The future of Australian property prices

[UBIQUITOUS]

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. :

Trainspotter, I reckon that once your whole street's prices decline by 20%, you will say something like "I'm not selling, so the price of my house has not declined at all."

 

[robots]

hello,

special hello to Kincella hope you enjoying the fresh air, take it easy brother

every things going really well

anyone have any data indicating Aussie house prices have crashed?

thankyou
professor robots

 

[Mr Z]

Ruh oh!

Kohler is onto bonds! Gotta be close to a top!

The season to consider bonds! By Alan Kohler

 

[robots]

hello,

yeah, all that keeps coming up is data indicating that house medians in Australia have risen to levels greater than pre GFC, just amazing since it has been the biggest financial event since 1929, howzat hey

and even during the GFC (the biggest financial event since 1929) medians dropped around 7-8%, yeah thats all, you ask

sifting through the data has been tuff, alot of data comes up on financial matters, but i noticed a lot of very very ordinary graphs still exist even 2yrs on from the GFC (biggest financial event since 1929!)

oh well, real terms

thankyou
professor robots

 

[trainspotter]

Trainspotter, I reckon that once your whole street's prices decline by 20%, you will say something like "I'm not selling, so the price of my house has not declined at all."

Hahahahaha UBI more than likely .... that is if there is anybody to sell to?

Surley they all would have self sacrificed with a bottle of Gin, a warm bath and a packet of razorblades by then?

Hopefully the house price has gone up by 20% .... no wait .... it already has ... so therefore if it goes down by 20% it has not declined at all. It is exactly what I paid for it 12 months ago.

Like my Granpappy used to say to me "If you are fearful of flying, don't get on the plane"

 

[Mr Z]

Spell stimulus!

Spell temporary!

Crikey mate that is like snorting coke and declaring a new and sustainable state of being, get real!

It was blindingly obvious that the money running from the share market and the stimulus combined where going to give housing a short sharp boost. Any num nut could have made that call, it was the Australian flight to 'safety'. The stimulus has almost run its course! Its now that we start to find out just how many are swimming naked. Unless of course we muddy the waters with bucket loads more debt and stimulus, which will just increase the problem down the track. This market needs to settle out to see just how strong it really is, I don't think anyone really knows yet, but to make that sort of declaration and ignore the artificial influences in this make is just plain mad.

You are playing tiddlywinks with yourself there!

 

[trainspotter]

Spell stimulus!

Spell temporary!

Crikey mate that is like snorting coke and declaring a new and sustainable state of being, get real!

It was blindingly obvious that the money running from the share market and the stimulus combined where going to give housing a short sharp boost. Any num nut could have made that call, it was the Australian flight to 'safety'. The stimulus has almost run its course! Its now that we start to find out just how many are swimming naked. Unless of course we muddy the waters with bucket loads more debt and stimulus, which will just increase the problem down the track. This market needs to settle out to see just how strong it really is, I don't think anyone really knows yet, but to make that sort of declaration and ignore the artificial influences in this make is just plain mad.

You are playing tiddlywinks with yourself there!

So how many houses did you buy to take advantage of this short sharp boost of 20% in 12 months? Do you not think the RBA has raised interest rates to do exactly that - settle out with corrections. DOH. I must have written this about a gazillion times now. I even put up a cartoon so you could understand it back in post # 2553

So num nut - did you make the call?

 

[robots]

Spell stimulus!

Spell temporary!

Crikey mate that is like snorting coke and declaring a new and sustainable state of being, get real!

It was blindingly obvious that the money running from the share market and the stimulus combined where going to give housing a short sharp boost. Any num nut could have made that call, it was the Australian flight to 'safety'. The stimulus has almost run its course! Its now that we start to find out just how many are swimming naked. Unless of course we muddy the waters with bucket loads more debt and stimulus, which will just increase the problem down the track. This market needs to settle out to see just how strong it really is, I don't think anyone really knows yet, but to make that sort of declaration and ignore the artificial influences in this make is just plain mad.

You are playing tiddlywinks with yourself there!

hello,

hehehehehehehehehehehehehehehehe classic

thankyou
professor robots

 

[Mr Z]

Hopefully the house price has gone up by 20% .... no wait .... it already has ... so therefore if it goes down by 20% it has not declined at all. It is exactly what I paid for it 12 months ago.

errr um... +20% then -20% = -4%

100 + 20 (20%) = 120
120 - 24 (20%) = 96 or 100 - 4%

Just sayin.... tis all. You have to make more than you lose on a percentage basis, share trading 101.

I like the way that a 20% move up is perfectly OK and to be expected yet talk of a 30% decline and its just not possible! Most markets can move down faster than they move up when the panic sets in. Brighton lost 40% in the Savings and Loans crisis... locals panicked, Pyramid tanked and we all paid more for our petrol. Mind you it did recover very quickly as they stabilized the problem, talk to an older agent in the area... some have good stories. What a buying op that would have been!

