Australian (ASX) Stock Market Forum

The future of Australian property prices

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Plumber1 said:
Sorry. I did not know that Victoria is not included.
Here on the beautiful, sunny Gold Coast (where all property prices have halved in the last 3 years), we cannot understand why anyone would live in a godforsaken, cold place like Victoria, :) so I have never attempted to look up any Victorian houses. :)
Click to expand...

boo

at least here in wonderful Melbourne my property values have gone up in the last 3 years. Not only that it is a fantastic place to live, give me a great lifestyle over supposedly good weather anyday :p:

Oh and you don't know what "godforsaken and cold" are until you have lived in Christchurch like I did for 6 long years :D
 
LOL ....... just went back to October 2010 and around post 3000, page 150ish of this thread.

Talk about déjà vu. Same same but different.

Man, we have flogged this dead horse :horse:
 
TH, this horse has just started to trot, the bolt has yet to become and then the complete and utter flogging.

But we are different here, just a little slower.

Cheers
 
just looked at ..on the house site...interesting the figures flashing up on the rhs....some places up 11% and 20% and some down 1%, god forbid one down 6%
so do you mob actually research the articles, information on these sites.....
as some of you have been frothing at the idea of 50-60% drops, and now 80%

you may get some sellers who had a margin loan gone bad, or some other catastrophe that requires a fire sale....
but I cant see it, from all the noise from lame stream media, the actual figures are nothing like it, in fact recent stuff from abs or whatever, instead of upgrading they are renovating to the tune of 31 billion in the last quarter...so most are staying put, and saving their money, for the surety of rainy days to come...

the other point missed is the higher priced homes are not selling or not in the market, so the middle and lower houses are changing hands, which brings the median value down...it does not mean houses are selling for less

news, ran a program this week, showing how many businesses had closed down and jobs lost, in each suburb....its worth having a read, + check out your suburb
it may surprise some of you, and those pretend economists, who I call econo- misteries , cause it seems they are off with the fairies,
I predicted gloom and doom a long time ago, for small business...and gfc mark 2
so whilst this is going down....there will not be interest rate rises for a long time

on the labor channel, abc24, they had a program about Vic 500,000 population increase, and how it will affect the regional cities....Bendigo, Ballarat, Shepparton etc
they mentioned Castlemaine, it has risen over 24% in past year, the locals are not that happy with the newbies arrivals...

those who go on about the lower auction numbers, also missed the high numbers last year, and last couple of years, when every man and his two dogs were buying...forcing the auction numbers way above the norm
I say you will not see anything like the doom and gloom the bears are frothing over in their cyrstal balls.....
you will see some forced sales, like after the business closed and no income, for the owners, some had business loans against their homes...
the banks are not lending to small business
the govt is pretending everything is hunky dory, to bolster their own egos...hence glen stevens pretending to back swan with his threatening to raise rates...its all crap...
all pretence...in fact you may see some rate drops, after worse figures come out in june..
a repeat of 2008 is on the cards, after they raised rates non stop, crowing about swans fiscal prowess, only to suddenly drop rates by 3%, with the reality
i swear some of you have been here for years, saying the same old gloom, yet year after year, nothing like it has eventuated...in fact its gone the other way, with rises generally..
up here in country nsw, its all rather ordinary, if not slight rises, as I see of at least 10% in the areas on my watch...
the lousy public housing, or low cost old housing, or unfavourable locations are selling as usual, but the nicer homes, in the better areas, middle class seem to be rising...some cases over 20%...but as they do with the median, they lump it all together, and you can get a lower median for the suburb...
oh well, once we get that change of govnuts, both state and federally, then you will see confidence rise, and the economy back on track...with house prices on their usual trajectory trend...upwards
 
kincella said:
just looked at ..on the house site...interesting the figures flashing up on the rhs....some places up 11% and 20% and some down 1%, god forbid one down 6%
so do you mob actually research the articles, information on these sites.....
as some of you have been frothing at the idea of 50-60% drops, and now 80%

you may get some sellers who had a margin loan gone bad, or some other catastrophe that requires a fire sale....
but I cant see it, from all the noise from lame stream media, the actual figures are nothing like it, in fact recent stuff from abs or whatever, instead of upgrading they are renovating to the tune of 31 billion in the last quarter...so most are staying put, and saving their money, for the surety of rainy days to come...

the other point missed is the higher priced homes are not selling or not in the market, so the middle and lower houses are changing hands, which brings the median value down...it does not mean houses are selling for less

news, ran a program this week, showing how many businesses had closed down and jobs lost, in each suburb....its worth having a read, + check out your suburb
it may surprise some of you, and those pretend economists, who I call econo- misteries , cause it seems they are off with the fairies,
I predicted gloom and doom a long time ago, for small business...and gfc mark 2
so whilst this is going down....there will not be interest rate rises for a long time

on the labor channel, abc24, they had a program about Vic 500,000 population increase, and how it will affect the regional cities....Bendigo, Ballarat, Shepparton etc
they mentioned Castlemaine, it has risen over 24% in past year, the locals are not that happy with the newbies arrivals...

