The future of Australian property prices

[robots]

hello,

not much, look just make sure you own "a" property for retirement

its easy man, dont listen to the vested interests it will cost you big time

kincella, have been saving so many birds from cats the last couple of weeks, just great, i spend all day watching birds now, awesome

thankyou
professor robots

 

[GumbyLearner]

hello,

not much, look just make sure you own "a" property for retirement

its easy man, dont listen to the vested interests it will cost you big time

kincella, have been saving so many birds from cats the last couple of weeks, just great, i spend all day watching birds now, awesome

thankyou
professor robots

You wouldn't happen to be Professor Paul Wilson would you robots?

 

[nunthewiser]

just great, i spend all day watching birds now, awesome

thankyou
professor robots

Yes the freemasons hotel front bar been excellent today for that.

thankyou

 

[robots]

hello,

no, I am Professor Robots from Melbourne University

oh gidday Gumby we all still waiting to hear from you over in the AFL Premiers thread to discuss St Kilda's best performance in the AFL grand final, sorry how many goals riewoldt get?

oh well, thanks man

thankyou
professor robots

 

[GumbyLearner]

hello,

no, I am Professor Robots from Melbourne University

oh gidday Gumby we all still waiting to hear from you over in the AFL Premiers thread to discuss St Kilda's best performance in the AFL grand final, sorry how many goals riewoldt get?

oh well, thanks man

thankyou
professor robots

Oh you mean the thread where almost everyone said the Saints had no chance to make the Grand Final let alone win it. We ended up playing Collingwood twice from memory, the AFL team with the most home games in the 2010 season and the most games at the MCG. Which has now been revealed that they also spent the most of all clubs to get it. I'm just proud we made them win almost in October!

http://www.heraldsun.com.au/sport/a...-seal-flag-glory/story-e6frf9jf-1225971749205



Oh well robots. Back onto property. Thankyou for your interest in my sporting interests.

I thought with such a prestigious title that of Professor Robots. You would at least correctly say you were from the University of Melbourne.

Oh well, stop casting aspersions about people there old Professor, like alluding to police corruption. You might get stripped of your title or even worse sued!!

 

[robots]

hello,

played them once in my mind and got flogged, i thought it was the best day in my life until the photos came out the other day and to cap it off the most over-rated player in the league hosted that press conference, hehehehehehehehe

"i posed for the photo because i thought it was going to be deleted" hehehehehehe

and remember man its the property thread you can discuss anything like all the other posters, hell we even get satellite pics of china in this thread, amazing

thankyou
professor robots

 

[kincella]

hello,
I was insinuating that property can provide other benefits....as in getting a closer look at nature....so Robots I am still discussing property....I dont want to get outed for being off topic....
did not see the birds today, so can only assume the bloomin neighbours cats got them in the night....they did appear to be nesting...
for those who do not know me, I have been living in the city for over 20 years....out of touch with nature, as when one lives in the country...

to answer the other poster....I do not expect interest rates to go to 10% for about another 10 years or more, if ever....the average over the past 20 years has been around the 6.5 to 7% mark....it was a couple of newbews who stuffed it up and sent it to 10% in the middle of the GFC, when every other country had dropped them to near zero....now we are seeing the results of that huge stuff up...the aftermath will last for a while yet...
now go and have a great christmas holiday or break, if you can
cheers

 

[explod]

hello,

played them once in my mind and got flogged, i thought it was the best day in my life until the photos came out the other day and to cap it off the most over-rated player in the league hosted that press conference, hehehehehehehehe

"i posed for the photo because i thought it was going to be deleted" hehehehehehe

and remember man its the property thread you can discuss anything like all the other posters, hell we even get satellite pics of china in this thread, amazing

thankyou
professor robots

I remember, you do not. There is not one semblance or hint on where Australian Property is headed in you post quoted above. You did mention the word "property" but without another word to give it direction it is off topic, meaningless.

In the absence of posts to the contrary it would apear that the clearance rate has dropped substancially which may indicate that the current direction of property prices in Australia at the moment is down.

 

[Dangerous]

on the mortgage stress topic. I don't think banks will keep putting rates up in face of delinquencies.... More likely to reduce their margin and make it back when the cycle turns, whenever that may be. Nonetheless, makes it tough for higher prices.

I can see property going sideways for a fair while with good prices being still had in certain instances (as I observed a few wks ago), unless mkts take a turn. With a higher percentage of Australian's owning shares and managing own super i think mkt movements affect sentiment more than people realize....

