The future of Australian property prices

WaveSurfer · 28 March 2010

tech/a said:
.....The best time to buy property is NOW.

It was in 2003,2004,2005,2006,2007,2008,2009, and NOW.
Now I'm not saying EVERY property DYOR

Have to agree with you there tech.

I bought a nice parcel of land with a dog box on it in the Sunny Coast hinterland last year. Received approval from the council to splice her up into 6 spacey lots just before chrissy (about 1.5 acres each lot). The first slab is ready to be poured next week.

I paid at least 1/2 the price it was actually worth too (so the bank told me ). I guess I saw the potential that others has missed. I was stunned that someone had not snapped it up.

As I said previously, the little gems are still out there. Just gotta be prepared look outside the box

kincella · 28 March 2010

all the people who like to use a graph to show the rise in house prices, for the last 10,20,50 or 100 years....and complain that the rise cannot be sustained into the future, should do this simple experiment....

simply turn the graph upside down....

now look at it, this will give you a good idea of just how much the dollar has deflated in the same period.....together with the true cost of inflation
or to put it another way, the buying power of the dollar reduces each year...it buys you less and less
The dollar has lost its buying power by over 95%...so yesterdays dollar now buys you only 5 cents......
so how does the graph look now..
viewed from a different perspective....ie; the diminishing value of the dollar
the true CPI is running at over 10% pa...and could be as high as 15%

then add the massive amount of money the govnuts world wide have been throwing out the window since the commencement of the GFC ...I would think the dollars diminishing buying power would have acclerated enormously in the past 3 years.

City house prices should still show a premium compared to houses in the outer suburbs.. like comparing a Jaguar car to a Honda jazz.

ps I did not actually have a graph and turn it upside down....to prove this point....just figure it should give you a simple, easy example of looking at the subject from the other side.

satanoperca · 28 March 2010

REIV Weekend Results

TOTAL AUCTIONS

This week: 881
Last weekend: 854
This time last year: 382

S Sold at Auction: 619
SB Sold before Auction: 115
SA Sold after Auction: 4
Passed in: 143
Passed in on vendor's bid: 71

Clearance rate: 84%

Fantastic result.

I say it again, Australia is truly the land of sunshine and lollipops.

Take Tech's advice and now is the time to buy.

Surely with a little more effort we can all get mortgage debt to be 200% of GDP, I know I'm helping.

satanoperca · 28 March 2010

Mums and dads adding to the great Australian nightmare

http://www.smh.com.au/opinion/society-and-culture/mums-and-dads-adding-to-the-great-australian-nightmare-20100326-r2zd.html

An astonishing one in seven taxpayers is a landlord or landlady, new figures from the Tax Office show.

1.7 million people have two, three or more properties.

Almost 1.2 million Australians in 2008 reported losses on their investment properties, allowing them to claim those losses against their taxable income. The tax breaks saved property investors about $4 billion, The Australian Financial Review reported. No comparable country is as generous.

Come and join the masses, dont be left behind.

Cheers

satanoperca · 28 March 2010

Housing starts surge most since 2001

Housing starts in the final three months of last year rose to the highest level since September 2001, offering a glimmer of hope for the nation's housing shortage

Year-on-year, seasonally adjusted housing starts rose 26 per cent in the December quarter, the ABS said.

http://www.theage.com.au/business/property/housing-starts-surge-most-since-2001-20100317-qdxm.html

More fantastic news, our economy just keeps on powering on.

Cheers

Hello_ · 28 March 2010

Auctioned/Sold 27th of March.

Brisbane 31/8
http://www.homepriceguide.com.au/saturday_auction_results/Brisbane.pdf

Melbourne 533/445
http://www.homepriceguide.com.au/saturday_auction_results/Melbourne.pdf

Sydney 426/337
http://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf

Adelaide 43/31
http://www.homepriceguide.com.au/saturday_auction_results/Adelaide.pdf

Brisbane fastest growing suburbs.
1 Brookwater $450,000 +30%
2 Kensington Grove $370,000 +19%
3 Hendra $731,000 +16%
4 Kenmore Hills $750,000 +15%
5 Corinda $582,000 +15%

Sydney fastest growing suburbs.

1 Point Frederick $600,000 +76%
2 Sylvania Waters $1,258,000 +48%
3 Glenorie $919,000 +38%
4 Palm Beach $2,600,000 +36%
5 Malabar $1,240,000 +33%

Would it be possible for Brisbane prices to deflate? Since not much is selling?

I haven't seen previous week's data.

UBIQUITOUS · 28 March 2010

satanoperca said:
http://www.theage.com.au/business/property/housing-starts-surge-most-since-2001-20100317-qdxm.html

More fantastic news, our economy just keeps on powering on.

