The future of Australian property prices

Julia · 8 June 2012

herzy said:
This is an invitation to treat, and so the previous discussions are not strictly binding. As McLovin points out, only the final agreement will be binding/enforceable. However, I would add that, reading the documents/communications as a whole (including the email stating 'everything as discussed'), while not actually including many of the specifics which were both discussed and crucial/provisional to you signing the contract would be misleading and deceptive conduct (s18 of the Australian Consumer Law, previously s52 of the TPA). However, given that you didn't sign and presumably suffered no loss, there's not really anything to be done now. Just FYI...

While withdrawing and changing an offer is in no way illegal, representing that it is the same offer as previously discussed would be misleading. The courts have taken a fairly expansive interpretation of what can constitute misleading/deceptive conduct.

McLovin said:
Interesting Herzy, thanks. Does there need to be financial loss in order to be prosectued under the ACL? Obviously, Julia couldn't sue for damages but a breach of the act has occurred.

My memory of contract law doesn't extend much beyond the Carbolic Smoke Ball Company.

Thanks for your comments, Herzy and Mc Lovin.
I'd never have thought his behaviour was illegal, just lacking in integrity and for me very disappointing.
Deceptive even. I was fortunately within the cooling off period of the land contract so was able to withdraw and think about the whole project further without much cost.

I only raised it as a very minor example of the sort of everyday misleading behaviour one has to be on the lookout for, and to underline the need for us as individuals to take responsibility not to be so misled.

Mr Z · 8 June 2012

im sparticus said:
Whos holding costs? Judging the return on a property by the current yeild is as naive as ranking companies by their pe ratios.

EVERYONES!

Mr Z · 8 June 2012

im sparticus said:
Ill write it again everything is deflating the least of all housing your graph illistrates this well. To which your response was that i need to understand how markets work.

Sounds like your reply was far odder than mine.
Care to ellaborate on what you were implying?

That is a justification for housing as an investment? YIKES!!!!

Deflation is a monetary phenomena, falling prices are a potential secondary impact... everything is not "deflating" per say. However if you do believe that to be the case and you can return 5.75% in a term deposit you have just argued cash is a favorable holding to real estate even if you are managing an equivalent yield, which I doubt. You appear to have shot at your own feet old chap!

Yes you need to get your head around market dynamics if you believe that a falling housing credit growth rate that has been trending lower for years is not a bad thing for house prices. If you can find a reason for this to expand again then you can argue potential gains but for now we are entering the zone where the lack of credit growth is clearly hitting prices. To be bullish on property under this market condition is a little nutty, maybe if interest rates where at 80's nose bleed levels and you could see why an end to that was coming... but while credit levels at historical highs and rates are pushing their lows globally... then... well then you have to worry.

We are Irish in the end, perhaps not Spanish but more fool hardy than the Americans and look at them!

im sparticus · 8 June 2012

Starcraftmazter said:
What the hell does that have to do with ANYTHING?

You claimed there was deflation in everything, that has to you been shown to be incorrect - and you have done nothing but post irrelevant nonsense. Is this some sort of a defence mechanism of denial that you have?

Now your taking what i have said out of context with your pathetic grab at straws try and stay just a little on topic.

Last i checked milk was a dollar a litre try telling the dairy farmers your thaughts on food

im sparticus · 8 June 2012

im sparticus said:
You will find as time goes on that no market prices things in multiples of the average wage or inflation adjusted price of however many years ago or what ever other wacky reason or ratio you think property prices are connected to. you would never do it for anything else. to be honest you might be a able to reproduce a 1960's median for scms quote 210k but you dont have a hope in hell of producing todays standard of a median house hence the price diff land afew km from the city didnt do much for you back then either but now can probably save you $50-100 dollars a week just in fuel not to mension time the utility of the land has also improved.

When prices of all assets start falling its a good sign we are in for some good old fashion deflation and your bullion is as much at risk as my houses accept my houses are producing an income as most even the bears have pointed out re has faired quiet well considering (down only a fraction of other assets from its highs including gold and alot less volitile gold just did 4% overnight dont even think the indexes are doing that) ontop of that if you include yeild as in an accumulation index it is yet to give a total negative return or only slightly negative for melbourne and lets not forget all the gains it made before giving a tiny percentage back so far its winning.

