The future of Australian property prices

[satanoperca]

At the end of the day, people bought into the bubble, those who think like you and me didn't.

So who you blame is subjective, I find these day's, there is always someone else to blame for people's bad choices.

I don't blame anyone. Everyone makes their own choices.

 

[luutzu]

Sprawler, great link, the tide has turned, just read the comments, Scomo and the RBA should have pulled the heads out of each other arses to realise that how this would play out.

Houses are for shelter, everyone needs shelter, even if it is a tent. Deployment of capital should be for productive means that benefit all in our society.

Too idealistic there Satan.

If the plebs aren't indebted to their eyeballs, how will they listen, beg for a job or three?

They'll go wild asking for raises every year, demand safety at work, spend weekends with their family or worst... read and think and enjoy life.

So if you're in charge and a bit short sighed, somewhat psychotic... you'd lower the interest rate to abnormal level to discourage saving, encourage them to borrow. You tell your watchdogs to look the other way, assume that everyone could afford a million or two worth of property, per property.

that way, you get the less experienced to jump up and down wanting to indebt themselves, pay you and you friends crazy prices with borrowed money. Then you take the cash, take a few holidays... watch and wait as it crashes then you load them for half the price.

 

[luutzu]

At the end of the day, people bought into the bubble, those who think like you and me didn't.

So who you blame is subjective, I find these day's, there is always someone else to blame for people's bad choices.

Choice is often an illusion.

It's like my wife telling me that she will be emptying the bins. That SHE will do it because it's really, really full. She will, right after doing to dishes and putting the kids to bed.

I sometime let her follow her wishes though.

 

[SirRumpole]

The thing that annoys me is that some people expect property prices to go up forever. They just don't realise that if house prices exceed the capacity of people to pay then the buyers stop bidding.

It's not rocket science, perpetual motion doesn't exist.

And the scare tactic about negative gearing is just a scare tactic. It's all grandfathered, people who ng now will still be able to do it and it will still be available on new properties. I doubt if the proposed ng changes will have much effect either way.

 

[luutzu]

The thing that annoys me is that some people expect property prices to go up forever. They just don't realise that if house prices exceed the capacity of people to pay then the buyers stop bidding.

It's not rocket science, perpetual motion doesn't exist.

And the scare tactic about negative gearing is just a scare tactic. It's all grandfathered, people who ng now will still be able to do it and it will still be available on new properties. I doubt if the proposed ng changes will have much effect either way.

The proposed changes to ng might actually increase property prices more than normal market/credit availability would have it now. For the short term anyway.

 

[satanoperca]

The proposed changes to ng might actually increase property prices more than normal market/credit availability would have it now. For the short term anyway.

Can you provide some insight into this statement. Given you did clearly state the short term, but still interested in your thoughts.

 

[luutzu]

Can you provide some insight into this statement. Given you did clearly state the short term, but still interested in your thoughts.

Being "fully grandfathered" mean properties purchased before the law is enacted will not be affected by the proposed changes.

So those high income earners who can still afford property now will jump in to take advantage of the current generous subsidies.

Them jumping in increased property, temporarily.

I wouldn't know by how much and all that, but that's the logic I reckon.

 

[satanoperca]

That sounds reasonable.

 

[satanoperca]

Why was ng introduced in the first place? to add to supply of housing so people could have shelter and reduce the burden on govnuts to provide.

I support NG on new builds and think it is a positive policy for govnuts, however this ideal (current situation) has not delivered its intended ideal, instead, investors bought established properties (where the profit has been), not adding to the requirement of shelter (supply), nor adding to economic expansion, business and innovation.

 

[sptrawler]

Being "fully grandfathered" mean properties purchased before the law is enacted will not be affected by the proposed changes.

So those high income earners who can still afford property now will jump in to take advantage of the current generous subsidies.

Them jumping in increased property, temporarily.

I wouldn't know by how much and all that, but that's the logic I reckon.

If that was the case Luu, with the election only 6 months away, I would have thought the price movement would have started happening.
But the price fall, is accelerating, so the next six months will prove you right or wrong.
I'm willing to put money on the fact prices will fall, there is no way anyone is going to house people for minimal gain, unless it is a first time investor.
I got out of it years ago, because it was more trouble than it was worth, that was when negative gearing and CGT was o.k.
Add to that, the first time investor is going to have more difficulty getting a loan, I think you're being optimistic.

 

[sptrawler]

Why was ng introduced in the first place? to add to supply of housing so people could have shelter and reduce the burden on govnuts to provide.

