Australian (ASX) Stock Market Forum

The future of Australian property prices

Jump to new
I read it'll take unemployment going up to 7-8% before there's a even a 5-10% decline in house prices.

That would take a major China and/or US meltdown affecting actual $ in Australia (not just negative sentiment), doesn't look like it'll happen this year, but I'm not an expert on global stuff.
 
A common logic seems to be that "the money has to go somewhere, so if not property then where?" followed by arguments that it won't be shares, gold etc because they're already not doing too well.

If we get what used to be known as a credit crunch, and there seem to be a few hints that we're heading that way at least to a modest extent with tightening lending criteria and so on, well then that changes everything. You don't need to worry about where the money will go if there isn't much money around in the first place.

Thinking of people I know and businesses that I know a bit about, they're pretty much all doing the same thing. Repaying debt and reducing risk. I don't see anyone borrowing big to buy anything they don't need but I do see plenty choosing to not travel or otherwise spend so as to reduce debt. Obviously that's a small sample, but I do think that mindset is becoming a lot more common that it was a few years ago. Now, if this idea becomes mainstream and "normal" then, given the huge amount of private debt that's around, it could continue for a very long time.

So will the money keep going into property? Or will it be stocks or gold or bonds? Or will the money simply be repaid and not be invested in anything? That outcome seems plausible to me at least to some extent.
 
Smurf1976 said:
A common logic seems to be that "the money has to go somewhere, so if not property then where?"
Click to expand...


Why money has to go somewhere? Money doesn't has legs, it is not moving by itself. It is the state of mind that controls movements of money. When everyone is scared, they will be more than happy to earn 1% per anum in their savings accounts.
Also, money kept in hares and real estate just disappears, goes in smoke, they won't move anywhere. Only cash is capable of moving somewhere if the owner allows this action.
 
Money simply repaid = collapse of fiat money system. This is the problem we currently (possibly) face.... Credit saturation.
 
trainspotter said:
*BINGO* .... posted on 10th-August-2013 11:31 AM

You HAD been warned !
Click to expand...

eh, the Aus Guvmint found a solution to this problem: import demand from overseas in the form of Chinese speculators.
What was once Australian FHOB v. Aussie Investor/speculator has now turned into Aussie Investor/speculator v. Chinese speculator with the only certain winners being developers.
 
wayneL said:
Money simply repaid = collapse of fiat money system. This is the problem we currently (possibly) face.... Credit saturation.
Click to expand...

That could be the reason China is stockpiling gold. They own $hit loads of U.S bonds money etc and the U.S has being undermining the value of their dollar, to make their businesses competitive.

I guess sooner or later, there will be a call to again tie currencies, to an underlying asset.

It won't work every time, to just print money, it worked for the U.S this time, but I can't see everyone wearing it again.:D
 
me thinks this is the proverbial taxi drivers talking about stocks

mortgage broker.jpg

Just think, there's no limit to what you can earn from being a broker.
 
I'd turn up for an Apple TV!

Anyways, the real bear leg of the market will probably move when house prices move.

Been an entertaining few days on the market, but we're back to 5183 now (Friday afternoon's price).
 
Sounds a bit like the white label "stock trading" platforms that people can re-sell with a borrowed AFS license.

I digress. My Mortgage broker told me today of CBA offering 2 year fixed loan for 4.19%. This is considerably cheaper than their discounted variable rate. My gut says this is because CBA thinks interest rates are heading lower.
 
Just read back to the beginning of thread .
Apparently in 2009 Melbourne was in the throes of a property bubble.

Another aspect of our current " over valuation" is over seas buyers (esp if locked into pound or USD ( read Yuan till 2 weeks ago)) see AUS property as one third cheaper to buy than 2 years ago !!

So we are not overpriced ; we just have to move out of the way for the next lot ( maybe it's Khama) ;)

Scub
 
MrBurns said:
Anyone know what happened to robots ?
Click to expand...

Living the dream and riding on the trams man !

APRA must be wringing their hands ...

