The future of Australian property prices

[tech/a]

It is a disgrace...

Why is nothing done ? because Govt is useless at anything except milking the public dry.

Property is in a bubble and all bubbles eventually burst, I hope China goes bad and these foreigners have to sell in a hurry......wishful thinking.

They are doing those couples a favor.

When the bubble bursts
Who do you think will be wearing it?

 

[Wysiwyg]

They are doing those couples a favor.

When the bubble bursts
Who do you think will be wearing it?

Not to mention the seller who made a nice capital gain.

 

[MrBurns]

They are doing those couples a favor.

When the bubble bursts
Who do you think will be wearing it?

We've been waiting for this bubble to burst for years now, when it does go, duck for cover.......

 

[Uncle Festivus]

Something must be going to happen in the next 5 years that I don't know about as a BIG food retail chain has purchased 18 acres to develop in a Northern suburb that is yet to be developed. There are 2000 blocks to be placed on the ground. Earthworks had started already. Hong Kong hedge fund is behind the sub division. They are talking about a 2019 start date for the complex ?? 89 specialty shops as well as the junk food outlets given a corner each.

Well that's just great - our soon to be, very own ghost cities funded by hot, freshly printed Chinese money!

 

[rryall]

Lots of interesting details coming to light regarding the point piper mention which was sold illegally a to Chinese company earlier this year for $39 million.

http://news.domain.com.au/domain/re...ve-web-of-chinese-wealth-20150531-ghdfid.html

What a joke it was sold off market especially after all the controversy and publicity...

All the black money coming out of China is now a real concern. It is frustrating when the answer appears to be so simple in regards to improving anti money laundering (AML) regulations when so many properties are bought with cash.

http://www.theage.com.au/business/c...-politicians-in-the-face-20150531-ghdjw7.html

 

[luutzu]

Lots of interesting details coming to light regarding the point piper mention which was sold illegally a to Chinese company earlier this year for $39 million.

http://news.domain.com.au/domain/re...ve-web-of-chinese-wealth-20150531-ghdfid.html

What a joke it was sold off market especially after all the controversy and publicity...

All the black money coming out of China is now a real concern. It is frustrating when the answer appears to be so simple in regards to improving anti money laundering (AML) regulations when so many properties are bought with cash.

http://www.theage.com.au/business/c...-politicians-in-the-face-20150531-ghdjw7.html

On an individual level, I can understand the frustration. On the national level, nothing beats having foreigners coming in to your home with mountain of cash, building and buying stuff they can't take home with them.

 

[rryall]

On an individual level, I can understand the frustration. On the national level, nothing beats having foreigners coming in to your home with mountain of cash, building and buying stuff they can't take home with them.

Although I agree with this perception in theory I don't think it holds up when you think about it at a deeper level. There is not much benefit having mountains of cash/property when unemployment/crime rates start to increase dramatically. You cant really put a price on a harmonious society but apparently the Australian government and financial institutions have no qualms in doing so and selling out the country.

I can fully understand people selling homes now in Melbourne/Sydney are rejoicing at the large capital gains. However, this is short sighted and will come at a cost to society at some point in the future.

 

[luutzu]

Although I agree with this perception in theory I don't think it holds up when you think about it at a deeper level. There is not much benefit having mountains of cash/property when unemployment/crime rates start to increase dramatically. You cant really put a price on a harmonious society but apparently the Australian government and financial institutions have no qualms in doing so and selling out the country.

I can fully understand people selling homes now in Melbourne/Sydney are rejoicing at the large capital gains. However, this is short sighted and will come at a cost to society at some point in the future.

It greatly benefits the average boomers with property to sell or to rent, also benefit property developers and investors and all that job in construction and related industries.

It's not doing the young families and first-home buyers any favour but on a social policy side, it does get them into financial debt and with debt they'll work harder for less pay and that's good for capitalist friends of "our" leaders

So on the one hand you got an important segment of society getting richer out of it and liking your political savvy, on the other you got young and troublesome idealists in too much debt to do much complaining or/and enjoying the high price and "profit" they're seeing from their mortgage to really think much about it to complain or care for those who can't buy in...

