The future of Australian property prices

[Smurf1976]

Property managers here now not allowing the tenant to do ANY minor repairs [even changing a light globe, tap washers] due to duty of care - wonder where this will take us [You will have to call in an expert to put chlorine in your pool?]

That's the sort of thing that leads me to prefer owning over renting no matter what the cost.

If a light bulb blows on Christmas Eve then do you think the landlord is going to send an electrician around straight away? Or will they try and get away with leaving it until normal business hours so as to avoid paying whatever the sparky charges for being called out at that time? And if they do leave it, what happens if you trip over in the dark? Do they have appropriate liability insurance to cover that one?

The good point about renting is that depending on circumstances it may be cheaper. The bad side is that it's often a lot of hassle.

 

[Miss Hale]

That's the sort of thing that leads me to prefer owning over renting no matter what the cost.

If a light bulb blows on Christmas Eve then do you think the landlord is going to send an electrician around straight away? Or will they try and get away with leaving it until normal business hours so as to avoid paying whatever the sparky charges for being called out at that time? And if they do leave it, what happens if you trip over in the dark? Do they have appropriate liability insurance to cover that one?

The good point about renting is that depending on circumstances it may be cheaper. The bad side is that it's often a lot of hassle.

It isn't always a hassle and we have found it to be the opposite, that is a lot less hassle than owning your own home, especially when it comes to repairs etc.

I don't think not being able to change a light bulb is standard in most rental agreements. We have rented two places recently and we are expected to change our own light bulbs and have done many times. Most landlords and agents are good, we had a badly dripping tap in the garden and it was fixed the same day. All emergencies (like hot water service going bung) must be fixed within 24 hours. All you have to do is call the agent, nothing easier

 

[kincella]

funny, so the asx dramatically outperformed property in 2012....
how convenient for you to forget how far down the asx is since 2007..when it was around 7000

Houses in the lower and middle income range have survived very well, maintained their status quo, and some have even gained or doubled in value.

The majority of investors in stocks in 2007, are still way down or underwater....or have retreated
with what if anything was left, for the safety of doing nothing.

Not many stock investors have the ability to match the gains as per the asx benchmark,
they play individual stocks, penny dreadful' s and the like and those stocks have not put on similar gains.

I thought it was a gambling den leading up to 2007, but it has made a turn for the worse since, and the antics would put the leading mafia gangs to shame.

I actually read individuals posts on stocks, and it is anything but champers out there, with a huge number hurting, and some will never return to the stock market again. Many were wiped out.

Regardless that this is a stock forum, everyone visiting this site still needs a roof over their heads, whether as a renter or buyer, and will have a view on the housing market.

A successful investor knows to hold the 3 main asset classes in a balanced portfolio, of cash , shares and property. The period since the onset of the GFC has provided a stunning example, of why that policy is successful. While one asset class goes down or falls over, the other two provide a sanctuary, a back up, while providing gains and income. Each asset class is affected by movements in the other classes. So when one goes down, the others move up. One of the greatest mistakes the newcomers fall for, is the idea that when one falls, they all fall as in a domino affect.
Many investors, at the first sign of trouble, will move their funds around to other asset classes, as in a Plan B.

The bears display of such an aversion to property, leads me to believe they will rarely be successful with their investments.
The biggest hurdle, and problems faced by the majority of investors, is allowing emotion to control their investment decisions.
Unless and until they make the stockmarket a level playing field, I doubt it will return to the glory of former days.
So where do investors park their money in the future. That is the big question.
cheers

 

[Tink]

61% this weekend

I have noticed the Mornington Peninsula is moving along -- must be alot of retirees moving down there.

Has anyone got a national data, rather than only Melbourne, just so it caters for everyone.

 

[Julia]

Houses in the lower and middle income range have survived very well, maintained their status quo, and some have even gained or doubled in value.

What do you mean "lower and middle income range?
You follow that with "have gained or double in value".
Well, I don't know what extra special place you live in to make that observation. Here in a quite attractive coastal resort town in SE Qld property is down around 30% and showing no signs of picking up in anything other than the bottom price range.

 

[kincella]

So the SE Qld coast determines prices Australia wide...?
Now I wonder what particular problem has contributed to that particular area, which is well reported as having some serious temporary problems. Lets look a little closer, it has its own problems, including the increase in crime, the GW con job with councils so that the sea rising means all the houses will be washed away, so there are scaredy cats who will panic and sell. Or is it the old white shoe brigade that took over the place in the 80's are all dying off, and the kids are cashing in their inheritance.
Most councils along the east coast have been putting in ridiculous restrictions , due to the fear about rising sea levels. However I guarantee there are plenty of people ready to pounce and get themselves a bargain, for a beach front when they see the change in council sentiment is imminent.

I don't live in any special place, but if you followed the market like I do, actively looking to buy, you would notice the big increases in the bottom of the market, and the good increases in good properties.

Of course if you just follow the media, without an active interest, you may have no idea of how the market is performing.
cheers

 

[Julia]

So the SE Qld coast determines prices Australia wide...?

Don't be so silly. I said no such thing. I simply pointed out that your implication that prices were up everywhere was not correct.

I don't have sufficient interest to be bothered arguing about it, save to point out that the Council here has not succumbed to the fear mongering about coastal property. Interestingly enough, much to the fury of some of the ardent greenies, they are actually removing scrappy trees and other weedy looking stuff along all the foreshore so that we all have better views and it looks more attractive.

Oh, and save your snide remarks about "if you only follow media". I am commenting on the basis of observation.

 

[kincella]

you said, "I simply pointed out that your implication that prices were up everywhere was not correct."

I never stated prices were up everywhere....that is just silly.

