The future of Australian property prices

[robots]

Slow and steady robots?

I just got back from an inspection from the town house directly behind mine. This place is pretty much the same as mine - built at the same time by the same builder (3 large blocks subdivided and a group of town houses built).

Only differences are: it has 1 less bathroom and toilet, and 2 of the 3 bedrooms are smaller than mine, plus I have a front lawn and small backyard (where as they just have a concrete driveway out front and an even smaller backyard). Asking price range is 25% to 33% higher than I paid just one year ago. Massive turnout for the inspection, and whilst I was there one guy put in an offer for more than the minimum asking price. It's only been on the market 3 days.

This isn't a one off either, I've been to quite a few open inspections in my area of this suburb - most places are on the market for a month or less, and selling significantly higher than I would expect. Last year I was tempted to wait and keep saving so I had a bigger deposit - so glad I didn't, my savings would not have kept up with the growth - and even if they did, my mortgage would be significantly larger (in dollar terms).

How long can this keep going? Sunshine and lollipops!

hello,

i wouldnt be too concerned about how things will go Gav, just go with the flow brother and set yourself up for a good retirement

stats will show in many years that aussie wealth will still be in bricks & mortar for those who got the $, same as it is today and same as it was yesterday

plod along for five years, get a promotion or save money increasing the in hand $, then kick off again, buy a shack in the bush, keep it principle and interest

this way its like capital growth going up the escalator while loan size going down the escalator, awesome result

day on the trams today, just superb mixing it with all the new aussies, afghanies, indians, sudanesie, iraqies, englishman and irishman, what a place

thankyou
robots

 

[Uncle Festivus]

festivus...you sound like your emotions are getting in the way....I generally find posters who feel the need to revert to, or denigrating fellow man...are lacking in the ability to debate the subject in a constructive manner....

so onto the debate..... where are the facts regarding all the property people getting burned.....not the vested interests of the stock market prophets looking jealously over their shoulders at the money invested in property....using their crystal balls....that are cracked and broken...


australia has a culture of home ownership, nothing wrong with the kids having a go....except in this instance the RBA and govnuts pulled the rug out from under them....(RBA made a gigantic mistake, and a repeat of the same mistake they made in 08) by raising interest rates 6 times in as many months....when it was not warranted....
retail spending is the bottom line that tells the true story of an economy...and those figures were lousy, and will only get worse
come the June figures....watch the interest rates plummet again....

then the AFC mining disaster tax has sent shock waves thru the market...
forget China saving us with its massive appetite....the 40% additional tax will mean China will look elswhere....and we will be left with nothing..
just a massive tax bill to pay for the excesses of the most incompetent govt in history...

I'm really not sure what to make of your posts - you tell us how well off you are and how good property is then go on to list reasons why the economy is so bad?

That incompetent gov just handed property investors a free ticket out of what was going to be a normal cooling off of prop prices, but just couldn't help themselves.

What should the RBA rate be, if going from 3% to 4.5% is not warranted?

 

[robots]

hello,

i reckon the interest rate should be the same as US, has to be

everything that happens in US must happen in Aus, surely

why is it different?

thankyou
robots

 

[Dowdy]

hello,

i reckon the interest rate should be the same as US, has to be

everything that happens in US must happen in Aus, surely

why is it different?

thankyou
robots

I suppose you also want a housing crash, just like the USA?

everything that happens in US must happen in Aus, surely

why is it different?


You don't put much thought into your post, do you?

 

[robots]

hello,

i just thought that interest rates must be the same as the US because for soooooooo many years a HUGE number of people have been telling us that what happens in the US MUST happen in Aus

but wait, Interest rates arent the same, house prices arent the same, the shelves at Walmart/Kmart arent the same, the cars on the road arent the same

it is different, different by a long long way

thankyou
robots

 

[wayneL]

it is different, different by a long long way

thankyou
robots

Tell us why you think Oz is so different.

 

[drsmith]

it is different, different by a long long way

While the dynamics of individual economic bubbles differ, they all go.....
pop

.....in the end.

The US's residential property bubble was popped by sub-prime. Ours will most likely be popped by a Chinese economic slowdown.

