The future of Australian property prices

[medicowallet]

There is only so much doom I want to read. I'm busy making money and there is plenty out there.

My bank manager is building another three duplex developments after a profitable first development a few months backr. Go figure, he works for gail

I'd be careful about using a bank manager as a yardstick for my future.


In my experience bank workers have next to zero idea about how to make money.

They have more experience with selling product, being your best mate when you have huge loans or deposits with them,

and your worst enemy when you cannot make a payment for whatever reason.

I tend to keep my bank managers on edge.

MW

 

[numbercruncher]

Haha yes taking that sort of advice from the guy lending you the money is hardly unbiased - no different than buying a property because the RE agent says youll make cash.

Good luck with the Leveraged speculating though Bulls ! Only one thing I see positive in Australian RE is that yields are rising as rates and prices plummet.

 

[moXJO]

Haha yes taking that sort of advice from the guy lending you the money is hardly unbiased - no different than buying a property because the RE agent says youll make cash.
.

Lol who is taking advice it's just an observation after he sent me the plans to quote on(i worked on the first one). The way you guys twist things is the reason you guys are the only ones posting on this pity party. Housing down... Yes
However there are some great deals out there and some fantastic ones if you do the numbers. And there is still a boat load of property I think is overpriced by $100k or more that sells quickly

 

[damien275x]

There is only so much doom I want to read. I'm busy making money and there is plenty out there.

My bank manager is building another three duplex developments after a profitable first development

Can't imagine it would be that profitable. We've already overbuilt like just about every other country. I was in Mainland China last year and I kid you not, there are entire cities EMPTY. Obviously we have not done it to that extent, but we've still overbuilt and overspent due to stimulus and cheap government money distorting the true demand. Now that the demand has been revealed , the prices are falling. It is basic economics.

If there was high demand like everyone (in real estate) says, prices would not be falling right now, and to the counter argument "well they just can't get loans" .. that's basically an admission that prices have been fueled by stimulus rather than true market demand, because without credit, the demand disappears.

The downside isn't the idiots who bought homes they can't afford are going to lose. That's their fault. The worst damage will be when the Federal Government has huge holes in their budgets because of stamp duty/property taxes not being collected @ sky high rates and percentages. When that happens, I assume it will be screw the people/introduce a new tax/expand the public service more to 'fix' the very problem they caused, and their solutions will only make it worse.

The future all depends on how they react when these market forces place pressure on them, and USA will also be knocking on our door for money in the next 5 years when they default too. They are absoultley stuffed and have contributed 800% of GDP in unfunded liabilities !!! LOL!!!

 

[moXJO]

Can't imagine it would be that profitable.

thats why this forum is full of blowhards, I'm out

 

[young-gun]

thats why this forum is full of blowhards, I'm out

looking forward to your return in 12-24 months, please bring stats(if you can bring yourself to look at them a second time) in relation to the profitability of ventures between now and then.

in saying that they might not be half bad if they throw enough money at potential buyers again.

 

[ROE]

Can't imagine it would be that profitable. We've already overbuilt like just about every other country. I was in Mainland China last year and I kid you not, there are entire cities EMPTY. Obviously we have not done it to that extent, but we've still overbuilt and overspent due to stimulus and cheap government money distorting the true demand. Now that the demand has been revealed , the prices are falling. It is basic economics.

Can you tell me what city that you visited?

is it those photos that taken early hours in the morning and all the shopping mall before anyone get out of bed and spread around saying China Building a ghost city

Pitt st Sydney is a ghost city if photos taken at 6am in the morning I can tell you that

 

[Mr Z]

I'd be wary of applying our norms to the Chinese property market, things work a little differently in many respects in China and they certainly have not got an economy built around a housing boom like the USA had. They tend to pay cash a lot and they will often invest in a property and leave it empty, new and never used is far preferable to the Chinese than a used property. I know it doesn't make sense to us but they do it. Yes there is an enormous amount of property but there are enormous numbers of people to fill it.

Added all up...

1. the leverage is not that high, beyond a third property you are forced to pay cash
2. the market potential is there, it is not really an over build if you look how a lot of the country is living
3. they do tend to leave investment properties empty for cultural reasons
4. the property boom in not "the" central stay to the economy
5. banks run crazy high reserve ratios and can withstand much higher default levels than our banks

All in all I can see that they are in big bad bubble territory, I can't say that I think this has to burst really badly to resolve itself, there is scope to work through this in an economy with its growth rate. Things are not so bad in China, hell even McDonalds are looking to add 70K workers!

Call me skeptical, if only because it is the property bubble the whole world seems to be calling!

I dunno about China... I get the feeling that most commentators don't really understand the place as well as they think they do.

 

[maffu]

Changes to the NSW budget results in changes to the property grants and stamp duty exemptions.

I received plenty of glossy brochures in the mail recently trying to sell off new apartments before the June 30 stamp duty exemption expires.
September 30 losing the $7,000 First Home Buyers grant is a good thing in my mind.
Overall I am happy with the direction of these changes, as its removing some of the perks for First Home Buyers that, I believe simply drive up prices for no real gain.

So NSW/Sydney will probably see the statistics jump around a little bit in July and again in October as people rush to take advantage of the grants, and then slow down in the following months.

Budget changes: Five important dates
June 30, 2012 The last day off-the-plan buyers other than first-home buyers - investors, upgraders and downsizers - can claim the stamp-duty exemption (Home Builders Bonus), worth more than $22,490 on a $600,000 property.

July 1, 2012 Buyers of new property other than first-home buyers will pay full stamp duty but can claim a $5000 New Home Grant for houses or apartments priced up to $600,000.

September 30, 2012 The $7000 First Home Owners Grant for existing property ends.