It would be impossible.


oh, and this might be one reason, that prices are not hunky dory on the Gold Coast
there might be a substantial cost to rectify this problem.
I guess giant tides might create havoc, it is nature after all.

http://www.news.com.au/realestate/i...ses-on-the-brink/story-fndbarft-1226538296354

 

[young-gun]

Oh, and save your snide remarks about "if you only follow media". I am commenting on the basis of observation.

It's ok Julia, it's now safe to follow the media again, as kincella is using the most mainstream of mainstream media to link his post.

 

[kincella]

young gun,
you appear not to have noticed the difference....the article was based on
a fact, about erosion to a beach front property-

versus the thousands of articles, which are purely opinion....
there are rarely any facts included in the opinion pieces

 

[Uncle Festivus]

Unless and until they make the stockmarket a level playing field, I doubt it will return to the glory of former days.

Unless and until they make property a level playing field, I doubt it will return to the glory of former days.

 

[Uncle Festivus]

You've had a good run, just accept & prepare for the inevitable........

 

[medicowallet]

Sure Kincella, lol, now I know you are just trolling.

You specifically mentioned how people are NOW putting money into super etc. Well, sorry champ, but I am just letting you know that over the past 12 months shares have dramatically outperformed property.

That is a fact.

I do agree that some very small investors try to gamble in the stockmarket, but any serious investor with a decent amount of capital invested, should be able to at least match an index fund, and outperform it regularly.

Why not take the performance of shares vs property from the month before the last housing market correction to today's date to make the comparison? Oh I know, because it suits your purpose to live in the past where fundamentals of shares were not sound, not in the present where fundamentals of residential property are not sound.

That is why the current housing correction is underway.

Also when did you purchase your last property?

 

[pavilion103]

Kincella, you don't have to hold shares through every bust (i.e 2008). So when using numbers of how the stock market has performed, take this into consideration.

With ANY investment class you need to recognise when the potential is there and when it isn't. Property was an amazing investment vehicle especially over a 10 year period. Now that prices are way way over extended there is not money to be made (only lost) by buying and holding real estate. There may not be money to be made in this way for many many many years.

You don't need to hold a balance of property, shares and cash. Just know when to be out of the market (i.e. like now with property) and preserve capital so that when opportunities arise you can capitalise on them. I bought in 2006 - 3 cheap properties. They luckily went up 50% in 24 months. I sold as I saw the writing on the wall. Since prices have fallen and won't rise for a long time. Had I held I'd be down from the peak. With no upside why hold?

Now that I've preserved capital I can pursue other opportunities rather than seeing it eroded in property.

 

[kincella]

Let s put what I said into context.... so it was not just the contribution, but a load of people focus on the tax rates for super at 15%
when it may be higher than their non super tax rates....plus why lock it into super until retirement.

I did not state the obvious, but there is also a risk with numerous changes in the legislation. There always seems to be someone with their eye on that bonanza, and wanting to get their hands on it. Like swan for instance, taking any balance under $2000 that may be dormant, and turfing it into general revenue.

How would you feel about the unions running the superfunds, in light of how they manage union funds for members?
Now they have changed the Auditor requirements, basically it will only be the larger Auditors to take their share of the mum and dad superfunds in the future. It is moving that way now. I would not be surprised if at some stage they cancelled the DIY superfunds, and made them turn it over to the bigger players.

my earlier post...........

"Wonder how many people are still pouring their money into super, and salary sacrificing under these adverse conditions. I am also surprised so many people still think only of the lower tax rates, as their reason for putting more of their hard earned into super. They have not kept up to date with the lower income tax rates. I think the average tax rate for income around $35,000 is now just under 10%, and around 20% for $50,000. Yet they will pay up for a contribution, paying 15% tax up front before the contribution earns any income, and they are stuck in the super funds until retirement age."

 

[kincella]

I know all about taking the funds back, out of the markets, and sitting on it.
The trouble with sitting on cash, is it devalues quickly, plus the woeful 3.5% at the moment, needs some serious
attention.
That is the reason I have been looking at the offset accounts. It is the equivalent of earning the same as the investor or home loan rates.

 

[medicowallet]

I just popped in to have a peep, to see if anyone was still here posting.
I see this forum is still alive, but only just.

I note the bears are still posting, nothing has changed.

Property has performed exceptionally well, interest rates at their lowest ever, and it is all roses and lolly pops.

Unfortunately the stockmarket has deteriorated, and taken a load of players, and gamblers with it.


Super has also taken a huge hit, due to most funds being invested in the gambling den, or cash only. Unbelievable bad management by fund managers, without exposure to the property market.

The above was conveniently forgotten hey Kincella?

 

[Knobby22]

You've had a good run, just accept & prepare for the inevitable........

View attachment 50011

Is it inevitable in the short term?

If interest rates drop another percentage point there might just be one last gasp left.

 

[Uncle Festivus]

Is it inevitable in the short term?

If interest rates drop another percentage point there might just be one last gasp left.

I haven't seen any effect from rates where they are now, in fact prices still falling overall?

It's the perfect conditions for property ie the usual reasons like low rates, demand outstripping supply yarda yarda etc etc yet the RBA is getting very little bang for buck out of it?

 

[Uncle Festivus]

I know all about taking the funds back, out of the markets, and sitting on it.
The trouble with sitting on cash, is it devalues quickly, plus the woeful 3.5% at the moment, needs some serious
attention.
That is the reason I have been looking at the offset accounts. It is the equivalent of earning the same as the investor or home loan rates.

If you aren't getting 5% minimum you aren't trying - use that as your comparison to returns on property right now?

As for super, I agree it's a ponzi scheme, but up till now it's worked ok. It was yet another baby boomer retirement scheme like property. Those days are gone (or coming to an end), so what's going to replace them?