The future of Australian property prices

[Glen48]

Is this where prices will end for OZ houses almost buy one take one:
645 @7.100 each.

Former yacht dealer Bill McMachen bought every home at the Macomb County auction in Michigan, paying a total of $4.55 million for the swag of properties, Detroit News reports.
READ MORE: America's most expensive apartment
There are around 400 family homes in the package which includes commercial and industrial real estate. But with many of the properties in a dilapidated state, Mr McMahen expects to make just $2 million profit off the entire transaction.


The homes he can't sell he will reportedly give away to charitable organisations.
Not everybody is happy about the deal after the 300 investors who registered for the auction were turned away.
One investor told Fox News he would have paid four times the amount Mr McMahen paid for one of the properties.
But Macomb county treasurer Ted Wahby defended the mass sell-off, saying by offloading the mixed bag of properties together the county would not be stuck with properties it could not sell.
"By packaging the good with the bag, it's in the centre for somebody to come in and buy it all," Mr Wahby told Fox News.
Mr McMahen said since buying the homes he had received a flood of emails from would-be buyers.

 

[apgb8]

stagnating in the west hey?

Not if you paid top dollar in mid 2007 its not...its fallen and its flat.

My mums going back to Busso at Xmas to try and sell her house again..she will need luck to get anywhere near what she wants for it.

yes if you paid top dollar in '07...the only thing dragging the average down is the high decreases in properties over $2M...i don't know about busso, but i'm talking perth. house i'm in was worth $650k in 07, is now worth $700k easy considering the house down the street sold for $715k a month ago.

 

[prawn_86]

house i'm in was worth $650k in 07, is now worth $700k easy considering the house down the street sold for $715k a month ago.

It's a very isolated example, but in this case it means the owner has only had a 10% gain in 5 yrs. Depnding on the size of their loan they have probably paid a lot more than that in costs and interest

 

[numbercruncher]

It's a very isolated example, but in this case it means the owner has only had a 10% gain in 5 yrs. Depnding on the size of their loan they have probably paid a lot more than that in costs and interest

Less than 8%


Factor in stamp duties, interest , loan fees , rates , insurance , maintenance and yet another speculator loses when he thinks he wins ...... Not to mention the opportunity cost that he could of invested in something productive and profitable .....

 

[young-gun]

yes if you paid top dollar in '07...the only thing dragging the average down is the high decreases in properties over $2M...i don't know about busso, but i'm talking perth. house i'm in was worth $650k in 07, is now worth $700k easy considering the house down the street sold for $715k a month ago.

That's the best way to judge what a house is worth..

 

[young-gun]

Less than 8%


Factor in stamp duties, interest , loan fees , rates , insurance , maintenance and yet another speculator loses when he thinks he wins ...... Not to mention the opportunity cost that he could of invested in something productive and profitable .....

but NC! what about the magic of negative gearing?!?!

 

[numbercruncher]

but NC! what about the magic of negative gearing?!?!

The tax payer loses along with the speculator -

sick system.


Bank wins big time though !

 

[numbercruncher]

As unemployment skyrockets house prices will continue to nose dive ....

Earlier, Treasurer Tim Nicholls revealed job losses in Queensland's public service could amount to more than 20,000.

 

[Glen48]

Not worth any thing until sold then you can work out the facts.

 

[Mrmagoo]

A fall in house prices can only be a good thing as it lowers the cost of living for every day Australians.

 

[doctorj]

UBS have compared the market cap of Australia’s banking system with those around the world. Interestingly, the combined market caps of the big 4 plus Macquarie is equivalent to the combined market caps of US Bancorp, Goldman Sachs, Standard Chartered, Deutsche Bank and the entire UK domestic banking system…

All this while BHP announced Olympic Dam’s $30bn expansion , bank NPLs are rising and China continues to weaken…

 

[Glen48]

http://finance.ninemsn.com.au/newsbusiness/aap/8520330/bhp-profit-down-by-more-than-1-3

Here are 30,000 workers who own a home or would consider buying now off the market and potential sellers.

The $US30 billion ($A28.73 billion) expansion of the massive Olympic Dam copper-uranium-gold project in South Australia has been shelved along with the $US19 billion ($A18.20 billion) Port Hedland harbour expansion in Western Australia.

Low commodity prices and soaring operating costs were blamed by BHP chief executive Marius Kloppers for the announcement on Wednesday.

He said the economics no longer stacked up for what would have been the world's biggest uranium mine at Olympic Dam.

"In a regime of falling prices, costs cannot continue to go up forever and it is very important to bend the trend," he told reporters.

"What you have is you've got a very high Australian dollar exchange rate and very high capital costs at this moment in time.

"If you build something while those conditions are in place, you effectively lock in the economics of the project in an unfavourable way because the capex (capital expenditure) is all spent during that unfavourable way."

Mr Kloppers said he would redouble efforts to develop new technology to improve the project's economics.

However, whether BHP keeps the Olympic Dam project is another matter.

An angry South Australian Premier Jay Weatherill said it was a dark day for the state and BHP would have to work hard to win over the state again.