those who go on about the lower auction numbers, also missed the high numbers last year, and last couple of years, when every man and his two dogs were buying...forcing the auction numbers way above the norm
I say you will not see anything like the doom and gloom the bears are frothing over in their cyrstal balls.....
you will see some forced sales, like after the business closed and no income, for the owners, some had business loans against their homes...
the banks are not lending to small business
the govt is pretending everything is hunky dory, to bolster their own egos...hence glen stevens pretending to back swan with his threatening to raise rates...its all crap...
all pretence...in fact you may see some rate drops, after worse figures come out in june..
a repeat of 2008 is on the cards, after they raised rates non stop, crowing about swans fiscal prowess, only to suddenly drop rates by 3%, with the reality
i swear some of you have been here for years, saying the same old gloom, yet year after year, nothing like it has eventuated...in fact its gone the other way, with rises generally..
up here in country nsw, its all rather ordinary, if not slight rises, as I see of at least 10% in the areas on my watch...
the lousy public housing, or low cost old housing, or unfavourable locations are selling as usual, but the nicer homes, in the better areas, middle class seem to be rising...some cases over 20%...but as they do with the median, they lump it all together, and you can get a lower median for the suburb...
oh well, once we get that change of govnuts, both state and federally, then you will see confidence rise, and the economy back on track...with house prices on their usual trajectory trend...upwards
Click to expand...

Who has been saying 50-80% drops?

Or did you just make that up?


Also, we will see what happens over the next 12 months.


What are you predicting for returns over that timeframe, considering your prediction prowess.
 
As a young person who wants a house to live in, I'm not buying right now. For 3 years I've been told to buy, but I refuse to accept the price tags right now. I would rather get more of a deposit behind me and a buffer account built up for tougher times that lie ahead. Most of my other friends and family my age feel the same way.

Even the most bullish of all property bulls are now changing their tune - saying things like "property is going to stagnate at worst" .. Yes, OK fair point. If it's going to stagnate for 3-5 years though, you have effectively lost 30%+ because you could have been getting 6%+ per annum by holding cash. I don't think a lot of these property investors are strong enough to hold onto their bricks and mortar when they are tumbling in value and bleeding money. After all, it's *never* happened before and they are only used to seeing prices rise in good times. A lot more sellers and a lot less buyers equates to lower prices.. or even a flash crash as the panic spreads. Markets are irrational and often overshoot one way or the other.

I think overall this is a good thing to have happen though, after all - a house isn't a bank. I don't know why people have got into the habit of parking all their cash and debt into one basket. It's a little bit dumb. I can live with my decision no matter which way the market goes, but I strongly expect it to fall for a while first. I see no hurry to rush out and buy, and if I ever do buy, it won't be to make money.
 
kincella said:
the other point missed is the higher priced homes are not selling or not in the market, so the middle and lower houses are changing hands, which brings the median value down...it does not mean houses are selling for less
Click to expand...

By that logic, when higher priced homes were selling, or in the market, why did it mean houses were selling for more? Why is the median house price only accurate when it is going up? What other market indicators are only accurate when rising?

The Australian Financial Review May 21-22 2011
THE GREAT WINTER HOME SALE
"The numbers tell the story. Property values are moving decisively in favour of buyers. There are bargains all around the country as sellers drop their prices – some by as much as 70 per cent."

"In 2008 the unit was brand new and it sold for $5 million. Yet at the twilight auction on May 13 a vendor bid of $2.5 million for the luxury Maroochydore penthouse unit was met with silence from the 50 onlookers."

"In the affluent Sydney beachside suburb of Palm Beach, public listings indicate that about one in 10 properties are up for sale."

So, kincella, I don't see how you can argue that higher-priced homes aren't on the market? 10% of the homes in Palm Beach are publically listed as for sale. To me that seems a massive amount!?!
 
Anecdotally...im on the move again and looking for rental property's on the lower north shore (Sydney) i inspected 6 property's today all at the lower end of my price bracket and can report the following.

  • 2 bed unit in Wollstonecraft $590 p/w...approximately 15 inspectors (vacant)
  • 2 Bed Town house in Artarmon $490 p/w...approximately 12 inspectors (vacant)
  • 3 Bed House in Artarmon $610 p/w..approximately 10 inspectors (vacant)
  • 3 bed unit in Cammeray $580 p/w...approximately 14 inspectors (almost vacant)
  • 4 bed house in Lane Cove $650 p/w...approximately 10 inspectors (vacant)
  • 2 bed unit in Artarmon $460 p/w...approximately 70 inspectors (occupied)

According to the media and the real estate industry there is a rental crisis, so how come there are so many empty property's? and why such disinterest, small numbers of inspectors. :dunno:

Also if we look at the 4 bed house in Lane Cove and assume a value of around 800K (its a very old crappy house) then consider the rent of $650 p/w that gives us a gross yield of around 4.3% ~ take out expenses and we are looking at less than 4% yield..maybe as low as 3.5% :eek: its woeful and thus as an investment, it only makes sense if there is at-least 4% annual capital growth.

