The future of Australian property prices

[robots]

hello,

they didnt get it right previously so I imagine this time will be no different, but stay true to the cause and follow what you think is right

no vision, they cant see things that I and others who called it can (a shame that one has left ASF)

great day

thankyou
robots

 

[robots]

hello,

oh yeah:

http://www.reiv.com.au/home/inside.asp?ID=162&nav1=652&nav2=162

bumper end to the year by the looks of it, 82% clearance today, SOLID

great asset class

thankyou
robots

 

[satanoperca]

they didnt get it right previously so I imagine this time will be no different,

Thats correct, they lower the rates to far for a recession we never had and are now realising their mistake and taking action promptly. We are different, no GFC affected country here.

You can also thank Labor for overspending, who would have thought, for part of the reason those rates are increasing. Goto to save those to big to fall.

It is sunshine and lolipops for all, including savers with banks offer increasing rates on term deposits.

Cheers

 

[cutz]

It is sunshine and lolipops for all, including savers with banks offer increasing rates of term deposits.

Exactly,

Can't believe the clowns in government are busy bagging the banks for lifting rates and going about their business.

I'm sure there are plenty of people out there sitting on cash who would be welcoming a few more rate rises.

10% anyone ?

 

[robots]

hello,

was commenting about Nab article,

thankyou
robots

 

[Beej]

Hello,

Property prices on way down, warns bank

http://www.smh.com.au/business/property-prices-on-way-down-warns-bank-20091204-kays.html





So an increase of over 30% on mortgage payments with a small correction on prices. The FHB segment of the market will be the one to watch, those who purchased with the lowest interest rates in 50 years & with high LVR's and high RE prices.

Cheers

Interesting article - may well be on the money (some moderate price falls across the board for late 2010). If things panned out like that then we would be following the 1988 - 1993 pattern almost exactly, with this year (09) being a bit like 1991 0r 92 from that period. So could be some good buying ops late next year for those on the ball

Cheers,

Beej

 

[Airfireman]

Much talk out there about the economy and interest rate rises, people locking there mortgage at fixed interest rates..house prices to fall...but its not looking that way at the moment!!!!.next year will see me return to the mortgage game after being burned in 89,90...i would love some hindsight if anyone out has a bit they can spare,,,

Tim

 

[Nyden]

Much talk out there about the economy and interest rate rises, people locking there mortgage at fixed interest rates..house prices to fall...but its not looking that way at the moment!!!!.next year will see me return to the mortgage game after being burned in 89,90...i would love some hindsight if anyone out has a bit they can spare,,,

Tim

Oh well. Looks like the housing market is going to crash after all

 

[MACCA350]

10% anyone ?

Yes Please

cheers

 

[Quincy]

Exactly,

Can't believe the clowns in government are busy bagging the banks for lifting rates and going about their business.

I'm sure there are plenty of people out there sitting on cash who would be welcoming a few more rate rises.

10% anyone ?

New warning on mortgages

http://www.smh.com.au/business/new-warning-on-mortgages-20091206-kcti.html

By ERIC JOHNSTON - December 7, 2009

COMMONWEALTH Bank has warned that increases in mortgage rates over the past week are a prelude to what may follow if rules requiring banks to bolster capital buffers substantially are adopted in full.

But Mr Norris told businessday that potential changes in liquidity rules could put more pressure on variable mortgage rates.

''New liquidity rule requirements will have potentially two impacts,'' he said. ''One will be interest rates continuing to increase at a faster rate than the official cash rates, and secondly, the issue around the availability (of funds).''

Reading through the above referenced article, it looks like the Banks' interest rates during the next 12 months may well rise more often and higher than the RBA's declared official cash rates.

Will be interesting to see whether or not this has a significant adverse affect on property prises in Australia.

 

[Mofra]

Interesting article - may well be on the money (some moderate price falls across the board for late 2010). If things panned out like that then we would be following the 1988 - 1993 pattern almost exactly, with this year (09) being a bit like 1991 0r 92 from that period. So could be some good buying ops late next year for those on the ball

Beej,

As someone who was a young 'un in those days, I don;t have a great handle on price movements in these years. Do you mind for the benefit of the thread providing a brief rundown of how things panned out year to year (in your opinion)?