I support NG on new builds and think it is a positive policy for govnuts, however this ideal (current situation) has not delivered its intended ideal, instead, investors bought established properties (where the profit has been), not adding to the requirement of shelter (supply), nor adding to economic expansion, business and innovation.

You may not have bought investment properties, but from my experience, the return on new build investment properties is very low. At best you get a 5% return, without costs, at worst you have a crap tenant or no tenant.

 

[satanoperca]

You may not have bought investment properties, but from my experience, the return on new build investment properties is very low. At best you get a 5% return, without costs, at worst you have a crap tenant or no tenant.

I hate forums, this is the exact reason I should not engage, for fu-ks sack, what was the reason behind NG, to add to the supply of rental accommodation by the private sector, so the govnuts didn't have to provide. This is why the policy has not worked, as it is better to invest in established properties, better CG, but not the reason for the policy.

Cheers to all, finished with this forum, wish all a good life, smell the roses, enjoy the sunrise and sunset. But a 1000 post or more, I have enjoyed.

 

[luutzu]

If that was the case Luu, with the election only 6 months away, I would have thought the price movement would have started happening.
But the price fall, is accelerating, so the next six months will prove you right or wrong.
I'm willing to put money on the fact prices will fall, there is no way anyone is going to house people for minimal gain, unless it is a first time investor.
I got out of it years ago, because it was more trouble than it was worth, that was when negative gearing and CGT was o.k.
Add to that, the first time investor is going to have more difficulty getting a loan, I think you're being optimistic.

If my assumptions [guess work? ] are reasonable, then the fall lately would have been a lot more if investors being attracted to NG wouldn't jump in to have their investment property grandfathered before Labor ruin the party.

Yea, property investment is a pain. Without gov't subsidies, investors and those fund managers better work harder to earn their salt than chugging the cash into property, receive the subsidies and wait for the capital gain.

 

[willoneau]

As far as I am aware the government introduced NG so they could get out or at least reduce their property managing ,that also reduces their risk .

 

[sptrawler]

I hate forums, this is the exact reason I should not engage, for fu-ks sack, what was the reason behind NG, to add to the supply of rental accommodation by the private sector, so the govnuts didn't have to provide. This is why the policy has not worked, as it is better to invest in established properties, better CG, but not the reason for the policy.
.

Hang on a minute I didn't mean to upset you, but why should a working person invest their hard earned money into rental properties, when as you say the Government don't want to do it.
Have you seen the losses the Government cop, from social housing, that is why they introduced incentives.
It isn't a lot of fun renting properties, it is a bit like lending your car to someone, that usually doesn't end well either.
I would never recommend building a house to rent, as an investment, for my children.

 

[SirRumpole]

Hang on a minute I didn't mean to upset you, but why should a working person invest their hard earned money into rental properties, when as you say the Government don't want to do it.

The politicians seem to do pretty well out of it.

Maybe it should only be available on units rather than single houses, more bang for the buck in terms of accommodation of people.

 

[notting]

Disclaimer - Remembering that it is the best place in the world to live.

 

[sptrawler]

Also house sizes are at a 22 year low, well that's what the headline says, if you read the article houses are still 30% bigger than 30 years ago.

http://www.thebull.com.au/articles/a/78436-australian-home-size-hits-22-year-low.html

 

[luutzu]

Also house sizes are at a 22 year low, well that's what the headline says, if you read the article houses are still 30% bigger than 30 years ago.

http://www.thebull.com.au/articles/a/78436-australian-home-size-hits-22-year-low.html

True, new builts are bigger than the old 3-bedders in the 80s. But for $1M a pop vs what... $120K? It better be. Land is way, way down though.

The build quality might not be too good either. I think the builders' engineers have been working overtime to bring the costs down. Waffle pods slabs that sit directly on the ground, would move in clayey soil if the owner decided not to concrete an apron around... plastic water/gas pipes the rats will get to after a few years.

That's just from a fair number of anecdotals.

 

[sptrawler]

True, new builts are bigger than the old 3-bedders in the 80s. But for $1M a pop vs what... $120K? It better be. Land is way, way down though.

The build quality might not be too good either. I think the builders' engineers have been working overtime to bring the costs down. Waffle pods slabs that sit directly on the ground, would move in clayey soil if the owner decided not to concrete an apron around... plastic water/gas pipes the rats will get to after a few years.

That's just from a fair number of anecdotals.

Families have got smaller also, I think there will be a return to smaller houses, as the cost to heat and cool them climbs.