The future of Australian property prices

[KurwaJegoMac]

Could be the outlier that causes the Black Swan Event.

Reasons as to why it wont happen;-

6) Government LOVES the housing system. Keeps the people in check and broke.

Love that point and oh so true!

Let's not forget that we have room to move in our interest rates, should the economy/housing market start to slow down. That would serve to potentially prop up prices by investors by increasing the rental yield as rates come down . Not to mention give confidence for non-home owners to enter the market (rightly or wrongly)

 

[Temjin]

http://www.smh.com.au/business/investors-could-create-housing-bubble-rba-20101006-166wh.html

Reserve Bank head of financial stability Luci Ellis, in an address to a CPA Australia conference in Brisbane, said lower rental yield will mean there is a limit on how far house prices can go.

Asked if the lower yields meant a limit to the rate of price appreciation, Dr Ellis said: "The short and simple answer is - yes".


"If rental yields are very low, investors are buying properties without really thinking abut the rental yield," Dr Ellis said.

"Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble.

"So that would be undesirable and be seen as a problem."

Rental yields have come up lately, Dr Ellis said.

She added that RBA considered the recent levelling off in housing prices as desirable, although didn't need to get back to their 1970s levels.

"But they can't go onwards and upwards faster than income forever," she said.

Really? I'm surprised to actually hear all this from the RBA. She might get fired for going rogue just for this.

See the latest Comsec report on property too.

http://www.filedropper.com/housingreport

Ohhh, remember what Craig James actually said 5 months ago?

“If it’s [the housing shortage] not addressed soon we’ll have a serious problem in Australia, some would say it’s already too serious… There’s only so much they can do with a strong demand for housing and the fact that supply isn’t keeping up.”

Now he says

“But it is important to note that the supposed under-building is largely a NSW and Queensland phenomenon. Approvals are actually above decade averages in Victoria, South Australia and Tasmania. In fact the annual total of non-NSW dwelling approvals hit record highs in August.

“While economists generally believe that Australia is not building enough new homes to meet demand, that view doesn’t stand up when there is an assessment of regional trends. Add in the fact approvals and home prices are both slipping and vacancy rates are gradually lifting. In addition Australians are making better use of their big homes (the biggest in the world) while the slide in migration levels is taking momentum away from the housing market.”

He really just make up his mind already.

So much for the uber supply shortage of housing in Australia that would drive prices up forever and ever.

As for the debate on "it's better to take actions than not because the latter will guarantee you nothing in return", I would say I will take actions with my money on other opportunities that have much better reward/risk.

As Van Tharp say, never ever fell in love with a particular position. This applies equally to anyone investment properties.

 

[tech/a]

As for the debate on "it's better to take actions than not because the latter will guarantee you nothing in return", I would say I will take actions with my money on other opportunities that have much better reward/risk.

All good and those not adverse to risk or understanding of an opportunity would do/are doing the same.

The point made in my statement which was not meant as a debatable topic was and still is.
DO SOMETHING!

Those frozen by fear will live in fear all their lives and look back at missed opportunities and a wasted life---which is available to only a few in the world.
Those in Australia being one of the few.
Many just never get the opportunity they----simply live.

If your one of those who strive just to exist in my view this is a great travesty.EVERYONE has opportunity in this country---you just have to get off your ar$e and DO IT!

 

[satanoperca]

If your one of those who strive just to exist in my view this is a great travesty.EVERYONE has opportunity in this country---you just have to get off your ar$e and DO IT!

When is your book coming out? Just want to make sure I can get a copy before it is sold out, could always see if I can get into one of your ultra expensive motivation seminars.

Finally someone that makes sense, just need to listen.

Cheers Tech/A and don't stop posting.

 

[financialdonk]

Love that point and oh so true!

Let's not forget that we have room to move in our interest rates, should the economy/housing market start to slow down. That would serve to potentially prop up prices by investors by increasing the rental yield as rates come down . Not to mention give confidence for non-home owners to enter the market (rightly or wrongly)

With the US ramping up QE measures do you think the Australian banks will be able to reduce interest rates when o/s inflation gets out of control? Remember they are miniscule in the scheme of things and will not be able to decouple from international events. The banks will always try and save themselves first and the RBA will be meaningless.

 

[financialdonk]

All good and those not adverse to risk or understanding of an opportunity would do/are doing the same.