All the leaders needs now is to bring it to a soft landing and hope for the next big big thing to kickstart the economy again.

If it goes on for longer then yea you'll get social unrest... but then you got the mainstream media, terrorists, Russians, Chinese and other ethnic minorities... and a militarized police force to take care of that.

Win, Win, Win... a handful of Aussies are losing, but then if you make them win too there won't be any more Aussie battler to sing about.

In all seriousness, we've done this before.. and foreign investors have paid handsomely trying to own us.

 

[sydboy007]

Wages growth down to 2.2% growth, barely level with inflation.

Prices going gangbusters in Sydney and Melbourne.

Investors over haalf the market in Sydney and Melbourne

Household debt back to 160% of GDP and counting.

How could anything go wrong

 

[sptrawler]

Wages growth down to 2.2% growth, barely level with inflation.

Prices going gangbusters in Sydney and Melbourne.

Investors over haalf the market in Sydney and Melbourne

Household debt back to 160% of GDP and counting.

How could anything go wrong

View attachment 62819

Well on the other hand, an astute investor, would sell and buy back after the crash.

 

[tech/a]

Your suggesting for investors

Sell
Capital gains
Then another round of stamp duty.

Nah

 

[Tyler Durden]

On an individual level, I can understand the frustration. On the national level, nothing beats having foreigners coming in to your home with mountain of cash, building and buying stuff they can't take home with them.

I never thought about this, but from their perspective, how prudent is it to buy something which may go down in value? Let's assume these foreigners are buying just for the sake of getting cash out of their own country and don't care about the yield.

Would they be right in thinking real estate is the safest place to put it in? What if there is a market crash? Wouldn't that semi-defeat their purpose? Would they even care if their "investment" goes down in value 10%, or 20%?

 

[sptrawler]

Your suggesting for investors

Sell
Capital gains
Then another round of stamp duty.

Nah

I wasn't suggesting do it.

Only pondering why, the ones that say a crash is imminent, don't do it.

It is somewhat like Mclovin, said he sold out of the banks, three weeks ago, since then they have dropped 20%.

If he buys back in, that is 20% more shares and or dividends, it takes balls but backing your judgement beats talking up a storm, everytime.

Did I sell the banks? no, didn't have the balls.lol

 

[qldfrog]

I wasn't suggesting do it.

Only pondering why, the ones that say a crash is imminent, don't do it.

It is somewhat like Mclovin, said he sold out of the banks, three weeks ago, since then they have dropped 20%.

If he buys back in, that is 20% more shares and or dividends, it takes balls but backing your judgement beats talking up a storm, everytime.

Did I sell the banks? no, didn't have the balls.lol

I did sold my IP in Brisbane at the end of March, i was out of banks and reentering now.
I have no regret on these two calls, but having balls as you say can also be costly and i have made costly mistakes, i am usually too early in all cycles; and it is not nice $ wise to be a trend setter in shares: you buy and sell too early and end up average as per the lemmings

 

[trainspotter]

It's now unequivocal ...

Treasury secretary John Fraser has warned that Sydney is "unequivocally" in a housing bubble, as the latest data shows annual growth rates picking up again.

Mr Fraser raised concerns that having interest rates at historically low levels was encouraging people to over-invest in real estate.

He told a Senate hearing on Monday morning there was no doubt in his mind there was a housing price bubble in some parts of the country.

"When you look at the housing price bubble evidence, it's unequivocally the case in Sydney. Unequivocally," he said.

http://www.abc.net.au/news/2015-06-...-in-may-but-annual-growth-strengthens/6511068



Notice how the RBA allows wriggle room for themselves when they quantify it as "some parts of the country" ....

Meanwhile back in reality ...

Perth house prices "DIP" http://www.abc.net.au/news/2015-04-07/perth-house-sales-drop/6376182

Darwin house prices "DROP" http://www.ntnews.com.au/realestate...ity-in-australia/story-fnk4wt05-1227289127955

12 per cent Brisbane price "DROP" nothing to worry about http://news.domain.com.au/domain/re...p-nothing-to-worry-about-20150414-1mkhs6.html

Adelaide prices could "FALL" http://www.news.com.au/national/aus...-property-market/story-e6frfkp9-1227278627860

Not going to bother with Canberra ... have I missed anyone?

