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The future of Australian property prices

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Bronte said:
Can you please give us another interesting example ?
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Their information is biased because they are in the business of selling the stuff. In that respect they are no different to a real estate agent or a car salesman.
 
25 years ago,we took note of similar sources of information as this and started buying
real estate in Australia and England. Sure pleased we did, drsmith.
Do you or have you not bought from any real estate or automobile spruiker's ?
 

So if this is true given an average house price of $500K in 2010, then property in 1830 would have cost 1 cent. Yes just 1 cent and going on population theory, wages x 4 = average house price. Average house price = x 4 Average Salary, thus being 0.33 of a cent pa. Likely not.

If you apply the same theory over say the last forty years, there may be some truth in it.

It seems if it is printed on a website it must be true.

Interesting peoples perceptions of reality.

Still if your not 200 years old, then the sun is shining on RE and a splendid day in Melbourne today.
 
Yes I agree, there is a flaw in the equation over 200 years.
We read in Jan Somers "Building Wealth" First released in Feb 1992
Almost 10% for more than 900 years (since records started from the Domesday Book of 1066)
This was good enough for us, so we found suburbs close to major cities and water and started
buying properties, one or two (if we could manage it) every year.
 
Bronte said:
This was good enough for us, so we found suburbs close to major cities and water and started
buying properties, one or two (if we could manage it) every year.
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Are you still buying and are you gearing your purchases to the max ?
 
drsmith said:
Are you still buying and are you gearing your purchases to the max ?
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No drsmith, those days are over for us.
We used to borrow the lot, including set up costs and all.
Just before Christmas we bought a Perth house with a million dollar water view, bank not required.
 
Yes Satan totally agree . the amount of utmost dribble and crap that gets swallowed by the punters because its on a webpage is just unbelievable .......

Mind you i spose its the same for Forums also and all the bignoting salami slapping it produces on occasion

No offense to any previous posters of course ........... just pointing out that this IS the internet and i can be Elvis today.
 
Also Michael Jackson tomorrow, nunthewiser....that is dead at 50
 
kincella said:
re the CPI figures
....they are dodgy, all involved know that, a decrease in the price of weetbix, or a tv set is recorded, and increase in interest rates and house prices is excluded...
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I question if all involved really know that! Such a vital part of the economy and it's true weight is not reflected in CPI and the young wonder why they are being left behind. Property not having enough weight in CPI may just be the trigger.

Hey UK property prices are now increasing instead of decreasing!

UK Inflation over the last 6 months.
September 2009 1.1%
October 2009 1.5%
November 2009 1.9%
December 2009 2.9%
January 2010 3.5%
February 2010 3%
Bank of England’s target inflation is 2%.
Interest rates still remain at 0.5% in the UK....


satanoperca said:
So if this is true given an average house price of $500K in 2010, then property in 1830 would have cost 1 cent.
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That can't be right it was written by former Reserve Bank of Sydney economist, and Australia Post, and former treasurer of Telstra!

Drsmith, see you got your answer! It's the debt age thingy. Point is though if ya wanna pay cash for a million dollar prop' you gota take some risks! So leverage leverage leverage people! Timing may not be right but like the stock market it will come back!

72% come in spinner!
wot a whole 19 props sold! Not worth the post bots. Happy Easter!
 
re the CPi...of course the average Joe Blow does not know, nor would he care...
but the govnuts world wide know exactly why it was changed, and the implications....the noise about CPI, as if they are trying to keep a lid on it

the whole idea was to deceive the population
the population that relies on the CPI figures for the increase in their pensions, wages etc, that is supposed to compensate them for the increased costs....
ask any pensioner today, how the pension keeps pace with inflation.....they will tell you its way behind, they get further behind every month....
no wonder when the real figures are higher than 10%

the govnuts worked out it would become too expensive to keep paying at the real CPI rate, they had to bring it down to an affordable level...so they use the fraud rate of 3%

as for the 1 cent....yeh thats so funny....what no relatives around to advise you of the house prices ages ago

my mother paid $3000 pounds in 1942 for a small house on 20 acres
she renovated the small house, turned it into 4 bedrooms, then built the extension, large dining, modern kitchen, modern bathroom, huge living, and hall way, verandah etc
the original bathroom was a separate room, as was most of the early houses....so that was converted to a large laundry

the land was subdivided, and the quarter acre blocks were sold for $3000 pounds each in the mid 60's....