Friends the other day could have been classified as "roped in first home buyers" having bought in 2006(ish)... just sold for 100% gain last weekend.... There are quite a few of these around to hold prices high for some time.

On mkts - I am a WSJ subscriber and usually read it every day. Have been busy lately and been skipping it but when i picked it up yesterday I could not believe the amt of bearish articles on Euro and Dubai debt.... don't see mkts going much higher in Q1 2011 - I am tempted by a XJO put warrant.

 

[Vicki]

to answer the other poster....I do not expect interest rates to go to 10% for about another 10 years or more, if ever....the average over the past 20 years has been around the 6.5 to 7% mark....it was a couple of newbews who stuffed it up and sent it to 10% in the middle of the GFC, when every other country had dropped them to near zero....now we are seeing the results of that huge stuff up...the aftermath will last for a while yet...
now go and have a great christmas holiday or break, if you can
cheers

Thankyou for your reply, but just out of curiousity, what do think [hypothetically of course] would be the effect of 10% rates on our r/e market?

I'll bet you a cheap bottle of 'cardonay, that rates will indeed creep higher, as they have done in the past!!

Its just now we're experiencing an increase in the 'real' cost of living, and one of the primary strategies to rien-in inflation, is increase rates [monetary policy?]
Unless there is a more effective way?

Also, as mentioned earlier, we're now more than ever a part of the 'global village', like it or not.

Friends the other day could have been classified as "roped in first home buyers" having bought in 2006(ish)... just sold for 100% gain last weekend.... There are quite a few of these around to hold prices high for some time.

What area [city] did your friends invest in, 100% in four yrs. is very impressive!
Was that 100% of what they put in initially, or was it 100% on the initial purchase price?

Prices though, are subject to what someone is willing to pay at the time, hence if there isn't a sufficient number of buyers at a given price, then you iether accept less [if you have to sell now] or be satisfied to hold for longer.

Vicki
p.s. I would also be a little bearish on xjo next yr.

 

[greebly24]

Thanks for the replies. Just like to repond.

Your view of China is very simple... wait till March and the new five year plan, the rumors are that it contains some surprises for those that think China is export dependent.

Look, China is still very very export dependent. When exports plummeted due to the GFC, China pumped money into construction of housing. It keeps people employed building empty cities. This is exactly the problem the US and Europe had. They lost their exporting ability to cheaper China, so instead they created a credit bubble which created a housing bubble. It worked great for a decade. House prices rose. People felt richer. But then it stopped working.

China is pumping money into housing because it keeps the peasants busy. It holds the day of reckoning off until the global economy recovers or their internal demand rises to compensate. But that is much harder than it sounds.

I'm no expert but some simple maths might help to explain my point. The average wage in China is something like $3,000 per year. Times that by 1.2 billion Chinese and you get a market of $3.6 trillion.

Now the average wage in USA is something like $45,000. Times that by 300 million Americans and you get a market of $13.5 trillion.

So the idea that you can replace a market of $13.5 trillion with a much smaller market of only $3.6 trillion without problems doesn't make sense. The European market is probably worth another $13.5 trillion and they're having problems too.

If the US and Europe's economies drop say 10% over the next couple of years, that is a loss of say $2.7 trillion dollars. The Chinese market would have to grow 75% over the next couple of years to make up for it. I think China's growing at something like 10% per year, which doesn't make up for the potential shortfall. Might come up 65% short.

The best quote I ever read about China and the other emerging economies was that around 4.5 billion people on the planet have a great plan to get rich, selling stuff to 1.5 billion people in the advanced Western economies. Hmm.

And they're going to have to do it with dwindling fossil fuels and scarcer resources. Hmm.

I love this stat... 95% of Chinas billionaires have made it on the local market... no export! They have internal momentum and a billion people... this is not a bubble, it is very different in the detail to what has gone on here and in the western world. Sure they will have up and downs but to suggest it will pop in a bubble type dynamic is missing the point of what is happening across Asia.

I found this stat hilarious and I don't doubt it. But it is pointless. Look, lots of property developers in the US became billionaires by simply developing property. Wow! No export! Before their housing bubble popped, they had lots of internal momentum too.

Look, if you're Chinese and want to become a billionaire it is simple. Go borrow ten billion from the bank, build a bunch of apartments and sell them for 10% profit. Hey, presto, instant billionaire. The local governments there would be happy to facilitate you, even if it means demolishing a bunch of peasants' farms. But how has the economy improved?

And finally (sorry, I can ramble), I get really scared when anyone says that this time it is different. Particularly when they use it to explain why it isn't a bubble.