 

[trainspotter]

Well that's just great - our soon to be, very own ghost cities funded by hot, freshly printed Chinese money!

And here it is ... must be the location being so close to the ocean that has got them all excited?

 

[luutzu]

I never thought about this, but from their perspective, how prudent is it to buy something which may go down in value? Let's assume these foreigners are buying just for the sake of getting cash out of their own country and don't care about the yield.

Would they be right in thinking real estate is the safest place to put it in? What if there is a market crash? Wouldn't that semi-defeat their purpose? Would they even care if their "investment" goes down in value 10%, or 20%?

I don't know. Don't think they think property will ever go down. Might believe what some of us do that property will either slow down or stay the same, never go down.

Saw docos where some property expert in China said what he's seeing in China will make the US property bubble that spark the GFC like a walk in the park. There's some 60 million empty apartments in China (this was 2 years ago) and a lot more that's bought and owned but empty because the rich and connected bought it as investment... some of them have only a safe in it for them to stash cash in. Contrast that to the average Chinese who sleeps an entire family to a room, can't afford much beside paying the bills.

So maybe what's happening in the Australian property market is relatively safe to them.

Who knows, they might walk away with a good lesson or two.

 

[satanoperca]

It's now unequivocal ...



http://www.abc.net.au/news/2015-06-...-in-may-but-annual-growth-strengthens/6511068

View attachment 62837

Notice how the RBA allows wriggle room for themselves when they quantify it as "some parts of the country" ....

Meanwhile back in reality ...

Perth house prices "DIP" http://www.abc.net.au/news/2015-04-07/perth-house-sales-drop/6376182

Darwin house prices "DROP" http://www.ntnews.com.au/realestate...ity-in-australia/story-fnk4wt05-1227289127955

12 per cent Brisbane price "DROP" nothing to worry about http://news.domain.com.au/domain/re...p-nothing-to-worry-about-20150414-1mkhs6.html

Adelaide prices could "FALL" http://www.news.com.au/national/aus...-property-market/story-e6frfkp9-1227278627860

Not going to bother with Canberra ... have I missed anyone?

Is that it? hardly any price changes except Brisbane and even then big deal.

Nothing to see here folks, the sunshine and lollipops still abound.

Thanks for the links, appreciated.

But I will throw this one out:

Not a single major city has seen negative growth in the last 12mnths even though the RBA thinks are economy is going to the dogs, keeps dropping IR screwing savers and pensioners at that same time

http://www.corelogic.com.au/media-release/capital-city-dwelling-values-rise-9-over-past-12-months-as-capital-gains-take-a-breather-in-may

 

[Value Collector]

keeps dropping IR screwing savers

What rate above the rate of inflation do you believe a government guaranteed deposit should earn?

In my opinion a bank deposit that have first claim to the banks capital, and is government guaranteed should only earn enough to offset the loss caused by inflation. In an environment of low inflation or deflation the deposit should earn nothing more than a small token interest payment.

 

[satanoperca]

What rate above the rate of inflation do you believe a government guaranteed deposit should earn?

In my opinion a bank deposit that have first claim to the banks capital, and is government guaranteed should only earn enough to offset the loss caused by inflation. In an environment of low inflation or deflation the deposit should earn nothing more than a small token interest payment.

Firstly, the govnuts shouldn't be guaranteeing private institutions, it is fool hardy at best. Ireland comes to mind to some degree. Banks are responsible to their shareholders, govnuts should not get involved.
Second, the guarantee will not cover all savers under a certain value, the guarantee is not a 100% of your savings up to a fixed amount.
Third, the official inflation rate is hardly a true indication of the increase to the basic cost of living each year.

So to answer you question, a reasonable rate of return after tax and say 50% above inflation.

But I ask you this, if the govnuts didn't offer the guarantee, what value would the banks place on deposits and what return would savers demand knowing that they money is not 90% safe? Currently it is not even 70% safe with the guarantee. Or even better, would people become more astute with their savings and look for opportunities that could grow their savings other than mostly non productive pursuits like property. Like innovation and creativity.