If only someone behind the levers of power understood this simple concept.
The future of Australian property prices
- Thread starter Joe Blow
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If only someone behind the levers of power understood this simple concept.
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Most likely its still a small but watered down by the business owner who is under financial stress, this is starting to be a normal practice overcharge for half the job. Similar trend property up, prices up, overall quality down.
Soon you might be drinking upsized tap water in a 800k termite infested 2 bed room metricon house with aldi brand 2.5D tv
nukz
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Does Robots actully hold any property or has he ever? or is this just some 12 y/o kid in the basement of his parents place talking crap.
I'm kinda curious..
I'm kinda curious..
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Victoria govnuts could never understand this simple concept with $3.8B in stamp duty revenue from last year. How would they replace it? Tax productive industries more.
Bit of a joke really, high cost of housing does not make a country wealthy.
Cheers
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Answer is Yes he does.
Cannot knock him, his simple approach to investing has been financial rewarding for him over the years whether he is a 12 or 100 year old.
Cheers
nukz
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What's the approach, i came into this threat at around page 70 and all i've ever seen is random comments and rarely a comment that even refers to property lol
So does he own property? lol or has he at one stage held property? i asked this same sorta question about 15 pages back and never got a answer from him lol
It makes me really curious who this guy is and if hes for real lol
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nukz
unlike the other threads, this one you can ramp the heck out of your case without proof, you can claim to be a "developa maate" and sight all these fanciful profits and the like, and no one will call you up for it. its almost like your getting investment advice from a real estate agent, rather than a debate on the future of australian property prices
imho the future of australian property prices is following the same monotonous track.. you have the kill list of robots, and the stayers whom see and identify a bubble
everyone makes a killing in a bubble, thats not the issue for me, what concerns me is that i know a hell of a lot of folk whom are property owners whom have a huge sum of capital to pay off on what i believe to be vastly inflated prices.. despite the usual suspects refusing to acknowledge the impact rising interest rates have on the bubble housing market, i steadfastly maintain the bubble is there and the consequence of the interest rates rises will be severe in the present market..
but the latte drinkin developas will keep it all off topic and i am certain the debate will continue with ridicule.. but there is a possibility the bubble will burst.. and that will be major problem for not only the housing market, but also the lenders. and ultimately the guvamen.. i am sure the riskier the market becomes, the higher the rates that the pillar banks will be delivered..
lets wait and see..
unlike the other threads, this one you can ramp the heck out of your case without proof, you can claim to be a "developa maate" and sight all these fanciful profits and the like, and no one will call you up for it. its almost like your getting investment advice from a real estate agent, rather than a debate on the future of australian property prices
imho the future of australian property prices is following the same monotonous track.. you have the kill list of robots, and the stayers whom see and identify a bubble
everyone makes a killing in a bubble, thats not the issue for me, what concerns me is that i know a hell of a lot of folk whom are property owners whom have a huge sum of capital to pay off on what i believe to be vastly inflated prices.. despite the usual suspects refusing to acknowledge the impact rising interest rates have on the bubble housing market, i steadfastly maintain the bubble is there and the consequence of the interest rates rises will be severe in the present market..
but the latte drinkin developas will keep it all off topic and i am certain the debate will continue with ridicule.. but there is a possibility the bubble will burst.. and that will be major problem for not only the housing market, but also the lenders. and ultimately the guvamen.. i am sure the riskier the market becomes, the higher the rates that the pillar banks will be delivered..
lets wait and see..
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Robots is the real deal. His approach is a different strategy to most. I personally enjoy his positivity that he brings to this thread. I think he lives by the KISS rule. 
Oh BTW Agentm .... if you need proof just ask the mods to request from the perpetrator for some evidence of their outlandish claims. Quite easy really.
I concur with your statement that there is a possibility that the bubble could burst. It is also possible that it will continue to slant sideways for several years. It is also possible that some areas will be hit very hard with mortgage stress and that some areas will continue to evidence good growth.
Oh BTW Agentm .... if you need proof just ask the mods to request from the perpetrator for some evidence of their outlandish claims. Quite easy really.
I concur with your statement that there is a possibility that the bubble could burst. It is also possible that it will continue to slant sideways for several years. It is also possible that some areas will be hit very hard with mortgage stress and that some areas will continue to evidence good growth.
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What a second, are you know admitting that there is a bubble?
And secondly, if some suburbs get hit hard, cannot see others defying the trend and growing, rather just not declining as much.
Cheers
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Nope ..... not what I typed. I concurred that there is a possibility of a flaw in the system and that "the" bubble could be bursting. It would appear that there are hard times ahead. Not necessarily in property either.