The point made in my statement which was not meant as a debatable topic was and still is.
DO SOMETHING!

Those frozen by fear will live in fear all their lives and look back at missed opportunities and a wasted life---which is available to only a few in the world.
Those in Australia being one of the few.
Many just never get the opportunity they----simply live.

If your one of those who strive just to exist in my view this is a great travesty.EVERYONE has opportunity in this country---you just have to get off your ar$e and DO IT!

They way you are referencing DO SOMETHING reminds me of the way that contestants claim they are not playing the game but just being themselves in the Big Brother house. The fact that they are inside the house means that they ARE playing the game (regardless of whether they believe themselves to be so or not), just that their tactics involve acting themselves rather than sabotage, mystery, evil etc.

In the same way, doing nothing is effectively doing something. In not making a decision you have effectively made a decision (possibly unbeknowst to you). Just as a proactive decision has varying degrees of failure to success so does indecision. If you do not make a decision then variables can change that may be favourable or unfavourable in the future from which you can benefit. Hence doing nothing is always doing something and doing something is unavoidable.

Just my

 

[trainspotter]

With the US ramping up QE measures do you think the Australian banks will be able to reduce interest rates when o/s inflation gets out of control? Remember they are miniscule in the scheme of things and will not be able to decouple from international events. The banks will always try and save themselves first and the RBA will be meaningless.

When is the O/S inflation going to get out of control? They are having trouble kickstarting the economy they have even with trillions being spent to stimulate. Unemployment is rampant and interest rates are at ZERO %. More like stagflation or possible double dip recession IMO.

Oh yeah ..... they are consumer economies. They export NOTHING. We truly are the lucky country with Asian markets greedy for our mineral wealth.

 

[trainspotter]

If you do not make a decision then variables can change that may be favourable or unfavourable in the future from which you can benefit. Hence doing nothing is always doing something and doing something is unavoidable.

Sounds to me you have commitment issues.

 

[KurwaJegoMac]

They way you are referencing DO SOMETHING reminds me of the way that contestants claim they are not playing the game but just being themselves in the Big Brother house. The fact that they are inside the house means that they ARE playing the game (regardless of whether they believe themselves to be so or not), just that their tactics involve acting themselves rather than sabotage, mystery, evil etc.

In the same way, doing nothing is effectively doing something. In not making a decision you have effectively made a decision (possibly unbeknowst to you). Just as a proactive decision has varying degrees of failure to success so does indecision. If you do not make a decision then variables can change that may be favourable or unfavourable in the future from which you can benefit. Hence doing nothing is always doing something and doing something is unavoidable.

Just my

What you're saying is right - doing nothing in itself is also doing something however that's provided you have made a concious decision to take the 'do nothing' approach.

What I believe Tech/A is trying to get at, is that you shoudn't be letting fear paralyse you and you should be doing something - even if you do nothing you need to ensure that you made the decision to do nothing because that was the best option given the current circumstances.

What you want to avoid is passively doing nothing because you are too afraid to make a choice and see it through.

 

[tech/a]

They way you are referencing DO SOMETHING reminds me of the way that contestants claim they are not playing the game but just being themselves in the Big Brother house. The fact that they are inside the house means that they ARE playing the game (regardless of whether they believe themselves to be so or not), just that their tactics involve acting themselves rather than sabotage, mystery, evil etc.

In the same way, doing nothing is effectively doing something. In not making a decision you have effectively made a decision (possibly unbeknowst to you). Just as a proactive decision has varying degrees of failure to success so does indecision. If you do not make a decision then variables can change that may be favourable or unfavourable in the future from which you can benefit. Hence doing nothing is always doing something and doing something is unavoidable.

Just my

Anyone who watches Big Brother let alone analyses the thought process of those involved--In my view needs to get a life.

Those who do nothing from a fear base or one of ignorance are and will always fall into the catagory of longterm procrastinators who inevitably get the result their effort afford them in life---Mediocrity.

If thats satisfactory then its a very simple achievement with over 98% of Australians successful in achieving mediocrity.

With 11,000,000 in the work force and 185,000 millionairs.----.0168% reach the magic number which is fast becoming less than magical.

 

[skcots]

So... some people are doing stuff, others are too scared and others are watching big brother reruns. Where are property prices heading?

 

[explod]

So... some people are doing stuff, others are too scared and others are watching big brother reruns. Where are property prices heading?

