The future of Australian property prices

[trainspotter]

RBA KEEPS RATES ON HOLD

Economists say inflation pressures have remained reasonably well contained, despite the obvious strength of the economy from last week's June quarter national accounts that showed gross domestic product (GDP) bounding along at its fastest pace in three years.

"The mid-year return to trend GDP growth, the income surge arising from the terms of trade boom and ongoing tight labour market are yet to translate into worrisome price pressures," TD Securities senior strategist Annette Beacher said.

While TD Securities' monthly inflation gauge released yesterday showed annual inflation at 3.0 per cent, at the top end of the Reserve Bank's two to three per cent inflation target, underlying inflation was a more modest 2.3 per cent.


Read more: http://www.news.com.au/business/bre...ld/story-e6frfkur-1225915342827#ixzz0yoef4Ql1

 

[robots]

RBA KEEPS RATES ON HOLD

Economists say inflation pressures have remained reasonably well contained, despite the obvious strength of the economy from last week's June quarter national accounts that showed gross domestic product (GDP) bounding along at its fastest pace in three years.

"The mid-year return to trend GDP growth, the income surge arising from the terms of trade boom and ongoing tight labour market are yet to translate into worrisome price pressures," TD Securities senior strategist Annette Beacher said.

While TD Securities' monthly inflation gauge released yesterday showed annual inflation at 3.0 per cent, at the top end of the Reserve Bank's two to three per cent inflation target, underlying inflation was a more modest 2.3 per cent.


Read more: http://www.news.com.au/business/bre...ld/story-e6frfkur-1225915342827#ixzz0yoef4Ql1

Hello,

hows that hey brothers! on hold for another month

well done everybody great outcome for the community

thankyou
professor robots

 

[robots]

RBA KEEPS RATES ON HOLD

Economists say inflation pressures have remained reasonably well contained, despite the obvious strength of the economy from last week's June quarter national accounts that showed gross domestic product (GDP) bounding along at its fastest pace in three years.

"The mid-year return to trend GDP growth, the income surge arising from the terms of trade boom and ongoing tight labour market are yet to translate into worrisome price pressures," TD Securities senior strategist Annette Beacher said.

While TD Securities' monthly inflation gauge released yesterday showed annual inflation at 3.0 per cent, at the top end of the Reserve Bank's two to three per cent inflation target, underlying inflation was a more modest 2.3 per cent.


Read more: http://www.news.com.au/business/bre...ld/story-e6frfkur-1225915342827#ixzz0yoef4Ql1

hello,

gee that inflation looks like its under control at 2.3%

i just got 3 1Lt bottles of Pepsi for $3, so it all makes sense

TD Securities do a good job with the data i reckon

thankyou
professor robots

 

[Mr Z]

CPI is NOT inflation! Inflation has been HUGE when and how that eventually manifests itself in the economy is another thing entirely. CPI lags INFLATION, reacting to CPI is like driving a car looking in the rear vision mirror. For now it appears than in Australia the truly MASSIVE INFLATION we have seen of global money supplies will first find its way into asset markets. If this is so the AUD should go on a tear along with Stocks and Real Estate (with qualifications!). RE should lag stocks as it is not as liquid & interest rates are on the rise in the US. How this hits our banks funding cost will depend on how they have their current book hedged. IF they have forecast this correctly then it should result in little or no rate pressure. If not there will be some short term pressure on funding costs, I suspect the latter because they have probably gone for a very 'safe' position and not taken a directional bet on OS rates. That should be short term pressure as they will readjust to the market... that makes the short to mid term play equities over real estate BUT it means that the outlook for real estate is good DESPITE its apparent over valuation. Equities on the other hand are coming from a position of relative under valuation, those exposed to 'new world' growth anyway!

My short term expectation is another move from RE to stock as the market realizes the reality of the situation, then RE should follow. The dangerous thing here is the potential to set up a bigger fall in the Australian housing market when/if it eventually materializes. This IMO depends on how the RBA handles it, while they can do little to fight rising rates they have capacity to force rates higher and level any credit 'bubble'. IF the RBA are serious about keeping Australian private debt in check, and manage to be effective, that could see a muted property market going forward. That would be the most politically astute way to work off the excesses in the RE market while keeping as many people hole as possible with out leading more into a potential credit trap chasing a 'bull' market.

