The future of Australian property prices

[nunthewiser]

Not so sunny up here in Gero either Al

Builders folding
listings sitting stagnant
listings gaining by the week
sales near on ground to a halt
listing prices getting slashed
mortgagee auctions appearing all over the shop


but its all good, im still waiting for the screams to get a lil bit louder

ho hum ..sunshine and lollipops i tap my fingers too in the meantime

 

[BigAl]

Builders and Land Developers doing it tough in WA as well.

Builders have been throwing in Free Swimming Pools on New Homes in the last 3 months to try and kick-start an industry in the dumps.

Cocky Land Developers that could release a 450 Housing Site, in lots of 20 for sale every 2nd month and on postage sized blocks of 400sqm - 550sqm blocks, are now doing it tough as well. It was reported a few months back that these upstanding corporate citizens were throwing in $5,000+ Balances on Credit Cards, on top of discounts of $10K. News on the ground today is that Developers slashing a further $20K off Vacant Land now to try and move stock. Still no takers and why would there be, the Average Aussie Family can see the Ponzi Scheme unravelling.

I'll be sipping my Latte as I watch these thieves (Land Developers) go belly up.

 

[BigAl]

Not so sunny up here in Gero either Al

Builders folding
listings sitting stagnant
listings gaining by the week
sales near on ground to a halt
listing prices getting slashed
mortgagee auctions appearing all over the shop


but its all good, im still waiting for the screams to get a lil bit louder

ho hum ..sunshine and lollipops i tap my fingers too in the meantime

And the Real Estate Shonks sprouting here and have been for many years, how Auctions are the only way to go.

Me thinks times are so tough for them that they are desperate to try anything for a sale. Auctions have never worked in WA, the Sandgropers can see this for what it is, a sham, bought by a gullible public in the Eastern States.

 

[schnootle]

I hope the Gov Nuts responsible for leading the FHG like lambs to the slaughter in the Great Ponzi scheme, take a good hard look in the mirror.

If it does all end in tears, it will be interesting to see how this is handled - I can see the ACA episodes and bad newspaper articles now. They did add fuel to an already roaring fire of fear about "getting into the market", "getting on the property ladder" before the door is closed for ever etc, etc. There was panic buying by FHB there for a while, it was ridiculous. From my perspective a lot of the FHB market has realised this is the top and there isn't a rush any more.

There will definately be fingers pointed at the FHB boost one day. I am astonished at the massive political swindle that scheme was, and the amount of people that think it was about the government helping young people "get into the market" - rather than the absolute opposite. On a political level it is beautiful.

 

[FxTrader]

Builders and Land Developers doing it tough in WA as well.

Builders have been throwing in Free Swimming Pools on New Homes in the last 3 months to try and kick-start an industry in the dumps.

Must be that the developers in WA have not tapped into the Chinese migrant market yet.

Have a read of this article in today's Age...

http://www.theage.com.au/business/property/developers-court-overseas-buyers-amid-fears-of-greater-urban-sprawl-20110206-1aihd.html

MAJOR builders and developers on Melbourne's urban fringe are selling up to half of some new housing estates to overseas investors and those hoping to migrate to Australia.

Victoria's largest home builder Simonds Homes is one of several to have sold house and land packages for the Sanctuary Lakes Resort and Featherbrook estates in Melbourne's west, of which it says half of the combined total of 2500 lots were sold overseas.

Simonds general manager of sales and marketing Mark Vujovich said foreign buyers were helping to create jobs in Victoria and boost new housing supply at a time when building activity had plummeted.

However, planning critics say selling new housing estates offshore only worsens Melbourne's problems of urban sprawl and record land prices.

Mr Vujovich predicted up to 10 per cent of its sales this year in Victoria (or 250 house and land packages) would be made in China and a much smaller number in Indonesia.

''We have 23 agents in China operating in five provinces including all the major cities,'' he said. ''We are introduced word of mouth through our clients and have worked hard at building relationships over there.''

Mr Vujovich said overseas buyers were usually associated with off-the-plan apartment developments, but that house and land packages are a growing market.

''There are two types of buyers - those that want to migrate and move their children here for the education system and then there's straightout investors buying something to rent out,'' he said.

