The future of Australian property prices

trainspotter · 24 August 2010

UBIQUITOUS said:
No need to back up the obvious fella. Here's another one for you to disagree with. And remember, if you don't believe its true, it can't be.

http://www.prosper.org.au/

Who is David Collyer again? Minack proportions? Nup... how about Rory Robertson proportions? Nup ??? I give up. Just another blogger.

USA is nearly four years post-bubble and their experience holds grim lessons for Australia.

Especially cracked me up. Australalia (Oz - trey - LA - LIA ) has 0% lending with jingle keys. We have GSE banks do we? freddie mac and fannie mae to the rescue ....... LOLOL

Ummmm ...... nope .... FFS ...... give me something to work with here UBI ... I am trying to assist you here and this is what I get??

We are not in the USA ..... robots is right .... we are not in the USA.

I am trying to break this down to the simplest form and yet I am still here sabre rattling with ghost writers.

If your point is to just take up bandwidth then you are doing a great job of smelling poor. If you want to have a meaningful conversation about WHY you think that property is going in the negative or positive area WHY DONT YOU HAVE AN OPINION ?????????

Please please please try and humour me and actually let me know your experience.

OR I can also post internet spam in here rather than actually writing of my experience to try and advise how it is possible to make money out of RE.

You do want to learn how to make money right? Just as much as I look at the charts in the stock section. Just as much as I look at the teachings of tech/a and Trembling Hand and others that show WHY they make money in shares. NO ??? Mr Z also gives me reasons as to WHY I need to change my thinking as well. NO ?? Julia offers crystalline responses that make me think about who and where I am as a person. NO ??? Garpal Gumnut brings me back to reality and lowers it to the lowest common denominator and makes me think about true positives. NO ???

Robots keeps it real for me and reminds me WHY I am involved in property and is a TRUE believer . NO ???

OR I can just f*ck off completley and leave you to argue amongst yourselves about how special you really are. FFS come up with something that wont jinx the thread and keep it alive and make some sense for a change instead of grab bagging and head lining ! It is getting boring.

wayneL · 25 August 2010

Meanwhile "O'er in the land of the free and the home of the brave":

http://www.bloomberg.com/news/2010-...more-than-estimated-to-3-83-million-rate.html

U.S. Existing Home Sales in Record Plunge
By Courtney Schlisserman - Aug 25, 2010 5:14 AM GMT+1200

Aug. 24 (Bloomberg) -- Robert Dye, senior economist at PNC Financial Services Group Inc., talks with Bloomberg's Mark Crumpton about July U.S. existing home sales and the outlook for the housing market. Sales of previously owned homes plunged 27 percent in last month, twice as much as forecast, to a 3.83 million annual pace, figures from the National Association of Realtors showed today. (Source: Bloomberg)

Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery.

Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. Demand for single-family houses dropped to a 15- year low and the number of homes on the market swelled.

Mr Z · 25 August 2010

It begs the question...

trainspotter said:
Hahahahhahaaaaa ...... too late ..... party is over. Already leveraged my way to Nirvana. Property HUH? Who would have thunk it?

Why are you still here then?

Mr Z · 25 August 2010

wayneL said:
Meanwhile "O'er in the land of the free and the home of the brave":

http://www.bloomberg.com/news/2010-...more-than-estimated-to-3-83-million-rate.html

It's a train wreck over there! Going to take some time to heal those wounds. So, does China wean herself off of the USA in one seamless movement or do they fumble the ball? A pause to change gears would be quite normal... that will impact us. Sofa so good, midterm all signs are pointing up, meanwhile we seem wed to the US equity markets. Not making that much sense really, however I have noticed of late that we do lead direction more and more.

Will spring see the normal rush from both vendors and buyers? If so buyers should be spoilt for choice!

No we are not the US, then again we are not Asia. We have a foot in each camp, the western debt disease and the Asian growth frenzy. A bipolar economy in many ways as well!

More fun...

Lollipops for all!