It's not a bubble cos this time it's different. Hmm. Yeah. Right. It's not really a strategy I'd be banking on. Gambling on, maybe.

 

[BigAl]

hello,

hehehehehehehe, oh yeah lets hear about China Us Uk Spain Italy Portugal instead

listen i am going to spell this out again for everybody, the thread is about Australian Property, clear, any post and poster deviating from the title will be treated accordingly

i know we will probably loose heaps of posters but OH WELL, its got well out of hand

its tuff but plenty of other forums around to talk about doom and gloom in bloggosphere,

ps. dont mention police corruption

thankyou
professor robots

Oh the irony....

There is a direct correlation between overseas market forces (Business & Property) and Oz Property.

People banging on about how pretty the pink birds are and others talking up their Latte expiditions with gay abandon.......

Put up or Shut the .... ..

Thank You
We now return you to your normal Oz Property Discussion

 

[GumbyLearner]

http://www.youtube.com/watch?v=gQS4uUBXMNY

Love this stuff.

http://www.youtube.com/watch?v=hy2F3vQJAqc&NR=1

http://www.youtube.com/results?search_query=inxs

 

[Aussiejeff]

The best quote I ever read about China and the other emerging economies was that around 4.5 billion people on the planet have a great plan to get rich, selling stuff to 1.5 billion people in the advanced Western economies. Hmm.

He he. That just about sums up the current state of the world Economy nicely IMO

Closer to home and totally within the thread's subject brief, check out these stats for the suburb of St Kilda.. http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=st+kilda

Click on the Supply and Demand tab to see a graph that shows the number of property detail web pages viewed per week for a particular suburb vs total number of listings per week for that suburb.

The trend for interest in purchasing St Kilda properties is DOWN around 50% from the high of 14th of Feb 2010 (12,605 property pages accessed vs 163 listings = 77 persons interested per listed property) to the latest data for 6th Dec 2010 (7,546 property pages accessed vs 192 listings = 39 persons interested per listed property).

I have looked at 100's of other suburbs across the states and noticed most suburbs with similar or worse trends (especially outer city suburban and country) over that period.

I suspect the missing data from the last fortnight (the data seems to be about 14 days or so in arrears to current data) will only show an even worsening trend of decreasing interest vs rising listings.

Have a browse and tell me it's all wrong.........



Have a Merry Xmas. Just in case it turns out to be a bit of a crappy New Year...

 

[Aussiejeff]

He he. That just about sums up the current state of the world Economy nicely IMO

Closer to home and totally within the thread's subject brief, check out these stats for the suburb of St Kilda.. http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=st+kilda

Click on the Supply and Demand tab to see a graph that shows the number of property detail web pages viewed per week for a particular suburb vs total number of listings per week for that suburb.

The trend for interest in purchasing St Kilda properties is DOWN around 50% from the high of 14th of Feb 2010 (12,605 property pages accessed vs 163 listings = 77 persons interested per listed property) to the latest data for 6th Dec 2010 (7,546 property pages accessed vs 192 listings = 39 persons interested per listed property).

I have looked at 100's of other suburbs across the states and noticed most suburbs with similar or worse trends (especially outer city suburban and country) over that period.

I suspect the missing data from the last fortnight (the data seems to be about 14 days or so in arrears to current data) will only show an even worsening trend of decreasing interest vs rising listings.

Have a browse and tell me it's all wrong.........



Have a Merry Xmas. Just in case it turns out to be a bit of a crappy New Year...

Oh dear! It must be all the Xmas spirit....

I appear to have misconstrued "pages accessed" for "persons interested"!! LOL

In actual fact, the number of "persons interested" per property would be significantly lower than the number of web "pages accessed" due to many accessing the same page multiple times in any given week! I'm sure our Esteemed and Most Eminent Pretend.....err... Confess ... or... PROfessor Robots might shed some light on where this trend might head into the New Year???

Anyhoo, my most humble and sincere Yuletide apology for stuffing up...

aj

 

[tech/a]

Been actively looking for development sites for the last few months.
Have bought an industrial site.
But domestic is proving more of a challenge.
I build apartments in the beach-side southern areas of Adelaide.

Of 5 auctions I have been to not one has been sold at auction and all didn't receive anything more than a vendor bid.

There is a group of developers who frequent the same auctions and we (as you would imagine) talk and Dont out bid each other (You know honour among thieves!).
Not one property of the 5 have been bought after auction and in every case have been retained by the vendor.