South Australia's Chamber of Minerals and Energy chief executive Jason Kuchel said he was confident the project would still go ahead and be a major contributor to the economy, just not now.

No more major projects were likely to be approved by BHP in the current year, with $US22.8 billion ($A21.84 billion) already committed to 20 projects including a planned increase in iron ore output to 220 million tonnes from a current 180 million tonnes.

Mr Kloppers said its first priority for shipping the extra iron ore would be the cheaper option of focusing on using the inner harbour at Port Hedland rather than developing the outer one.

With prices for major commodities plunging in the past year, increased production to counter the falling prices was Mr Kloppers' message.

He blamed "one-off" operational issues affecting production of three assets: Queensland coal, copper mining in Chile and offshore natural gas in the US.

Production in all those areas would be double-digit this year, he said, while the company's Eagle Ford shale business in the US would become its largest producing petroleum field, with output of 200,000 barrels by 2015.

"Achieving these strong results before the upside these three facilities have as they come back is testament to the value of our diversified approach," he said.

The low commodity prices and about $US2.5 billion ($A2.39 billion) of write-downs on US shale, Australian nickel and Olympic Dam contributed to the weaker profit.

There was a 15 per cent decline in underlying earnings before interest and tax to $US27.2 billion.

BHP said it expected more volatility in commodity markets in the short term due to weakness in manufacturing and construction sectors in all key markets weighing on market sentiment.

"However, in the medium term we expect supportive economic policy and a broad growth bias, particularly in China, to lead to measured improvement in the external environment beginning in the first half of the 2013 financial year," the company said in a statement.

BHP increased its final dividend by two US cents a share to 57 US cents a share.

City Index analyst Peter Esho said BHP had ridden out the difficult economic conditions well.

 

[basilio]

Interesting story on how banks and other lending bodies have constructed loan applications that allowed pensioners etc to take out unaffordable home loans.

Makes one wonder how good the home loan books are.

There are predators in our own backyard, but where are our financial watchdogs?

The level of sub-prime mortgages in Australia may be far in advance of what was previously assumed and provided for by banks. The story was broken on the ABC, and covered elsewhere. The revelations centred around two personalities: Kate Thompson and Denise Brailey.

Kate Thompson was a licensed mortgage broker at Mortgage Miracles in Western Australia. A highly regarded and award-winning broker, Thompson disbursed a veritable torrent of credit from bank and non-banking lenders to clients wanting funds to buy property, making around $5 million a year from upfront and trailing commissions. She is now facing fraud charges for what amounts to predatory lending: providing credit to people with little to no expectation they will be able to repay the entirety of the loan. This fraud was achieved by fudging the income and assets of clients, making them appear much wealthier on paper than was the case. Soon to face the State Administrative Tribunal in Western Australia, Thompson will provide incriminating evidence that predatory lending is widespread throughout the industry.

Denise Brailey is the President of the Banking & Finance Consumers Support Association, an organisation dedicated to protecting the public against predatory financiers. Having worked in this field for the last twenty years, criminologist Brailey has seen first-hand the financial and social wreckage wrought by a multitude of scams and predatory lending.

https://theconversation.edu.au/ther...rd-but-where-are-our-financial-watchdogs-8871

 

[doctorj]

Some may find this detailed report from Deloitte helpful - it's a few weeks old now but covers each state's economic outlook, with particular attention to property.

 

[numbercruncher]

Interesting story on how banks and other lending bodies have constructed loan applications that allowed pensioners etc to take out unaffordable home loans.

Makes one wonder how good the home loan books are.



https://theconversation.edu.au/ther...rd-but-where-are-our-financial-watchdogs-8871

Well hopefully a prison sentence coming for these criminals.!

 

[greebly24]

Interesting anecdote. Female friend at work was excited as her husband texted to say he got a job outside the RE industry. Apparently he worked for a large mortgage broker in Adelaide which has just gone a month without writing a new mortgage (first time ever). Lots of people re-financing though. Pulling out equity for increased living costs. Hmm.

Heard there was about 100 property developments planned for Roxby Downs too, before BHP's announcement. Bugger.

 

[Mrmagoo]

I just want to see all of these greedy people who wanted to drive others in debt slavery suffer the same fate. Did people really think that a 100k increase on the cost of a necessity of life in a couple of years was good for society ? I hate to say this but : THINK OF THE CHILDREN.

My parents had crap jobs, but were able to afford a roof over our heads and you want to deny that to future generations of children : DISGUSTING.

 

[howmanyru]

It's the Fed banksters & Governments that drove up property prices with their stupid monetary policy, it was a global phenomenom. People are opportunists so RE agents, banks, developers, investors and so on just took advantage of it, and why not?

 

[Mrmagoo]

It's the Fed banksters & Governments that drove up property prices with their stupid monetary policy, it was a global phenomenom. People are opportunists so RE agents, banks, developers, investors and so on just took advantage of it, and why not?

Banks not force you to buy a house, to pay an amount, to borrow too much. Banks are good guys. They lend money to the economy. We need banks.

 

[young-gun]

Banks not force you to buy a house, to pay an amount, to borrow too much. Banks are good guys. They lend money to the economy. We need banks.

Now I've heard it all.