Cheers

The Australia RE market is the world's biggest casino. There are going to be a LOT of people who will have ruined their lives by getting sucked into this 'bigger fool' market.

The music will have to stop at some point, and only the naive will believe that at worst there will be stagnation in the market until incomes catch up. The rises have happened too steeply and for too long for stagnation to happen. The correction will be severe. There WILL be a rush for the exits. Infact, by seeing these record numbers of properties for auction, I would say that the smart money is already leaving. The dumb money believes that the smart money is entering the market. Reality check time I think.

Then again, gains of 30% a year means that if we all buy, we can double our money every 3 years. Sound too good to be true?

drsmith · 28 March 2010

UBIQUITOUS said:
The music will have to stop at some point, and only the naive will believe that at worst there will be stagnation in the market until incomes catch up.

History has shown that managing a slow decline in real asset values relative to income is indeed difficult.

UBIQUITOUS · 28 March 2010

drsmith said:
History has shown that managing a slow decline in real asset values relative to income is indeed difficult.

That would be due to the herd mentality of investors.

1q2w3e4r · 28 March 2010

UBIQUITOUS said:
The Australia RE market is the world's biggest casino. There are going to be a LOT of people who will have ruined their lives by getting sucked into this 'bigger fool' market.

The music will have to stop at some point, and only the naive will believe that at worst there will be stagnation in the market until incomes catch up. The rises have happened too steeply and for too long for stagnation to happen. The correction will be severe. There WILL be a rush for the exits. Infact, by seeing these record numbers of properties for auction, I would say that the smart money is already leaving. The dumb money believes that the smart money is entering the market. Reality check time I think.

Then again, gains of 30% a year means that if we all buy, we can double our money every 3 years. Sound too good to be true?

We are getting out for exactly the reasons you list above. It's simply not sustainable at the current rate.

Go Nuke · 29 March 2010

So although some will complain about the affordability of housing, they are unlikely to move to locations where although they can afford a house, they may not get employment.

Spot on!
That ugly four letter word.......WORK:horse:

Go Nuke · 29 March 2010

I predict there will not be many rate rises this year.....its actually all looking a bit shaky out there....lets wait unti August, see how bad things really are..if they have the first half year figures by then...
remember they did this last year....racked up the rate rises, told the world Aust was immune from the GFC...that we live in fairyland...lalala....then the mud hit the fan about August...and they hit the panick stations...
short memories for these cowboys....
4 rate rises in 6 months.....they never wait to see the affect. of last months rise...just up it again....because they believe its fairyland out here on the desert, middle of the ocean, little water, half a million immigrants pouring in each year.....just throw the arms up in the air....throw money out the window, or at dodgy schemes....

Love your thoughts mate

I keep hearing about how great the Aus economy is blah,blah,blah...Ive yet to see it or meet anyone that agrees.
Our work has dropped off and its going to be quiet for the next 2 months ( servicing the Alumina industry)

I thought inflation was well under control? Is there no better way to stop an asset bubble from forming in RE than jacking up interest rates over and over? Its not like there's that many Australians who will benefit as we all all hopeless savers (pouring it all into morgages/banks)

Bill M · 29 March 2010

WaveSurfer said:
Have to agree with you there tech.

I bought a nice parcel of land with a dog box on it in the Sunny Coast hinterland last year. Received approval from the council to splice her up into 6 spacey lots just before chrissy (about 1.5 acres each lot). The first slab is ready to be poured next week.

I paid at least 1/2 the price it was actually worth too (so the bank told me ). I guess I saw the potential that others has missed. I was stunned that someone had not snapped it up.

As I said previously, the little gems are still out there. Just gotta be prepared look outside the box

Well done Waversurfer, you are right, there are plenty of opportunities out there. You just got to think for yourself (as you do) and never follow the crowd, good luck.

Bill M · 29 March 2010

So although some will complain about the affordability of housing, they are unlikely to move to locations where although they can afford a house, they may not get employment.

Go Nuke said:
Spot on!
That ugly four letter word.......WORK:horse:

I live just over an hours drive from Sydney on The Central Coast. The quailty of houses out here are just unbelievable and you can still buy a nice house less than 10 years old for 350k. If you were happy with an older style timber cottage you can pick that up for less than 250k. Jobs are plentiful in Sydney, what's wrong with just over an hours drive to get to work? Some people spend that long in a bus just going to work there.

There is plenty of cheap housing in Australia if you are prepared to do a little travel.

Disclosure: I own rental property in Sydney and receive income from it.

Go Nuke · 29 March 2010

There is plenty of cheap housing in Australia if you are prepared to do a little travel.