A large part of what we are about to experience in our markets is the result of INFLATION only we don't call it that when it hits asset prices first... we call it prosperity. Truth is that it dislocates society and makes the rich richer and the poor poorer... you will see more and more about the income 'divide' over the coming years BUT that is a whole new subject! We are entering into a period of money depreciating at a higher than normal rate, the trade will be anything tangible or related until it settles again. These markets will become partly driven by the fundamentals of the 'real world' but more so driven by the fundamentals of the currencies we use to measure them in. This is where people with bearish tendencies will get a nasty surprise, deflation will not persist, it will always be a short term credit driven event in a world of FIAT currencies, a crunch if you will. For deflation to persist we'd need to have sound money, we don't!!!!

Sooooooo....

Watch the Australian Dollar and get long risk until it all gets really silly again...

Itssssssh a roll-her-coast-her, ready for an exciting ride?

The future of RE prices? Is still looking flat to up, up is RBA dependent, with a possible near term dip depending on these banks and what the heck they have done with IRS's etc. This is all sans some fatal accident in the IRS market!

BTW, apparently The Bank of America is looking dodgey... the FDIC are concerned that they currently could not handle it going bang and that it has system breaking potential. They are aware that it is an issue, that means it will likely be 'rescued' albeit with a sea of newly minted 'free' money. If it blows watch for flames on the IRS scene, we can only guess at the connections... if it is saved.... well then get ready to ride the QEII wave.

All JMO...



:





Have a brilliant day Bots! U 2 TS and crew

Cheers
Z

 

[trainspotter]

Australian housing finance commitments for owner-occupied housing rose 1.7 per cent in July, seasonally adjusted, to 47,511, the Australian Bureau of Statistics said on Wednesday.

The median market forecast was for a one per cent rise in housing finance commitments in the month.

Total housing finance by value rose by 0.7 per cent in July, seasonally adjusted, to $20.854 billion.

http://www.heraldsun.com.au/news/breaking-news/housing-finance-rose-17/story-e6frf7ko-1225915804947

The Aussie Dream is alive and kicking I see. Just keeps on keeping on.

 

[Mr Z]

Kultural thang... like beer but cheaper over a life time.....

 

[trainspotter]

People must be feeling very secure in their jobs to buy into PPR right now or the banks must have relaxed lending criteria?

The mantra of home ownership runs deep in the veins of the psyche of the little Aussie battler. The industry is geared up to expose this tingling nerve and drive them into a roof over their heads. TV has shows like "Hot Property" and "Better Homes and Gardens" adding fuel to the fire. Spring Sales have not kicked in yet. Will be interesting to see what the data implies.

 

[Mr Z]

I would hate to be in government come the day that mantra is given a rattle Man would you get a hot poker from da peeps! Fair or not it would be a government changer in Oz... IMO.

 

[KurwaJegoMac]

The mantra of home ownership runs deep in the veins of the psyche of the little Aussie battler. The industry is geared up to expose this tingling nerve and drive them into a roof over their heads. TV has shows like "Hot Property" and "Better Homes and Gardens" adding fuel to the fire. Spring Sales have not kicked in yet. Will be interesting to see what the data implies.

No to mention the constant, rehashed news stories on how housing is 'fast becoming out of reach for most Australians' causing panic and an "I must get in lest i'm left behind" mentality.

Uh oh... I just realised I don't own any property!!!! (*&#(*^#$(@$@$###% :asdf: brb... just going to visit the real estate agent and lock me into giving out 30% of my household income for the next 30 years coz like you know, i need a big house for, like, all me stuff. interest rate rises?

pfft i'll be fine mate

 

[KurwaJegoMac]

P.S. I love you shiny golden robot man and scary choof choof train and omg dont even get me started on that professor without the picture :O

Hello,

hows that hey brothers! on hold for another month

well done everybody great outcome for the community

thankyou
professor robots

I would have spat my coffee all over the screen after reading this comment had I been a coffee drinker.

Alas I am not, i'm sorry.

Still, that comment made my day. It's the little things in life that one must appreciate.

Like cheese.