Loans to property investors across Australia kept on rising in July, according to figures released on Monday, despite banks starting to try to discourage landlords.

The Australian Prudential Regulation Authority (APRA) monthly banking statistics show that $539.5 billion worth of loans to property investors were on the books in July 2015, a jump of 22.8 per cent since July 2014.
Click to expand...

http://www.domain.com.au/news/apra-figures-yet-to-show-signs-of-investor-slowdown-20150831-gjbbas/

Hmmmm maybe they aren't aware of this ....

The Reserve Bank of Australia said last year that clearance rates were highly correlated to house prices.

Sydney recorded its lowest clearance rate of the year at 80 per cent on the weekend, according to Domain's latest auction data, which is the first sign of a slowing market.

"Over the last six weeks we have seen five drops and the trend is clearly down," Domain's senior economist Andrew Wilson said.
Click to expand...

Read more: http://www.afr.com/real-estate/resi...ousing-slowdown-20150713-giayov#ixzz3kSrPE1uP

mr housing bubble.jpg
 
http://www.afr.com/news/policy/budg...mulative-deficits-in-60-years-20150505-gguuug
Got to love numbers.

Back in the 1977 and 1983 recessions, the household debt-to-income ratio was only 34 per cent and 37 per cent, respectively. Even in the 1991 recession, it was just 48 per cent, which is one reason why home loan arrears were so benign.

Yet by 2015, the household debt-to-income ratio had jumped 3.2 times to an incredible 154 per cent, which is above its pre-GFC climax because families haven't deleveraged.
Click to expand...

Nothing can go wrong, just ask Joe - worlds best treasurer 3 years running
 
satanoperca said:
http://www.afr.com/news/policy/budg...mulative-deficits-in-60-years-20150505-gguuug
Got to love numbers.

Nothing can go wrong, just ask Joe - worlds best treasurer 3 years running
Click to expand...

A DEBT binge by households is putting people in dangerous financial positions and leaving them unprepared for future interest rate rises.

Despite falling interest making it easier to pay down loans, Australian households now owe almost $1600 billion, a 28 per cent rise in just five years, and economists say our personal borrowing levels are among the highest in the world.
Click to expand...

http://www.news.com.au/finance/mone...-billion-in-debt/story-e6frfmcr-1227289530147

I blame the Labor Government for this .... $900 bonus and all HAHA !!

Mr Woskett said most people aged under 40 could not remember Australia’s last recession in the early 1990s. “Maybe some older folk may also have dusty memories,” he said.

“Then in 2008 we had a GFC. The government of the day built some schools as part of the stimulus package, while many people received a bonus $900 to go shopping. I recall younger workers saying to me ‘hey, if this is a crisis, bring it on’.”
Click to expand...

http://www.news.com.au/finance/mone...-billion-in-debt/story-e6frfmcr-1227289530147

Just gonna dust off my memory bank ... ERROR ERROR :banghead:
 
I was wondering if anyone has ever had anything to do with, or heard of this guy?

He claims to be a property cycle guru and is saying current cycle is no where near finishing and will run for at least another 14-15 years. Hard believe if the stock price trend of the big four banks is any guide at present??

He says property prices follow cycles of 14 years of expansion followed by 4 years of contraction (18 year fixed cycle)


http://www.phillipjanderson.com/18-year-real-estate-cycle/
 
What would 14 more years of property price expansion do to this graph?

I guess we might find out! The 4 year 'debt reduction' phase which follows would be interesting.

Barclays2.JPG
 

Similar threads

3
Future of $100,000 overland tourer Aussie lifestyle and the EV era
2
Replies
21
Views
2K
qldfrog
qldfrog
A
The future of Astraya
2 3
Replies
45
Views
8K
SirRumpole
SirRumpole
Dividend
Ultimate Acronym List (UAL)
Replies
0
Views
5K
Dividend
Dividend
A
Factors affecting property prices
Replies
3
Views
11K
Space Invader101
Space Invader101
MrBurns
Australia's own Ponzi scheme: the property market
Replies
4
Views
5K
Glen48
Glen48
Top