Yeah its always a bit of a tradeoff I guess.

You have to weigh up the extra costs spent on fuel, wear and tear, time spent sitting in traffic rather than at home earlier (good if you have a family) rather than coughing a little more up to live a little closer to work.

I'll be building 21klms from Brisbane CBD, which during peak hour would probably take about anywhere between 1-2 hrs.
No trains near where I'll be living either as its a relatively new area.

Guess lifes all about trade offs.
Being in our 30's with no kids because too busy saving for a deposit has been one of them.
And my Mrs didn't meet me earlier :>

Bill M · 29 March 2010

Go Nuke said:
I'll be building 21klms from Brisbane CBD, which during peak hour would probably take about anywhere between 1-2 hrs.
No trains near where I'll be living either as its a relatively new area.

>

Sorry Nuke, I don't follow the thread too closely but if you own a plod 21 kms out and are planing to build then you will do ok, no probs there. 21 kms is inner city in Sydney and it won't be long before they say that for Brisy too, good luck.

Dowdy · 29 March 2010

Anyone see the interview with Glenn Stevens today on Sunrise?

http://au.tv.yahoo.com/sunrise/video/play/-/6994337/em-rba-em-governor-glenn-stevens/

When the man who writes the rules says to not over leverage in real estate then you know there is a bubble. He's of-course not going to admit there is one but you can tell he doesn't like the current situation RE is in.

"I think it is a mistake to assume that a riskless easy guarantee way to prosperity is just to be leverage up into property..." - Glenn Stevens

Bill M · 29 March 2010

Dowdy said:
"I think it is a mistake to assume that a riskless easy guarantee way to prosperity is just to be leverage up into property..." - Glenn Stevens

Yes, I agree with this too. People borrowing in the hope of making a quick buck in a short time could end up in disaster. Just ask all those who bought shares on a margin loan and then had to sell at massive losses during the GFC!

Bill M · 29 March 2010

OK, time to get back on the thread. 3 Weeks ago I met an old ex navy man in Manly. We got talking about stuff when I asked him where he lived, he told me he lived in Beacon Hill. Beacon Hill is roughly 25 kms from the Sydney CBD, it is not serviced by train and is totally reliant on buses and private motor vehicle for transport.

This man told me than in 1967 he had an agent try to convince him to by the house off the plan in Beacon Hill for $6,000. It took the agent all day to convince him that is was a good idea. He told me he was so scared to do it and that it was just so much money and that he was uncomfortable about it all. He said the only thing that convinced him was that a few Navy mates had already done it and that is was a good idea. In the end he decided he would go for it. He put down the deposit and from that time on his weekly salary paid for the repayments.

The man was not bragging but he said it was the best thing he ever done.

Now this Timber home on brick foundations is worth $800,000..... Will property prices rise in future? Absolutely no doubt in my mind.

Buckfont · 29 March 2010

Bill M said:
OK, time to get back on the thread. 3 Weeks ago I met an old ex navy man in Manly. We got talking about stuff when I asked him where he lived, he told me he lived in Beacon Hill. Beacon Hill is roughly 25 kms from the Sydney CBD, it is not serviced by train and is totally reliant on buses and private motor vehicle for transport.

This man told me than in 1967 he had an agent try to convince him to by the house off the plan in Beacon Hill for $6,000. It took the agent all day to convince him that is was a good idea. He told me he was so scared to do it and that it was just so much money and that he was uncomfortable about it all. He said the only thing that convinced him was that a few Navy mates had already done it and that is was a good idea. In the end he decided he would go for it. He put down the deposit and from that time on his weekly salary paid for the repayments.

The man was not bragging but he said it was the best thing he ever done.

Now this Timber home on brick foundations is worth $800,000..... Will property prices rise in future? Absolutely no doubt in my mind.

Bill M, I am perhaps of the old school, where sometimes it is wise to be prudent to scan the horizon first and wait for oncoming ships so to speak,that may show that, when they arrive whether their sails have been ripped to shreads, they still arrive to a new day.

I have a long holding on many assets, and as my home in Nth Avoca bought in 1994 for $140000.00, on 1200sqm, is testament to the holding power.

Same with equities. BHP , CBA, and the rest are all great buys if you get in early. Sometimes its that just tooo late.

The future of Australian property prices

WaveSurfer

Manic

kincella

satanoperca

satanoperca

satanoperca

Hello_

UBIQUITOUS

drsmith

UBIQUITOUS

1q2w3e4r

Go Nuke

Go Nuke

Bill M

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Bill M

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Go Nuke

Bill M

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Dowdy

Bill M

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Bill M

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Buckfont

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