The future of Australian property prices

[trainspotter]

News Ltd seem to think he is confused ?

But the RBA doesn't know if that transition - the fabled "rebalancing" of the economy - will be achieved without the need for more interest rate cuts.
The governor said he did not currently think that would be needed.
And if it is achieved, it's not known how quickly or strongly that will happen, so the timing or size of any eventual interest rate rises can't be pinned down either

http://www.news.com.au/finance/business/rba-acknowledges-the-unknowns/story-e6frfkur-1226848259048

 

[kid hustlr]

ya perhaps a bit of confusion,

regardless my mail says on hold then up barring a disaster

 

[sydboy007]

If this keeps up I think there's a chance we'll see some more rate cuts

 

[Mrmagoo]

Cutting rates is a stupid idea. The economy should be allowed to correct and enter a deflationary spiral so that productive investments cease to be crowded out by the current fiat currency allocated in a command like economy fashion to failing industries.

If my pay goes down to a quarter I won't care because everything will also be cheaper the only people who lose will be the ones currently getting the money for free.

 

[satanoperca]

News Ltd seem to think he is confused ?



http://www.news.com.au/finance/business/rba-acknowledges-the-unknowns/story-e6frfkur-1226848259048

I can help him, by selling him one of my crystal balls, predicts the future with 100% accuracy guaranteed once I have your money.

Seems he is living in reality and telling the truth, they just don't know, but either does anyone else.

Sydboy, the new norm is interest rates at 2.50%. Cannot see the cash rate returning to above 5% for the foreseeable future.

As for house prices returning to 3-4 average household income, just not going to happen. The new norm is also 6-8 average household income. In the future it will be 8-10.

In Shanghai it is more like 20-25 times the average salary. Do you hear people complain, no!

Cheers

 

[Mrmagoo]

I can help him, by selling him one of my crystal balls, predicts the future with 100% accuracy guaranteed once I have your money.

Seems he is living in reality and telling the truth, they just don't know, but either does anyone else.

Sydboy, the new norm is interest rates at 2.50%. Cannot see the cash rate returning to above 5% for the foreseeable future.

As for house prices returning to 3-4 average household income, just not going to happen. The new norm is also 6-8 average household income. In the future it will be 8-10.

In Shanghai it is more like 20-25 times the average salary. Do you hear people complain, no!

Cheers

You do not hear them complain, probably because if they did, they communist government would shoot them.

In HK they do complain, loudly.

8-10 times the average salary means the average house will cost $750,000. It is already at that point. IT doesn't matter anymore. The average first home buyer is already utterly priced out of the market. IT is done.

 

[trainspotter]

AMEN ... If you read my posts previously you will see that it is part of the cycle. Still waiting for the March/April banks to want RoR on their endeavours ... nice call on the China default CanOz ... flow on effect will be banks claiming "higher cost of funding"in the near futire and blame "global conditions" as their excuse. Beware the Ides of March .... also keepan eye on the bankruptcy rates for companies in Australia ... just my opinion of course.

How does this effect home prices ? Inflation is the reason

 

[sptrawler]

It will be interesting to see how SMSF, that have jumped into residential property go, when their drawdown amount increases with valuations.
I hope their rental return has risen in line with their property valuations.

It is all moving into uncharted waters.

 

[qldfrog]

And another one which is not good news for Iron Ore, and so Australia overall with direct ripple effect on RE:
http://www.sbs.com.au/news/article/2014/03/08/china-posts-unexpected-trade-deficit-government

 

[sptrawler]

Well NZ has started raising interest rates.

http://www.theage.com.au/business/m...nterest-rates-more-on-way-20140313-34n73.html

Apparently they expect to raise rates by 2% points over the next two years, back toward long term normal levels.

Could it be a precursor to our interest rate movements?

 

[qldfrog]

not si sure, the employment figure release today are actually quite bad
a smoke and mirror:http://au.finance.yahoo.com/news/jobs-surge-mirage-060629184.html
I actually believe interest rate in Oz might go even lower to avoid a catastrophic unemployment effet

 

[sptrawler]

not si sure, the employment figure release today are actually quite bad
a smoke and mirror:http://au.finance.yahoo.com/news/jobs-surge-mirage-060629184.html
I actually believe interest rate in Oz might go even lower to avoid a catastrophic unemployment effet

You may be right, in W.A the proverbial is starting to hit the fan.

http://au.news.yahoo.com/thewest/a/21955763/jobless-rate-soars-to-pre-boom-levels/

People I talk to, who are directly involved in the retail economy, say it is the worste they've seen it in 40 years.