 

[medicowallet]

hello,

i wouldnt be too concerned about how things will go Gav, just go with the flow brother and set yourself up for a good retirement

Exactly.

Just go with the herd and suck up gullible money whilst you can.

The only thing is, you need to be smart and get out before they start to panic.

 

[MACCA350]

Hey Robots, you didn't post this week's auction clearance rates mate

It's alright, I'll help you out:................78% Link

And this little tid bit:

The impact of 6 rate rises, affordability concerns and the unseasonally high stock levels are clearly having an impact on demand.

Are some starting to head for the exits?

cheers

 

[robots]

hello,

thanks macca350 for helping out in the thread, sometimes the workload is rather large for this thread

probably see a few auctions get cancelled now, accept a pre-offer

I am glad you asked WayneL, my belief is:

Australia is paradise, no guns at kmart, no extremists, no crackheads on every street corner, a place where all are accepted and with plenty of room for more to join us (plenty of land right?)

we give our new migrants a go and for this we are rewarded with experiencing there cultural ways, this all integrates to create one magic place

yes it is different, fantastic and its great reading about the same doom and gloom prophecies that have persisted for many years

went over to GPHC.com to see if any new readings but the joint is gone, taken the money and run apparently

thankyou
robots

 

[kincella]

Morning Robots,
they were good auction results, considering the mayhem out there in the finance world, with the stock market in freefall, the UK election fiasco, and Australia's own GFC with the attack on the mining industry....

Festivus....the bankers are liars....and their policies erode my profits, my wealth....an old saying...'look after the pennies and the pounds look after themselves ' is even more appropriate today...

Gail Kelly of WBC has been screeching about how the banks were hurting, hence they needed to raise rates above the RBA rate....then 6 months later they produce massive profits, up 30% to 3 billion dollars.....warning bells were ringing the whole time, to me, during the GFC..
the banks were borrowing overseas at those lovely low rates, but hiked our rates....liars...
this article states the banks gouged on average an extra 733 from customers, but more likely about 3000 from each of us...
extract follows..............
The $733 increased cost per customer is the average across all 15 million bank customers. But because the APRA data only applies to the big four banks, the actual figure for customers could be more than $3000 a year, according to InfoChoice.

"It's a simple function of passing on more of the hikes on the way up and less of the cuts on the way down," said InfoChoice chief executive Shaun Cornelius.

http://www.news.com.au/money/how-ba...-at-your-expense/story-e6frfmci-1225864049320

ps Still out on a spending spree, catching some great bargains..
Daughter made a leather bikers jacket for the dog....with studs etc looks great...

 

[UBIQUITOUS]

Hey Robots, you didn't post this week's auction clearance rates mate

It's alright, I'll help you out:................78% Link

And this little tid bit:
Are some starting to head for the exits?

cheers

Thanks Macca. That clearance rate is dropping fast. Word on the street is that auction houses are running at max capacity and more and more sellers are heading for private sales, with only the fairest priced houses being pushed for auction.

Yet all the while, clearance rates plummet.

 

[Uncle Festivus]

Festivus....the bankers are liars....and their policies erode my profits, my wealth....an old saying...'look after the pennies and the pounds look after themselves ' is even more appropriate today...

Their policies give property investors their profits I would have thought? In cahoots with the Fed Gov they have over-extended their mortgage books and have indicated that they are 'full' - there is an imbalance between their property & business portfolios.


So we have the perfect storm brewing for property -

• Banks tapering off housing loans (changing LVR's?)?
• Interest rates rising - starting to hurt already, even though rates are still 'behind the curve'?
• An increase in supply eg unit construction
• Policy changes - to do a back flip on foreigners holding property
• Governmenbt subsidies - the Fed is out of easy money, now looking for ways to replentish the coffers via resources & banks?
• 1% a month price appreciation - unsustainable. As prices go up it is harder to get the same return, tapering returns for a huge liability and illiquidity?

Your arms length disdain for the equity markets is from a veiwpoint of not utilising all available methods - I'm doing 30% a month just from going exclusively short. I'd be shorting Aus property too if only Goldman Sachs would make up a derivitive for it

Property prices will be lower 12 months from now........