most of those graphs, charts you see today have a starting point of 100....
regardless that we know of prices of $1000 pounds, or $100 pounds
or $5 pounds...

btw just scoffing at believing everything one sees on the net, seems a cop out....
do you not believe govt web sites, or reputable sources....
historical societies and libraries have gone to a lot of trouble to scan documents and put them out there on the net...

its wading through all the rubbish posts by the bloggers that makes the job 1000 times more difficult than it should be
 
robots said:
huge 72%, just fantastic, gee the auctioneers do a great job
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This week: 40
Last weekend: 965
This time last year: 505

Figures even down as a % on last week are relatively meaningless given the volume.

But still, good figures.

kincella said:
as for the 1 cent....yeh thats so funny....what no relatives around to advise you of the house prices ages ago
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Just working of what was stated, just figures no more, no less that disprove what was being stated.

Got to keep it real, don't we.


Fail to see how someone stating that something published on a commerical site can easily be proven mathematically to be incorrect also encompasses all that is published on the internet to be false.

But believe that you wish to believe sunshine.

kincella said:
its wading through all the rubbish posts by the bloggers that makes the job 1000 times more difficult than it should be
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Useless to some, valuable to others, make of it what you will or just don't look.

On the record, you may bag the RBA all you want, but they have more education, knowledge and information available to them than many/and or all of us.

Cheers
 

Don’t think the nun was knocking govt sites there Kincella. Don’t know about anyone else, but it’s a bit strange you mention in the same post the CPI conspiracy with the govnuts being in on it! Thanks for the reply, but it isn't one of your best.

Few holes in those reputable articles of yours as well, including the one about house prices rising on higher interest rates!

Of course the RBA is trying to keep a lid on inflation and the inflation rate is as the ABS states! What is the point otherwise? A few questionable products like computers no doubt!

My point was the disconnection between property prices and the CPI figure which I concluded with an explanation.

Interest rates are a major factor in the change in property prices. However, interest rates are governed by CPI which doesn't reflect enough change in property prices.

Anyone else see the danger here?
 
hello,

no, i do not see any danger here

inflation is a given in life just like the sun coming up and going down and thats why you have to put in place strategies to deal with it

everyone has the opportunity to do that or they can suffer from inflation

thankyou
robots
 
THE federal government will consider slashing Australia's annual migration intake to help tackle concerns about traffic congestion, housing, hospitals, water and the environment
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This would obviously make the biggest impact to future property prices if immigration was reduced to the current global level, Australia is currently at twice that.

The Govnuts are a smart bunch, they obviously do not travel from outer suburbs into the cities each day to work and realize the current transport infrastructure cannot support current transport requirements of citizens let alone double those levels today.

Just a little suggestion to the pollies, fix the public transport system first. Owe they have attempted that in Victoria and guess what they have failed.

Cheers
 
robots said:
hello,

no, i do not see any danger here
Click to expand...

Robots, agree with keeping up with inflation but maybe you have missed my point. My fault perhaps....

Guess the questions are:
What is the likelihood for higher inflation?
What will high inflation do to the highly leveraged?

http://www.smh.com.au/business/beware-its-the-negativegearer-right-next-door-20100403-rkzv.html
Rising house prices and rising interest rates create the perfect climate for negative gearing, a way of getting tax deductions on the excess of expenses over rental income on an investment property.
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I just don’t get it! Locking low interest rates in makes more sense!
 
MR. said:
I just don’t get it! Locking low interest rates in makes more sense!
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That article makes the common sense suggestion of capping the deductions associated with negative gearing.

I wonder though whether the government now fears that this in itself could prick the bubble.

The time to do it was the 90's after interest rates had fallen but before the current long term property boom.

High interest rates could be of benefit to property investment but only after capital values had adjusted (higher yield from longer term expectations of higher interest rate/inflation). If this were to occur it would represent a retraction of that part of the price appreciation that came from the longer term expectation of lower interest rates/inflation.
 
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