Some suburbs will be hit hard and others will continue to perform fait accompli.
Same as buying shares. There are non performers in a portfolio and others that require a massage to get them moving. 
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Do you mean that travelling saleman Verge32 who has now moved on to sell somewhere else? His post was straight out of a salesman's manual.
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I can see John Clarke and Brian Dawe debating this one satanoperca .
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From the mouth of Glenn Stevens in March this year.
"It's a mistake to assume a riskless, easy, and guaranteed way to prosperity is just to leverage to property," he said.
“These (house) prices are getting quite high,” Mr Stevens said. “I’ve got kids that within not too many years are going to want somewhere of their own to live and you wonder how is that going to be afforded.”
Well Glenn, for the last 6 years the RBA have been saying house price growth has not been an issue. Then all of a sudden in March this year it is???? Isn't it funny how these things just creep up on you without warning.
The more I hear from the RBA, the more sense the Austrian School of Economics' explanation of asset price inflation makes.
"It's a mistake to assume a riskless, easy, and guaranteed way to prosperity is just to leverage to property," he said.
“These (house) prices are getting quite high,” Mr Stevens said. “I’ve got kids that within not too many years are going to want somewhere of their own to live and you wonder how is that going to be afforded.”
Well Glenn, for the last 6 years the RBA have been saying house price growth has not been an issue. Then all of a sudden in March this year it is???? Isn't it funny how these things just creep up on you without warning.
The more I hear from the RBA, the more sense the Austrian School of Economics' explanation of asset price inflation makes.
wayneL
VIVA LA LIBERTAD, CARAJO!
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Yep.
Of course it always made perfect sense anyway.
nukz
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Treasury warning on home price 'bubble'
A SENIOR Treasury official has sounded the alarm over Australia's property market.
He has warned that the prospect of a sudden and dramatic drop in prices is "the elephant in the room" and should not be ignored by the federal government.
While the government and Reserve Bank insist Australia does not have a housing bubble - as some economists and the International Monetary Fund suggest - it remains such a worrying concept that Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the US.
Documents obtained by The Weekend Australian under Freedom of Information laws show the Treasury officials preparing the so-called Red Book of briefs for the incoming government were as divided as private sector economists about the strength of the property market.
Phil Garton, the manager of Treasury's Macro Financial Linkages Unit, sent colleagues a draft paper on the rise in household debt, prospects for further growth in the debt-to-income ratio and the potential implications of slower household debt growth.
His email prompted an exchange with Steve Morling, currently the general manager of the Domestic Economy Division, who argued the paper should "make a bit more about the risks".
"The elephant in the room is house prices or more specifically the risk of a precipitous drop in them, perhaps from an external shock or perhaps from their own internal dynamics when affordability constraints or capacity debt levels see prices and expectations of house prices start to move in the opposite direction," Mr Morling wrote on June 15.
"(I) know there are very supportive fundamentals, but prices rose by 50-60 per cent in three to four years in the early part of this decade, with largely unchanged fundamentals, so they can have a life of their own.
"And given what's happened elsewhere I'm far less sanguine about this - and the interplay with debt - than in the past."
Mr Garton agreed that there would be risks if the fundamentals of low interest rates, unemployment, and financial deregulation "reversed significantly". But he maintained the price growth in the early 2000s was based on a "lagged response" to improvements in the fundamentals, and questioned how Australia could have maintained a bubble for more than six years.
Mr Morling said other bubbles had lasted that long, and the fundamentals were often used to justify price rises - including in Britain where a debate over lack of supply drove property prices higher "before the British property bubble burst".
"(I) think price expectations can take over from the fundamental drivers that you have identified for extended periods, including generating house price falls," he wrote.
With house prices static at best - the market is particularly soft in the capital cities - there are renewed doubts over the boom of the past decade and whether prices are sustainable.
Average house prices doubled in the 2000s and, despite the global financial crisis, remain 20 per cent higher than levels three years ago. The latest figures from the Australian Bureau of Statistics showed prices rose just 0.1 per cent overall in the September quarter - and fell in all capital cities except Melbourne, Perth and Darwin - but were still 11.5 per cent higher over the past year. Treasury's Household Demand Unit is re-examining the fundamentals in the property market to determine factors that have driven, or sustained, prices.
