The future of Australian property prices

[sptrawler]

Not yet need to buy in the deep south........Falcon to Dawesville cut area

There is some unbelievable bargains there, I ride the push bike down to there and back to Mandurah, via the estuary terrific area. They just have to stop the overseas guests, from fishing out the cut.

 

[IFocus]

Yes value at the moment a lot of of places siting for a year or so will see how I go with cash offers in a few weeks time.

Dont mind the fishing but an issue when they kill, bleed and gut fish next to where I surf brings in the Great Whites all fired up.

 

[IFocus]

I ride the push bike down to there and back to Mandurah, via the estuary terrific area.

I ride the coastal side as well (water boy for the daughter marathon training) views are very good through the rolling hills around Seascapes, coffee at the Falcon bay cafe or at the other end Halls head Dome......what more could a man ask for

 

[sptrawler]

I ride the coastal side as well (water boy for the daughter marathon training) views are very good through the rolling hills around Seascapes, coffee at the Falcon bay cafe or at the other end Halls head Dome......what more could a man ask for

I do that side in summer, I would say that area, is the best bang for bucks in Australia ATM.

 

[Smurf1976]

It seems that cracks maybe starting to appear in Melbourne too:

https://www.theage.com.au/national/...wer-complain-of-cracking-20190726-p52azy.html

 

[sptrawler]

It seems that cracks maybe starting to appear in Melbourne too:

https://www.theage.com.au/national/...wer-complain-of-cracking-20190726-p52azy.html

I wonder if all the publicity, has caused a stampede for the exits?
I know I would be trying to get out of a $1m appartment contract.
I also know my dream of owning an apartment with a view, is out the window, so to speak.

 

[sptrawler]

Well when Adelaide Brighton cement is feeling the downturn, it has to be bad, obviously the housing market hasn't turned yet.

https://www.abc.net.au/news/2019-07...righton-ralan-group/11369548?section=business

 

[PZ99]

It seems that cracks maybe starting to appear in Melbourne too:

https://www.theage.com.au/national/...wer-complain-of-cracking-20190726-p52azy.html

Right next to the Yarra river at zero elevation and 101 stories with a single core. It's gonna move.

One earthquake and they'll get liquefaction to boot

 

[sptrawler]

It seems that cracks maybe starting to appear in Melbourne too:

https://www.theage.com.au/national/...wer-complain-of-cracking-20190726-p52azy.html

It looks as though the apartment industry is starting to suffer from the fall out, the opal towers and other high rise apartment issues must be kicking in by now, I know I wouldn't be putting a deposit down in a hurry.
Those with a deposit now have an apartment that will be worth less than when they signed up, and not many buyers in the market, who said stocks were more speculative than property?
https://www.abc.net.au/news/programs/the-business/2019-08-01/high-rise-downturn/11376142

From the article:
Administrators for Ralan, one of Australia's biggest private property groups has collapsed, leaving three thousand unfinished apartments in Sydney and the Gold Coast.

Also from Sir Rumpole's post in the state of the economy thread.
https://www.abc.net.au/news/2019-08...cks-showing-as-major-developer-falls/11374464

 

[basilio]

As SP points out we are seeing a confluence of issues around property that should make investors think very carefully about their savings

1) Widespread serious problems around the integrity of many new builds. These threaten to undermine the value of whole apartment blocks .

2) Hundreds of apartments built with inflammable cladding . This is now certain. What is not known is how much rectification will cost and ho this will impact on individual owners and body corporates

3) Collapse of demand for apartments. As factors 1 and 2 kick in potential buyers are looking at settling on properties worth substantially less than they signed up for. Walking away now seems likely. So the developers are going down.

There will be knock on effects. I 'm wondering how the insurance industry is going to survive the litigation that will follow issues 1 and 2. At the very least we can expect big jumps in the cost of insurance across the board as companies attempt to balance the books.

I see the banks as having some serious problems. When do they reassess the value of the collateral against loans to suspect apartments? How big is this issue ? When should investors be told ?

What about property trusts ? What is their exposure in this situation ? They are usually the first investments to fail in these situations.

What is the status of lenders who are financing the high rise developments ? I wouldn't want to have funds in these bodies at the moment.

Cash looks good...

 

[qldfrog]

Just a point:
Yesterday watched a house hunter show on Life tv
Young family looking for a house near New York
45min commuting to Manhattan,
Small acreage with typical 4 bedrooms 3 bathrooms , living room the size of a hall and walk in pantry the size of a Melbourne studio
750k usd
So 1.2m Aud
Should i say more
https://www.zillow.com/katonah-ny/
We are talking posh up market estates with deers in the yard and 30m tall established trees,pool, deck etc
Australian prices have a lot to go down....

So putting on sell next week
Anyone interested in a huge acreage in Brisbane north, less than 1h door to door from either airport or cbd and amazing views.
Pm me before i sign the re contract

 

[sptrawler]

Just a point:
Yesterday watched a house hunter show on Life tv
Young family looking for a house near New York
45min commuting to Manhattan,
Small acreage with typical 4 bedrooms 3 bathrooms , living room the size of a hall and walk in pantry the size of a Melbourne studio
750k usd
So 1.2m Aud
Should i say more
We are talking posh up market estates with deers in the yard and 30m tall established trees,pool, deck etc
Australian prices have a lot to go down....
So putting on sell next week
Anyone interested in a huge acreage in Brisbane north, less than 1h door to door from either airport or cbd and amazing views.
Pm me before i sign the re contract

This is the problem Australia has, the whole economy is geared around housing and owning one.
The underpinning thing to it is wages, wages keep chasing the cost of housing and vice versa, it has become a vicious cycle driven by an obsession. We have become disengaged from the reality of Countries like the U.S and U.K, our lifestyle is envied by those who come from overseas, how long it can be maintained is the question?
I guess as long as we can keep digging $hit up and selling it, while maintaining a relatively small population, in reality we sell the same stuff as Brazil but they support 220million we only support 25million, big difference.
Just my opinion.

