The future of Australian property prices

[Glen48]

Click on the title it should open at the site???

 

[Starcraftmazter]

Click on the title it should open at the site???

I meant download the video to my computer.

 

[MrBurns]

Click on the title it should open at the site???

I think there's more manipulation of markets generally than most people could even imagine

 

[ishakeel]

very difficult to predict

 

[ishakeel]

 

[freebird54]

Ch 10 breakfast this morning did the rent v buy argument with a financial planner and it seemed to come out in favour of renting for many

In USA they even narrow it down to which cities are best for each

http://money.cnn.com/galleries/2011/real_estate/1101/gallery.rent_or_buy/index.html

 

[satanoperca]

Since it seems our long time poster has left the building, so keeping it real for the Sunshine and Lollipops brigade some interesting data from RPdata.

Melbourne -7% YOY
5 capital city aggregate -4.68 % YOY

And with parts of the FHBG being scrapped in Victoria and a massive oversupply of apartments coming online in the next year, Vic is in for more than just a healthy correction but could be heading for a crash, dare I say. All those that bought using the FHBG to leverage up their capital base and to soon find out that it has cost them more than the govnuts gave me. Bad, bad govnuts for interferring in so called free markets.

Not to mention the worse land sales since 1994, the market has turned and even with dropping interest rates and increasing unemployment (retrenchments seem to be front page news) and I cannot see anyone wishing to take on more debt in this environment.

Back to the bear cave I crawl.

 

[MrBurns]

, Vic is in for more than just a healthy correction but could be heading for a crash, dare I say. .

Went to an auction in Kew last week very popular location mid range property low
$500's ........not one bid.

Havent seen that in a while but now very common.

 

[Knobby22]

Went to an auction in Kew last week very popular location mid range property low
$500's ........not one bid.

Havent seen that in a while but now very common.

Yes, I am in the market but need to sell my old house and I am unsure whether I would get a buyer. It forces me to consider selling it first and renting.

 

[MrBurns]

Yes, I am in the market but need to sell my old house and I am unsure whether I would get a buyer. It forces me to consider selling it first and renting.

Sell first then you know exactly where you stand.

You may not have to rent there will be plenty on the market if things keep going this way and it seems they will I cant see any reason for things to pick up.

 

[Knobby22]

Thanks Burnsy.

 

[satanoperca]

Just popped head out of cave, thought things might have improved after reading the pamphlet from REIV only to see stock on the Melbourne market still trending up at around 4 year highs.

So lets recap the Melbourne market, oh why bother it is looking ill.

Cheers

Returns to bear cave

 

[Glen48]

At least you have a Cave by Xmas a lot will be sleeping in cars etc.

 

[Glen48]

Now we know house prices are on the way down I am predicating:

Bankruptcies will increase over the years as FH victims relaise they are fighting a loosing battle and a lot will be un-employed so hand in the keys maybe and walk away go live with some friends parents.
House prices will be down for 10 yrs or more we will follow USA in dropping IR to nil however as the bottom gets close it will be a good time to buy as IR will be low houses cheap and inflation cancelling out any IR.
Slater and Gordon could try a few banks in a class action because they FHV were not told they could go under and want their money back.

 

[Ijustnewit]

I'm personally coming across some interesting plays by Real Estate agents whilst searching for a house in Hobart. The market is in decline , one or more Real Estate agents has shut down and let staff go due to the downturn. Houses are sitting for months on Realestate.com and Tasmania is or very close to being in recession.
However every time I make an enquiry about a property that has been sitting on the market for some time they reply with "Oh we just got a contract on that this morning , but your still welcome to inspect and make a better offer" .
This has happened 4 times and the funny thing is I don't like playing games and I decline. But here's the thing the property still sits on the market and in the paper for weeks after.
For years the Tasmanian Real Estate industry has been able sell a 1940's home that has not been touched since 1940 for half a million that needs another 100,000 spent on it to make it liveable to Interstate Investors. I think those buyers have dried up now, but it's taking the Agents and Sellers a bit longer to catch on. They are still asking the big dollar and thus the property still sits unsold. So something has to give eventually.