Hard to get a clear picture, but on an average of what is coming across, including an increased persistence by the perma bulls on this forum, I would say it is going sideways.

Better plays elsewhere; IMVHO.

 

[wayneL]

OK lets suppose that the bears overcome their fear or whatever the bulls think the reason is that bears are bears.

What would you suggest is the type of property opportunity to be pursued and why?

 

[tech/a]

OK lets suppose that the bears overcome their fear or whatever the bulls think the reason is that bears are bears.

What would you suggest is the type of property opportunity to be pursued and why?

High equity 30-40% at this time is in my view advisable regardless of "type" of investment.

As for my prefered type it is currently both Industrial and Domestic property developement.

Why.
There is a shortage of available industrial developements currently in my area and what is available is being released very slowly with the developer knowing that once released thats it---plus the area is at the end of the freeway widening programme and rail line.This release was 12 block all sold I have one.
12 mths ago 50 were released for $125K each
These $195K and smaller sold in 2 weeks.
The next are expected to be smaller again and $245K in a few mths.
Held in SMSF Trust and will be developed for passive income and capital gain----best keep the Super working---65% is in property 10% in Stocks and 25% in cash currently.

Domestic am looking for suitable property in my area to take 4 apartments 1 and 2 bed.
Why
There arent enough those that come up are selling at stupid prices relative to cost to hold and construct---I'm blogging the exercises on "the other site" if interested.All is revealed there as far as developement costs hints and progression of the 2 investments.

 

[financialdonk]

Those who do nothing from a fear base or one of ignorance are and will always fall into the catagory of longterm procrastinators who inevitably get the result their effort afford them in life---Mediocrity.

We are in agreeance on fear and ignorance. Those who entered the market last year for fear of 'not being to get into the market later' or those who ignorantly continue to enter the market without concern for current situations will inevitably get the result their efforts afford them.

 

[financialdonk]

What you're saying is right - doing nothing in itself is also doing something however that's provided you have made a concious decision to take the 'do nothing' approach.

What I believe Tech/A is trying to get at, is that you shoudn't be letting fear paralyse you and you should be doing something - even if you do nothing you need to ensure that you made the decision to do nothing because that was the best option given the current circumstances.

What you want to avoid is passively doing nothing because you are too afraid to make a choice and see it through.

I agree conscious decisions generally end up being better than unconcious. Although that is not to say that being paralysed by fear does not turn out to be better in individual cases in the long run. It's just difficult to see recent examples of this in a debt leveraged bull market.

 

[jonojpsg]

With 11,000,000 in the work force and 185,000 millionairs.----.0168% reach the magic number which is fast becoming less than magical.

Hey tech, just to be picky, 185000/11000000 actually is 1.68% NOT 0.0168% Means almost 2 in 100 are millionaires as opposed to 2 in 10000!

 

[tech/a]

Hey tech, just to be picky, 185000/11000000 actually is 1.68% NOT 0.0168% Means almost 2 in 100 are millionaires as opposed to 2 in 10000!

Yes thought .0168% was as you say.
But see the confusion.
Tardy on my part.

 

[tech/a]

I agree conscious decisions generally end up being better than unconcious. Although that is not to say that being paralysed by fear does not turn out to be better in individual cases in the long run. It's just difficult to see recent examples of this in a debt leveraged bull market.

If thats the reason you see for increased property values over the last 10 yrs and going forward.

If like myself others dont see this as a valid reason then its simply an excuse for more procrastination.

 

[explod]

OK lets suppose that the bears overcome their fear or whatever the bulls think the reason is that bears are bears.

What would you suggest is the type of property opportunity to be pursued and why?

This is a hard one because bears and even bulls can change their minds at any moment.

As a bear, at the moment, I have no fear of property, in fact at one stage eight years ago I held five investment properties at the one time, small time granted, but for a number of reasons, one of which I got my fingers burnt in a trickey subdivision deal, I became a bear; because I wanted to know why I went wrong, hit the books and for the first time in my life realised that property is not always one way. (from first home in 1968 it was yeehaa for 30 years)

Of course by hitting the books I found out that good money can be made with little downside risk in other plays too, and you can get out at the click of the mouse, not three plus months. You get my idea.

So bull or bear I be, depending.

Didgja see silver go last night, yeehaa.