The future of Australian property prices

[Uncle Festivus]

A regional city near me, at the coal face (hint), Chinese 'investors' are still sitting on empty dwellings even though several coal mines have closed with several hundred jobs lost, which may explain why prices have not tanked completely. Just what their tolerance is and when to sell will be interesting to see, and will almost definitely result in a 'tsunami' of supply.....

 

[poverty]

A regional city near me, at the coal face (hint), Chinese 'investors' are still sitting on empty dwellings even though several coal mines have closed with several hundred jobs lost, which may explain why prices have not tanked completely. Just what their tolerance is and when to sell will be interesting to see, and will almost definitely result in a 'tsunami' of supply.....

So far we know that the faceless Chinese investors know how to buy houses. However, I'm yet to see any evidence that they know how to sell them.

 

[tech/a]

So far we know that the faceless Chinese investors know how to buy houses. However, I'm yet to see any evidence that they know how to sell them.

They probably don't have to.
They have other agendas.
Currency protection.
Once they have an AUSSI asset
If the $A remains stronger than the Yuan
Then they are not concerned as much with
Price fluctuations

 

[tech/a]

Further as you can see someone buying an AU property with Yuan in 2011-12
due to currency weakening they are around 50% better off than holding Yuan
as a cash asset.

So pretty clever these Chinese are!

 

[craft]

View attachment 64658

Further as you can see someone buying an AU property with Yuan in 2011-12
due to currency weakening they are around 50% better off than holding Yuan
as a cash asset.

So pretty clever these Chinese are!

???????


Hope they are smarter then a duck

Frack to bunt.

 

[skyQuake]

???????


Hope they are smarter then a duck

Frack to bunt.

Looks like they're breaking even at best.

On the flip side if they're cashed up its a 2nd chance to buy @ 2011 prices! (in CNY)

 

[tech/a]

Yes your right.

Seems todays buyers are the smart ones.

 

[craft]

Yes your right.

Seems todays buyers are the smart ones.

Maybe, Maybe not.

Take a look at the Chinese balance of trade – it could be argued that the Yuan is still undervalued so currency strength could be a theme for a long time yet. The suppression of the Yaun and accumulation of the Chinese surplus has really been a suppression of the purchasing power of Chinese labour whilst concentrating the wealth in the hands of the capital holders. That’s about run its course – China needs to transition from being so reliant on export and capital investment to more internal consumption so even if the Yaun never freely floats I can’t see it remaining as suppressed as it was even remaining as a controlled currency.

Can’t say I see Aust real estate as cheap, at least not the stuff they are buying. – If the price stop rising, Chinese real-estate buyers would start to feel the currency macro tide - No more flat lining in currency adjusted terms. If prices fall it could become a rip tide with two macros against them. How committed would they be to a losing investment?

 

[wayneL]

In keeping with the high end taking it up the @## theme, we (a group of specialist equine practitioners) have just offered 2.5m on a 4m asking price.

They haven't told us to £%& off yet. I sorta hope they don't accept, we'll get it for 1.8 next year.

 

[CanOz]

In keeping with the high end taking it up the @## theme, we (a group of specialist equine practitioners) have just offered 2.5m on a 4m asking price.

They haven't told us to £%& off yet. I sorta hope they don't accept, we'll get it for 1.8 next year.

Wayne was that on acreage? One of the RE guys we were speaking with in Brissy just paid 900k for 50 acres just outside town, for his horses....

FWIW, there's an entire housing estate right on the lake here that's bought and paid for, sitting almost completely empty...the thing they don't get is if they don't maintain these places they'll be rotted away to nothing by the time they go to do anything with them....

 

[wayneL]

Wayne was that on acreage? One of the RE guys we were speaking with in Brissy just paid 900k for 50 acres just outside town, for his horses....

FWIW, there's an entire housing estate right on the lake here that's bought and paid for, sitting almost completely empty...the thing they don't get is if they don't maintain these places they'll be rotted away to nothing by the time they go to do anything with them....

Yep acerage, Brisbane river frontage,flash as a rat with a gold tooth, only about 15 km from cbd

 

[qldfrog]

Yep acerage, Brisbane river frontage,flash as a rat with a gold tooth, only about 15 km from cbd

flooded every 10y?