 

[cutz]

Festivus....the bankers are liars....and their policies erode my profits, my wealth....an old saying...'look after the pennies and the pounds look after themselves ' is even more appropriate today

Banks have always been very helpful with dealings i've had with them, remember rates are still below the long term average. If the market can't sustain a few more tweeks, trouble must be brewing in paradise.

Perhaps for the benefit of those too young to remember, what were the banks like before deregulation (anyone) ?

 

[MACCA350]

probably see a few auctions get cancelled now, accept a pre-offer

Yes, no doubt. Our next door neighbor was due for auction, but they ended up taking an offer after the second inspection so it never reached the auction date.

I'm sure there are many who have been given reasonable offers above what they were expecting and so are happy to pull the plug on the auction for a quick sale.

cheers

 

[medicowallet]

then 6 months later they produce massive profits, up 30% to 3 billion dollars.....warning bells were ringing the whole time, to me, during the GFC..
the banks were borrowing overseas at those lovely low rates, but hiked our rates....liars...
...

I don't mind the banks getting their fair share out of the housing bubble.

Banks make money, home owners make money, government goes into debt, home owners go into debt, banks take on risk.

What is wrong with this? If people don't want to use a loan to increase their profits, then they can quite easily fund the purchase out of their own money, or not make the purchase.

Nobody is holding a gun from k-mart up to their heads to accept the loan.

 

[cutz]

It’s astounding how people have to scoff at bank profits, our massive property bubble needs funding, who else is going to provide it ?

Massive private debt goes hand in hand with massive bank profits, so what’s the big deal, we should be happy we have solid financial institutions making good dough.

 

[Bill M]

Slow and steady robots?

This isn't a one off either, I've been to quite a few open inspections in my area of this suburb - most places are on the market for a month or less, and selling significantly higher than I would expect. Last year I was tempted to wait and keep saving so I had a bigger deposit - so glad I didn't, my savings would not have kept up with the growth - and even if they did, my mortgage would be significantly larger (in dollar terms).

How long can this keep going? Sunshine and lollipops!

You did the right thing gav buying your place and you are in front already. One thing for sure your property will not crash 10% in 2 weeks like the ASX has (more to come tomorrow too). You will always have that roof over your head whilst the tyre kickers pay rent. Sunshine and lollipops? You bet, it's your own place and you paid last years price for it, well done.

 

[trainspotter]

Their policies give property investors their profits I would have thought? In cahoots with the Fed Gov they have over-extended their mortgage books and have indicated that they are 'full' - there is an imbalance between their property & business portfolios.

So we have the perfect storm brewing for property -

• Banks tapering off housing loans (changing LVR's?)?
• Interest rates rising - starting to hurt already, even though rates are still 'behind the curve'?
• An increase in supply eg unit construction
• Policy changes - to do a back flip on foreigners holding property
• Governmenbt subsidies - the Fed is out of easy money, now looking for ways to replentish the coffers via resources & banks?
• 1% a month price appreciation - unsustainable. As prices go up it is harder to get the same return, tapering returns for a huge liability and illiquidity?

Your arms length disdain for the equity markets is from a veiwpoint of not utilising all available methods - I'm doing 30% a month just from going exclusively short. I'd be shorting Aus property too if only Goldman Sachs would make up a derivitive for it

Property prices will be lower 12 months from now........

Please define WHERE you believe the prices will be lower. Across the board or in certain areas? How much are you predicting the housing market will fall in a percentage term? I am happy you are utilising all available methods of deriving income in these uncertain times. 30% shorting is a good haul. How long will this last? What dollar value are you risking to earn this amount?

Not attempting to be antagonostic ... more on a fact finding mission.

 

[UBIQUITOUS]

You did the right thing gav buying your place and you are in front already. One thing for sure your property will not crash 10% in 2 weeks like the ASX has (more to come tomorrow too). You will always have that roof over your head whilst the tyre kickers pay rent.

You're right Bill, property will not crash over 2 weeks, but over a much longer period. Remind us how well property performed from 1989-1999.

As well as this?

http://203.15.147.66/products/pdf/share_price_movements.pdf