The future of Australian property prices

[trainspotter]

Lenders LVR for SMSF are dropping ....

Effective tomorrow St George will reduce their SMSF LVR from 80% to 70% - this is on the back of them requiring 10% surplus after purchase.

St George have been our main lender of choice due to their offset feature - these changes are going to be make them far less competitive...... unless other lenders follow suit.

https://propertychat.com.au/community/threads/st-george-smsf-70-lvr.1614/

Don't you worry about what we are up to in WA ... http://www.glenfieldbeach.com.au/

 

[Uncle Festivus]

the grattan institute is now campaigining for the states to get rid of SD on house transaction and replace with a broadly based land tax

Being sensible policy reform the chances of it happening are low at the moment, but if a property bust does come for a state, they may be forced into action when SD levels drop to the point they're forced to change.

This is like creating a problem to fix a problem?

Why should I and the vast majority of homeowners pay yet another tax to fix a 'problem' caused by other issues?

The focus should be on the act of the transaction if anything. There could be many ways to adjust the current SD - charge at the GST rate as a max with a sliding scale lower under a certain amount?? But the tax should still be on the transaction, not on those who simply live in their house for many years ie don't flip.

 

[Uncle Festivus]

It really does ring alarm bells, why is property going so stupid?

There must be an underlying driver, blind freddy knows it is over priced, so why is the driver still there?

Either we are not seeing the bigger picture, or a lot of cashed up punters see something we don't.

Um, Chinese money and Australian bank money (financed from OS) probably chasing a finite resource. State government unwilling to stop the stamp duty gravy train. Developers landbanking. Deficient policies. Poor regulatory oversight. Literally zero cost of finance - low interest rates.

Take your pick, but put em together and you have a bubble.

 

[trainspotter]

This guy doesn't think so ...

NSW’s strengthening economy and rising levels of migration will ensure Sydney property prices continue growing in the near future, despite persistent rumours of a housing bubble, predicts real estate kingpin John McGrath.
The McGrath Estate Agents founder and chief executive said the current housing boom wouldn’t last, but instead of coming to an abrupt end would gradually come off the boil.
“The boom will end at some point, but that doesn’t mean price growth will end, but rather continue in a more moderate fashion,” Mr McGrath said.

http://www.news.com.au/finance/real...mes-off-the-boil/story-fnd91nhy-1227452541613

 

[Klogg]

This guy doesn't think so ...

http://www.news.com.au/finance/real...mes-off-the-boil/story-fnd91nhy-1227452541613

In my opinion, the idea of a plataeu just doesn't work. If people are losing money every year (negative gearing) and are seeing no capital appreciation, at some point they'll pull the plug...

Not to say that house prices will crash in a spectacular fashion, but there will be a few people selling at a loss at some point.

 

[satanoperca]

This guy doesn't think so ...



http://www.news.com.au/finance/real...mes-off-the-boil/story-fnd91nhy-1227452541613

I wonder why, no vested interest at all. He is a salesman after all. Interpreting his statement, don't worry sheepe, there is no bubble and no need to worry about any future property declines as it is all up up and up, goes not as fast as it has been for the last few years, no better time to invest.

My overtake on Australian property prices.

I can foresee any decline greater than 10% in the near future for the reasons that if it does :-

1. RBA will drop IR's to 0%
2. The Govnuts will open the flood gates to foreign investment without restrictions, not that there are any enforced restrictions at the moment. The govnuts will do this as they are all heavily invested in property.

The second point is the scary one for me when I think of the life style and opportunities my son will have lost when he becomes an adult, maybe he will feel similar to the native peoples of this great land.

 

[wayneL]

Here's a left field view of relative values.

In my profession (farrier), the median house price is over 4000 multiples of the average professional fee to shoe a horse here in Brisbane.

In Sydney, its 6500-7000 times, even with higher farrier prices. Other capital are somewhere between the two.

I decided to poll my overseas colleagues on their relative costs. So far the ramge has been 1800 - 2400 times.

Food for thought?

 

[trainspotter]

In my opinion, the idea of a plataeu just doesn't work. If people are losing money every year (negative gearing) and are seeing no capital appreciation, at some point they'll pull the plug...

Not to say that house prices will crash in a spectacular fashion, but there will be a few people selling at a loss at some point.

I think Sydney prices increased by 23% in the last fiscal year? Perth backwards by 1.4 % and Melbourne 10.3% upwards. Go figure?

 

[trainspotter]

Here's a left field view of relative values.

In my profession (farrier), the median house price is over 4000 multiples of the average professional fee to shoe a horse here in Brisbane.

In Sydney, its 6500-7000 times, even with higher farrier prices. Other capital are somewhere between the two.

I decided to poll my overseas colleagues on their relative costs. So far the ramge has been 1800 - 2400 times.

Food for thought?

What did Joe Hockey say? http://www.smh.com.au/federal-polit...job-that-pays-good-money-20150609-ghjqyw.html

LZ 129 Hindenburg anyone?

