The future of Australian property prices

Also time for some ridiculous sale prices. Just moved a commercial property for above market value. Vacant tenancy as well. Location was the kicker.

Time to get out of Dodge if TS is selling down and hunting for bargains.

Require about 2000m2 light/heavy industrial with a strong head lease. Any takers?

trainspotter said:

Time to get out of Dodge if TS is selling down and hunting for bargains.

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...or the best buy signal ever!

wayneL said:

...or the best buy signal ever!

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Be interested in your points to this possibility.

trainspotter said:

Misinterpreted what I wrote. Not looking down on anyone. Previous posts from "other" ASFers were saying how easy it is to declare yourslef bankrupt instead of facing the music. The rules have changed. You are still liable for the debt. The bank/financier/loan shark will sell everything to recoup their debt. You are left with nothing. Banks take fixed and floating charges over your company as well as your assets. You cannot transfer funds/assets into the partner/wife/superior other/family prior to declaring bankruptcy either. ANY money you earn after the debt has been repaid (if there is a shortfall) will also be taken from you on a percentile ratio to repay funds outstanding.

The point of my post was that it is not that easy anymore to chuck your hands in the air and say "It is all to hard ..... I'm gonna walk". Nothing was mentioned from my quarter about "Poor investment decisions, redundancy, gambling problem, spending problems, small business failure, natural disaster, marriage breakdown, mental health problems."

P.S. Yes I do know several companies and individuals who have gone into receivership/bankruptcy. Not pleasant at all.

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Point taken. It's not an easy option, and not a decision to be taken lightly!

Found some more figures on the year-on-year increase in real estate stock on the market (according to SQM Research):

Adelaide + 72.6%
Brisbane + 72.9%
Canberra + 82.3%
Darwin + 73.4%
Hobart + 65.1%
Melbourne + 104.5%
Perth + 74.8%
Sydney + 54%

So there's twice as many homes for sale in Melbourne now as there was a year ago!

It still doesn't seem like many though, for such a large city.

Melbourne homes for sale: 32,572
Melbourne units for sale: 10,979

But it sure makes for a few busy weekends if you're in the market to buy

It's when you apply the median price that things get scary:

March 2010
14,662 homes for sale x median price $520,000 = $7,624,000,000
6,639 units for sale x median price $450,000 = $2,987,000
21,000 homes/units for sale in Melbourne for about $10.6 billion dollars.

March 2011
32,572 homes for sale x median price $565,000 = $18,400,000,000
10,979 units for sale x median price $460,000 = $5,050,000,000
43,000 homes/units for sale in Melbourne for about $23.5 billion dollars.

So there's now about $13 billion more dollars worth of real estate on the market in Melbourne than there was one year ago!!! That's about 121% more!!!

Not sure what it means. Just like playing with numbers. Any thoughts?

There are houses in Essendon a few Ks from where I live that have been on the market for many months now, owners are finding it hard to sell poorly maintained property around the 1 mill mark as buyers have become more discerning.

I have been looking but just don't feel any urgency. I think I am typical.

Knobby22 said:

I have been looking but just don't feel any urgency. I think I am typical.

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In a similar situation. Saved a deposit. I'd like to buy but can easily wait a couple more years.

Read this article today:

WA suffers record low property transactions
THE State Government has confirmed that WA's declining property market has hit rock bottom, with property activity last month falling to 16-year lows.
http://www.perthnow.com.au/business...frg2ru-1226054805452?source=patrick.net#story

Yeah, I don't think it's hit rock bottom. Not as far as prices are concerned. Just the prelude. Give it a couple more years I think.

74.8% more properties for sale in Perth than a year ago, and the lowest property activity in 16 years. Hmm.

Knobby22 said:

There are houses in Essendon a few Ks from where I live that have been on the market for many months now, owners are finding it hard to sell poorly maintained property around the 1 mill mark as buyers have become more discerning.

I have been looking but just don't feel any urgency. I think I am typical.

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I'm doing the same. There is a place near me that has been on the market since the start of the year - I want to see how long it takes for it to sell... on it's second real estate agent now....

I don't see the rush. If you rush to buy now, you'll be pay many years more on interest payment. Save more so there will be less interest to pay later on

greebly24 said:

snip.

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Rock bottom

andy0 said:

Rock bottom

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What's the point of your post ando0,

Are you suggesting Perth is not rock bottom yet ?

