keep up the good work MR. May the force be with you.

P.S. Robots is happy with what he has. Living the dream man.

 

[trainspotter]

Explod LOL...

TS... I am currently out pacing property in returns, I have no concerns about returning to the market when it makes sense. I am not hiding under anything I am simply invested elsewhere.

MR. Real investment, good to see!

Read the post above in regards to where you are at and where I am at. Once I have fulfilled my discourse into this venture no doubt my John Deere machinery will open it's sleepy eye. Oh well. BUT now is not the time for me either. SIP principle again.

 

[MR.]

Try and keep on the rails there Trains smash!

When I bought the "Massey" the salesman was talking all about how he was going to buy another investment property. His first one had done well and he wanted to add another. His actions weren't to reassuring.

He bought more property with his money as I bought machinery with mine.

I questioned his purchase and it appeared, it was all about the tax incentives!
Amazing the investment just to save a little tax!

 

[nunthewiser]

Try and keep on the rails there Trains smash!

When I bought the "Massey" the salesman was talking all about how he was going to buy another investment property. His first one had done well and he wanted to add another. His actions weren't to reassuring.

He bought more property with his money as I bought machinery with mine.

I questioned his purchase and it appeared, it was all about the tax incentives!
Amazing the investment just to save a little tax!

Depreciation on machinery and plant is a doozy

Dry hire on new machinery a nice lil number . Older machinery a pain in the neck.

every dodgy diversified investor type should consider this strategy if they get the urge to look outside the box

I hold machinery

 

[trainspotter]

Try and keep on the rails there Trains smash!

When I bought the "Massey" the salesman was talking all about how he was going to buy another investment property. His first one had done well and he wanted to add another. His actions weren't to reassuring.

He bought more property with his money as I bought machinery with mine.

I questioned his purchase and it appeared, it was all about the tax incentives!
Amazing the investment just to save a little tax!

Sorry ... was having an out of body experience for a second there MR. You don't buy property to get a tax incentive these days do you? Surely not? Machinery on a chattel mortgage perhaps as long as it is income producing ... anyways I am getting off track here ... AHEM ... property prices eh ??

Out of interest what kind of machinery do you have ?

 

[trainspotter]

Depreciation on machinery and plant is a doozy

Dry hire on new machinery a nice lil number . Older machinery a pain in the neck.

every dodgy diversified investor type should consider this strategy if they get the urge to look outside the box

I hold machinery

Welcome aboard there NUN ! Long time no see. Do my boats count as machinery? No wait ... I don't hire them out anymore.

 

[nunthewiser]

Welcome aboard there NUN ! Long time no see. Do my boats count as machinery? No wait ... I don't hire them out anymore.

im just sitting back chillin with Dr Bots and enjoying some of the creative arguing and banter that appears in the meantime.

 

[MR.]

You don't buy property to get a tax incentive these days do you? Surely not?

Me? no..... Others perhaps! ..... Not you? What do you mean "these days"
I'd think more than a few are negative geared!

Machinery on a chattel mortgage perhaps as long as it is income producing ...

Oh yeah, she has to be income producing. New, if she's high tech.

Me plough has lights!

 

[Mr Z]

Amazing the investment just to save a little tax!

That is common among the people I know, they'd not see the point of a positively geared portfolio which of course is the route you need to travel if you are going to get to any size. They typically have one or two properties depending on the size of their tax 'problem'.

I guess it helps the renters out! Remember what happened to rents when Hawke stopped negative gearing, boy did they back out of that fast as it blew up in the blue collar rents face with instantly higher rents! I think it last like 6 months.

Not what I call a real 'investment', its a tax dodge really, but certainly a factor in containing rents, which does hinder those trying to build a bigger portfolio.

 

[Uncle Festivus]

im just sitting back chillin with Dr Bots and enjoying some of the creative arguing and banter that appears in the meantime.

Iz been chillin through winter too nunster, but stumbled back in here for a dose of deja vue - or deja moo - same ol' bs.....

I liked the bit about banks having to continually 'grow' their business by lending - the bedrock ponzi scheme if ever there was one? Just shows that the current system is one giant Ponzi waiting for a 'Madoff Moment'?

 

[Mr Z]

Banks always need to lend that is true, largely because debt is constantly being retrenched. They are in control of the 'need' to grow but the market does pressure them to grow. Technically a bank could aim to stay stable and merely turn over its portfolio, slightly growing or shrinking as the rates etc dictated BUT you'd not want to be the CEO presiding over it! We are after all addicted to growth.

Overall the system does need to grow, that is true... if it does not our banking system kinda stops working, at least in the long run. I suppose that is why deflation is the enemy.

The concept of a zero growth stable economy is something that requires a major rethink of our methods, yet as we grow to the limits of the planet the need to contain ourselves in a sustainable way becomes an imperative. At least if it is to be resolved civilly.

