The future of Australian property prices

[jbocker]

Close relative of mine is going for a loan. The repayments will be $8 per week more than the rent they are currently paying. The bank has been mauling over their figures for nearly 5 weeks now. While the fixed 2 year rate is a little under 4% they are calculating everything like it is at a rate of little over 7%.
Probably a good thing and probably a fallout of the Royal commission, but I think more to ensure the banks R's is completely covered.
The effect no doubt is the huge tightening of money and consequently the lack of buyers and add to this the repayment struggles of many sellers already holding mortgages in P&I loans. The Grey Boomers are no longer investing or have slowed down.

More than ever this makes Cash THE absolute KING during this time. While interest earned on it is dismal its buyer power is huge.

 

[sptrawler]

Close relative of mine is going for a loan. The repayments will be $8 per week more than the rent they are currently paying. The bank has been mauling over their figures for nearly 5 weeks now. While the fixed 2 year rate is a little under 4% they are calculating everything like it is at a rate of little over 7%.
Probably a good thing and probably a fallout of the Royal commission, but I think more to ensure the banks R's is completely covered.
The effect no doubt is the huge tightening of money and consequently the lack of buyers and add to this the repayment struggles of many sellers already holding mortgages in P&I loans. The Grey Boomers are no longer investing or have slowed down.

More than ever this makes Cash THE absolute KING during this time. While interest earned on it is dismal its buyer power is huge.

My son just bought a block of land, after pre approval, he went back for the money and had to put up another $40k.
I guess they will be working it out on 7%, because that is the long term average, or it was. lol
It would be nice to get back to it, then pay rises would flow and the economy would start moving again.

 

[moXJO]

It would be nice to get back to it, then pay rises would flow and the economy would start moving again.

Usually about 5-7 years of stagnation in the economy when it happens though.

 

[Humid]

Wait for the next hit when the NG changes come.


Royal Caribbean are increasing the number of cruises from the East Coast next year, due to excessive demand, people have just changed their focus from housing to enjoying the moment.
Once this happens, it takes a long time to change peoples focus, because money they had for a deposit, gets spent on something else.
We just did a cruise from Sydney on the Ovation, I chatted to a lot of people, the boat was packed to capacity with families and age pensioners.
The housing situation in Perth has been in free fall for five years, and it doesn't look like slowing.
The house next to us sold 5 years ago for $700k and is on the market ATM, so it will be interesting to see what it eventually goes for, the owner has gone O/S so it should sell.

Would’ve have anything to with the banks shifting the goal posts

 

[jbocker]

Would’ve have anything to with the banks shifting the goal posts

Yes they have taken them off the park. Grabbed our balls and taken them too. Making it impossible for some to kick goals.

 

[sptrawler]

Would’ve have anything to with the banks shifting the goal posts

That has already kicked in, when you take investors out of the market, the competition for owner occupiers will obviously affect pricing.
Anyway we will soon find out.

 

[sptrawler]

Interesting graphs on migration, it is easy to see why property prices in Melbourne and Sydney stayed so buoyant for so long.



https://thewest.com.au/business/eco...ts-abandon-west-for-east-coast-ng-b881149162z

 

[satanoperca]

The ponzi scheme is starting to fail.

 

[explod]

The ponzi scheme is starting to fail.

Can't tick you on this S, this is going to be very tough and sad for many people not prepared.

 

[satanoperca]

Should have explained myself better :
Mining boom - we sell our resources to the highest bidder, fantastic, generates wealth of Australia
We do not utilize this income productively, we squander it - govnuts
Govnuts then realise the gravy train is coming to an end, sh--it themself and look for another boom
This time they find 2 sources of income :
1. Construction brought on by debt as the result of low interest rates
2. Increase immigration and juice up demand for property
3. Sell the farm and anything else to anyone around the world, given this approach why spend $50B on subs, what to protect our borders when the land within the borders is up for sale anyway

Result :
Huge national private debt (future capacity to pay it back bought forward for a short term sugar hit)
Congested public infrastructure, hospitals, roads, education. So govnuts need to find even more revenue to help solve this issue, increase taxes making it harder for innovation to thrive.