October 1, 2012 First Home Owners Grant for first-timers buying new property (off the plan or newly built) jumps from $7000 to $15,000. This applies for property valued up to $650,000.

Also The concession threshold for the stamp-duty exemption for new property rises by $50,000 to $550,000, with discounts on stamp duty for new property priced up to $650,000 (the concession reduces 1 per cent for every $1000 spent in that range).

January 1, 2014 First Home Owners Grant for new property reduces from $15,000 to $10,000.

 

[damien275x]

Grants help nobody except the builders and the sellers, as soon as a grant is offered prices rise by the very amount of the grant, worse - when it expires, they go down, and you lose.

 

[medicowallet]

Grants help nobody except the builders and the sellers, as soon as a grant is offered prices rise by the very amount of the grant, worse - when it expires, they go down, and you lose.

If only this was the case....


$7000 "equity" = $70000k+ borrowings

yay, I can now pay $197000 for the $190000 house..

What's that!!! 7 other FHB are buying as well

Well, I'll show them, I'll pay $260000 for it... it has the deck I always DREAMED of....

 

[medicowallet]

Good evening brothers,

Such a glorious day here, it was raining and the global warming has made it awfully cold for this time of year,

but another FANTASTIC auction clearance result

"Saturday 16th June 2012

A clearance rate of 56 per cent was recorded this weekend compared to 53 per cent last weekend and 53 per cent this weekend last year.

There were 229 auctions reported to the REIV today with 297 selling and 229 being passed in, 142 of those on a vendors bid.

The auction market continues to reflect the conservative position of buyers and sellers.

Next weekend the REIV expects around 610 auctions.

Enzo Raimondo
CEO REIV"


Enzo says 610 Auctions next week!!!! I guess that they will sell 280 of 510 reported then


Sunshine and lollipops,

MW
The original Robot destroyer

PS Where is Robots?

 

[young-gun]

If only this was the case....


$7000 "equity" = $70000k+ borrowings

yay, I can now pay $197000 for the $190000 house..

What's that!!! 7 other FHB are buying as well

Well, I'll show them, I'll pay $260000 for it... it has the deck I always DREAMED of....

but it has the deck we've always dreamed of also. i guess i'm gonna have to go 270. if you go higher ill just go higher again, property always goes up after all, I cant really lose on this one.

 

[drsmith]

All government grants to purchse property should be abolished as should all property taxes at the state government level.

The only tier of government that should apply taxes to property is local government and then only in the form of rates as is the case now. That's the only level of government that directly provides services to property owners.

 

[numbercruncher]

Another area of the property spruiker exposed as false!

AUSTRALIA lost almost 300,000 people on the way to last year's census. The census count suggests that Australia's population growth since 2006 was much smaller than previously estimated, especially in New South Wales, Victoria and Queensland.
In its first release of census-based data, the Bureau of Statistics has slashed its estimate of the population in mid-2011 from 22.6 million people to 22.3 million. The cut of 294,400 is equivalent to wiping away roughly a year's population growth.


Read more: http://www.smh.com.au/opinion/polit...sus-mystery-20120620-20oh5.html#ixzz1yVzsPsp7

Further more from ABS -

There were 297,900 births registered in 2010, a slight increase (0.7%) from the number of births registered in 2009 (295,700)

So our entire net populaion growth appears to be babies who dont buy houses !

 

[Mr Z]

It always shrinks in the cold weather

 

[numbercruncher]

More and more business leaders getting the Bear goggles out !

AUSTRALIA is unlikely to ever see the housing boom that sparked a massive rise in personal wealth across the country in the past decade, Westpac managing director Gail Kelly told the economic forum in Brisbane yesterday.
In a closed session, Ms Kelly told business leaders that the years of compound growth in house prices were over for good.
She also said Australians were rejecting the high levels of debt that allowed them to borrow vast sums against the equity in their house.


Read more: http://www.news.com.au/money/money-...od/story-e6frfmd9-1226395093277#ixzz1ybVVk0ew

 

[medicowallet]

Good evening brothers,

Such a glorious day here, it was raining and the global warming has made it awfully cold for this time of year,

but another FANTASTIC auction clearance result

"Saturday 16th June 2012

A clearance rate of 56 per cent was recorded this weekend compared to 53 per cent last weekend and 53 per cent this weekend last year.

There were 229 auctions reported to the REIV today with 297 selling and 229 being passed in, 142 of those on a vendors bid.

The auction market continues to reflect the conservative position of buyers and sellers.

Next weekend the REIV expects around 610 auctions.

Enzo Raimondo
CEO REIV"


Enzo says 610 Auctions next week!!!! I guess that they will sell 280 of 510 reported then


Sunshine and lollipops,

MW
The original Robot destroyer

PS Where is Robots?

"Saturday 23rd June 2012

A clearance rate of 55 per cent was recorded this weekend compared to 56 per cent last weekend and 55 per cent this weekend last year.

Next weekend marks the end of the first half of the year and the year to date clearance rate is 61 per cent compared to 63 per cent this time last year and 82 per cent in 2010.

There were 515 auctions reported to the REIV today with 284 selling and 231 being passed in, 152 of those on a vendors bid.

Next weekend the REIV expects around 500 auctions.

Enzo Raimondo
CEO REIV"


Pretty close to the 510 I predicted and the 280 sales.... The REIV is such a predictable beast.

A corrected 46% clearance rate is looking interesting

MW
The original robot destroyer

PS Where is Robots?

 

[robz7777]

Pretty fair prediction there MW!! Any predictions on Interest Rates or the ASX by December? Put those economists to shame!

 

[medicowallet]

Pretty fair prediction there MW!! Any predictions on Interest Rates or the ASX by December? Put those economists to shame!

If only,

I'd be happy enough just to predict the weather for fishing tomorrow!