Hi all,

Anyone know where I can find the sale prices for stuff on realestate.com.au???

In the 'sold' section most come up with Contact Agent - any way of sourcing?

I just got notification of a Webinar "Where to for Australian house prices in the next 12 months?" on Alan Kohler's site Business Spectator. It may be of interest to forum members.


"When: Thursday, May 19, 2011 at 12pm AEST
(which is 10am for WA, 11:30am for NT, 12pm for QLD and 11:30am for SA)

Duration: 45 mins

REGISTER NOW

Australian house prices are 'the highest in the world' says the IMF, but is it true? We have recently seen some softening of residential house prices, especially in Victoria, but there are also signs of weakness in other regions, particularly those which are not directly linked to the mining boom.

Is it the reckoning the bears have been waiting for, or simply a soft patch in a wider acceleration that will continue thanks to a rising population, a shortage of housing stock and the powerful long term effects of negative gearing.

Business Spectator has gained a reputation as one of the prime debating arenas over house prices in the Australian media. Join Managing Editor James Kirby, economist Steve Keen and HIA's Harley Dale to hear what lies in store for the next 12 months.
REGISTER NOW!
Don't forget, this avenue is a great way to have your questions answered in real time - you can submit them during the webinar via a panel on the screen.
Be quick to register as there are a limited number of places available."

cutz said:

What's the point of your post ando0,

Are you suggesting Perth is not rock bottom yet ?

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Without going back on the post i believe Perth still has some more to fall for sure, imagine if there is a slowdown in mining... it will be in free-fall.

I like it how you see these realestate agents saying property in Melbourne should rise again now because its corrected... down what 2% since it rose in some parts over 100% in 1 year lol. I hate that they try to sucker in the FHB's with this kinda crap talk.

Here it comes:
from H S
More mortgage defaults than at GFC peak
Queensland suffered biggest acceleration
Points to new wave of repayment stress
MORTGAGE customers are defaulting on their loans at a faster pace than at the height of the global financial crisis as soaring living costs stretch household budgets to breaking point.
Westpac, the nation's second-biggest home lender, revealed yesterday that mortgage delinquency rates had climbed above the peaks they reached late in 2008 as the crisis swept around the globe.

And chief Gail Kelly, unveiling the bank's record first-half profit yesterday, said they were likely to climb further - albeit off a low base - as households struggled with rising utility bills and other costs.

Customers accounting for about 1.5 per cent of Westpac's $275 billion home loan book were more than 30 days behind on their repayment schedule at the end of March, according to the data released yesterday.

And the proportion of home loan clients more than 90 days late has jumped to 0.6 per cent - almost double the rate of a year ago and significantly above the high watermark hit during the financial crisis.

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Although Queensland has suffered the biggest acceleration in delinquencies - compounded by the natural disasters that beset the state over summer - defaults are gaining pace in every state.

Analysts said the surge in defaults, which comes despite the robust state of the nation's employment market, pointed to a new wave of repayment stress in Australia's mortgage belt.

UBS analyst Jonathan Mott questioned whether the rise was driven by first home buyers who used grants to enter the market.

The abrupt surge in the proportion of customers who were at least 30 days behind on payments was likely to "flow through over time" to the proportion at least three months late, Mr Mott said.

Mrs Kelly said the lift in delinquencies was "entirely within our expectations".

"It is picking up and we think it will pick up actually a little more, because we're in that stage of the cycle," she said.

While more customers were likely to require support to manage their loan repayments, "we don't actually see it translating into loss".

The revelation came as Westpac posted a cash profit for the six months to March of $3.17 billion, up 7 per cent on the same period a year ago in a result aided by a sharp fall in the charge for bad and doubtful debts.

Net profit soared to $3.96 billion - a 38 per cent increase largely fuelled by a favorable taxation ruling, previously announced by the group, relating to its 2008 acquisition of St George.

Nomura analyst Victor German said there were "no obvious problems" with Westpac's result, despite the 2.5 per cent fall yesterday in the value of the group's share price on a downbeat day across the market.

Some investors were concerned that the increase in profit, which beat analysts' forecasts, was largely fuelled by the sharp drop in the charge for bad and doubtful debts, Mr German said.

Also, the new Federal budget is really pulling a lot of money out of the economy.

