The future of Australian property prices

nunthewiser · 22 November 2010

My area.

Housing still in limbo.
Rents falling
more rental supply
rental listings sitting unnocupied longer unless priced VERY below market
for sales listed longer
some getting snapped up 20% below 2 years ago
more for sale supply

lifes getting better for the patient scavengers waiting to pick some bones

robots · 22 November 2010

matty77 said:
sorry where does it say 30% for 2010?

oh that's right it doesn't, yes another fine day here too Sir.

hello,

see, i got that link from one of SusanW's post, just amazing you really got too watch em i tell you

amazing, who really knows whats going on, oh well

no big deal, as we know banks still loan the same way as they did 50yrs ago, and with deposit rates dropping its just business as usual

sinner got me going on re-visiting a few items as well,

still at 7-8x income to median price?
medians still greater than pre-GFC values?

OH YEAH

thankyou
professor robots

satanoperca · 22 November 2010

All smoke and mirrors to me.

prawn_86 · 22 November 2010

nunthewiser said:
lifes getting better for the patient scavengers waiting to pick some bones

within another year or so we should have quite a nice amount built up for a deposit, hopefully prices have cooled even further by then. Property gains and falls (usually) are a lot slower than other markets so just gotta be patient

nunthewiser · 22 November 2010

prawn_86 said:
within another year or so we should have quite a nice amount built up for a deposit, hopefully prices have cooled even further by then. Property gains and falls (usually) are a lot slower than other markets so just gotta be patient

its good to have a plan

Peak Debt · 22 November 2010

Alex Barton said:
Here is an article about the Australian Housing Bubble that I had published on Ezines. The bulls most probably won't agree with any of it, so fire away with your criticism, I can take it!

Australian Housing Bubble

I'm interested to hear what people think about the article. Thanks!

It sounded accurate to me

I liked it, well done

FxTrader · 23 November 2010

Alex Barton said:
Here is an article about the Australian Housing Bubble that I had published on Ezines. The bulls most probably won't agree with any of it, so fire away with your criticism, I can take it!

Australian Housing Bubble

I'm interested to hear what people think about the article. Thanks!

Since you asked for feedback...

Since the title of your article implies the existence of a "bubble" why not try and define this abused term in the context of the property market. What denotes a property bubble exactly? What measures are you using to establish the existence of this bubble and did these measures accurately forecast a collapse in other markets historically? Are they reliable predictors for our market?

Early in the article you note contributing factors to rising property prices in Australia but of course some are more significant than others. Govt subsidy, restrictions and tax incentives to investors continue to underpin price.

Sadly, the exponential growth of property related debt in Australia has created nothing positive for most Australians. While the explosion in property credit may have boosted GDP figures, it has not manifested in any real production or productivity gains. Instead, it indicates wasteful consumption, as the vast majority of property related debt is funneled into the trading of existing dwellings, rather than the development of new housing stock."

Agree, but then this debt growth is based on the notion that residential real estate is a store of wealth and for property investors, as source of income as well. I have several friends who would not consider investing in anything other than property and are very wealthy, on paper, as a result and govt incentivizes this activity.

Apart from providing basic shelter, housing offers little of benefit to an economy (beyond the initial construction boost). On the other hand, business investment, which furthers technological advancement and creates employment, does provide long lasting economic benefits. The vast capital flows that are currently directed towards the trading of existing dwellings in Australia could be allocated much more productively to other sectors of the economy.

As long as property investment incentives exist and the perception that property is a safe long term, income producing investment, distorted capital flows will continue. Business investment in the form of capital raisings, shares, IPOs etc. is seen as to speculative to the property investors I know.

Quoting predictions of a crash in AUS property prices of 40% (over some unknown time frame) is fodder for those twisted individuals here who would like to see this scenario unfold but it's a low probability event IMO. More likely and desirable is a gradual downturn and/or long period of stagnant property prices as we had in the late eighties.

FxTrader · 23 November 2010

Alex Barton said:
Here is an article about the Australian Housing Bubble that I had published on Ezines. The bulls most probably won't agree with any of it, so fire away with your criticism, I can take it!

Australian Housing Bubble

I'm interested to hear what people think about the article. Thanks!

Since you asked for feedback...

Since the title of your article implies the existence of a "bubble" why not try and define this abused term in the context of the property market. What denotes a property bubble exactly? What measures are you using to establish the existence of this bubble and did these measures forecast a collapse in other markets historically? Are they applicable to our market, if so why?

Early in the article you note contributing factors to rising property prices in Australia but of course some are more significant than others. Govt subsidy, restrictions and tax incentives to investors continue to underpin price.

Sadly, the exponential growth of property related debt in Australia has created nothing positive for most Australians. While the explosion in property credit may have boosted GDP figures, it has not manifested in any real production or productivity gains. Instead, it indicates wasteful consumption, as the vast majority of property related debt is funneled into the trading of existing dwellings, rather than the development of new housing stock."

Agree, but then this debt growth is based on the notion that residential real estate is a store of wealth and for property investors, as source of income as well. I have several friends who would not consider investing in anything other than property and are very wealthy, on paper, as a result and govt incentivizes this activity.

Apart from providing basic shelter, housing offers little of benefit to an economy (beyond the initial construction boost). On the other hand, business investment, which furthers technological advancement and creates employment, does provide long lasting economic benefits. The vast capital flows that are currently directed towards the trading of existing dwellings in Australia could be allocated much more productively to other sectors of the economy.

As long as property investment incentives exist and the perception that property is a safe long term, income producing investment, distorted capital flows will continue. Business investment in the form of capital raisings, shares, IPOs etc. are seen as to speculative to the property investors I know.

