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The future of Australian property prices

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depends on what discount you buy them at

many years back i bought MBLHB at ( about ) $62.50 ( $100 face value ) a few years back MQG redeemed them @ $100 plus interest due now sure at face value the returns weren't that flash , but at MY buying price the returns still beat a term deposit .

but yes it is very entertaining to watch the Basel III 'stress tests ' on the big international banks ( if say two were to implode , contagion would most likely follow , am particularly watching Deutsche and Credit Suisse , but the Japanese have some contenders as well )

am more an investor that takes passing opportunities ( in one or two shares it almost looks like trading )
 
All this hand wringing over increases in interest rates and the impact on property buyers. Is the media regurgitating the stories from the late 1980's and early 1990's? Probably saves them time trying to think of something new I suppose.
 
Belli said:
All this hand wringing over increases in interest rates and the impact on property buyers. Is the media regurgitating the stories from the late 1980's and early 1990's? Probably saves them time trying to think of something new I suppose.
Click to expand...
Absolutely spot on, after the next banks reporting season, it will be back to giving the Govt heaps, wash, rinse, repeat.
 
Belli said:
All this hand wringing over increases in interest rates and the impact on property buyers. Is the media regurgitating the stories from the late 1980's and early 1990's? Probably saves them time trying to think of something new I suppose.
Click to expand...
Probably!! But whenever the stories make the press or even catches the attention of the government, then most likely that particular leg of the trend is close to an end or at least a pause..
 
one problem i see coming this time , is the folks who only paid a 5% deposit and borrowed close to the maximum ( and weren't aggressively paying down the mortgage in 'the good times ' )

lenders tend to get very nervous when the borrower owes more than the current value of the asset
 
Housing affordability issues is creating innovation in assembly line pre-fab housing. Companies like Boxabl are springing up in the USA and I think it's only a matter of time until we start seeing them here.

 
This is amazing people are crying end of the world and property is collapsing but it is still 20% or 30% up pre covid. Using some ridiculous guilt tactics on rba. Sounds like a bunch of selfish whinghers to me... there is no buyers its the end of the world quick inflate and destroy the dollar more so a few investors balls deeps can survive at the cost of the whole population.

Auctioneer Tom Panos has called on the RBA to consider the impact of its aggressive rate hikes on the real estate market, which continued to fall last month led by declines in Sydney and Melbourne.

 

ah !! but what about the ( outstanding ) debt obligations in the public sphere and the overall economy

yes i basically agree , BUT the general public has been loaded up with excessive debt in one way or another
 
againsthegrain said:
Auctioneer Tom Panos has called on the RBA to consider the impact of its aggressive rate hikes on the real estate market, which continued to fall last month led by declines in Sydney and Melbourne.
Click to expand...

“We’ll all be rooned,” said Hanrahan,
“If interest rates don’t drop this week.”

Apologies to John O'Brien.
 
And there seem to be a lot of headlice with a similar message.

  • A 38-level Perth block won’t be built after construction costs surged 30 per cent in a less than year.
  • Melbourne developer Central Equity has abandoned plans to build a $500 million apartment tower in Surfers Paradise on the Gold Coast over concerns that surging construction costs will make the project unprofitable.
  • Residential construction costs nationally jumped 10 per cent, the highest annual rate of growth since the introduction of the goods and services tax at the turn of the century pushed costs up 10.2 per cent in the year to March 2001, new figures from data provider Cordell show.
  • The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index showed new orders were down by 7.5 points even before Tuesday’s interest rate rise, with the downward trend attributed to earlier rate rises.
Supply and demand.
 
I wonder if this is the fallout from the covid inspired moratorium on evictions for non payment of rent? Maybe a lot of landlords decided renting out property isn't the easy money they thought it was and sold out, into a rising property market.
For every action there is a consequence.

Australia's rental crisis screams Code Red

CoreLogic has released rental listings data, which shows that the number of properties listed for rent across the combined capital cities has plummeted to just 80,000 – around 50,000 (40%) less than were available for rent in July 2018 and July 2021: In turn, the rental vacancy rate has...
www.macrobusiness.com.au
CoreLogic has released rental listings data, which shows that the number of properties listed for rent across the combined capital cities has plummeted to just 80,000 – around 50,000 (40%) less than were available for rent in July 2018 and July 2021:

In turn, the rental vacancy rate has collapsed to just 1.3% across the combined capital cities and 1.0% across the combined regions. This has driven rental growth to its highest level in decades: 9.1% across the combined capital cities and 10.8% across the combined regions:
The outlook for Australia’s rental market is poor. Residential construction rates are tipped to plunge next year as the pipeline from the HomeBuilder stimulus is finally worked-off. Dwelling approvals have already fallen sharply, which should continue amid rising interest rates and the various cost pressures afflicting the construction industry:

At the same time, the Albanese Government is expected to ramp-up immigration to its highest ever level following next month’s Jobs & Skills Summit, with the permanent non-humanitarian migrant intake expected to be lifted to 200,000 for the first ever time.

The obvious question needs to be asked: with Australia’s rental market already experiencing record tightness and rents soaring at near double-digit rates, where will the hundreds of thousands of migrants entering Australia every year live?

The logical outcome from the Albanese Government’s immigration influx will be more shrinking of rental vacancies, higher rents, and increased homelessness as tenants compete like the Hunger Games for housing.
 

The return on residential rental investment has been low for a very long time, and the risk high.

Most renters think that the landlord is super rich and owes them something, the renter will call when a light bulb goes out, or a tap drips.

The landlord pays the council rates, water and sewerage rates, maintenance and repairs and high insurance fees.

The renter may or may not look after the garden, signs an agreement with a no pet clause, and then buys a puppy that lives inside.

Commercial rental investments offer higher returns and less risk. Most of the people I know that invest in properties have sold off their residential portfolio and built a commercial investment property portfolio. All are happier and wealthier.
 
Not a very interesting scenario,
- loans are expensive
- investors starting to see re as bad investment
- surplus stock for sale
- low rental stock
- increasing supply of renters

tent city here we come
 
Looks like the Sydney property bubble might be deflating, at last the ponzi might be over.

Chinese sell off luxury homes as vacancy tax bites​

There’s been a dramatic shift in the luxury home market, particularly in Sydney and Melbourne, with wealthy overseas Chinese owners selling up.
 

I wonder if any if them are worrying what will happen to their "investments" if china does go to war over Taiwan
 
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