The future of Australian property prices

[Tysonboss1]

Fantastic day brothers,

Quiet in the streets, less cars driving by looking at the houses on display.

Don't you live in a cul de sac, maybe it's the advent of the GPS navigation your picking up on, less people taking a wrong turn into your dead end street.

 

[Tysonboss1]

Just found out - agent has gone bankrupt - that happens often here - how can a rental only agent lose money? ;-)

Same as any other business, ie, Income is less than out goings = business failure.

 

[medicowallet]

Don't you live in a cul de sac, maybe it's the advent of the GPS navigation your picking up on, less people taking a wrong turn into your dead end street.

Maybe they just have a lot more choice of houses, and don't need to come down my street anymore.

Maybe they are sidelined and awaiting bargains.

All I know is that the for sale signs are showing signs of the weather, and real estate agents are even calling me now. I wasn't even aware of being on any databases anymore.

The latest one was about 2 weeks ago. A RE agent in NSW (yes NSW!!) calls up saying I had better get in soon because the govt there is going to cut stamp duty concessions by jan, and that house prices are going to boom because of this! What a load of rubbish. I gave him my and told him that I would contact him when house prices had gone down by minimum of 20%, looking for desperate sellers.


MW

PS Is Robots at work today again?

 

[medicowallet]

Great news brothers! Clearance rate holding up at 57%!

A bit concerning is that the REIV predicted this morning that 670 auctions were going to happen today, so I guess 130 houses sold before auction this week.


Keeping the nightmare alive

MW

PS Where is Robots?

"There was a minor improvement in the clearance rate this weekend with 57 per cent of homes offered at auction selling compared to 54 per cent last weekend and 69 per cent this weekend last year.

So far this year just over 11,500 homes have sold at auction. This is less than 2010, 2008 and 2007 but more than in either 2009 or 2006.

A total of 540 auctions were reported of which 306 sold and 234 were passed in, 159 of those on a vendors bid"

 

[satanoperca]

It wouldn't surprise me if clearance rates went up as sellers adjust to new market prices.

Cheers

 

[kincella]

you guys just dont get it!....
the housing market is not like the stock market....where stocks move around every day...actually its more like a gambling den...and boy has the stockmarket put on a great display recently.....
the big guys taking money from the babies....

housing is predominately a basic need for most....
unless you prefer to live in a cave....
the majority of people, buy a home, they may upgrade at some stage to accommodate the teenagers....but not all...
most people live in the same house for anywhere between 20-50+ years...
they dont care about the prices, or the mood...
the enjoy their lives....then hand it over to the kids on death...they love their community
they could not care less what the value is....they have no intention of moving....
some of you appear to be ...well fringe dwellers.....
on the outside looking in....
you may not see the woods for the trees....
you dont recognise a bargain or opportunity when its staring you in the face...
you have a mindset...like penny dreadful stocks...
trying to pick the tops and the bottoms
I can almost bet I will still see the same ones here in 5 years time....still whinging, betting, gambling....
life will eventually pass you by....
no wonder the property investors are happy to keep on investing in that market....
.....all those disgruntled renters....who are still waiting for the market to crash
all the bailouts for all those bankrupted countries....can only mean one thing....more money being printed...dollar devalued.....means more dollars for less value
or hyperinflation....
my case has 100's of years of proof.....historical figures.....
dont give me crap about Japan, or the US where Obama 's rule that it was racial discrimination not to lend to a no income borrower.....
but I am pretty sure you will...

 

[medicowallet]

same house for 20-50 years lol.


I think you do not get it. House prices rise and fall depending upon the recent sales (however little % of the turnover is)

So be happy sitting in your house in 5 years time, which has declined in value in real terms.

The above sentence highlights the fact that the average home owner does not have a clue that their property showing negative or zero return is a bad thing, that it stifles their ability to fund their future.

Of course some people (like me) don't really care whether or not we lose money in the market, as it is all swings and roundabouts, but some do care, and the ones forced to sell will determine the valuation, not me.

There were a lot of people enticed into high priced homes by the labor party. Retail and manufacturing is in recession. House prices are falling.

Sunshine, lollipops and smaller bubbles

MW (The biggest baddest Robot killer)

PS Where is Robots?

 

[robots]

hello,

still here MW, long weekend again for us in the building industry

how you going to kill me Medicowallet, like you keep you keep posting your the Robot killer! amazing

bad dose of pethidine the last few day

thankyou

professor robots

 

[satanoperca]

What a strange article in the Weekend Age

The strange cases of the good houses that just won't sell

Read more: http://www.theage.com.au/victoria/t...t-wont-sell-20110917-1kfci.html#ixzz1YFwiJC00

http://www.theage.com.au/victoria/the-strange-cases-of-the-good-houses-that-just-wont-sell-20110917-1kfci.html#ixzz1YFczCDcE

Is it a case of unrealistic sellers or that the market has fallen?