Quoting predictions of a crash in AUS property prices of 40% (over some unknown time frame) is fodder for those twisted individuals here who would like to see this scenario unfold but it's a low probability event IMO. More likely and desirable is a gradual downturn and/or long period of stagnant property prices as we had in the late eighties.

SusanW · 23 November 2010

robots said:
see, i got that link from one of SusanW's post,

I bet you loved playing Chinese whispers when a kid Bots.

just amazing you really got too watch em i tell you

and some you just put on ignore.

matty77 · 23 November 2010

SusanW said:
and some you just put on ignore.

so he links something then blames someone else.. :headshake

Sunshine and lollipops here drinking my Nescafe, 2 sugars this time.

againsthegrain · 23 November 2010

Just some funny quotes by robots that I found

My background:

* been invested in RE for the past 11yrs
* have been awarded an Associate Professorship by Melbourne University for research undertaken on residential property (all self funded to by the way).
* one of only five of the true visionaries of society who have consistently called it.
* interest rate strategist

Just pop me a PM or post any questions you may have on the forum.

Thankyou
Professor Robots

yeah no worries susuanW, wouldnt have a clue what you on about but oh well

:bonk:

nukz · 23 November 2010

I love it when you ask people if they know about property(or anything) and they say they do because they have a certificate/masters/phd/bechelors lol.

prawn_86 · 23 November 2010

We all know robots is an antagonist with no known qualifications and no known holdings of property, but for some reason a lot of members seem to like it when he posts...

againsthegrain · 23 November 2010

A reply from another member to his claims:

Just a couple of holes there ole champ.

Post Graduate Research opening the way to an Associate Professorship cannot be brought, it is either a scholarship funded by the Institution or private sector, in this case perhaps the Real Estate Insititute.

If you are an Associate Professor you are not entitled to use the title of Professor.

And he still has not replied to that

trainspotter · 23 November 2010

prawn_86 said:
We all know robots is an antagonist with no known qualifications and no known holdings of property, but for some reason a lot of members seem to like it when he posts...

Not sure prawn86 as to why his posts are seen as invidious? I do know that he does have a PPOR and an IP. RP DATA is a wonderful thing. His qualifications are a bit on the dubious side of things but he has not wavered in his belief in RE in Australia. I admire someone who sticks to their ideals even when they are staring in the face of populist (and negative) opinions.

Buckfont · 23 November 2010

Well I`ve been involved in property going back I guess 40 plus years and from then on I`ve really had the bug. Unfortunately I have no degrees apart from a lot of experience.
One of my early purchases was in Sydney:-

vhttp://www.modelrailroads.net/cgi-bin/mrrlinks/go.cgi?id=1344

Agentm · 23 November 2010

trainspotter said:
Not sure prawn86 as to why his posts are seen as invidious? I do know that he does have a PPOR and an IP. RP DATA is a wonderful thing. His qualifications are a bit on the dubious side of things but he has not wavered in his belief in RE in Australia. I admire someone who sticks to their ideals even when they are staring in the face of populist (and negative) opinions.

so you admire bernanke,,

cool

trainspotter · 23 November 2010

Agentm said:
so you admire bernanke,,

cool

Mr. Bernanke, who unlike Mr. Greenspan shuns the Washington social circuit and lacks close ties to conservative Republicans thusly leaving himself open to the attacks on his stewardship. If he had not acted then he would have been criticized for ignoring the slow paced recovery. Lose / lose situation all round really. Raving loony Tea Party and Sarah Palin squawking about printing 600 billion dollars is not helping. It has gone political now.

:topic

SusanW · 23 November 2010

trainspotter said:
Not sure prawn86 as to why his posts are seen as invidious? I do know that he does have a PPOR and an IP. RP DATA is a wonderful thing. His qualifications are a bit on the dubious side of things but he has not wavered in his belief in RE in Australia. I admire someone who sticks to their ideals even when they are staring in the face of populist (and negative) opinions.

If Bot bought Melbourne RE (PPR and IP) since GFC, you might say he has convictions.

If Bot bought these properties pre GFC and hasn't used equity to buy anything since, then he must have become a property bear or have paid well above market value.

Either way, I skimmed his posts and all it motivated me to do was put him on ignore.

Anyways, despite buying two properties this year, I still think the market will soften further in the short to medium term..... go figure

trainspotter · 23 November 2010

SusanW said:
If Bot bought Melbourne RE (PPR and IP) since GFC, you might say he has convictions.

If Bot bought these properties pre GFC and hasn't used equity to buy anything since, then he must have become a property bear or have paid well above market value.

Either way, I skimmed his posts and all it motivated me to do was put him on ignore.

Anyways, despite buying two properties this year, I still think the market will soften further in the short to medium term..... go figure

I believe the Botman had his PPOR pre GFC and the IP came post GFC. He used the PPOR equity to leverage into IP. Not that hard really.

Your choice on the ignore button.

I concur with your statement SusanW in regards to the slanting of property ATM. 2011 will be a corrective year in the building industry which in turn will force the Guvmint to offer further incentives to keep the ball rolling.

The future of Australian property prices

nunthewiser

robots

hello

satanoperca

prawn_86

Mod: Call me Dendrobranchiata

nunthewiser

Peak Debt

FxTrader

FxTrader

SusanW

matty77

againsthegrain

nukz

888

prawn_86

Mod: Call me Dendrobranchiata

againsthegrain

trainspotter

Buckfont

Agentm

trainspotter

SusanW

trainspotter

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