Currently, I can't believe the amount of infill housing and new housing estates, the frenetic building pace leads me to believe we must be expecting an allien invasion.

 

[sptrawler]

not si sure, the employment figure release today are actually quite bad
a smoke and mirror:http://au.finance.yahoo.com/news/jobs-surge-mirage-060629184.html
I actually believe interest rate in Oz might go even lower to avoid a catastrophic unemployment effet

Well a new bull on interest rates, Westpac's Bill Evans, has changed his mind and now thinks interest rates may rise.
He has being saying endlessly, they will continue falling.

 

[trainspotter]

Well a new bull on interest rates, Westpac's Bill Evans, has changed his mind and now thinks interest rates may rise.
He has being saying endlessly, they will continue falling.

*Hear ye Hear ye* ... to make Australia attractve on the bond rate as mining stalls as China stalls on repayments. *Hear ye Haahhahahaaaa*

Blaming global conditions no doubt !

 

[satanoperca]

*Hear ye Hear ye* ... to make Australia attractve on the bond rate as mining stalls as China stalls on repayments. *Hear ye Haahhahahaaaa*

Blaming global conditions no doubt !

Come on, why are IR's so low. Everything is steaming along in this great country.

Property prices are up
Property prices are up
Property prices are up
Property prices are up
Property prices are up
New builds are up
Foreign investment is up
Employment is low

Everything is going great guns

Now for inflation to raise it's ugly head

Then IR's up up up and away

 

[Tyler Durden]

This may be relevant:

China faces the biggest property default on record as credit curbs threaten to break the housing boom, leaving a string of "ghost towns" across the country.

The Chinese newspaper Economic Daily News said Xingrun Properties, in the coastal city of Ningbo, is on the brink of collapse with debts of $US570 million ($627.3 million), mostly owed to banks. The local government has set up a working group to contain the crisis.

http://www.smh.com.au/business/worl...-after-developer-collapse-20140318-34yw1.html

 

[satanoperca]

This may be relevant:

http://www.smh.com.au/business/worl...-after-developer-collapse-20140318-34yw1.html

Love this bit :

The authorities are trying to wean the economy off excess credit after a $US16 trillion ($17.6 trillion) spike in loans since 2009 - equal in size to the entire US banking system - but lending curbs are beginning to expose the sheer scale of bad debt in the system.

Read more: http://www.smh.com.au/business/worl...er-collapse-20140318-34yw1.html#ixzz2wJWrGFG1

Isn't that the size of the US govnuts debt.

and this

Three developers have abandoned half-built projects in the 2.5m-strong city of Yingkou, on the Liaodong peninsular

So that makes up hmmmm 0.25% of the population or less. Gee that is a threat.

and more

Prices have since roared back in the tier 1 cites such as Shanghai and Beijing but while these places capture the headlines, they account for just 5per cent of total building in China. Prices are falling in 43per cent of the tier 3 and 4 cities.

Wow, just a 43% of tier 3 and 4 cities, sounds exciting, but by how much?

More sensationalism. Of course Chinese property market will have some winners and losers, so do, do all property markets and for that, all businesses. Last month my sales were up 100%, this month they are down 20% based on last months sales.

and more

The yuan has fallen 2 per cent against the dollar since January

A whole 2%, the world is ending. F--k me, Oz must be dead then. How much has the AU$ ours fallen since the peak.

Again, I think their leaders have a game plan and are well in control. Haven't they lifted several hundred million people out of poverty in 30 years, sucker the US in with cheap products, built entire new cities and public infrastructure. What the f---k have we done. Oh yes, we have manage to destroy manufacturing but have some of the highest property prices in the world, not bad given that we live on a massive big island. Not to mention sold of our natural resources so future generations have nothing to trade with.

Love the media and those who believe it.

Cheers

- - - Updated - - -

This may be relevant:

http://www.smh.com.au/business/worl...-after-developer-collapse-20140318-34yw1.html

Love this bit :

The authorities are trying to wean the economy off excess credit after a $US16 trillion ($17.6 trillion) spike in loans since 2009 - equal in size to the entire US banking system - but lending curbs are beginning to expose the sheer scale of bad debt in the system.