In other words they are keeping rather than selling at discount prices----and these are development properties---knock downs.

Industrial is proving far more profitable particularly with massive savings on Chinese warehousing (sheds).I can get 3 x 350 square meter tenancies on a 2200 squ mtr property returning 12%
Cant get that with apartments.(well I cant)

 

[nukz]

Of 5 auctions I have been to not one has been sold at auction and all didn't receive anything more than a vendor bid.

I remember when i got my first place it originally went to auction and was passed in on vendors bids.

Then after it was over me and 2 other party's started negotiations with the agent we where both looking at a much lower price than the vendors bid.

But the agent kept telling us we had to offer a amount equal to or higher than the vendors bid lol because he said it was passed in at that amount...

I'll never forget arguing with this agent about this and in the end telling him if the vendors bid is such a great offer then sell to them haha

This was one of the biggest agents in Melbourne as well lol

 

[Mr Z]

Thanks for the replies. Just like to repond.

Look, China is still very very export dependent. When exports plummeted due to the GFC, China pumped money into construction of housing. It keeps people employed building empty cities. This is exactly the problem the US and Europe had. They lost their exporting ability to cheaper China, so instead they created a credit bubble which created a housing bubble. It worked great for a decade. House prices rose. People felt richer. But then it stopped working.

China is pumping money into housing because it keeps the peasants busy. It holds the day of reckoning off until the global economy recovers or their internal demand rises to compensate. But that is much harder than it sounds.

I'm no expert but some simple maths might help to explain my point. The average wage in China is something like $3,000 per year. Times that by 1.2 billion Chinese and you get a market of $3.6 trillion.

Now the average wage in USA is something like $45,000. Times that by 300 million Americans and you get a market of $13.5 trillion.

So the idea that you can replace a market of $13.5 trillion with a much smaller market of only $3.6 trillion without problems doesn't make sense. The European market is probably worth another $13.5 trillion and they're having problems too.

If the US and Europe's economies drop say 10% over the next couple of years, that is a loss of say $2.7 trillion dollars. The Chinese market would have to grow 75% over the next couple of years to make up for it. I think China's growing at something like 10% per year, which doesn't make up for the potential shortfall. Might come up 65% short.

The best quote I ever read about China and the other emerging economies was that around 4.5 billion people on the planet have a great plan to get rich, selling stuff to 1.5 billion people in the advanced Western economies. Hmm.

And they're going to have to do it with dwindling fossil fuels and scarcer resources. Hmm.

I found this stat hilarious and I don't doubt it. But it is pointless. Look, lots of property developers in the US became billionaires by simply developing property. Wow! No export! Before their housing bubble popped, they had lots of internal momentum too.

Look, if you're Chinese and want to become a billionaire it is simple. Go borrow ten billion from the bank, build a bunch of apartments and sell them for 10% profit. Hey, presto, instant billionaire. The local governments there would be happy to facilitate you, even if it means demolishing a bunch of peasants' farms. But how has the economy improved?

And finally (sorry, I can ramble), I get really scared when anyone says that this time it is different. Particularly when they use it to explain why it isn't a bubble.

It's not a bubble cos this time it's different. Hmm. Yeah. Right. It's not really a strategy I'd be banking on. Gambling on, maybe.

OK... you are right Doom, doom, China is going to pop... again. Sorry but its Xmas and I can't be bothered to argue the points with you

 

[tech/a]

if the vendors bid is such a great offer then sell to them haha

All the R/E agents know us and know that if its passed in at vendor bid they wont hear from us.
They of course continually ask before during and after auction what its worth.

The response is ALWAYS the same.
Cheap enough to make it a profitable development.
Normally thats 15-20% lower than vendor "expectation" which for a knock down is common---they are thinking as a home owner not a developer---with a property only suitable for development---they are not targetting their market.
Eventually they do understand that.

Im sure a few here find this thread interesting.
Its like telling Usain Bolt he cant run less than 10 sec.

Those of us involved in the industry just love to hear from those who arent---whats going to happen next!!

 

[Mr Z]

Those of us involved in the industry just love to hear from those who arent---whats going to happen next!!

Hmmmmm... you are a developer looking for a margin on a product. Price should matter little to you so long as a margin is to be had. To think that qualifies anyone in 'the industry' as an expert on the longer term price prospects for real estate is hubris. After all the US housing industry was laying on some pretty heavy long bets at the wrong time, how is it you guys have it all over them for forecasting ability?

I will not argue that well thought out developments will not be profitable BUT that says little about over all price direction over then next decade.