A spokesman for Wayne Swan said yesterday the Treasurer retained the view that Australia did not have a property bubble, citing recent reports and statements by Westpac and the RBA. "Of course, we expect our officials to test and debate policy within the department - it is an important and normal process of government," the spokesman said. "However, it is the considered position of the Treasurer and the Treasury that our housing market reflects the fundamentals of supply and demand and not a bubble - specifically that Australia is simply not building enough new houses."
The RBA was concerned by double-digit price growth earlier this year, especially in Melbourne, but now expects interest rate rises to moderate demand and keep prices at a realistic level.
The RBA has gone to great lengths to pull apart claims of a housing bubble by the IMF, Morgan Stanley economist Gerard Minack, legendary US investor Jeremy Grantham and The Economist magazine, even comparing and contrasting their modelling.
On Thursday, RBA deputy governor Ric Battellino sought to reassure the market that the slowing in growth of household debt would lessen the risks to the economy.
"The current picture is one where borrowing for housing is broadly growing in line with income, house prices are stable and there is little appetite for other forms of debt," Mr Battellino said. "From the Reserve Bank's perspective, this seems to be a satisfactory state of affairs."
The RBA believes demand was responsible for the early rise in property prices, and government restraint on housing supply prevented a US-style slump.
The OECD report on the Australian economy released at the weekend did not identify a "bubble" but warned that house prices could not keep rising faster than household incomes.
"Caution is advisable, given the experience of other countries," the report said.
Source - http://www.theaustralian.com.au/bus...ome-price-bubble/story-e6frg9gx-1225956866267
A SENIOR Treasury official has sounded the alarm over Australia's property market.
He has warned that the prospect of a sudden and dramatic drop in prices is "the elephant in the room" and should not be ignored by the federal government.
While the government and Reserve Bank insist Australia does not have a housing bubble - as some economists and the International Monetary Fund suggest - it remains such a worrying concept that Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the US.
Documents obtained by The Weekend Australian under Freedom of Information laws show the Treasury officials preparing the so-called Red Book of briefs for the incoming government were as divided as private sector economists about the strength of the property market.
Phil Garton, the manager of Treasury's Macro Financial Linkages Unit, sent colleagues a draft paper on the rise in household debt, prospects for further growth in the debt-to-income ratio and the potential implications of slower household debt growth.
His email prompted an exchange with Steve Morling, currently the general manager of the Domestic Economy Division, who argued the paper should "make a bit more about the risks".
"The elephant in the room is house prices or more specifically the risk of a precipitous drop in them, perhaps from an external shock or perhaps from their own internal dynamics when affordability constraints or capacity debt levels see prices and expectations of house prices start to move in the opposite direction," Mr Morling wrote on June 15.
"(I) know there are very supportive fundamentals, but prices rose by 50-60 per cent in three to four years in the early part of this decade, with largely unchanged fundamentals, so they can have a life of their own.
"And given what's happened elsewhere I'm far less sanguine about this - and the interplay with debt - than in the past."
Mr Garton agreed that there would be risks if the fundamentals of low interest rates, unemployment, and financial deregulation "reversed significantly". But he maintained the price growth in the early 2000s was based on a "lagged response" to improvements in the fundamentals, and questioned how Australia could have maintained a bubble for more than six years.
Mr Morling said other bubbles had lasted that long, and the fundamentals were often used to justify price rises - including in Britain where a debate over lack of supply drove property prices higher "before the British property bubble burst".
"(I) think price expectations can take over from the fundamental drivers that you have identified for extended periods, including generating house price falls," he wrote.
With house prices static at best - the market is particularly soft in the capital cities - there are renewed doubts over the boom of the past decade and whether prices are sustainable.
Average house prices doubled in the 2000s and, despite the global financial crisis, remain 20 per cent higher than levels three years ago. The latest figures from the Australian Bureau of Statistics showed prices rose just 0.1 per cent overall in the September quarter - and fell in all capital cities except Melbourne, Perth and Darwin - but were still 11.5 per cent higher over the past year. Treasury's Household Demand Unit is re-examining the fundamentals in the property market to determine factors that have driven, or sustained, prices.
A spokesman for Wayne Swan said yesterday the Treasurer retained the view that Australia did not have a property bubble, citing recent reports and statements by Westpac and the RBA. "Of course, we expect our officials to test and debate policy within the department - it is an important and normal process of government," the spokesman said. "However, it is the considered position of the Treasurer and the Treasury that our housing market reflects the fundamentals of supply and demand and not a bubble - specifically that Australia is simply not building enough new houses."
The RBA was concerned by double-digit price growth earlier this year, especially in Melbourne, but now expects interest rate rises to moderate demand and keep prices at a realistic level.
