Australian (ASX) Stock Market Forum

The future of Australian property prices

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sptrawler said:
I wonder if many IO investors, are converting their loans to P & I ?
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Well, a weekly repayment on an IO $500,000 loan over 30 years (10 years interest only) would currently be $571 per week. If they stay with IO, Friday will see that payment increase to $600 per week. If they change to P & I over 30 years, that will take their weekly payment to $677 per week. Some may convert to P & I but due to the $106 weekly increase I believe there will be a large number who cannot afford to. The lenders have become greedy and somewhat complacent which will end up being to the detriment of the borrowers and I believe it won't be too long before we start seeing that in the market. Either way, people are going to be squeezed tighter and tighter as IO interest rates increase and people become unable to swap to P & I repayments because they will be unable to service the debt.
 
Cam019 said:
Well, a weekly repayment on an IO $500,000 loan over 30 years (10 years interest only) would currently be $571 per week. If they stay with IO, Friday will see that payment increase to $600 per week. If they change to P & I over 30 years, that will take their weekly payment to $677 per week. Some may convert to P & I but due to the $106 weekly increase I believe there will be a large number who cannot afford to. The lenders have become greedy and somewhat complacent which will end up being to the detriment of the borrowers and I believe it won't be too long before we start seeing that in the market. Either way, people are going to be squeezed tighter and tighter as IO interest rates increase and people become unable to swap to P & I repayments because they will be unable to service the debt.
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It is bound to have an impact, it possibly could start the stampede for the door, so to speak.
I suppose a lot will depend on what collateral, the investor has put up.
I doubt an IO loan is only backed by the property, therefore an investor may think it prudent to bail out, at this point in time.
Over here in W.A, we have had a major contraction, but I'm not seeing many mortgagee sales.
I am hearing of people getting large discounts, on the asking prices though.
 
sptrawler said:
It is bound to have an impact, it possibly could start the stampede for the door, so to speak.
I suppose a lot will depend on what collateral, the investor has put up.
I doubt an IO loan is only backed by the property, therefore an investor may think it prudent to bail out, at this point in time.
Over here in W.A, we have had a major contraction, but I'm not seeing many mortgagee sales.
I am hearing of people getting large discounts, on the asking prices though.
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Agreed. I think it will be the investors who come to the realisation that they can no long afford the repayments and sell before the lenders need to repossess the properties. Out of curiosity, what is the % discount range on the properties your have heard about?
 
Cam019 said:
Agreed. I think it will be the investors who come to the realisation that they can no long afford the repayments and sell before the lenders need to repossess the properties. Out of curiosity, what is the % discount range on the properties your have heard about?
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A friend of mine's daughter and her partner, put an offer of $325k on a house listed at $385k, it was accepted.
There are a lot of houses for sale, in Perth's outer suburbs, it's a bit of a smorgasboard.
 
sptrawler said:
A friend of mine's daughter and her partner, put an offer of $325k on a house listed at $385k, it was accepted.
There are a lot of houses for sale, in Perth's outer suburbs, it's a bit of a smorgasboard.
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Man, I haven't heard of any house at that price for about a decade here.

Maybe in a couple of years I'll be seeing it again.

I'm starting to see some listings of cleared/knocked-down land for sale around my old neighbourhood. That and a few to be consolidated blocks from some builder with big dreams who now want to offload it.

If nothing serious is done soon, all these will end in total disaster.
 
Just a statistic
Grattan shows that if interest rates went up 2 percentage points, which is possible, stress levels would be the highest on record apart from the squeeze in 1989, which scarred a generation of home-owners.":speechless:
 
notting said:
Just a statistic
Grattan shows that if interest rates went up 2 percentage points, which is possible, stress levels would be the highest on record apart from the squeeze in 1989, which scarred a generation of home-owners.":speechless:
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This property cycle is not going to end well.

Weren't long ago that a $1M property does actually look and feel like a million dollar. Now for $1.9M you could get a cheapy 5 year old McMansion on some 850m2 in freaking Canley Vale - 30km west of Sydney. ANd for about $900k you can get a cleared blocked of about 850m2 near a busy road that's too far to walk to a station but too close to drive.
 