Looking forward to me the only real risk is deflation (and this goes for every asset class accept cash ofcourse im starting to think cash atm is giving the best total returns high interest low to no inflation) which the rba has quiet alot of ammo for and falling of rents there is so much going on with re that medians dont capture just trying to judge an entry on the median of something that is not fungable is nonsence best to just be taking advantage of opportunities when they present themselfs or for the proactive when you find them is the best i think. but if you want a prediction on future medians all bar melbourne stable to increasing. melbourne maybe a little more falling to stable and well stable by the time im ready.

We all know record low interest rate began the last great australian property boom, i wonder if they can do it again?

I have already discussed the merits of cash short term mr z i am a realist after all. however to compare yield of property to cash is as naive as ranking companies by their pe ratio

numbercruncher · 8 June 2012

Sparticus - I have to know , are you , or have you been , a licensed Realestate salesperson ?

Starcraftmazter · 8 June 2012

im sparticus said:
Now your taking what i have said out of context with your pathetic grab at straws try and stay just a little on topic.

What context can there be in something completely irrelevant?

How do profit margins have ANYTHING, ANYTHING AT ALL to do with your stupid argument of "deflation everywhere"?

im sparticus said:
Last i checked milk was a dollar a litre try telling the dairy farmers your thoughts on food

http://en.wikipedia.org/wiki/Anecdotal_evidence

im sparticus · 8 June 2012

This thread is about property and its comarison to other investment classes this is the context to which i am posting. most if not all investment asset classes are down from there highs this is what i mean when everything is deflating. gosh its hard to respond to you without being rude. you just dont get it do you?

im sparticus · 8 June 2012

numbercruncher said:
Sparticus - I have to know , are you , or have you been , a licensed Realestate salesperson ?

No

number do you have a personal vendetta against property investors that stems from a deep seated jealousy of their past profits?

Starcraftmazter · 8 June 2012

im sparticus said:
most if not all investment asset classes are down from there highs this is what i mean when everything is deflating

This is entirely relative, there is always going to be highs, lows and in-betweens. Not all asset classes are falling either.

Nor does this have anything to do with deflation.

numbercruncher · 8 June 2012

im sparticus said:
No

number do you have a personal vendetta against property investors that stems from a deep seated jealousy of their past profits?

Haha no - My Issue is with typical Australian realestate and so far im spot on as it continues slide down the cliff, Im not concerned with individuals in the slighest. I do like how you use the term " past " because thats pretty much where its at.

Just the way you post is very irrationally bullish towards Australian realestate as noted by many other contributors to this thread.

I actually had the very last of my monies just returned to me today that was invested in realestate - and I was lucky to get all of my capital returned, no profit. Inflation adjusted I lost on the deal, and at the beginning of this project they projected a 3-400pc return. Maybe I can be even more bearish now that I have no conflict of interest huh

I would actually agree that Realestate in some places isnt a bad investment - just not currently in this country. Infact its so out of control that it risks leading to our entire economy falling off that proverbial cliff just like many other nations imo.

But happy Specufesting anyway

im sparticus · 8 June 2012

numbercruncher said:
Haha no - My Issue is with typical Australian realestate and so far im spot on as it continues slide down the cliff, Im not concerned with individuals in the slighest. I do like how you use the term " past " because thats pretty much where its at.

Just the way you post is very irrationally bullish towards Australian realestate as noted by many other contributors to this thread.

I actually had the very last of my monies just returned to me today that was invested in realestate - and I was lucky to get all of my capital returned, no profit. Inflation adjusted I lost on the deal, and at the beginning of this project they projected a 3-400pc return. Maybe I can be even more bearish now that I have no conflict of interest huh

I would actually agree that Realestate in some places isnt a bad investment - just not currently in this country. Infact its so out of control that it risks leading to our entire economy falling off that proverbial cliff just like many other nations imo.

