This sell off should drop the price of houses

[Ken]

Does Logic say this?

The economy now has less money due to the sell off of stocks. People would have lost money. Hopefully this effects how much they have to pay for housing, and investors are forced to sell houses.

SO although I may have lost 10k on the stocks if property falls by 2-3% in effect it could be a good thing.

Although the majority of housing is for owner occupier obviously.

Combined with interest rate rises. surely! this would slow, or drop the level of houses to some extent.

Am I clutching at straws here?

Does the market have an effect on property? Or is just a supply and demand thing solely.

 

[numbercruncher]

Re: this sell off should drop the prices of houses

lenders will raise there Interest rates for hundreds of thousands of people beyond the reserves raise ..... Lenders will be alot more choosy whom they lend to ......

All the dominoes are in place for realestate to get hammered in the coming months/years.

 

[bigt]

Re: this sell off should drop the prices of houses

Isnt there an inverse correlation between the stock market and the housing market (generally) i.e. stocks down/houses up?

Or does this go beyong the generalisation, as its related to credit issues?

 

[YOUNG_TRADER]

Re: this sell off should drop the prices of houses

Thats one way to look at it, here's another which I think is far more important,

I know plenty of big hitters with over $1m in cash sitting in thier accounts, now the longer this volatility lasts in equity marekts the more they consider alternative investment options such as Bonds/Fixed Interest Securities and Property,

So if anything a falling stock market in my opinion makes alternative investments more attractive, not that I think we're quite there yet,

As for myself, I have just finished building another property and have been flooded with buy offers for it, so I can tell you the demand is still there

Keep the faith, RESOURCE BULL = STRONGER FOR LONGER!!!!!!!!!!

 

[UPKA]

Re: this sell off should drop the prices of houses

lenders will raise there Interest rates for hundreds of thousands of people beyond the reserves raise ..... Lenders will be alot more choosy whom they lend to ......

All the dominoes are in place for realestate to get hammered in the coming months/years.

Boral has disagreed, they have "predicted" a recovery in housing sector by 2009:
http://www.news.com.au/business/story/0,23636,22248385-31037,00.html

bt with the rising interest rate, I seriously cant see that happening anytime soon. not to mention that labour might come into power by then.

 

[numbercruncher]

Re: this sell off should drop the prices of houses

Commonwealth Bank chief Ralph Norris concedes that interest rates could rise for hundreds of thousands of mortgages - regardless of official increases by the Reserve Bank - because lenders are struggling with a global credit squeeze caused by the crisis in the US housing market.

www.smh.com.au/news/national/credit-squeeze-to-push-rates-higher/2007/08/14/1186857512018.html


Labor wont have any effect on Interest rate decisions.

 

[wayneL]

Re: this sell off should drop the prices of houses

Isnt there an inverse correlation between the stock market and the housing market (generally) i.e. stocks down/houses up?

Or does this go beyong the generalisation, as its related to credit issues?

It used to be the case, a la the economic clock.

But Greedscam through pebbles into the cogs after 911. The clock's now broken and everything will tank together.

 

[numbercruncher]

Re: this sell off should drop the prices of houses

Basically the days of spending more than you earn with asset price rises picking up the tab are gone.


No one really beleived that house prices could rise at a double digit rate for ever did they ?

Wonder if they can fall at the same exhorbarant rate ?

Politicians will be blamed ? Johnny will surely be strung out over the whole realeGate scandal ....

Maybe theyll drop interest rates to 1pc and let the party go full swing (>:


Time will tell i guess .....

 

[YOUNG_TRADER]

Re: this sell off should drop the prices of houses

But Greedscam through pebbles into the cogs after 911. The clock's now broken and everything will tank together.

Greedscam, lol Wayne thats a nice one!

 

[Ken]

Well I can say house prices have been rising around Melbourne. Median house price up to 410k.

I hear a lot about home owners being stretched, but house prices keep rising.

Kew rose by 12% since the start of the year. Unsustainable I would have thought.