If this is the new normal, when it goes it will stay gone for a looooooooong time! -

"Today, the number of single adults in the U.S. – and many other nations around the world – is unprecedented. And the numbers don’t just say people are staying single longer before settling down. More are staying single for life.

I’m a social scientist, and I’ve spent the past two decades researching and writing about single people. I’ve found that the rise of single living is a boon to our cities and towns and communities, our relatives and friends and neighbors. This trend has the chance to redefine the traditional meaning – and confines – of home, family and community.

The majority of unmarried Americans are not living with a partner or living alone, but are living with their parents or with various combinations of friends, roommates, parents, children and other relatives."

The Airbnb thing could get really creative, like, 'why own a house when you can share a house?' kind of thing kicks in due to initial unaffordability becomeing a revolution in house, room and land sharing could kick in and get very interesting!
It's already kind of crazy to own a holiday house when you see what is on offer and the shear variety and affordability of Airbnb stuff.
 
A quick look at my own area (suburb of Hobart) on a common real estate website finds that firstly there are very few houses for sale, at least there are very few listed on that website.

As for the price, it would be almost exactly the same for a similar house as what I paid for this one 10 years ago.

Prices might be booming in Sydney but they're flat for the past decade around here it would seem. No doubt someone can twist some stats to say otherwise but that's my observation based on properties actually for sale at the moment.
 
moXJO said:
I'm seeing property turnover slowing where I am. Stupidly high prices are sitting on the market for weeks now. Where as before they were going in days.
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Me too. I considered selling about 6 months ago, because of where prices had gone. I bought in 2013 for $1.5m had done a bit of work, but not much, and was looking at around $2.7ish as a reasonable sale price. From what I've seen around here, the market has cooled a lot in the last couple of months. I reckon I'd still get that price, but it would take a while and there wouldn't be much chance of it going much higher.
 
moXJO said:
Bit of a wan.k map for bears.

I'm seeing property turnover slowing where I am. Stupidly high prices are sitting on the market for weeks now. Where as before they were going in days.
Click to expand...

Scary map. Full of pending horror and opportunities.
 
McLovin said:
Me too. I considered selling about 6 months ago, because of where prices had gone. I bought in 2013 for $1.5m had done a bit of work, but not much, and was looking at around $2.7ish as a reasonable sale price. From what I've seen around here, the market has cooled a lot in the last couple of months. I reckon I'd still get that price, but it would take a while and there wouldn't be much chance of it going much higher.
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I think $2.7m is more than reasonable man.
 
Time to build a new city in Australia. Maybe near
Lake Eyre Canal.

https://en.wikipedia.org/wiki/Lake_Eyre
Lake Eyre (/ˈɛər/ AIR), officially known as Kati Thanda–Lake Eyre,[1] contains the lowest natural point in Australia, at approximately 15 m (49 ft) below sea level (AHD), and, on the rare occasions that it fills, is the largest lake in Australia covering 9,500 km² (3,668 sq mi). The shallow endorheic lake is the depocentre of the vast Lake Eyre basin and is found in Northern South Australia, some 700 km (435 mi) north of Adelaide.

Energy and Lake Eyre
http://mikesprojects.net/lake eyre project.htm

How to build a city from scratch: the handy step-by-step DIY guide
https://www.theguardian.com/cities/2015/jun/30/how-build-city-step-by-step-diy-guide
 
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McLovin the problem with selling your place of residence is that you have to live somewhere. If you sold would you move to another city?

For example in Sydney somebody with a decent house in the eastern suburbs (i.e. near the beaches) or north shore (also near the beaches) or Surry Hills (walking distance to the CBD), etc has gotten used to certain lifestyle factors and I doubt they would want to sell and move to crappy Western Sydney and buy a house there for half the price. For example somebody living in Sydney or Melbourne could sell and buy a house in a prestige suburb with good lifestyle in Perth or Adelaide, or Hobart for much less and invest the remainder.
 
On 16 July @017 Bitcoin was 2500 today 3/09 it hit 6k..did make 6300 earlier,,, I would be selling for something cheaper and buying Crypto,,,
 

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