Final end result : the recession we have not had for 30 years, to reset everything back to the mean

 

[Smurf1976]

Mining boom - we sell our resources to the highest bidder, fantastic, generates wealth of Australia
We do not utilize this income productively, we squander it

I'll add to that:

*We've give up much of our productive industry that actually produced something of value. All too often we now have "big box" stores filled with imported goods standing on the site of what were once productive manufacturing industries.

*The fire sale of resources has undermined future potential to establish higher value industries based upon them and in at least some instances has directly lead to the closure of existing industry.

*What I'll refer to as essential service industries, and by that I mean things like utilities, transport and so on, that is the necessary supports for most forms of commercial activity, have in most cases become inefficient and expensive compared to the rest of the world.

At some point there's a shock coming for many who seem completely unaware of reality.

 

[sptrawler]

We seem to be stretching the elastic band on most fronts, taxes, wages, power costs, welfare, price of housing, personal debt.
Something has to give soon, as a nation we seem to be scrounging around, to see where we can conjure up money to support our lifestyle. IMO
Yet we are being promised more, smoke and mirrors, I think are the call of the day.
As you say smurph, a shock appears a certainty.

 

[Humid]

Stopped the boats and opened the airports

 

[Smurf1976]

We seem to be stretching the elastic band on most fronts, taxes, wages, power costs, welfare, price of housing, personal debt.
Something has to give soon

30 years ago we had 5 car manufacturers, we were 85% self-sufficient in oil and related fuels, most household goods were locally made, we had the third cheapest electricity in the developed world, and so on.

Now we have no car manufacturers, are net 74% reliant on imported oil, virtually all household goods are imported and we are among the most expensive countries on the planet for rather a lot of things including utilities and housing.

Whatever underlying problems we had economically a generation ago, they would seem to be far worse today.

 

[sptrawler]

W.A's housing slide continues, I guess the Eastern States will follow suite, now the slide has started. It is very hard to turn public opinion, and at the moment, it isn't in favour of buying a house.

https://thewest.com.au/opinion/dani...eatens-to-drag-down-wa-economy-ng-b881156774z

 

[jbocker]

Close relative of mine is going for a loan. The repayments will be $8 per week more than the rent they are currently paying. The bank has been mauling over their figures for nearly 5 weeks now. While the fixed 2 year rate is a little under 4% they are calculating everything like it is at a rate of little over 7%.
Probably a good thing and probably a fallout of the Royal commission, but I think more to ensure the banks R's is completely covered.
The effect no doubt is the huge tightening of money and consequently the lack of buyers and add to this the repayment struggles of many sellers already holding mortgages in P&I loans. The Grey Boomers are no longer investing or have slowed down.
More than ever this makes Cash THE absolute KING during this time. While interest earned on it is dismal its buyer power is huge.

To follow up on this post the loan got approved today, more than 8 weeks after the application. If you are about to go for a loan allow a decent finance approval period would be my advice. Additionally when they are assessing the loan at 7+% they are doing that to all your existing loans.

 

[Toyota Lexcen]

What do people think are going to happens with rents and property prices if Labour win election?

If you build a new house/unit you would have to sell at some stage.

 

[sptrawler]

What do people think are going to happens with rents and property prices if Labour win election?

If you build a new house/unit you would have to sell at some stage.

What makes me laugh is, they say people can't afford to buy their own house, yet they are going to be given assistance to build an investment house.

Talk about perks for the rich.

 

[Humid]

What do people think are going to happens with rents and property prices if Labour win election?

If you build a new house/unit you would have to sell at some stage.

What do you think would of happened if the current government had done something about this 5 years ago
Nah we’ll just blame a government that hasn’t been elected yet

 

[Toyota Lexcen]

Sorry what do you think will happen?