Its a real ponzi isn't it....someone has to pay more than you did or it all falls apart.
 
There is a few 3 bedroom houses near my place, when I go for my relaxing nightly walks while sipping a late I note how long they have been on the market for lease. One 3 months the other 4 months. This must be owned by those owners who say dont worry rent will cover interest and ill just raise rent if rates go up.

Oops thats already 4 months income lost maybye ubank at 6.51% was not such a bad option
 
So_Cynical said:
Anecdotally...im on the move again and looking for rental property's on the lower north shore (Sydney) i inspected 6 property's today all at the lower end of my price bracket and can report the following.

  • 2 bed unit in Wollstonecraft $590 p/w...approximately 15 inspectors (vacant)
  • 2 Bed Town house in Artarmon $490 p/w...approximately 12 inspectors (vacant)
  • 3 Bed House in Artarmon $610 p/w..approximately 10 inspectors (vacant)
  • 3 bed unit in Cammeray $580 p/w...approximately 14 inspectors (almost vacant)
  • 4 bed house in Lane Cove $650 p/w...approximately 10 inspectors (vacant)
  • 2 bed unit in Artarmon $460 p/w...approximately 70 inspectors (occupied)

According to the media and the real estate industry there is a rental crisis, so how come there are so many empty property's? and why such disinterest, small numbers of inspectors. :dunno:

Also if we look at the 4 bed house in Lane Cove and assume a value of around 800K (its a very old crappy house) then consider the rent of $650 p/w that gives us a gross yield of around 4.3% ~ take out expenses and we are looking at less than 4% yield..maybe as low as 3.5% :eek: its woeful and thus as an investment, it only makes sense if there is at-least 4% annual capital growth.

Its a real ponzi isn't it....someone has to pay more than you did or it all falls apart.
Click to expand...

Coming into winter is not usually peak rental time as compared to Jan for eg.

I also think your yields are a bit out unless the property in the eg has only just been purchased. If the property has beed owned for say 5 or more years then the purchase price would have been far less than $800k which would change the yield figure.
 
NewOrder said:
I also think your yields are a bit out unless the property in the eg has only just been purchased. If the property has beed owned for say 5 or more years then the purchase price would have been far less than $800k which would change the yield figure.
Click to expand...

But if one was to buy it now and rent it out that would be the current yield.
 
NewOrder said:
yes which is what I said. But if it was purchased years ago the yield figure given would be incorrect.
Click to expand...

If the property is now worth 800K then the yield at today's value is woeful....and totally dependant on capital growth to make the yield competitive in the longer term.

In the stock market when yields blow out the SP will adjust accordingly or the yield will pull back, there is loose correlation between the two....now if property is just an asset with a yield, one would think that the value is going to reflect the yield (prices fall) or the yield is going to met the value (rents increase).
 
NewOrder said:
yes which is what I said. But if it was purchased years ago the yield figure given would be incorrect.
Click to expand...

Yield is quoted on current value, not purchase price. This is important so that the investor can determine whether it is better to liquidate and find better yields elsewhere (capital gain potential considered).

It's a quirk of property investor psychology that up to the minute values are used to calculate capital gain, yet value from the pre-cambrian era is used for yield.

Can't have it both ways.:2twocents
 
http://theage.domain.com.au/agents-cutting-rates-as-market-cools-20110521-1ey2y.html

Agents cutting commissions for property likely to sell.

Seems to me that the market is slowing considerably. I guess the agent might have to get a new Audi every 5 years rather than every 3.

This coupled with the pressures to list at a reasonable price...

Doesn't bode too well for capital growth in the short to medium term.

Good luck to the people who require capital growth to make interest repayments or to maintain their lifestyle.
 
China woes loom over local property market
Alison Bell
May 23, 2011 - 7:59AM

But bigger price falls may be on the horizon given ructions in China's property market, according to famed short-seller and China bear, Jim Chanos.

House sales are slowing in China and prices declining, Mr Chanos, founder of New York-based short selling firm Kynikos Associates, told the CNBC television network on Wednesday.

"The cracks are spreading on the facade," he said, of China's economic growth story.

"You're seeing real estate firms shutter, sales offices closed down.

"Some of the engine behind the boom is at least beginning to sputter."

Chinese developers are now turning to Hong Kong to raise capital through junk bonds as China's banks wind back lending, he said.

Sixty per cent of China's economy is driven by the 12-year-old real estate construction and development market - twice the proportion of the Asian tigers before the Asia crisis hit in 1997, he told CNN earlier this year.

By contrast, 10 to 15 per cent of Western economies are driven by construction.

http://news.theage.com.au/breaking-...ver-local-property-market-20110523-1ezdz.html

Quite a interesting article "It's interesting that the only other countries that are experiencing a property boom besides China are Brazil, Australia and Canada."

I am still confident that China plays a huge part in the future of property prices in Australia even though Robots suggests otherwise. Only time will tell but the..
 

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