''It's about educating both types of buyers over there that you are far better off buying house and land than an apartment because, unlike in China, you can actually own that piece of land.''

Australia's foreign investment laws encourage overseas-based investors to buy new real estate with the aim of increasing housing supply.

A series of law changes in recent years made it easier, and then harder, for foreign investors to buy existing homes, but were mostly unconcerned with sales of new housing stock.

Simonds international sales manager Jonathan Wang said a new house purchase counted for 28 of the 150 points needed by applicants for permanent residency to qualify.

He said estates in the west were the most popular with overseas buyers because they were 23 kilometres or less from the CBD and relatively close to Port Phillip Bay.

Other estates marketed offshore include Point Cook's Saltwater Coast, The Rise and Rose Grange in Tarneit, Williams Landing near Truganina and The Grove in Cranbourne.

Cranbourne local George Zhang, originally from China's Guangdong province, purchased three new houses, a pizza shop and a convenience store in Melbourne in his quest for permanent residency.

''A lot of Chinese people are trying to immigrate to Australia,'' he said. ''Buying property is the first stage of coming to live here.''

Mr Zhang, his wife Rita Tian and daughter Ella, recently became Australian citizens. They are now advising friends in China about how best to buy real estate and small businesses in Melbourne.

''Australia is paradise, especially for small business people,'' he said. ''You don't have to go through a lot of hierarchy, everything is transparent and it's easy to recruit because there's a lot of students who want to work part time.''

However, RMIT planning professor Michael Buxton said companies such as Simonds were being irresponsible in courting overseas buyers.

''Some developers cry poor about the alleged lack of outer urban land while promoting sales overseas,'' he said.

''Overseas marketing of outer urban housing makes it harder to satisfy Melbourne's housing demand. It creates an artificial demand to increase developer profits, raises outer urban housing prices and places more pressure on the urban growth boundary.

''We should not be expanding the outer urban areas for any reason let alone for overseas speculative purchasers. That is just outrageous and wrong and stretches the boundaries of all proper planning.

So there you have it, evidence that foreign buyers are snapping up new housing stock, contributing to the supply problem and providing support for prices on the fringe. Wealthy foreign buyers are now a key target market for developers. The bubble continues its expansion with the aid of foreign investment, just wonderful.

 

[schnootle]

So there you have it, evidence that foreign buyers are snapping up new housing stock, contributing to the supply problem and providing support for prices on the fringe. Wealthy foreign buyers are now a key target market for developers. The bubble continues its expansion with the aid of foreign investment, just wonderful.

First we send our all our manufacturing overseas, then we let overseas companies buy out local companies, now we sell residential land piecemeal overseas. Yay, I swear one day silly white australians will be kepts as house monkeys by another country not stupid enough to sell everything.

 

[Tysonboss1]

First we send our all our manufacturing overseas, then we let overseas companies buy out local companies, now we sell residential land piecemeal overseas. Yay, I swear one day silly white australians will be kepts as house monkeys by another country not stupid enough to sell everything.

Do you purchase goods manufactured overseas, If so you part of the problem. every time we import we are putting Australian dollars in the hands of other nations, and when they are not buying our products they will look to buy our assets.

The question is, Is is moral to accept their goods and services if we are not willing to let them spend the dollars as they wish. Think about that next time you Buy an imported beer of wine or plastic doodad, they give us a beer and we give them a little piece of the australian pie.

 

[FxTrader]

Do you purchase goods manufactured overseas, If so you part of the problem. every time we import we are putting Australian dollars in the hands of other nations, and when they are not buying our products they will look to buy our assets.

Or buy our debt with their surplus AUD. In many cases there is no alternative but to buy goods manufactured overseas. For instanace, how many electronics goods we consume are manufactured in Aus? Saying that one is "part of the problem" for buying imported goods is a nonsense, the problem with trade imbalances is a dilemma for the entire world economic system.

The question is, Is is moral to accept their goods and services if we are not willing to let them spend the dollars as they wish.

Of course it's moral, not everything in Australia is up for sale nor should it be and that's why we have the FIRB. Allowing foreigners to buy property unrestricted here is folly as noted by Buffett in the YouTube vid.