God i love cheese.

btw largely resiliant Australian economy, interest rates still able to drop further to cushion downturns, large generation (population size) of baby boomers set to retire and possibly sell down, constant immigration, poorly designed cities,short-sighted government policy and planning annnnd the crazy "i have to buy a mansion even though I can't afford it mentality" should see housing continue to rise steadily.

IMO.

Then again I'm a young, naive Gen Yer who doesn't even own any property yet.

So ignore my ramblings. Clearly i'm having an exceptionally busy day at work today.

 

[Mr Z]

Dude....

Go buy a house you good fur nuthin long haired layabout!

 

[cutz]

Then again I'm a young, naive Gen Yer who doesn't even own any property yet.

Hang in there bro,

The time will come, you'll have your chance.

 

[Mr Z]

Yeah... don't force it. A time will come when all of a sudden it seems very achievable... then don't hesitate, buy a house and lever up on investment property.... especially if everyone is telling you not to because its risky.

For now I would not sweat it one little bit.

 

[KurwaJegoMac]

In all seriousness now, I'm taking it easy with regards to property. Been trading in the market for the past three years, building up a capital base to either purchase a home or jump into an investment property - I have a good situation at home which has enabled me to save a lot, but I don't want to burden my parents much longer (although i do pay board and do chores and all that sort of thing)

Just keeping an eye on the market now, and tossing up between starting on an investment property first - putting money into your own home is a relatively poor investment choice as it generates no income and you're relying solely on capital appreciation. I see no sense in forking out a lot of my weekly pay to pay for a house that is going to give me lower returns than an investment property or the sharemarket.

That being said i'd jump into property more aggressively if the bubbled 'popped' so to speak but I just dont see any major factors over the next decade or so that will cause house prices to drop significantly - I mean there is a possibility they may become stagnant, but even during the worst of the GFC house prices barely stagnated - yes some areas fell slightly but on the whole the residential market remained quite strong. So that begs the question: What sort of cataclysmic event would be required for house prices to really drop? Outside of a black swan - not going to happen.

I'll keep crunching the numbers and wait until it's viable. In the mean time it's save and invest in the sharemarket for me

 

[explod]

What sort of cataclysmic event would be required for house prices to really drop? Outside of a black swan - not going to happen.

I'll keep crunching the numbers and wait until it's viable. In the mean time it's save and invest in the sharemarket for me

How about interest rates at 18% It happenned 30 years ago and if they keep printing money around the globe as the US in particular is at the moment then the value of money in some of the so called developed countries is going to be nearly worthless, so that real money with substance is going to cost a great deal more.

Not saying it will but some fundamantal dynamics point to it and in my view that would be your "cataclysmic event". I am happy to be renting and keeping my powder dry for the moment.

 

[UBIQUITOUS]

How about interest rates at 18% It happenned 30 years ago and if they keep printing money around the globe as the US in particular is at the moment then the value of money in some of the so called developed countries is going to be nearly worthless, so that real money with substance is going to cost a great deal more.

Not saying it will but some fundamantal dynamics point to it and in my view that would be your "cataclysmic event". I am happy to be renting and keeping my powder dry for the moment.

Supply and Demand Explod....supply and demand. As long as people want something enough all they have to do is tap their heels together and say "there's no place like home, there's no place like home, there's no place like home, "

 

[Mr Z]

I think energy will be the problem. Rising energy cost are defacto rate rises, by 2014 oil should be heading higher, much higher. It will hurt a lot of other markets because we are not nearly prepared enough to wean ourselves off oil. All other things staying on the reservation, no derivate accidents or anything silly energy is the unavoidable one.

 

[sorcar]

I've been hearing that the US is headed for another recession - one that was worst then the last and that if it doesn't happen now its only being delayed - Do they need to crash and burn?

If this is the case are our current house prices near peak.. ready to come down?

 

[robots]

hello,

yeah ring the bell man,

this is the exact time when you should be buying something Kurwa (either property or share), get a home loan or margin loan and get some assets

not 5yrs or 10yrs down the path, now when the yrs will disappear before your eyes and presto the $ are in your hand

thankyou
professor robots

 

[explod]

this is the exact time when you should be buying something Kurwa (either property or share), get a home loan or margin loan and get some assets


thankyou
professor robots

And exactly why is it the best time Professor self proclaimed?