The economy is too confusing..

errr

 

[Pat]

Well I can say house prices have been rising around Melbourne. Median house price up to 410k.

I hear a lot about home owners being stretched, but house prices keep rising.

Kew rose by 12% since the start of the year. Unsustainable I would have thought.

The economy is too confusing..

errr

Agree mate, far too many variables to place a bet.

You thinking of buying?

 

[ROE]

Re: this sell off should drop the prices of houses

Isnt there an inverse correlation between the stock market and the housing market (generally) i.e. stocks down/houses up?

Or does this go beyong the generalisation, as its related to credit issues?

Only way house goes up is cheap credit and low interest rate.
Stock fall during those times is just pure random chance

but having said that House price should move up in line with inflation so I'm talking about a boom here something in the order of 8-10% or more a year.

 

[ROE]

Well I can say house prices have been rising around Melbourne. Median house price up to 410k.

I hear a lot about home owners being stretched, but house prices keep rising.

Kew rose by 12% since the start of the year. Unsustainable I would have thought.

The economy is too confusing..

errr

I dont know some of the figure may be dodgy as hell because rich suburb where borrowing isn't a factor for rich people then they just buy what ever they like at any price so they push the general price up ... but look to outer suburbs and average folks I dont think so..

 

[ROE]

Re: this sell off should drop the prices of houses

Boral has disagreed, they have "predicted" a recovery in housing sector by 2009:
http://www.news.com.au/business/story/0,23636,22248385-31037,00.html

bt with the rising interest rate, I seriously cant see that happening anytime soon. not to mention that labour might come into power by then.

Real estate people and real estate related industry every three months
they talk up the market there going to be a recover soon and demand are picking up but the fact is they been saying that since 2003

 

[Kathmandu]

Rockhampton Central Qld is being touted as having the most affordable housing in QLD.

Houses that were selling here 4 years ago for $60k are now $300k+

http://www.realestate.com.au/realestate/agent/ray+white+rockhampton/xrwxem/104189368

Today I moved into my new build that cost house and land inc A/c, turf ,fences $380k , the price rise in 7 mths ? , well this is for sale a few houses away.

http://www.realestate.com.au/realestate/agent/l.j+hooker+rockhampton/xljroc/page2/104138952

Dave

 

[toothfairy]

Re: this sell off should drop the prices of houses

Only way house goes up is cheap credit and low interest rate.
Stock fall during those times is just pure random chance

Not absolute, I don't know whether you are old enough to remember the 1987-1990 housing boom period, what was the interest rate?

 

[Kathmandu]

Re: this sell off should drop the prices of houses

Not absolute, I don't know whether you are old enough to remember the 1987-1990 housing boom period, what was the interest rate?

Bring on that 18%, I'm ready and waiting.

Dave

 

[toothfairy]

Re: this sell off should drop the prices of houses

Bring on that 18%, I'm ready and waiting.

Dave

Thank you, here comes the interesting part :

AND the 1987-1990 high interest rate housing boom came AFTER the 1987 stock market crash.

SO anything is possible, but not absolute, never say never.

 

[Broadside]

this is an interesting discussion, not sure though that money looking for safety will flow into property given valuations *by historic measures* have reached all time highs. Frankly I see more safety staying in the market or hiding cash under the mattress.

But after 1987 yes property boomed, seems a different set of conditions this time.

Do many people think real estate is a safe bet at this point in time? With liquidity tightening and real estate in the US under the pump, I certainly don't.

 

[toothfairy]

I am only talking about very selected properties for investment only. They should be within 5 km of CBD. In Vic. that restricts to Carlton, Fitzroy, South Melbourne, Richmond etc. The reason being the restricted number and the style/period of these houses will not be repeated. Also, furthering the distance will decrease the exclusivity by a factor of the square of the distance. It works for all parts of the world, why not here? These are not the first home buyers' choices because they are too small for the price, first home buyers like a bit of comfort value. These are for rental purposes for the pre-first-home-buyers who like to be near action areas.