 

[Tysonboss1]

Saying that one is "part of the problem" for buying imported goods is a nonsense, the problem with trade imbalances is a dilemma for the entire world economic system.

.

Offcourse you are part of the problem (I don't really see it as a problem though), Every time you buy imported products you are contributing to the problem.

Every time we import a container load of LCD TV's we have to ship a frieght train load of coal to maintain the balance. And if we import so much then they will have to spend their money on assets.

If we were not importing so much our currency would be stronger and our assets less atracttive.

But any way, I think if you do your research you will find many Australians Buying Property all over the world, especially NZ and USA. And many foreign companies investing in china.

So us Aussies are busy buying up the rest of the world, just as quick as they are buying here. And just because they buy Here, doesn't mean they won't eventually sell it back, no one lives forever.

 

[Quincy]

Must be that the developers in WA have not tapped into the Chinese migrant market yet.

Have a read of this article in today's Age...

http://www.theage.com.au/business/property/developers-court-overseas-buyers-amid-fears-of-greater-urban-sprawl-20110206-1aihd.html

So there you have it, evidence that foreign buyers are snapping up new housing stock, contributing to the supply problem and providing support for prices on the fringe. Wealthy foreign buyers are now a key target market for developers. The bubble continues its expansion with the aid of foreign investment, just wonderful.

Forget about interest rates affecting the future of Australian property prices (for some suburbs in Sydney and Melbourne that is). Many Chinese buyers just pay cash when buying established Oz property - no need for bank loans.

This sort of thing (see below) has been happening in a big way over the past few years in my local area. There are also, I imagine, other Sydney and Melbourne suburbs that no doubt are also being targeted by the Chinese in this way. I also know of properties that have been purchased by Chinese buyers after viewing over the internet only (local relative or friend with P.R. / Oz citizenship executes the sale). If under the threshold they have also received the first home owners grant and stamp duty discount. Great for local Aussies trying to purchase in the subject areas.

Another property touted as the biggest house in Palm Meadows, and built by a Japanese investor in the 1980s as a corporate retreat, sold for $2.6m to Sydney-based Chinese buyers, who flew into the Gold Coast on Saturday morning, viewed the property for the first time, and purchased it on Saturday night.

Sitting on 4095sq m at 43 Meadowlake Drive, it has five bedrooms, 12 bathrooms, three kitchens, two media rooms, a library, massage room, sauna and a 20m pool.

http://www.theaustralian.com.au/new...a-falling-market/story-fn6njxlr-1225998825087

 

[FxTrader]

Came across this assessment recently while reviewing a CBA valuation report...

"In addition, the Australian residential property mortgage market – which
CBA is heavily leveraged to - is characterised by one of the highest
levels of household debt in the world. This has come about through
several years of lax lending standards (pre-GFC), government-induced
stimulus (particularly for First Home Buyers) and an unsustainable level
of speculative investment activity.

Any stagnation or below-inflation returns on residential property – even
without an increase in unemployment or any external shocks to the
Australian economy – will produce lower returns in the property market.
This will result in higher levels of stress, defaults and, critically, a lower
level (or even negative) of mortgage growth origination. This will have a
direct impact on CBAs bottom line."

Entering the IP market now entails much greater risk than many presume IMO.

 

[bellenuit]

For those who are interested, a very amusing and informative (and very long) article from Vanity Fair on how Ireland ended up in the pooh following the collapse of its property bubble. Whether there are parallels with Australia or not, I will let others judge.

When Irish Eyes Are Crying

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103?currentPage=1

 

[BigAl]

On the whole buy local vs Overseas,

Confirmation that my company is now buying goods direct from China on a myriad of items, stickers, Hats, Shirts, pens, Flags etc, stationary... These items are internal costs and are not onsold or Retailed in the Country. Estimated our Cost in Oz is $200M. By reducing the middle man out of Oz, cost will be below $50M.

I've got a range of emotions on this. Nothing is made in Oz anyway, cut out the local distributors and go China and Malaysia direct. Saves the Company money, shareholders are happy.

But by doing this, we're cutting out local businesses, some will close business. In turn, with these businesses we have traditionally supported, they'll either close shop or sustain themselves on less profit, and in the end spend less with us. And of course if the public cottoned on to this, there could be a backlash and the public boycott our products.