 

[Julia]

However every time I make an enquiry about a property that has been sitting on the market for some time they reply with "Oh we just got a contract on that this morning , but your still welcome to inspect and make a better offer" .

Real estate agents, like the government, must imagine people are just silly.

I've just pulled out of a plan to build a new house. Had the offer on the land accepted and sorted out a builder from seven I approached who had a good reputation and who seemed responsive to what I described I wanted.

He submitted a final plan that was good with an estimate of cost, final cost to be supplied after the designer had done all the detailed drawings and he had contacted suppliers for exact costs. He advised that the cost was unlikely to vary much from the estimate.

So the designer suggested an extension to the patio area, I agreed subject to cost.
Designer phoned the builder to get cost per sqm of patio and advised the addition would be about $4000. OK, fine.

Queensland has had a government building boost grant which offered $10,000 for new homes where contract was signed by 30 April. The builder was made very aware of my desire to get it all signed up before this date.

However, it wasn't until the day before that he emailed me the specifications, various other documents to be read, and the contract. About 50 small print pages all up.

The original list of inclusions provided with the cost estimate stipulated security screens on all doors. However, when I got to that part of the specifications, lo, this has just disappeared and there are just fly screens.

Further, the total price has increased by over $35,000!!
My request for an itemised breakdown of how this was comprised was met with surprise but it did appear. It included - in addition to the above mentioned patio extension - an increase in the interior of 7sqm. No such increase had been authorised and I was unable to see where on the plan any such increase occurred.

Via email I raised the issue of the security doors not being included in the final cost and suggested that page of the specifications needed to be redone to stipulate this as per original inclusions list.

I also reminded him that he was yet to provide me with details of his insurance.

This is the night before 30 April deadline.

No response to my request above.
Fortunately I was still within the cooling off period with the land contract so have withdrawn, feeling disgusted and disappointed.

What is going on here? Has there developed such a laissez-faire culture where clients don't routinely check e.g. specifications, are in love with a dream and just OK whatever the builder does?
Are builders so accustomed to this loose and casual approach that they are unwilling to accommodate a client who expects what has been promised?

Buying/building a house is one of the most significant capital events in any of our lives and surely most people would be careful to ensure they're actually getting what has been promised? Perhaps not.

I'd be interested to know if others have had similar experiences.

 

[MrBurns]

I'd be interested to know if others have had similar experiences.

Seems like a problem with a builder not a real estate agent.
Don't build buy an established house and you'll save yourself a brain hemorrhage.

 

[Glen48]

Julia sounds like a stroke of good luck with RBA telling us on Tuesday there will be a housing crash maybe you can get out of building.

 

[doctorj]

At least you have a Cave by Xmas a lot will be sleeping in cars etc.

This may be a bit extreme, but the tide of opinion outside Australia seems to be turning. No one's citing anything new (affordability etc), but it seems the 50bps rate cut has made the AUD less attractive and prompted people to dig a bit deeper. Loudest amongst the new bears is SocGen who in the past week have come out with some of the following on Australian property and the AUD

All we have in Australia, at its simplest, is a credit bubble built upon a commodity boom dependent for its sustenance on an even greater credit bubble in China. Of all the bubbles I have seen over the last 30 years in this industry, this one is even more obvious than the rather prominent nose on my increasingly haggard face.

Our own more Minskyan interpretation of events is that the lack of volatility in the Australian economic cycle and the absence of any recession since 1991 has led Australians to have an excessive appetite for debt in the belief the future will reflect the past.

But for us, suppressed volatility is merely storing up an even bigger crash further down the road. The Australian "miracle" is dependent on the wheels not coming off China.

When you scratch the surface of the Australian 'miracle' you don’t just find an unmiraculous commodity super-cycle: you also find an equally unmiraculous credit super-cycle as well. A credit bubble built on a commodity market built on an even bigger Chinese credit bubble, Australia looks like leveraged leverage, a CDO squared

In short, it seems they're recommending foreign folk short AUD and Aussies go long gold….

 

[Julia]

Julia sounds like a stroke of good luck with RBA telling us on Tuesday there will be a housing crash maybe you can get out of building.

I am out, Glen. As above I withdrew during the cooling off period for the land purchase and the building contract was not signed.