The future of Australian property prices

[sptrawler]

With all due respect,

Affordable in whose eyes? You are out of step with reality if you believe this.

Meanwhile in WA, a lot of press here on the weekend that the Retail sector is officially in Recession and things haven't been this bad for many, many years.

Your spot on BigAl, retail over here is sliding into a hole and property is following it. I don't mean to be alarmist but W.A being such an isolated place is a weather bell for the economy. I can tell you confidence is down and people are battening down the hatches.
Mineral boom or no mineral boom the shopaholics are on the wagon and one bit of bad news is going press the elevator "down" button. Bargain basement here we come, is my guess.
If property is 20 - 30% overvalued, then wages have to go up a lot or prices have to come down a lot. Heads or Tails?

 

[TabJockey]

Well you property bulls, on the weekend I watched my first auction. The property was purchased 18months ago for $750k, the house was demolished and block cleared then subdivided. About 12months ago the 3 blocks were put on the market for 395k each.
At the peak that was somewhere near the price being achieved (apples for apples) they didn't sell. Well onto the auction last weekend, 30 or so people turned up, no starting bid at $250k.

Interesting how much land in what suburb?

 

[UBIQUITOUS]

What I find interesting is that Enzo reported the clearance last weekend at 62%. Notice how he revised that figure down now to 59% to give the impression that the property is picking up. REIV would have to produce the dodgiest stats out there.

Agreed. I don't recall the REIV ever revising clearance percentages DOWN after having received the 'missing' data.

 

[sptrawler]

Interesting how much land in what suburb?

Approx 400sq/m .Riverton

 

[kingcarmleo]

Anyone have an updated list of average prices per state.

 

[medicowallet]

http://www.theage.com.au/business/p...am-still-rises-to-the-top-20110417-1djow.html

median price in melbourne drops 6% in march quarter.

Don't know what it means, just putting it up for people.

I wonder what people with low equity or recent purchases think of the property outlook at the moment.

 

[CamKawa]

Here we go.... land sales are down 40% but prices are up 4.1%. How does that work? Someone is playing funny buggers with the figures I think.

Land sales fall to 10-year low

A report on land sales shows the number of lots sold fell sharply in the December quarter to the lowest level in a decade.

The Housing Industry Association and RP Data Residential Land Report shows sales were down 40 per cent compared to the same time a year ago.

However land values accelerated in the quarter and the weighted average land value rose 4.1 per cent to $194,000.

For the 12 months to December land values rose 5.9 per cent.

The report says the figures indicate the housing construction sector will continue to struggle.

 

[MR.]

Hello, Just callin' in to read what's happening......



Geez.....Some very disappointing figures above. Hope the index isn't a leading indicator!





There's no real need for interest rates to come down.

Now how's that chant go again?

bye

 

[tothemax6]

Glad this thread is going so strong - good for a read.
t6 awaits the housing downturn, but fears he will be waiting a long time.

 

[moXJO]

Glad this thread is going so strong - good for a read.
t6 awaits the housing downturn, but fears he will be waiting a long time.

Another street record price in my area.
Yup wake me up when they start moving down.

 

[medicowallet]

Another street record price in my area.
Yup wake me up when they start moving down.

Yes, of course, your street is "different"

The thing that protects property is that people are naive as to the value of their house.

ie you could assume that most houses in melbourne dropped in the last quarter, but most people would assume that their house went up or stayed flat.

The interesting thing is that 6 extra weeks have passed since that quarter, and I wonder what has happened to prices in that 6 weeks?

What about the next 6 weeks as investors ponder another potential 6% fall?

Have the people in the know started bailing out already?

What effect has the dollar, inflation in China, and lending standards there had on the market?

Why has Robots disappeared? had to take on extra shifts?

Has trainspotter sold out yet? Is he going to ride it out and destroy equity like I am?

Why have the inventories of sunshine and lollipops started to increase? can people not afford optional extras?

Why have I started to get e-mails from real estate agents I have not heard from in years?

 

[cutz]

Another street record price in my area.
Yup wake me up when they start moving down.

This thing may take years to play out, there will always be exceptions because the market is so illiquid, i.e two irrational bidders can push up the price way beyond the mean.

 

[trainspotter]

TS is confident the property he has amassed will not take a big hit. Commercial tenants are locked down in long leases. Residentials are paying weeks in advance with a big bond. But I did weaken the other day and accepted a large offer on a resi block of land. Finance pre approved and settlement in 28 days etc etc.

What does this mean? It means that there has been reams of prose on countless blogs and websites warning of impending doom.

You see, house prices only fall when people are forced to sell their homes. Otherwise, households choose to simply remain in their home and wait things out. Property investors are loath to realise their capital loss.