You can talk about being good Corporate Citizens, well I'm quite disgusted with what we are doing.

I'm somewhere up there in the chain of command, but not close enough to the top to make a difference in decision making. I'm just a small cog in the wheel.

A sign of bigger things to come?

 

[prawn_86]

How does any of that apply to property prices BigAl?

 

[BigAl]

How does any of that apply to property prices BigAl?

I thought it would be obvious,

Businesses close down and / or businesses with less profit to spend in the local economy = less buying power on housing, or less people competing to buy in the marketplace.

Shift in Wealth, from OZ to China.

The post has 100% relevance to the housing market.

 

[prawn_86]

I thought it would be obvious,

Businesses close down and / or businesses with less profit to spend in the local economy = less buying power on housing, or less people competing to buy in the marketplace.

Shift in Wealth, from OZ to China.

The post has 100% relevance to the housing market.

I'm not a property bull either, but one could argue that this shift of wealth has been going on for at least 2 decades (Japan then pretty much all of Asia), yet property prices have still increased

 

[explod]

I'm not a property bull either, but one could argue that this shift of wealth has been going on for at least 2 decades (Japan then pretty much all of Asia), yet property prices have still increased

Probably five decades, the workers/middle class rose from serfdom and the financial system has loved it. And the efficiency of production has become near perfect.

Nostradarmus predicted the problems by calculating human growth and Marx predicted that mass production would outdo itself when there were no more workers to buy the goods. Are we at the tipping point?

What has this to do with property ? We will not be able to continue to pay for it or even rent it.

Leave you to argue the merits, back to the vegies.

 

[medicowallet]

"This weekend there have been 326 auctions reported and with a total of 206 selling a clearance rate of 66 per cent has been recorded. Of the 110 passed in 63 of those were passed in on a vendors bid.

This compares to the clearance rate of 54 per cent from last weekends 182 auctions and the 85 per cent reached on this weekend in 2010."

66% vs 85% last year, what this means, not sure!

Last weekend revised to 54% from 61%, not sure what this means either.

Just keeping it real for the believers.

Sunshine, fairies and fruit tingles here today. My son and I got some detergent and made bubbles, but the bigger we blew them up the more they popped, just thought I'd share that story with you all, don't know why.

 

[Agentm]

"This weekend there have been 326 auctions reported and with a total of 206 selling a clearance rate of 66 per cent has been recorded. Of the 110 passed in 63 of those were passed in on a vendors bid.

This compares to the clearance rate of 54 per cent from last weekends 182 auctions and the 85 per cent reached on this weekend in 2010."

66% vs 85% last year, what this means, not sure!

Last weekend revised to 54% from 61%, not sure what this means either.

Just keeping it real for the believers.

Sunshine, fairies and fruit tingles here today. My son and I got some detergent and made bubbles, but the bigger we blew them up the more they popped, just thought I'd share that story with you all, don't know why.

sunshine and lollipops and all things warm and fuzzy.. these dizzy believers will swallow any story i guess..

its all good in the make believe land of peter pan..

but i agree..

lets keep it real

84 mysterious auctions went AWOL.. no one could figure out where to put those stats

last weeks fudges figures of 61% clearance went to a corrected 54%

lets not add the auctions that are pulled on the last few days, or more commonly now, on the day itself when no one shows.. or simply forgotten in the figures and we see the numbers just melt away and vanish..

but auctions are pulled from the clearance figures week in week out, so it artificially raises the clearance rate.. simple!

6 were pulled last week, so it artificially raised the clearance rate a further 2%

so 52% is the correct clearance rate for last week, not the fudged 61% touted by them

last weekend 203 auctions were reported, but in the actual last count, they only allowed for the results of only 182 to draw statistics from

so many properties are simply not reported, they vanish.. which is the magic that the reiv have, they just make things disappear..

keepin it real medicowallet.. keepin it real...

REIV

Real Estate Invariably Vanishes

lol

 

[MACCA350]

The next three weekends will see significantly more auctions with 695 next weekend followed by 980 and 910 in the following two weekends.The high number of listings shows that sellers have a reasonable degree of confidence in their prospects, reflecting the overall health of the national and state economy.

Said like a true property bull

Cheers