Read more: http://www.smh.com.au/business/world-business/china-facing-fresh-ghost-town-crisis-after-developer-collapse-20140318-34yw1.html#ixzz2wJWrGFG1

Isn't that the size of the US govnuts debt.

and this

Three developers have abandoned half-built projects in the 2.5m-strong city of Yingkou, on the Liaodong peninsular

So that makes up hmmmm 0.25% of the population or less. Gee that is a threat.

and more

Prices have since roared back in the tier 1 cites such as Shanghai and Beijing but while these places capture the headlines, they account for just 5per cent of total building in China. Prices are falling in 43per cent of the tier 3 and 4 cities.

Wow, just a 43% of tier 3 and 4 cities, sounds exciting, but by how much?

More sensationalism. Of course Chinese property market will have some winners and losers, so do, do all property markets and for that, all businesses. Last month my sales were up 100%, this month they are down 20% based on last months sales.

and more

The yuan has fallen 2 per cent against the dollar since January

A whole 2%, the world is ending. F--k me, Oz must be dead then. How much has the AU$ ours fallen since the peak.

Again, I think their leaders have a game plan and are well in control. Haven't they lifted several hundred million people out of poverty in 30 years, sucker the US in with cheap products, built entire new cities and public infrastructure. What the f---k have we done. Oh yes, we have manage to destroy manufacturing but have some of the highest property prices in the world, not bad given that we live on a massive big island. Not to mention sold of our natural resources so future generations have nothing to trade with.

Love the media and those who believe it.

Cheers

 

[waterbottle]

This may be relevant:



http://www.smh.com.au/business/worl...-after-developer-collapse-20140318-34yw1.html

Looks like the Zhejiang Xingrun Real Estate Co. has already collapsed!

http://www.bloomberg.com/news/2014-...-5-billion-yuan-in-debt-said-to-collapse.html

Interesting times.

 

[trainspotter]

Things must be heating up when the Yanks start commenting

http://www.news.com.au/realestate/b...omist-robert-gay/story-fndban6l-1226763042194

As per CanOz friend of a friend buying up BIG in Toorak etc. there is a limit to prices and to what the market can withstand. As shares go down (read plunge) "Black Monday, 19.10.1987" for example so can the prices of property IF and it's a pretty big IF a number of factors come into play.

1) RBA lowers interest rates AGAIN
2) Unemployment rising
3) FIRB relaxation of policy (read Asian purchasing)
4) ???? ... anybody care to comment?

Meanwhile back in reality:-

http://www.abc.net.au/news/2013-11-27/apra-working-with-banks-on-lending/5119022

Number 4 ladeeez and generalmen ....

4) Lending standards (is the answer)

26th MARCH 2014 - Tread very carefully in the housing market, because rising prices and low interest rates won't last forever - that's the message for both banks and their customers.
The financial system is performing strongly, the Reserve Bank of Australia said in its twice-yearly financial stability review released on Wednesday.
But there's a catch.
The more settled environment, with its more moderate rate of credit growth, could limit the potential sources of profit growth for banks, the RBA said.
"It will be important for financial stability that banks do not respond by unduly increasing their risk appetite or relaxing their lending standards."

http://www.thebull.com.au/articles/a/44993-rba-warns-on-housing-prices.html

Hmmmmmmmm I posted the above back in November 2013.

Seems 4) is rearing it's ugly head ... only need the banks to raise their rates due to "global funding circumstances" but the RBA reckons it has got easier to get credit?

 

[satanoperca]

http://www.thebull.com.au/articles/a/44993-rba-warns-on-housing-prices.html

Hmmmmmmmm I posted the above back in November 2013.

Seems 4) is rearing it's ugly head ... only need the banks to raise their rates due to "global funding circumstances" but the RBA reckons it has got easier to get credit?

Talk about **** covering by the RBA. They warned the public, so don't blame them if everything goes pear shape in the future, but they maintain there is no bubble.

As for the banks, they will do what ever is necessary to keep those mega profits flowing, including increase IR's and relaxing lending standards, that is if they can be loosened any further.

Come on RBA, increase rates, unemployment is low, building boom is happening, inflation is rising, the economy is bubbling away and house prices are inflating

As for the $, stop trying to manipulate something that you have little control over as has been shown. It will be back at parity soon.

And why the need for a low $ anyway, manufacturing is gone and will not return, we export dirt and import everything else. + our economy is bullet proof as long as RE prices continue to rise, with exception to QLD, but they were always a banana state.

Personally I have gone from a net saver to f---k it, borrow as much as I can for productive pursuits other than RE.