 

[medicowallet]

hello,

still here MW, long weekend again for us in the building industry

how you going to kill me Medicowallet, like you keep you keep posting your the Robot killer! amazing

bad dose of pethidine the last few day

thankyou

professor robots

With kindness of course

How are your properties going at the moment? Good % falls no doubt, with more coming.

No problems mate,
Take another job
Don't frequent the internet cafe as much
Beer only on special occasions
Electrical tape as band-aids
Hitch hike instead of trains
Take out another mortgage if possible


Endless potential in paradise,

Sunshine, lollipops, smaller bubbles and a dead canary.

MW
PS what do you make of the clearance rate Robots (not that it means anything)

 

[Dowdy]

housing is predominately a basic need for most....
unless you prefer to live in a cave....

Stupid argument. I don't own a house but yet my cave has internet...amazing, isn't it!

most people live in the same house for anywhere between 20-50+ years...

Not today's' generation......

no wonder the property investors are happy to keep on investing in that market....
.....all those disgruntled renters....who are still waiting for the market to crash

Who said they're disgruntled? Most are happy renting and can see the market for what it is.

all the bailouts for all those bankrupted countries....can only mean one thing....more money being printed...dollar devalued.....means more dollars for less value
or hyperinflation....

yes the dollar will be devalued but it the US dollar that will devalue. The Australia will rise against the US giving us more purchasing power or if hyperinflation happens does happen does that mean I can buy a house with 1oz of gold?

my case has 100's of years of proof.....historical figures.....
dont give me crap about Japan

You mean the crap where Japan kept propping (stimulating) their economy, which lead to 20 years of stagflation?? Hmmm, sorta sound familiar...

 

[freebird54]

you guys just dont get it!....
the housing market is not like the stock market....where stocks move around every day...actually its more like a gambling den...and boy has the stockmarket put on a great display recently.....
the big guys taking money from the babies....

housing is predominately a basic need for most....
unless you prefer to live in a cave....
the majority of people, buy a home, they may upgrade at some stage to accommodate the teenagers....but not all...
most people live in the same house for anywhere between 20-50+ years...
they dont care about the prices, or the mood...
the enjoy their lives....then hand it over to the kids on death...they love their community
they could not care less what the value is....they have no intention of moving....
some of you appear to be ...well fringe dwellers.....
on the outside looking in....
you may not see the woods for the trees....
you dont recognise a bargain or opportunity when its staring you in the face...
you have a mindset...like penny dreadful stocks...
trying to pick the tops and the bottoms
I can almost bet I will still see the same ones here in 5 years time....still whinging, betting, gambling....
life will eventually pass you by....
no wonder the property investors are happy to keep on investing in that market....
.....all those disgruntled renters....who are still waiting for the market to crash
all the bailouts for all those bankrupted countries....can only mean one thing....more money being printed...dollar devalued.....means more dollars for less value
or hyperinflation....
my case has 100's of years of proof.....historical figures.....
dont give me crap about Japan, or the US where Obama 's rule that it was racial discrimination not to lend to a no income borrower.....
but I am pretty sure you will...

1. Am a happy renter - do repairs myself to save owner money - do important things with what I save

2. I have owned homes both to live in and rent out

3. I have been a real estate agent for 25 years

4. I invest in the stockmarket using options to lessen the risk

5. I live in SE Qld. and hate what I see happening with RE

6. In the USA you can buy good homes in good areas [Memphis – Nike, FedEx, US biggest truckers all HQ’d there and climate with seasons [Florida too hot as many now discovering] for $40,000 and many more are renting, Met an ordinary RE agent the other day who owns 300 homes! Rents and living costs there are half here

7.Also we have denied ourselves grandchildren as their kids cannot afford kids – this is serious.

8. I am near retirement age and still working 50 hrs./week

9. And still have 3 kids at home – eldest 26 and teaching – unheard of years ago

10. For many years it was 2x income to buy a home now it is 7-9x – something has to break.

11. Developers not developing due to council fees/nightmares

 

[Smurf1976]

most people live in the same house for anywhere between 20-50+ years...
they dont care about the prices, or the mood...
the enjoy their lives....then hand it over to the kids on death...they love their community

I am one of those who hates moving but I am well aware that living at the same address for 30 years is about as common as having the same job for 30 years these days. Some do it, but most don't.