 

[Beej]

Beej,

As someone who was a young 'un in those days, I don;t have a great handle on price movements in these years. Do you mind for the benefit of the thread providing a brief rundown of how things panned out year to year (in your opinion)?

Happy to! My view at that time was more Sydney-centric, and I've attached an article that pretty much shows what happened then in Sydney as well. So these comments pertain more to the Sydney market rather than the national one.

* 87-89; massive gains with prices on average increasing by 100% or more, and much more in some area's. Prevailing interest rates were around the 10% mark, and inflation was 5-10% pa as well. This period makes the rate of the price rises of the past 10 years look insignificant to me....

* 90/91; recession in full swing, interest rates peaked at 17%, property market stalled significantly, forced sales due to high interest rates and few buyers, prices fell back by 10-15% on average, and some top end area's saw greater falls (just like last year).

* 92/93; Pretty stable/stagnant market, but rising confidence and volumes, falling interest rates, inflation below 5% and looking like staying low. With encouragement of parents Beej decides to make first property purchase while still in early 20s

* 94 onwards; prices start to steadily rise, interest rates keep coming down as inflation stays low, real wage growth starts kicking in, banks start lending larger multiples as low inflation/low interest rates look like staying for quite a while..... by 96 things were really starting to get going again and the boom was on.

The rest is history! I think in this modern age with a more mobile population, increased communication and a less stratified economy, that the other cities markets behave more like Sydney now than they used to (also why they have started to catch up to Sydney prices IMO). I reckon last year was like 90, this year is like 91, and next year might be a bit like 92/93 (where prices pull back a bit before the next steady up trend).

Cheers,

Beej

 

[satanoperca]

Will make it a little more difficult to services those huge mortgages.

Business StoryWorkers take pay cuts to stay employed

http://www.news.com.au/business/workers-take-pay-cuts-to-stay-employed/story-e6frflwr-1225802028060

Isn't this referred to as wage deflation. Coming to a business near you.

The market expects this week's unemployment rate to rise slightly to 5.9 per cent.

Seems unemployment could continue on its merry trend given business loans continue on their descent downward of ten months

Cheers

 

[inenigma]

5. In parallel to steps 1-4, boom, bust, boom, bust, boom, bust to coda or ad finitum, whichever comes first

I thought it was Gloom, Boom & Doom......

But, what do I know ???

 

[adobee]

THE MARKET - December 2009
Sydney City & Inner Rings

Media focus over the past twelve months has mainly concentrated on strong growth within the first home buyer market; we continue to find demand from owner occupiers and investors exists for properties which are well located. Key buyer considerations appear to currently rate in the following order of preference being location; price; property condition; rental returns; growth forecasts.

First home buyers are by far the most active market segment with many looking to purchase whilst interest rates remain at low levels and they are able to take advantage of the increased government incentives.

Buyer inquiry has substantially increased for residential apartments up to $600,000 however the enquiry beyond this price point is somewhat subdued; in comparison residential home sales up to $1million have shown increased popularity amongst owner occupiers.

We are yet to see the affects of the most recent increases to the cash rate however feel that lending criteria has eased since the first quarter of 2009 and that the small variation will have little affect upon those looking to enter the residential property market.

The economic crash of 2008 and high interest rates of the earlier part of that (2008) year appear to have been long forgotten in the minds of many prospective purchasers and economists whom are now predicting an upturn in property prices and accelerated growth in the later part of 2010 and into 2011. We would suggest that such forecasts will largely depend on both the RBA leaving rates on hold throughout the majority of 2010 and continued positive influences of economic growth.