Foight! Foight! Foight! Foight! Foight! Foight! Foight! Foight!

UBIQUITOUS · 25 August 2010

Soft landing? ROTFL!!!

http://www.news.com.au/money/proper...ck-housing-gains/story-e6frfmd0-1225909165963

Investors 'disappointed' over quick housing gains

Real estate agents expect a flood of investment properties on the market in coming months

Investment properties to flood market
Prices set to soften
Short-term gains unlikely
PROPERTY investors are targeting off-the-plan apartments hoping for short-term capital gain, with thousands of prospective pre-sale buyers eyeing Sydney projects.

Ray White is reporting a 6 per cent lift in investor buying as shares weaken and with the end last year of the boosted first-home buyer's grant, The Australian reported.

But analyst Michael Matusik predicts investment properties will flood the market in the near term, leading prices to soften.

An Australian Housing and Urban Research Institute report this month said 80 per cent of investors buy for long-term gain, but at least half sell within five years because of cashflow problems or disappointing capital growth. One in four investors sells within 12 months.

Developers in Sydney are reporting strong demand for new residential projects following stamp duty concession by the NSW government this year.

Tim Casey of St Hilliers Group says his company has had 650 people interested in apartments at the Caritas site in inner Sydney's Forbes Street, for which marketing begins this week.

And Harry Triguboff's Meriton Apartments reports strong interest for proposed apartments at the former Seven Network site at Epping, with more than 300 applications.

Mr Matusik said property prices would not crash, but there would be deflation in values over time.

"In the next decade, we might see very little growth, and if investors keep buying and thinking 'I'm going to make a killing and then move on', they're going to find themselves a little disappointed," he said.

This would be mostly the case in Melbourne, where the market had been strong, he said. In Perth, Brisbane and Adelaide, the trend had already started to occur.

Mr Z · 25 August 2010

???!

One in four investors sells within 12 months.

That is one hell of a number?!

Wonder if that includes property developers or they are just talking your garden variety working, negative gearing property investor.

Mr Z · 25 August 2010

Interesting...

Banks loosen the vault hinges

Mr Z · 25 August 2010

Bottom in sight?

US predator sniffs wind

Bushman · 25 August 2010

Re: ???!

Mr Z said:
That is one hell of a number?!

Wonder if that includes property developers or they are just talking your garden variety working, negative gearing property investor.

Property developing is a lot different to a 'buy and hold' investor?

Property development is a business where you buy a block of land, subsivide (adds value) and then build a series of dwellings (add value) which you sell for a profit (or loss if you are no good at it). Like any business, you are producing a good/service which you are then selling to your customers. Like any business, it is affected by cyclical factors.

It is not 'buy and hope for a gain' property investing where you buy at a price where you will get a 3-4% yield and hope for a capital gain.

Mr Z · 25 August 2010

Errrr... well thanks for that!

Yes I have developed real estate and I do understand the difference.

I was talking about the number and what they saw fit to include in it! If a private buyer of a city block that builds, subdivides and sells in 12 months is considered an investor then that will skew the number. IF it is 25% of all traditional 'long term' buy the property and lease it out type investors then its one hell of an attrition rate, don'tcha think?

Bushman · 25 August 2010

Mr Z said:
Errrr... well thanks for that!

Yes I have developed real estate and I do understand the difference.

I was talking about the number and what they saw fit to include in it! If a private buyer of a city block that builds, subdivides and sells in 12 months is considered an investor then that will skew the number. IF it is 25% of all traditional 'long term' buy the property and lease it out type investors then its one hell of an attrition rate, don'tcha think?

Goodo, just wanted to make sure as it gets hard to follow who knows what in the property 'stream of consciousness' thread.

Yep a 25% attrition rate would be up there with the Somme . I see no reason for 'buy and hold' to deliver above trend returns at these levels and expect there to be a generational change of ownership as Baby Boomers sell up investment properties to chase yield and fund theire retirements.