But happy Specufesting anyway

ok now i get it, your sore because you lost money while most creamed it. the only way for you to be happy is to see them have the same or slightly worse outcome than yourself, right?

numbercruncher · 8 June 2012

haha - wrong -

I cashed out most my chips earlier as I recognised like many many others that this was merely a unsustainabile bubble with easy credit being the ultimate fundamental - Why does it need to be personal with you anyway young Sparticus ? starting to wonder about the quality of your upbringing my friend ....

im sparticus · 8 June 2012

Starcraftmazter said:
This is entirely relative, there is always going to be highs, lows and in-betweens. Not all asset classes are falling either.

Nor does this have anything to do with deflation.

You argued your 4% pop was the reason gold was not deflating. and poof like magic it gone!

Actually i think my hypothetical short might now be profitable. might dig up some of the old quotes just for laughs....you remember them dont you number?

Starcraftmazter · 8 June 2012

im sparticus said:
You argued your 4% pop was the reason gold was not deflating. and poof like magic it gone!

No I didn't, and no it isn't. Can you stop spouting crap now?

im sparticus said:
Actually i think my hypothetical short might now be profitable. might dig up some of the old quotes just for laughs....you remember them dont you number?

Your short would have been closed for lack of capital to cover your losses by now.

im sparticus · 8 June 2012

Starcraftmazter said:
Your short would have been closed for lack of capital to cover your losses by now.

Speak for yourself scm

im sparticus · 8 June 2012

Starcraftmazter said:
1. You stupidly imply they will deflate by the same amount.
2. Wage deflation is not only good, but necessary in order to restore competitiveness.
3. House prices will deflate far far far more than wages
4. I said wages will deflate in the construction industry - not anywhere else, as a result of the housing bust.

Do you live in bizzaro world or something?

Deflation doesn't occur everywhere, in every sector and asset class simultaneously and equally, Mr. Troll.

Starcraftmazter said:
I'm not boasting about anything actually, I'm just pointing out that you claimed gold "has tumbled" at a time when it actually rose quite a lot - showing once more, that you have no idea what you are talking about.

Keep avoiding what one? You make no sense as usual.

... I don't really know how else to address this but again say that you have no clue, no understanding and no concept of what you are talking about.

No, silver too.

Maybe you should learn some economics, and then explain how anyone could be bearish about anything before they could speak, and what relevance that has to this thread.

Mmmmmmmmmmm

Mr Z · 8 June 2012

im sparticus said:
I have already discussed the merits of cash short term mr z i am a realist after all. however to compare yield of property to cash is as naive as ranking companies by their pe ratio

Not in a deflationary environment as you asserted, it is just basic investment sense.... there is no naivety about it at all. Investing in property heading into a credit contraction (you have noticed the trend since 2007 haven't you?) is naive in the extreme. Why are you fixated with PE's? Why not compare eggs with eggs and talk grossed up yields? I can tell you there are many stocks that are looking like much better deals that RE... and it even looks like prices will get a little sillier over the US summer. A smart operator will be able to kill RE fro return over the next 12 months.

Keep it up.... I like upset RE agents, when I was developing property I did very much enjoy winding them up on the odd occasion! Some of them really deserved it! Especially the young cocky ones.

Mr Z · 8 June 2012

im sparticus said:
You argued your 4% pop was the reason gold was not deflating. and poof like magic it gone!

Actually i think my hypothetical short might now be profitable. might dig up some of the old quotes just for laughs....you remember them dont you number?

LOL... you talk short term when it suits I see!

sptrawler · 8 June 2012

As was mentioned by SCM at least 6 months ago the reserve bank was doing a good job of deflating the housing bubble. Well if the banks don't hold the line they are going to be in deep manure, as can be seen by this arcticle.

http://www.theage.com.au/business/r...ding-house-prices-stevens-20120608-200ti.html

Up untill now the banks have been toeing the line and creaming a bit off the top, obviously the Reserve think it is time to pull their heads in.
However the fact still remains the overpriced are going to be squeezed.

The future of Australian property prices

Julia

In Memoriam

Mr Z

Mr Z

im sparticus

im sparticus

numbercruncher

Beware of Dropbears

Starcraftmazter

im sparticus

im sparticus

Starcraftmazter

numbercruncher

Beware of Dropbears

im sparticus

numbercruncher

Beware of Dropbears

im sparticus

Starcraftmazter

im sparticus

im sparticus

Mr Z

Mr Z

sptrawler

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