 

[adobee]

BIS SHRAPNELS THOUGHTS
EXECUTIVE SUMMARY HOUSING OUTLOOK OCT 2009

Following substantial decreases in the second half of 2008, property prices recovered over the first half of 2009. High interest rates had initially created a sharp decline in turnover, and the Reserve Bank of Australia (RBA) sought to dampen demand inflationary pressures emerging from strong economic growth. The Global Financial Crisis led to a sharp and rapid shift in economic conditions, with interest rates cut heavily in response. The 425 basis point reduction in the cash rate by the RBA (and 380 basis point decline in the standard variable rate) between September 2008 and April 2009 alleviated the pressure on many households, while also bringing housing affordability back to its most attractive level for almost a decade across most state capitals. Improved affordability and the introduction of the Federal Government’s First Home Owner’s Grant Boost Scheme (FHOGBS) in October 2008 (as well as various other State Government incentives) has driven a surge in first home buyer demand at the more affordable end of the market.
This has had the effect of stabilising the falls in house prices that were coming through in the second half of 2008. The FHOGBS provided the impetus
for movement of renters to owner occupation, and this is likely to continue after the incentive has expired, albeit at a more moderate rate. The lead times in ramping up construction means that new dwelling activity will be below underlying demand in the short term, particularly in the apartment
sector, where the tight credit environment has meant that developers have found it difficult to obtain finance to proceed””even in projects that would otherwise be financially viable. The shortfall in supply will continue to underpin
tight vacancy rates and further rental growth, which should ensure that the owner occupation versusrent equation continues to remain attractive in the current low interest rate environment. The surge in first home buyer
demand is now slowly permeating through to greater demand from upgraders who are trading over to their next dwelling after selling to the buoyant first home buyer market. In addition, the strong rental environment and stabilisation of prices is also beginning to attract investors back into the
market. Activity from these two groups should continue to gather momentum through the remainder of 2009, being the main driver of demand from the start of 2010 and offsetting some of the decline in first home buyer demand after the FHOGBS expires. Nevertheless, the weakened economic Environment is expected to continue to dampen price growth in 2009/10, as further negative influences on the national economy maintain concerns about the employment outlook. In addition, household income overall is being
undermined by the reduction in working hours, even though the peak unemployment rate may not now reach the levels initially feared at the start of the year. Price growth is consequently forecast to be limited in 2009/10,
before accelerating into 2010/11 and 2011/12 as economic growth begins to gather momentum. Price growth will be driven by low interest rates. After raising the cash rate by 25 basis points in October 2009, and a further increase forecast before the end of 2009, the RBA is expected to pause efore lifting rates again in the second half of 2010. With few positive influences on economic growth expected in 2009/10, it is anticipated that the RBA will be keen to encourage an upturn in residential construction to help drive the economy. Stronger rate rises are expected in 2010/11 and in 2011/12, as the
RBA restores the cash rate from the current highly stimulatory level to a more neutral setting. Price growth is forecast to ultimately slow from 2012/13, as further rises to interest rates, in response to lower unemployment and emerging inflationary pressures, begin to impact on affordability and demand.

 

[robots]

hello,

good evening brothers, fine day

http://www.morrellandkoren.com.au/topend/

great reading as usual, fair

like the one about if you aint on it (missed out), its a bubble but really its all just plain old vanilla LIFE

thankyou
robots

 

[Gerkin]

Wy are there so many people on this forum who want property investors to fail?

The bottom line is if the property market fails in Australia, the sharemarket will also fail. Australian culture is built on owning property, if the market fails consumer sentiment is going to be very low, leading to reduced spending etc etc, can you people see where im going. You have to hold a very distinct portfolio to be protected by any property crash.

 

[Gordon Gekko]

You have to hold a very distinct portfolio to be protected by any property crash.[/QUOTE]


How about cash?

 

[joeyr46]

Wy are there so many people on this forum who want property investors to fail?

The bottom line is if the property market fails in Australia, the sharemarket will also fail. Australian culture is built on owning property, if the market fails consumer sentiment is going to be very low, leading to reduced spending etc etc, can you people see where im going. You have to hold a very distinct portfolio to be protected by any property crash.

Why do you think people want property investors to fail. when many just have a realistic idea of debt and servicing that debt. If you mean property investors we all wish you well but if you mean joining the ponzi scheme of forever higher prices without any value then no we dont wish you well as this serves no one and only destroys real wealth by destroying the value of our currency or falsely creating the illusion of wealth without producing anything for it. Before you say "SOUR GRAPES" I have benefited from this process over the years but now feel it has gone too far price wise and also feel that it is not in the best interests of society as a whole to price so many out of the market and to have tax concessions for investors that are not available to owner occupiers. I guess the other thing is nothing keeps going up for ever markets don't work like that and fundamentals won't let you know when the correction is coming