I know you wouldn't think that if you read Murdoch Press, but the truth is that there will be a lot less cash around, a lot less government discretianary spending as nearly every department has to cut.

The high Aussie dollar will cause many businesses severe overseas competition. Also retail will continue to suffer as goods re bought overseas for far less.

We may have a quarter of negative growth soon.

Knobby22 said:

We may have a quarter of negative growth soon.

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I read somewhere that we DID have a quarter of neg growth. If we have another quarter then it's an official recession

cutz said:

What's the point of your post ando0,

Are you suggesting Perth is not rock bottom yet ?

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To much is happening to make that call IMHO. China slow down, accelerating defaults, boomers retiring (deleveraging/liquidating), population deleveraging/saving, tightening of credit, unemployment growth etc

"Inclement weather around Melbourne today had no impact on the clearance rate for residential auctions with 59 per cent of the 467 auctions reported selling.

This is broadly in line with the year to date clearance rate of 61 per cent and less that the comparable weekend last year when there was 776 auctions reported with a clearance rate of 75 per cent.

Of the 467 auctions reported this weekend a total of 275 sold and 192 were passed in, 119 of those on a vendors bid.

Conditions will continue to favor buyers over the rest of May with an average of 694 auctions each weekend, well above the 20 year average of 551."

Don't know what it means.

Perhaps something for some posters to comment on between their extra shifts.

medicowallet said:

"Inclement weather around Melbourne today had no impact on the clearance rate for residential auctions with 59 per cent of the 467 auctions reported selling.

This is broadly in line with the year to date clearance rate of 61 per cent and less that the comparable weekend last year when there was 776 auctions reported with a clearance rate of 75 per cent.

Of the 467 auctions reported this weekend a total of 275 sold and 192 were passed in, 119 of those on a vendors bid.

Conditions will continue to favor buyers over the rest of May with an average of 694 auctions each weekend, well above the 20 year average of 551."

Don't know what it means.

Perhaps something for some posters to comment on between their extra shifts.

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it means, regardless of the weather, the governments policy of trying to keep the housing price bubble inflated, is possibly working fine.. but there are signs its got cracks imho..

changing things around a little will make for a healthier RE market

1. Limit the First Home Vendors Grant to new housing only;
2. Limit new Negative Gearing to new housing only; and
3. Bring the capital gains tax rate back into alignment with the income tax rate.

90% of first home buyers are not buying new properties..600 million wasted on inflating the bubble and doing nothing to keep a healthy building industry alive

so 100,000 first home buyers per year are funding the price bubble in property prices simply by competing for existing properties and bidding the bejesus out of each others lenders credit accounts.., so clearance rates will continue to remain healthy looking and the demand continues for potential to inflate the housing bubble, but there is a good argument that the massive credit required to sustain this price bubble is stressing the heck out of the first home buyers big time.. but who cares ??? right!!

as for negative gearing, its simply an instrument to keep the housing bubble sustainable.

less than 2% of negative geared investor finance is going to the new housing market.

so when you hear that the new house and land packages are so unattractive to investors and first home buyers, the only way to keep the new home market alive is to export it.. i mean you have absolutely no interest from australian first home buyers and investors in keeping the housing industry alive, so the only way to sell new house and land packages currently, is to put sales reps into asia, and try to sell that shortfall of demand for new house and land in australia into the cash rich countries like singapore, malaysia and of course china.. i recall housing companies saying they are selling more than 40% of the house and land packages into asia as no one here in australia wants to keep the housing industry alive and there is no demand for it..

its possibly the asian money thats supporting the housing industry to the place it is now.

just imagine what a healthy business model it would be if you actually promoted a building industry, allowed first home owners grants to apply to new properties.. and funnelled the negative gearing investor finance into new homes only.. then genuine jobs and growth would result in the RE market... rather than an auction bonanza price driven housing bubbling insane model currently being nurtured by the good people, bankers and government of australia..

bwtfwik

Agentm said:

just imagine what a healthy business model it would be if you actually promoted a building industry, allowed first home owners grants to apply to new properties.. and funnelled the negative gearing investor finance into new homes only.. then genuine jobs and growth would result in the RE market... rather than an auction bonanza price driven housing bubbling insane model currently being nurtured by the good people, bankers and government of australia..

bwtfwik

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I concur ........ a healthy building industry is what is required for the common good of Australia. Many trades will be affected as well as suppliers.