 

[robots]

So how many houses did you buy to take advantage of this short sharp boost of 20% in 12 months? Do you not think the RBA has raised interest rates to do exactly that - settle out with corrections. DOH. I must have written this about a gazillion times now. I even put up a cartoon so you could understand it back in post # 2553

So num nut - did you make the call?

hello,

NO COMMENT

thankyou
professor robots

 

[Mr Z]

So how many houses did you buy to take advantage of this short sharp boost of 20% in 12 months? Do you not think the RBA has raised interest rates to do exactly that - settle out with corrections. DOH. I must have written this about a gazillion times now. I even put up a cartoon so you could understand it back in post # 2553

So num nut - did you make the call?

Yes! I did.... and none, its a bit like buying the last spike of a share move. Dangerous territory that you are foolish to buy into until at least you have seen the dust settle. Again trading 101 you always leave some on the table, only mugs try for the highs and lows. Its always unpredictable stuff in terms of the size of the move, not the fact that there will be a reaction, but the size of the reaction.

The RBA drives using the rear vision mirror, LOL, if they had known that they fed a 20% move in RE they'd have jump on the brakes a lot sooner! You seriously credit the RBA with more sense and power than it actually has! They have a moderate degree of control while things are stable, things go wrong and they get dragged kicking and screaming by the market.

Yes you have said it a gazillion times and yet you still don't really understand it, that much is obvious!!!

 

[Mr Z]

hello,

yeah, all that keeps coming up is data indicating that house medians in Australia have risen to levels greater than pre GFC, just amazing since it has been the biggest financial event since 1929, howzat hey

and even during the GFC (the biggest financial event since 1929) medians dropped around 7-8%, yeah thats all, you ask

sifting through the data has been tuff, alot of data comes up on financial matters, but i noticed a lot of very very ordinary graphs still exist even 2yrs on from the GFC (biggest financial event since 1929!)

oh well, real terms

thankyou
professor robots

LOL oh yeah I almost forgot to mention it... gold in AUD terms into the crisis was +72% at one point. That is what you call real terms....

Then there was the opportunity to roll into insanely cheap gold stocks!

Oh and guys... don't try and tell me you captured the +20% in real estate, -8% from pre GFC +20% now is only a 10.4% gain on pre GFC so if lose 20% from here you are more than likely 11.7% down on pre GFC prices. For real estate its volatile that is for sure but its not like you used stop losses and rolled back in lower like a stock trader could. On top of that Bots is buying stalling highs? Brave or...what?

Where as most gold investors would have been buying pre GFC just on the seasonal factors, without trying to be some market savant. Just like the last couple of weeks has been buying time again for the season in the new year.

Now my favorite gold stock that is up 800% from GFC lows, now you are talking gains

You know, while we are cherry picking numbers and all....

Relatively there where much better places to be. Even if you rode gold back down after it cracked you still did +22% at the subsequent lows and where back to +66% at the recent highs.

Better places to be boys, better places to be!



CYA!

 

[trainspotter]

errr um... +20% then -20% = -4%

100 + 20 (20%) = 120
120 - 24 (20%) = 96 or 100 - 4%

Just sayin.... tis all. You have to make more than you lose on a percentage basis, share trading 101.

I like the way that a 20% move up is perfectly OK and to be expected yet talk of a 30% decline and its just not possible! Most markets can move down faster than they move up when the panic sets in. Brighton lost 40% in the Savings and Loans crisis... locals panicked, Pyramid tanked and we all paid more for our petrol. Mind you it did recover very quickly as they stabilized the problem, talk to an older agent in the area... some have good stories. What a buying op that would have been!

Hahahah aaaa hahaa ... yeppers you got me a beauty there Mr Z. I had my mouth open and everything for full effect. Nice catch.

I am yet to see a chart or graph evidencing a 30% decrease. I have seen plenty where there are 20% increases in RE though. What is making this catastrophic call of falling is where I splutter. It is going to take several things to happen;-

1) Wholesale job losses - then people cannot afford to pay their mortgage.
2) Massive increase in interet rates - yet RBA scribblings deny this is going to happen.
3) One of the big 4 banks falling over - unlikely but possible. (Govt backed I believe)
4) Toxic debt and non recourse and ratchet loans kicking in - We don't have ANY of these.
5) Secondary wave of GFC - possible but unlikey due to this Guvmint printing money to prop the industry up.

Anyone else got any other ideas? IRS is valid but unlikely as the rest of the world is operating at 0% and we are on a 10 year Govt bond rate of 4.5%.

I remember Pyramid very well. As I was shovelling money in the front door the manager was shovelling it out the back. They don't exist anymore. For a very good reason.

We have come a loooong way since those days. AND you know it.

 

[MR.]

What a fantastic 24 hours. I’m chuffed. All me favourites have popped in. UF, Nun, Temjin, Bots this is just great.

Now I just need Alan Kohler to put up a few charts on property, Tech to pop in on his 3 month roster and the confession that Kincella’s offloaded the property portfolio!

 

[trainspotter]

Yes! I did.... and none, its a bit like buying the last spike of a share move. Dangerous territory that you are foolish to buy into until at least you have seen the dust settle. Again trading 101 you always leave some on the table, only mugs try for the highs and lows. Its always unpredictable stuff in terms of the size of the move, not the fact that there will be a reaction, but the size of the reaction.