My outlook for subdivisions in 'hot spots' is more bullish if you are buying into either of the following demographic trends -
1. delivering medium density to the inner city on the back of gentrification;
2. delivering affordable housing close to jobs/transport; or
3. servicing the mining boom towns.

Land banking in the 'well heeled' suburbs is the best 'buy & hold' for me.

Property is a many headed beast so there will always be opportunities in most markets. If you are simply gearing up, buying anything that comes to hand and hoping for a capital gain (you know, like those property magazines advocate) then the outlook is not so bright IMO.

Mr Z · 25 August 2010

Bushman said:
Yep a 25% attrition rate would be up there with the Somme .

Yeah, ain't it but I would want to see the details on that one, gotta be a catch.

Bushman said:
I see no reason for 'buy and hold' to deliver above trend returns at these levels and expect there to be a generational change of ownership as Baby Boomers sell up investment properties to chase yield and fund their retirements.

So do I and if we are relying on demographics to take up that slack it ain't going to happen. The following generations are smaller, bad savers, not as inclined to invest in property. To continue to fly beyond the Boomer boom this thing needs immigration.

Bushman said:
Land banking in the 'well heeled' suburbs is the best 'buy & hold' for me.

Yes, eventually you will have a good outcome. The question becomes when and can I hold for the duration. The boomer effect is something we have not really got a handle on IMO. So many things could exacerbate or moderate it however if selling gains momentum in that demographic it could be a nasty feedback loop. So far the boomers have been at the heart of a number of 'booms' they have been the ultimate self fulfilling prophecy --> $64 Q, does it turn negative and if so how negative. Some investment guru's think it is quite a problem, most don't mention it?!

MR. · 25 August 2010

Mr Z said:
FWIW... the paper that is shares and the secondary market that is the ASX allows for and sets the price for raising capital for companies that do exactly what you do MR... LOL and what TS does sometimes as well........

We do know this Z, I just preferr to be pulling the levers. I like to always know what the true state of affairs are and not hanging off the next quarter's results etc. etc. Although with my decision the down side is the eggs are more so in the one basket but perhaps no worse than some property owners.

Mr Z said:
The fact is we need it all in the correct proportions, the argument is just over how much of what and how much is too much! MR making unwanted widgets as bad as TS making unneeded houses. Loose money distorts all these markets and gives us all bad signals, any of us could be setting our foot down in the wrong place.

Yep, unwanted widgets would be as bad as unneeded houses. Hopefully we can all end up follow the demand. All, will not.

TS, we are manufacturing anything where demand takes us in the steel industry. No, John Deere or Massey Ferguson sorry! There is demand in housing. Buyers usually know that if they bought land and built their own house they would get it cheaper. You supply the finished product and we want it now! Over more than the past few years every (building) trades person and their dog seemed to be on selling houses. They did very little but juggle the money. You appear to be more involved in the building business, ok..

Movin on....

Oh no. Is this really happening? An old friend and their family just called in, they're staying a few days. He brings up this investment property they are looking at. (I think I've just about run out of friends which don't own investment properties) I don't see anything special about it or the location. (But would I anyway?) They're buying it for their kids "for the future" because of prices and all. Jeez, I even mentioned Ballarat and Bendigo as alternatives, I must be sick.

I wonder where some of the demand comes from
"The fear of being left behind" ?

As Dick Smith the other night said on his population program:
"If this chart was from the stock market, we all know what happens next!"

MR. · 25 August 2010

Problem is, what makes me right! I've simply been wrong and could continue to be. "Sure, sounds great, go buy that little money maker"

Bigukraine · 25 August 2010

MR. said:
Problem is, what makes me right! I've simply been wrong and could continue to be. "Sure, sounds great, go buy that little money maker"

It's all about percieved value and as in any market opportunity allways show's it self ....... it's a matter in a rising or falling mkt to identify "a good deal"
just because you couldn't see value in your friends potential investment property purchase doesn't mean it won't be a good buy short or long term

robots · 25 August 2010

MR. said:
We do know this Z, I just preferr to be pulling the levers. I like to always know what the true state of affairs are and not hanging off the next quarter's results etc. etc. Although with my decision the down side is the eggs are more so in the one basket but perhaps no worse than some property owners.