The RBA has gone to great lengths to pull apart claims of a housing bubble by the IMF, Morgan Stanley economist Gerard Minack, legendary US investor Jeremy Grantham and The Economist magazine, even comparing and contrasting their modelling.
On Thursday, RBA deputy governor Ric Battellino sought to reassure the market that the slowing in growth of household debt would lessen the risks to the economy.
"The current picture is one where borrowing for housing is broadly growing in line with income, house prices are stable and there is little appetite for other forms of debt," Mr Battellino said. "From the Reserve Bank's perspective, this seems to be a satisfactory state of affairs."
The RBA believes demand was responsible for the early rise in property prices, and government restraint on housing supply prevented a US-style slump.
The OECD report on the Australian economy released at the weekend did not identify a "bubble" but warned that house prices could not keep rising faster than household incomes.
"Caution is advisable, given the experience of other countries," the report said.
Source - http://www.theaustralian.com.au/bus...ome-price-bubble/story-e6frg9gx-1225956866267
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From the mouth of Glenn Stevens in March this year.
"It's a mistake to assume a riskless, easy, and guaranteed way to prosperity is just to leverage to property," he said.
“These (house) prices are getting quite high,” Mr Stevens said. “I’ve got kids that within not too many years are going to want somewhere of their own to live and you wonder how is that going to be afforded.”
Well Glenn, for the last 6 years the RBA have been saying house price growth has not been an issue. Then all of a sudden in March this year it is???? Isn't it funny how these things just creep up on you without warning.
The more I hear from the RBA, the more sense the Austrian School of Economics' explanation of asset price inflation makes.
Unfortunately Mr. Stevens has his hands on the interest rate levers and can help bring about a correction in the property market that he so desires for his kids by continuing to jack up rates in the guise of controlling inflation. Under this theory of economics, forcing many to buy home brand products from Woolies because they can barely afford their mortgage payments (or even bring about defaults) due to rate rises is good economic management. Funny thing is, property prices go down, but mortgage payments increase so it's little help to the poor home buyer.
Why not focus on the factors that are contributing to rising house prices like land supply, local council and govt urban policy, speculation by local and overseas investors (due to tax breaks) and population demographics/growth for instance.
I live in Melbourne's outer east surrounded by large properties with huge paddocks on flat land. Most are empty paddocks with a few horses used as lawn mowers and for agistment revenue that can't be subdivided. A friend has a 10 acre property he is not allowed to subdivide by council decree so the best use he has for this land is to agist horses. Planning for growth is the key, without it price pressure remains.
There is little doubt that recent price growth in property (in some areas) is unsustainable but predicting a crash or collapse in prices is scaremongering. The GFC did not cause a crash in house prices here, for a variety of reasons, so what cataclysmic event are the doomsayers predicting that would precipitate such an outcome I wonder, more RBA rate rises perhaps?
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I suspect that what Glenn Stevens would like to see is a gradual decline in house prices relative to household income. In this sense, gradual would mean that house prices would would continue to rise in nominal terms. This would be bad for heavily geared investors as the capital growth may not be sufficient to cover income losses after tax. This though would avoid pain for owner-occupiers and lower geared investors.
A gradual deflation of the bubble though has history against him. Also against him is the fact that the last term of the Howard Government and this Government have effectively lost the plot when it comes to fiscal management.
http://www.smh.com.au/business/beware-the-dutch-disease-20101119-1812g.html
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It's not a conspiracy. House prices do form part of the CPI equation which the RBA's uses in their interest rate settings! The last two quarters CPI rose 3.1% and 2.8% which is on the upper band.
IMO the percentage change in house prices doesn't show enough clout in the CPI figures. That's one sure reason why house prices are where they are today by not having enough exposure in the CPI average. Now, if house prices fall a percent or two a quarter the CPI calculation can easily still add pressure for further rate hikes. It's just how it is!
Too many people do think the sure way to make money above inflation is in property. Those low interest rates sure sucked more than a few investors into properties of late.
Yes, there was underlying demand and the number one reason was hype. Property has been red hot for such a long time.
Strange logic you employ. Why did home buyer enter into a property with such a large relative cost to his income that it stopped them from purchasing food on the basis of sequential rate hikes? If home buyer doesn't like it, they are advise to sell and rent instead.
Because any real focus on any of those things would probably collapse the market overnight.
This is weird speculator logic again isn't it? Why on earth buy a piece of land to subdivide it, when you know you can't subdivide it? On the assumption that you would be allowed to subdivide it?
Please name the reasons. None of them are sustainable either. You cannot solve a problem by adding more of the same problem to the pile.