The RBA drives using the rear vision mirror, LOL, if they had known that they fed a 20% move in RE they'd have jump on the brakes a lot sooner! You seriously credit the RBA with more sense and power than it actually has! They have a moderate degree of control while things are stable, things go wrong and they get dragged kicking and screaming by the market.

Yes you have said it a gazillion times and yet you still don't really understand it, that much is obvious!!!

So according to your theory we should have bought property when? When the buying signals were there or when they weren't? Just want to make sure is all as obviously even though I have written it clearly a gazillion times I still do not understand.

So the RBA has no power eh? Bwaahahaahhahaaa ... you make me laugh. Nearly gagged on this gem. Nearly as good as the "A home is a consumable and not an investment" statement.

con·sum·a·ble (kn-sm-bl) adj.
1. That can be consumed: consumable energy.
2. Able or meant to be consumed, as by eating, drinking, or using: consumable goods.

 

[Mr Z]

We have come a loooong way since those days. AND you know it.

You do know what is happening in the US don't you? You do know that we are under a government backed deposit guarantee protecting the banking system don't you? You do understand that a market can collapse from a simple debt over burden without any notable trigger don't you?

Just like it was a basic call that property would gain interest after our stock market fell apart and stimulus was poured on from up high (seriously this is Australia, what is the basic investment cycle? Where does scared stock money always run? What you think that took some effort to deduce?) It now a basic call to say this market is in danger, all the numbers point at it! Guessing amplitude is a mugs game, so lets not go there.

Here is a call for you, you are about to see a reversal of favor with RE falling and commodity based stocks (mainly) on a tear into next year. Some good gains to be had in the next 9 months or so IMO. A less obvious call, string me up if its wrong!

 

[Mr Z]

So according to your theory we should have bought property when? When the buying signals were there or when they weren't? Just want to make sure is all as obviously even though I have written it clearly a gazillion times I still do not understand.

Early 90's... when the market fell and stabilized. Fundies supported it back then. There have been better places to be since early 2000's 2003/4 say. Not to say property was done but there where better things to do at lower risk fundamentally speaking.

So the RBA has no power eh? Bwaahahaahhahaaa ... you make me laugh. Nearly gagged on this gem. Nearly as good as the "A home is a consumable and not an investment" statement.

con·sum·a·ble (kn-sm-bl) adj.
1. That can be consumed: consumable energy.
2. Able or meant to be consumed, as by eating, drinking, or using: consumable goods.

Look up consumer durable, a house is a consumer durable.... land is not. What else do you think it is laughing boy? An everlasting magic pudding?

The RBA has limited power mainly when the situation is stable (alot of the time) it has influence with in limits... don't you remember just recently when the banks led them up saying tough! --> funding cost are driving this and you can do jack about it. Wayne pulled his little saber out and rattled it but the RBA moved with the banks wishes. THE BOND MARKET IN THE US LARGELY DETERMINES RATES AND ALL ELSE FLOWS FROM THERE. To believe that the RBA has control over anymore than the short rate is a fundamental misunderstanding of our system. Sure the RBA can push the short rate down or up but if the market does not sponsor the move i.e. its the wrong thing to do the market will win and the RBA will look foolish. Learn a little so that when it happens you will understand why all of a sudden they are talking of the need for higher rates and not saber rattling. YOU CAN'T TELL BIG MONEY HOW MUCH IT MUST TAKE AS A RETURN.... it votes in a market, the bond market. It is crucial to your real estate future and its in a monster bubble, it should concern you... but it doesn't. Go figure...

 

[robots]

hello,

Ubi can you please tell MrZ this is a property thread and if wants to discuss gold go to the commodities zone

Oh yeah MR isnt life a ride man and i also must take time out to thank everyone here, you wouldnt change it for a second
Thankyou
Robots

 

[Mr Z]

Now I just need Alan Kohler to put up a few charts on property

Alan is my hero, for all the wrong reasons! :

 

[trainspotter]

What a fantastic 24 hours. I’m chuffed. All me favourites have popped in. UF, Nun, Temjin, Bots this is just great.

Now I just need Alan Kohler to put up a few charts on property, Tech to pop in on his 3 month roster and the confession that Kincella’s offloaded the property portfolio!

This is how you "Reinvigorate ASF" by having an intelligent, constructive debate on a highly topical subject matter with people who are willing to go with the ebbs and flows and not sulk in the corner because they are not being understood or getting their point across. Good to see the old flames ready to fire again.

Or we can do this:-

"I think stock ZXT will go to $1.00 in the next few months" - contestant A
"I think it will go to $2.00 soon BUT IT WILL GO" - contestant B
"I have been holding the ZXT since 2003 so I want it to go up" - contestant C

Yeppers ... that is a great stock analysis going on right there.

Joe Blow thunders " I hope you boys got good reasons as to why you are writing this."

Contestant A "Naaahhhh just wishful thinking"

If I want this kind of stimulus I will bugger off to Hot Flopper.

Last decent discussion on stock is in the CFU thread. IMO. Fair judgement and lots of information.