Yep, unwanted widgets would be as bad as unneeded houses. Hopefully we can all end up follow the demand. All, will not.

TS, we are manufacturing anything where demand takes us in the steel industry. No, John Deere or Massey Ferguson sorry! There is demand in housing. Buyers usually know that if they bought land and built their own house they would get it cheaper. You supply the finished product and we want it now! Over more than the past few years every (building) trades person and their dog seemed to be on selling houses. They did very little but juggle the money. You appear to be more involved in the building business, ok..

Movin on....

Oh no. Is this really happening? An old friend and their family just called in, they're staying a few days. He brings up this investment property they are looking at. (I think I've just about run out of friends which don't own investment properties) I don't see anything special about it or the location. (But would I anyway?) They're buying it for their kids "for the future" because of prices and all. Jeez, I even mentioned Ballarat and Bendigo as alternatives, I must be sick.

I wonder where some of the demand comes from
"The fear of being left behind" ?

As Dick Smith the other night said on his population program:
"If this chart was from the stock market, we all know what happens next!"

hello,

good work MR, great towns and infrastructure already in place

bob katter reckons its the way

thankyou
professor robots

Mr Z · 26 August 2010

MR. said:
We do know this Z, I just prefer to be pulling the levers.

Me too sometimes...

'Paper' often gets disparaged without a thought as to what it actually is/means. Irritates me a little on the odd occasion.

Anywhooooo....

A likely catalyst moving forward--->

Morgan Stanley Says Government Defaults Inevitable

The US can't do what it has committed to do, the maths just will not work... some form of default is coming and will be met with higher rates. However the first option is always 'print more money' (really a form of default), when the market twigs to the fact that direct monetization is going to be on going.... then it gets interesting.

Anyway, it all means rates go on a fly sometime.... $64 Q, when?

It is a bond bubble really, all else is servant to that.

Hi Robots.... spring is almost here! Melbourne about to 'spring' into life, happy times.

LOL... screw it all, cars where the place to be!

trainspotter · 26 August 2010

Gotta watch right to the end to get the "real picture" LOL

MR. · 26 August 2010

http://www.youtube.com/watch?v=oZFt46aQyQ8

From the 2 minute mark "should about do it" LOL

trainspotter · 26 August 2010

Isn't it funny that the posts we have put in here are to do with the US and UK house prices and not the Australian house prices?

Thought I might post a few links to the Australian prices.

1) AVERAGE house price values have fallen for the first time in 17 months as interest rate hikes begin to bite. 0.7% ABS has quantified this FACT.

Read more: http://www.news.com.au/money/proper...08/story-e6frfmd0-1225899002446#ixzz0xgVy6QNK

2) "DOOMSDAY" economist Steve Keen had to leg it 230km from Canberra to the top of Kosciuszkol, 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

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

3) The case for why property prices will not collapse in Australia.

http://www.shareswatch.com.au/blog/...s-debate-part-2-why-prices-will-not-collapse/

4) This is because a very large percentage of the residential mortgages in Australia is money borrowed from the international market using a process called securitization. Since the Global Financial Crisis, the securitization market is almost closed or too expensive for just about any lender to raise more money. Even if there is demand for housing due to the current shortage of housing in Australia, people cannot buy houses without credit.

http://blog.sli-smsf.com/2009/11/23/australian-house-prices-in-2010/

Oh well .... But it is different here !

The future of Australian property prices

trainspotter

wayneL

VIVA LA LIBERTAD, CARAJO!

Mr Z

Mr Z

UBIQUITOUS

Mr Z

Mr Z

Mr Z

Bushman

Mr Z

Bushman

Mr Z

MR.

MR.

Bigukraine

robots

hello

Mr Z

trainspotter

MR.

trainspotter

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