 

[wayneL]

flooded every 10y?

Nup, good side of the river. Still no accept or reject/counter offer.

 

[Uncle Festivus]

Maybe, Maybe not.

If the price stop rising, Chinese real-estate buyers would start to feel the currency macro tide - No more flat lining in currency adjusted terms. If prices fall it could become a rip tide with two macros against them. How committed would they be to a losing investment?

Spot on. Starting now on both counts.......with an added supply 'tsunami'

A home-building frenzy that is shoring up Australia's economy as the mining boom ends may also be what finally takes the steam out of one of the world's most expensive property markets.
The case in point: Green Square. Nearly 10,000 apartments will be built in one of Sydney's newest suburbs in the next four years to satisfy investor demand, which has already sent property prices in the city to the highest ever. It will also add to the record 213,000 new home starts across the country amid slowing population and economic growth, prompting Goldman Sachs to warn of a supply glut by 2017.

 

[tech/a]

Spot on. Starting now on both counts.......with an added supply 'tsunami'

Yeh but it really seems to be localized.

Sydney
Melbourne
Inner areas

Mining towns.

In Adelaide we work on Subdivisions and they are popping up
every week. They are released in stages and aren't let to
contractors to sub divide until they are at least 50% sold.

We are currently working 3 in the outer suburbs which roll from
one to the next. Demand for these is very strong.
These are what Id call middle class suburbia. The land is either owned
by large land developers like Land SA or the bigger builders like Hickenbotham.

They sell to the public and other builders.
No land
No building companies
No employment.
I'm seeing demand here.---been like this since 2011

 

[satanoperca]

Maybe no subprime lending by Australian banks directly, but it seems it is still happening through Chinese banks, with the Chinese buying a significant share of new apartments in Melbourne and Sydney.

From the AFR:

http://www.afr.com/markets/market-data/interest-rates/zero-deposit-loans-for-chinese-investors-to-spur-australian-property-market-20151025-gkhujs

One of China's biggest financial institutions is offering zero-deposit home loans for off-the-plan apartments in Melbourne and the Gold Coast, a practice at odds with efforts by Australian regulators to tighten lending standards and cool the property market.

So the Chinese lending stumps up the deposit and the Australian bank loans the rest. No skin in the game makes it easier for the speculator to walk away at settlement if the price did not rise.

Nothing can go wrong here at all.

Maybe the next global shock will come from China itself and it's poor and loose lending practices.

 

[sptrawler]

Maybe no subprime lending by Australian banks directly, but it seems it is still happening through Chinese banks, with the Chinese buying a significant share of new apartments in Melbourne and Sydney.

From the AFR:

http://www.afr.com/markets/market-data/interest-rates/zero-deposit-loans-for-chinese-investors-to-spur-australian-property-market-20151025-gkhujs



So the Chinese lending stumps up the deposit and the Australian bank loans the rest. No skin in the game makes it easier for the speculator to walk away at settlement if the price did not rise.

Nothing can go wrong here at all.

Maybe the next global shock will come from China itself and it's poor and loose lending practices.

I don't think so, China knows exactly what it is doing, the Australian banks aren't stupid.

 

[sptrawler]

What are you on about mate.....

Perth is safe according to David Airey (perth property agent and former reiwa president).

“We are looking forward to a big jump in the market,” Mr Airey said.
“I don’t think there is any risk of a correction here.”

http://www.afr.com/real-estate/resi...to-march-across-the-nullarbor-20150929-gjxdos

I told you he must be smoking something.

https://au.news.yahoo.com/thewest/a/29964289/perth-house-prices-hit-by-record-fall/

 

[wayneL]

Reality check

36 squares, 30 min drive from Houston CBD. Not even the best value just mid range in the burbs

http://www.realtor.com/realestatean...-Park-Ln_Houston_TX_77070_M84656-67781?row=10

 

[tech/a]

Wayne
That's still about $400k AUD
You can get similar here in Adelaide.
20k out. No doubt it's good buying!

You wouldn't in Sydney,Brisbane,Perth or Melbourne

Nor would you in LA,Washington,Chicago or New York.