Some are "stayers" but the rest aren't. Looking at the area where I grew up, my parents still live there and so does the neighbour on one side. The house on the other side has changed hands a couple of times now. And the houses 2 doors on either side have had numerous owners over the years. I'd say that's a fairly typical situation - some stay at the one address but a lot don't.

Personally though, I couldn't really care what my house is worth as long as it's not dropping in value relative to other similar properties. So what if it drops by $100K - there's no practical effect as long as every other similar house has dropped by the same amount.

The ones who gain from house price falls are first home buyers or those upgrading. The ones who lose are last home sellers or those moving to a smaller (cheaper) property. For everyone else, it's pretty much irrelevant unless you want to mortgage the house and spend the money on something else (some will, most don't).

 

[satanoperca]

The ones who gain from house price falls are first home buyers or those upgrading. The ones who lose are last home sellers or those moving to a smaller (cheaper) property. For everyone else, it's pretty much irrelevant unless you want to mortgage the house and spend the money on something else (some will, most don't).

A lot of small business owners use the equity in their homes to provide funding for their business. Any descent drop would have them concerned.

Cheers

 

[medicowallet]

Personally though, I couldn't really care what my house is worth as long as it's not dropping in value relative to other similar properties. So what if it drops by $100K - there's no practical effect as long as every other similar house has dropped by the same amount.

May be true for you and I.

What about the people who draw off their house to buy new cars/holiday. Retirees requiring their property to maintain / grow to funt their retirement / reverse mortgage.

What about people who borrow against their properties to gear into investment properties ( eg someone with only 40% equity is probably down to 30% now with more decreases to come, or even someone who for example geared off a property (eg melbourne) to buy regional property))


These are the people who may struggle. These are the people who will offer the best deals to the conservative investors who have seen this coming for a while.

 

[Tysonboss1]

Dowdy,

Why would hyper inflation mean you could purchase a house for an ounce of gold.

It's funny to me that the gold bugs seem to think that hyper inflation only increases the value of gold,

Hyper inflation would force up the price of all assets including property.

 

[Knobby22]

Dowdy,

Why would hyper inflation mean you could purchase a house for an ounce of gold.

It's funny to me that the gold bugs seem to think that hyper inflation only increases the value of gold,

Hyper inflation would force up the price of all assets including property.

True, actually if anything property would be more valuable as it would be one of the few things you could own that will retain value. Especially farm land.

Shares would be damaged and metals etc. would be worth less as the economy stalled.
Gold would be worth a lot but would rely on people accepting it in exchange for food etc.

 

[medicowallet]

True, actually if anything property would be more valuable as it would be one of the few things you could own that will retain value. Especially farm land.

Shares would be damaged and metals etc. would be worth less as the economy stalled.
Gold would be worth a lot but would rely on people accepting it in exchange for food etc.

Why would shares be worth less? Do you not understand the underlying fundamentals of the Dow atm? Money printing.


Houses are not going to fall due to inflation, they are going to fall because gearing cannot continue to grow in such an accelerating fashion. Therefore they will LAG inflation.

There are going to be less $$ for our banks to lend out, because overseas banks are under pressure.

We are also seeing manufacturing and retail in recession = house price declines in the capital cities.

They will also fall as developer and builder margins drop as wages come back and balance sheets are rebalanced.

 

[tech/a]

Property always remains a great hedge to inflation.
Cash depreciates in buying power so you buy less for the same amount.
Property becomes less affordable,rents rise,prices of housing increases as material and labor costs rise.
If a tank of
Gas was $60 and is now $100 the $s locked in an IP are more valuable.
Cash becomes less valuable.that cash in the bank buys less.

Shares drop as companies tighten up and profits shrink.

 

[medicowallet]

Property always remains a great hedge to inflation.
Cash depreciates in buying power so you buy less for the same amount.
Property becomes less affordable,rents rise,prices of housing increases as material and labor costs rise.
If a tank of
Gas was $60 and is now $100 the $s locked in an IP are more valuable.
Cash becomes less valuable.that cash in the bank buys less.

Shares drop as companies tighten up and profits shrink.

Which comes first the chicken or the egg?

Who do these companies who "tighten up" employ? Where do they get their funding?

House prices CAN fall, they HAVE fallen previously and currently ARE falling, and you still preach that they are infallible.

Cash at 6.5%, inflation 3%

beats

Property -10%, inflation 3%, gearing 50%

Labour costs rising is something taken for granted. Fundamentals and trends do not lie, and at some time, house prices/margins will return to a trend. Whether lack of capital, unemployment leading to decreased wages or some unforseen shock causes it, it WILL happen, and it would not take much to cause further falls atm.