Cripes I sound like a hippy, a capitalist one at that... talk about conflicted !

That should get a smirk on the face of a few.

Enjoy

 

[Mr Z]

Mr Pascoe you surprise me!

''Moreover, this underscores an obvious point: while we can debate the macro risks surrounding housing, it is likely to be a very poor investment given current valuations. House prices can - indeed, often do - show no growth in real terms for a very long period. To take an extreme example, real house prices in Melbourne did not surpass their 1891 peak until 2001. Buying a bubble is an extremely bad investment. I expect that the real returns on residential investment will be negative over the next decade.''

Housing bubble trouble for the middle class...

Housing investors running from the dangerous stock market will become a danger to themselves in the property market IMO. Running with the herd means start early, finish early... now where is that finishing line. Mum? Are we there yet? Are we there yet? Are we there yet? Are we there yet? Are we there yet? Hmmmmmm.... $64 question!

 

[trainspotter]

Taken from the same article as Mr Z provided.

Minack reckons the RBA appreciates the risk of our housing bubble and that capping house prices was a key aim of RBA policy tightening earlier this year.

''Better to slowly deflate a bubble than to see it pop. If Australia could achieve a cycle where house prices are steady or see moderate nominal declines, while growing incomes at a trend 6 per cent growth rate, it could reduce the over-valuation and financial risks associated with excess debt,'' Minack writes.

Ummmm ..... GOSH .... I dunno then .... he seems to be having a bob each way on this one? I am sure I wrote all of this about 20 pages ago? But it must be true if Minack says so. And Keen.

 

[Mr Z]

If this does qualify as a bubble slow deflation is not the normal outcome, I know it has been done but its not the safe bet.

So is it a bubble, seeing as we can't define a bubble here I am not sure we would know!

Either way, a pop or a slow grind lower in real terms... they both do nothing for me!

RBA's benign rates view they appear to be in the walking on egg shells phase of the rate cycle... to use a medical maxim "first do no harm"!

 

[Temjin]

While we are still debating on whether house prices will collapse here, our fellow Canadians are starting to see their own bubble to pop soon.

http://westernstandard.blogs.com/shotgun/2010/08/canadian-real-estate-bubble-officially-pops.html

We have had a massive drop in sales lately, and they are experiencing exactly the same thing. A coincidence perhaps?

But I was told that they have a severe supply shortage as well! So perhaps their house prices will go to the moon as well.

Anyway, we are different because we have kangaroos.

 

[trainspotter]

Yep, just like Canada we are ......

CREA asserts that not all provinces will feel the effects of fluctuating real estate prices equally. Some provinces will have a more profound move in housing prices than others. Here is one of their predictions:

In 2011, Canada will experience an overall decline of 0.9% in home prices. Simply put, if a home is worth $100,000, it will fall by an additional $900 of value in 2011. Again, in some areas the price of homes might actually increase while other areas might see prices fall two or three times this much.

What is another housing price forecast for 2011?

The Canadian Real Estate Association expects a 7.3% decline in home sales
While the real estate prices might remain fairly stable, the buying activity is expected to slow down significantly. This means that homeowners in a panic to sell may have to drop their prices substantially in order to liquidate. Others may need to wait longer than in previous years to sell.

Read more at Suite101: 2011 Canadian Real Estate Market Forecast and Prediction http://buyingsellingahome.suite101....market-forecast-and-predictions#ixzz0wvlR0DUJ

Except they have otters and we have platypuses. :

 

[robots]

hello,

well good afternoon, another fantastic day in real terms

great discussion, another aspect often over looked is the benefit of the tenant paying of your principle and interest loan in real terms

its just fantastic, as the years roll on you cleaning up in real terms

utopia in real terms

its like sitting at the shopping centre and watching the escalators, a light bulb moment in real terms

oh well,

thankyou
professor robots

 

[Mr Z]

Utopia yet...

Well I will be... and its so risk free!

Do you know of Ian Kiernan?

Just wondering.

:

 

[robots]

hello,

yeah, we should get him into ASF to do some work

thankyou
professor robots

 

[Mr Z]

Yep... he is good at cleaning out old dumps! Could even give some good advice on the dangers of investing long and borrowing short.

Wouldn't ya love to get the sort of mortgages they have in the US, 30 year fixed... I mean talk about making things more secure for the investor! All the while we get a few years fixed at the most and what the yanks call ARMS. They hate ARMS over there... We are all ARMS... another one of the major differences between our markets. The more ARMS you have the more pressure can be applied.... ask Ian, they ripped his bloody ARMS off! Poor bugger, I think he had some thing silly like 1000 houses at the time! At least that is the number I have heard touted, you can't say he didn't throw himself into it, what an effort! The guy is passionate! Anyway his bust lead to the clean up Australia thing so he put his notoriety to excellent use! Full marks for that!!

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