A true collapse in house prices would indeed require some large external shock - a doubling of unemployment or interest rates - to trigger the wave of forced home sales that it would take to provoke house price falls.

Read more: http://www.smh.com.au/opinion/polit...ice-phobias-20110322-1c559.html#ixzz1JvHdekdJ

 

[medicowallet]

A true collapse in house prices would indeed require some large external shock - a doubling of unemployment or interest rates - to trigger the wave of forced home sales that it would take to provoke house price falls.

Read more: http://www.smh.com.au/opinion/polit...ice-phobias-20110322-1c559.html#ixzz1JvHdekdJ

To cause catastrophic falls, well maybe.

The market has been propped up by foreign $$$ and our dollar and events around the world may be causing this to dry up.

I still think stagnation or up to a 20% drop is possible, however over how long of a timeframe I do not know.

I just find it very interesting that 6% in 3 months can happen when some people say property can never fall... interesting indeed.

 

[Aussiejeff]

To cause catastrophic falls, well maybe.

The market has been propped up by foreign $$$ and our dollar and events around the world may be causing this to dry up.

I still think stagnation or up to a 20% drop is possible, however over how long of a timeframe I do not know.

I just find it very interesting that 6% in 3 months can happen when some people say property can never fall... interesting indeed.

Then again, wouldn't a paltry but grinding 20% drop over 20 years ultimately be "catastrophic" for home investors?

Even stagnation or 0% increase over 20 years would be horrendous for RE capital wealth accumulation after inflation applied? If China pulls back export growth and foreign investment over the long term to concentrate on their own internal consumer economy as suggested by many world boffins, this scenario *might* be possible?

Hmmm..

 

[satanoperca]

To cause catastrophic falls, well maybe.

The market has been propped up by foreign $$$ and our dollar and events around the world may be causing this to dry up.

I still think stagnation or up to a 20% drop is possible, however over how long of a timeframe I do not know.

I just find it very interesting that 6% in 3 months can happen when some people say property can never fall... interesting indeed.

You dont need IR's or unemployment to go up to see a drop in property just consumer sentiment to fall off a cliff will do it, which will then be followed by rising unemployment.

A 6% drop in a qtr will prick the ears up of many, if followed by a second quarter drop then confidence will start to take a beating. The belief the property only goes up will be busted. Maybe we need myth busters on the case.

Once average joe realises there lose making investment is not going to see any capital growth for several years then they will sell, along with everyone else.

Cheers

 

[Glen48]

Why I’m Never Going to Own a Home Again
Mar. 21 2011 - 4:20 am | 87,268 views | 2 recommendations | 62 comments
By JAMES ALTUCHER
Many people have said to me in the past month, “I’m going to buy a home.” Or, “What do you think of the idea of me buying a home?” I like the second batch of people. They are my friends and it seems like they are sincerely asking for my advice. And I’m going to give it to them. Whether they meant it or not.

I have some stories about owning a home. One of them is here: “What It Feels Like to be Rich” where I describe my complete path into utter depravity and insanity. The other one is still too personal. Its filled with about as much pain as I can fit onto a page. Oh, I have a third one also from when I was growing up. But I don’t want to upset anyone in my family so I’ll leave it out. Oh, I have a fourth story that I just forgot about until this very second. But enough about me. Lets get right to it.

There are many reasons to not buy a home: [By the way, I also put this in the category ofAdvice I want to tell my daughters, including my other article: 10 reasons not to send your kids to college.]

Financial:

A) Cash Gone. You have to write a big fat check for a downpayment. “But its an investment,” you might say to me. Historically this isn’t true. Housing returned 0.4% per year from from 1890 to 2004. And that’s just housing prices. It forgets all the other stuff I’m going to mention below. Suffice to say, when you write that check, you’re never going to see that money again. Because even when you sell the house later you’re just going to take that money and put it into another downpayment. So if you buy a $400,000 home, just say goodbye to $100,000 that you worked hard for. You can put a little sign on the front lawn: “$100,000 R.I.P.”

B) Closing costs. I forget what they were the last two times I bought a house. But it was abo

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[cutz]

Then again, wouldn't a paltry but grinding 20% drop over 20 years ultimately be "catastrophic" for home investors?

Even stagnation or 0% increase over 20 years would be horrendous for RE capital wealth accumulation after inflation applied?

Agree, a point that's often missed,

Especially by the NG'd property seminar set.

 

[nukz]

Hey were is robots, you told me i wouldn't be here in a few months time.

Still sipping latte's with a slightly increased number of for-sale signs in the area?

 

[Dowdy]

Hey were is robots, you told me i wouldn't be here in a few months time.

Still sipping latte's with a slightly increased number of for-sale signs in the area?

He's downgraded to tea