 

[SirRumpole]

As SP points out we are seeing a confluence of issues around property that should make investors think very carefully about their savings

1) Widespread serious problems around the integrity of many new builds. These threaten to undermine the value of whole apartment blocks .

2) Hundreds of apartments built with inflammable cladding . This is now certain. What is not known is how much rectification will cost and ho this will impact on individual owners and body corporates

3) Collapse of demand for apartments. As factors 1 and 2 kick in potential buyers are looking at settling on properties worth substantially less than they signed up for. Walking away now seems likely. So the developers are going down.

There will be knock on effects. I 'm wondering how the insurance industry is going to survive the litigation that will follow issues 1 and 2. At the very least we can expect big jumps in the cost of insurance across the board as companies attempt to balance the books.

I see the banks as having some serious problems. When do they reassess the value of the collateral against loans to suspect apartments? How big is this issue ? When should investors be told ?

What about property trusts ? What is their exposure in this situation ? They are usually the first investments to fail in these situations.

What is the status of lenders who are financing the high rise developments ? I wouldn't want to have funds in these bodies at the moment.

Cash looks good...

Apparently we have a big influx of migrants (as we always have had), so where are they living, and why are all these apartments unwanted ?

It's pretty difficult to understand why housing goes empty and property prices are falling while our transport infrastructure is cracking at the seams with the weight of population growth.

Has anyone got any ideas about this, because I sure don't.

 

[jbocker]

I love this site (Aussie stock forums) able to review comments from the past...
I looked up a comment I made 10 years ago....and I don't see it has changed much but for the boomers have pretty much left the market. I don't think much will change till the children of boomers get cashed up into their 50s. Also we add to that the children of the immigrants.

Agree with you, baby boomers have to some degree been through their big spending years, ie they are on big earnings, little debt so can spend and invest big money.Banks et al have tried to suck this out of the baby boomers and everyone else to the point where the sub-prime crisis has fallen upon us. Superann in turn has copped a flogging and the retiring baby boomers now are interested in scraping together enough to retire on. Licking their wounds, they probably wont be chasing the investment with such enthusiasm for a while (living in fear, greed will come again no doubt but will the cash be there to spend?). Boom and Bust the cycle continues, growth will return, not at the rates we have just seen, for a while anyway. For the youngsters these are good buying years.

 

[jbocker]

Apparently we have a big influx of migrants (as we always have had), so where are they living, and why are all these apartments unwanted ?

It's pretty difficult to understand why housing goes empty and property prices are falling while our transport infrastructure is cracking at the seams with the weight of population growth.

Has anyone got any ideas about this, because I sure don't.

Living in cars, on side streets and parklands??? Cars and vans are the new homes??

 

[basilio]

Apparently we have a big influx of migrants (as we always have had), so where are they living, and why are all these apartments unwanted ?

It's pretty difficult to understand why housing goes empty and property prices are falling while our transport infrastructure is cracking at the seams with the weight of population growth.

Has anyone got any ideas about this, because I sure don't.

Simple unfortunately

Many migrants are sharing homes. This can be doing it formally or with multiple beds in apartments or houses.
These days many people rent rooms not houses. A house has 5-6 lockable bedrooms and the landlord rents out individual rooms. This is not simply house sharing as we knew it but renting a room.

The empty apartments? I believe mostly owned by overseas investors from China. Sort of land bank idea.

One of the big population influxes is overseas students.

 

[basilio]

This is the problem Australia has, the whole economy is geared around housing and owning one.
The underpinning thing to it is wages, wages keep chasing the cost of housing and vice versa, it has become a vicious cycle driven by an obsession. We have become disengaged from the reality of Countries like the U.S and U.K, our lifestyle is envied by those who come from overseas, how long it can be maintained is the question?
I guess as long as we can keep digging $hit up and selling it, while maintaining a relatively small population, in reality we sell the same stuff as Brazil but they support 220million we only support 25million, big difference.
Just my opinion.

I don't think this is accurate SP. Once-upon-a-time people were determined to own their on home and for a good period of time were able to afford a house on a single age and then perhaps 1-5 incomes. Houses were priced at these approx wage levels. Banks loaned to people based on their wage and their saved deposit

In my view the big changes happened around 2001-2 . I believe that was when we saw some serious turbocharging of buying houses as a way to become wealthy. The pitch was to borrow 100% of the house cost put in a tenant, get a tax deduction on your investment loss and wait for capital gain to make you a millionaire .

This suddenly created a whole new group of buyers who were not constrained by their income and were willing to bid up properties prices to build their portfolio. If I remember correctly there was one particularly property guru who kicked this pyramid off. (forget his name..)

And so for the next 15 years we saw the self fulfilling situation of property investors pushing up prices an then basking in their paper millions. Meanwhile "real" purchasers struggled to match the ever increasing house prices - becasue they couldn't.

 

[qldfrog]

From my experience especially with chinese travelling holidays visa guests
Landlord rent 1 house or flat to a Chinese speaking tenant
That tenant sublets beds in the place, multiple per room, no formal arrangement
Flexibility, low costs and after 2 weeks in Brisbane, the young boy/girl leaves for the next city
Someone is doing a killing, but that is not the landlord.ALP can rest..

 

[SirRumpole]

Maybe all the migrants go from one AirBnb to the next.

 

[qldfrog]

But sir rumpole, we all know migrants are either refugees housed in public housing or valuable skilled workers filling jobs no Australian can fill: brain surgeons, rocket scientists, etc stabilising Toorak market.
It can not be a problem
Can not be a problem