 

[Uncle Festivus]

Mmmmm.....another vested interest wanting the rest of us to pay for them? I suggest increasing stamp duty for properties over $1M perhaps?

Increasing the GST to 12.5 per cent, expanding its base, and imposing a 0.25 per cent universal land tax would raise enough money to abolish stamp duty and cut the company tax rate to 27 per cent.

The Property Council of Australia said the plan would "increase economic well-being by just over $10 billion per annum" by getting rid of taxes that stymied economic activity.

"We can both grow the economy and raise more revenue if we rely on a better mix of taxes than what we do today," Property Council chief executive Ken Morrison said.

"That means being bold enough to embrace GST reform to abolish a range of inefficient state taxes."

Goodbye great Aussie dream - for that will be all it is for Aussies?

Sydney's median house price has climbed higher than London to top $1 million, Domain Group figures show.

The 22.9 per cent increase in the year to June to $1,000,616 – the quickest pace of gain since at least the late 80s – put the NSW capital above London, where the equivalent was $900,000, but still below New York, where it was $1.5 million, and Paris, where it was about $2 million.

The rise – from $814,285 a year earlier – did nothing to dampen the city's attraction for investors, Domain senior economist Andrew Wilson said.

 

[wayneL]

What did Joe Hockey say? http://www.smh.com.au/federal-polit...job-that-pays-good-money-20150609-ghjqyw.html

LZ 129 Hindenburg anyone?

I made 4k this week, is that good enough?

 

[MrBurns]

I made 4k this week, is that good enough?

You made it off me, that's about what I lost on shares, I'll PM you my address so you can send me a cheque.

 

[Value Collector]

Mmmmm.....another vested interest wanting the rest of us to pay for them? I suggest increasing stamp duty for properties over $1Ms?

Why?

Why not just increase the stamp duty on gold transactions?

Seems just as silly

 

[Mrmagoo]

The bottom line is we're going to have a catastrophic recession. Had it happened 5 years ago, at that level of debt we would simply have had a really, really big economic catastrophe. Now I don't know what will happen. Our sovereignty could even be threatened if the Chinese come in and buy up all of the bad debt.

I can't believe Baby Boomers are so stupid as to believe that just sitting on a house that they bought for nearly nothing means they "earned" 2 million dollars, or nearly 75k a year, every year, after tax. For just owning a house and that this won't have dire consequences for the economy.

 

[MrBurns]

Auction results aren't looking too flash in some States -

https://www.realestate.com.au/auction-results/wa

 

[Uncle Festivus]

Why?

Why not just increase the stamp duty on gold transactions?

Seems just as silly

Why? Because basic housing shouldn't be an speculative investment to make money off while ever people go homeless or pay exorbitant rents.
What does it have to do with gold, unless people make houses out gold?

 

[shouldaindex]

Since 1988 the ASX has dropped over 15% 7 times and property prices have declined (by various %) 7 times.

They all happened together, and there was no other 15% drop in ASX or housing decline outside of those 7 times.

 

[rimtas]

Since 1988 the ASX has dropped over 15% 7 times and property prices have declined (by various %) 7 times.

They all happened together, and there was no other 15% drop in ASX or housing decline outside of those 7 times.

This is true, because house prices are regulated by the same processes as stock prices. Applying fundamental reasoning (like population growth or house shortage) as to why house prices fluctuate are just dead wrong. When mood turns down, stock and house prices fall.
And as stock market is pointing to another dramatic fall, people buying property today find themselves trapped if they are investing, or feel like fools if they buy it for living, because they overpaid. Now is sellers paradise, but as in a stock market, this will be realized just after the fact-when those prices are gone.

If one succeed in real estate, he must succeed in stock market too, and vice versa. Just majority think that holding a leveraged "investment" like a house is less risky than holding stock portfolio, which is wrong. Both carry the same risk, and because houses usually are under leveraged money, they are even riskier investments, but a confidence towards buying a house is greater because of "having something real", which is an illusion developed from the century long uptrend.

 

[trainspotter]

I made 4k this week, is that good enough?

Should get you a two room bedsit in Redcliffe mate

http://www.realestate.com.au/property-unit-qld-redcliffe-118207151

You could become a member of the Humpybong Yacht Club

 

[trainspotter]

Meanwhile back in the real world ....

ANZ and CBA increase rates to would be investors. Talk about shutting the gate after the horse has bolted.

It was ANZ Banking Group that kicked off on Thursday the new mortgage repricing cycle, raising the variable interest rate for property investors by 0.27 percentage points. Fierce competitor Commonwealth Bank of Australia moved less than 24 hours later by precisely the same amount. Analysts expect other banks to follow suit.

http://www.afr.com/business/banking...erest-rates-are-headed-higher-20150727-gikhio

CBA's earnings will be lifted by 2 to 3 per cent from its move on Friday, while NAB could gain 1 to 2 per cent and Westpac 3 to 4 per cent should they follow suit, according to BOAML's Hill. All up, the big four banks' combined profits would be boosted by almost $800 million