Panda Posted June 13, 2009 Share Posted June 13, 2009 No I just dont get the Australian Property in freefall bit unfortuantely. Take a look on here; http://www.realestate.com.au/ OK? Type in or pick; 1) To Buy 2) Queensland 3) Southport or Cleveland or Redcliffe All popular normal areas you might want to live or buy? Then take a look at the reductions or statements. Like "must sell" "Seller liquidating" "Please buy my shed" "i am in the sh!t, must sell" Discounts coming through!!! Prices are dropping now, and they are going to pick up speed, mark my words. Bardon, you seem a nice chap, but come on, lets be honest, once the first time buyers bribe has gone, the market has no where to go but down. I have friends in Brisbane, unemployment is rising, the feel good factor has gone. I was there last year and going this year; and things were getting bad, the first time buyers bribe under pinned the lower end of the market for a while, but now, i am sorry if this hurts, hurts enough to still argue against real stories. But the Oz economy is a third of the size of the UK, and we are f00ked. You are in denial mate, the mechanics over over priced Ozzy houses are in melt down, you know it, i know it, the law cannot be re-written, its like gravity i suppose. Unless you manage to keep unemploymnet down, and also manage to keep wages rising above general cost inflation, so to support ever increasing housing costs, then the peak has been and gone, you are on the way down like the rest of us, well in Queensland, do not know about other states. I think they will try to support asset prices, like our clowns, they will let the currecy drop i think, but for me that is the wrong decision, a choice between economy and currency, well for me no choice, currency every time. Panda Quote Link to comment Share on other sites More sharing options...
Bardon Posted June 13, 2009 Share Posted June 13, 2009 (edited) Panda, Brisbane prices are actually rising sure the top end has come back but they are rising. Not that I am suggetsing that we are in for galloping growth that will come back on later. As I keep saying I dont see a house price crash and I dont think it is delusional to think so. You could say that those that are arguing for a crash since 04 are the ones that are delusional. Right now the economic news seems to be getting better out here. Yes unemployment is increasing and will get worse no doubt about it. But again the recent job numbers are a lot better than expected and we have just had the largest jump in consumer confidence levels in 22 years which is now back on the long term average. There is no reason to be complacent in the current economic environment but a house price crash I dont think so. Edited June 13, 2009 by Bardon Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 13, 2009 Share Posted June 13, 2009 You cant post a link to this one its is subscrpition only.Its not so much me giving up its more the market doing what it does I am merely an observer. No one seems to get this bit. Quote Link to comment Share on other sites More sharing options...
Pindar Posted June 13, 2009 Share Posted June 13, 2009 . Quote Link to comment Share on other sites More sharing options...
Bardon Posted June 14, 2009 Share Posted June 14, 2009 No one seems to get this bit. Here is another perspective, click the link to see the charts. US pain, Australian gain Macquarie Bank’s esteemed interest rate strategist, Rory Robertson, has produced this excellent little note on the Australian and US housing markets, which he has allowed me to reproduce here (it will also shortly appear in BRW). Enjoy… “Chalk and cheese in Oz and US housing markets Recent developments in the Australian and US housing markets are as different as chalk and cheese. Average house prices here have increased in 2009, while US house prices have continued to decline, and now are down by over 30 per cent from their mid-2006 peak (chart). According to the reliable RP Data-Rismark measure, Australian house prices fell by 4.6 per cent on average between February 2008 and January 2009, but have since rebounded by 2.7 per cent.. With low interest rates now firmly in place, there's a growing chance that the trend in local home prices already is up again, not down. If that indeed turns out to be the case, the peak-to-trough decline in local prices will end up being only a small fraction of the 30-40 per cent declines forecast by high-profile housing Chicken Littles. High-end hit hardest Looking back, the main driver of the across-the-board home-price declines in 2008 was not economic weakness but the big increases in mortgage rates between July 2007 and July 2008. The halving of the sharemarket also wreaked havoc in “top end†housing markets, as sharply reduced wealth cratered spending power and prompted a series of “forced salesâ€. The RBA has documented that the biggest price falls have been in the flashest 20 per cent of suburbs (see chart). By contrast, average prices in most other suburbs generally have been flat or rising since the RBA delivered its big interest-rate cuts last October, November, December and February. Record low interest rates the main driver With mortgage rates having dropped from over 9 per cent to near 5 per cent, interest rates have swung from being the biggest downward pressure on home prices in 2008 to being the biggest supportive factor in 2009. Canberra’s standard $7000 “boost†for first-time homebuyers also has helped housing markets across the country, but by less than many commentators realise. The lowest mortgage rate in four decades is the dominant factor at work. Yes, the share of first-time buyers within the overall market has risen sharply to 28 per cent, but first-timer activity always surges after interest rates are cut and “pent up demand†is released. In this episode, the RBA's long tightening cycle between 2002 and 2008 encouraged many would-be homebuyers to stay longer with their parents or in rental accommodation. From last September, however, after the collapse of Lehman Brothers collapsed global growth, the RBA replaced its big red STOP sign with a big green GO sign. The 4-percentage-point drop in mortgage rates collapsed the cost of home-buying relative to the cost of renting. Canberra’s standard $7000 “boost†reinforced that story. With the buy-rent decision suddenly tilted towards BUY, first-time buyers naturally have been busy buying. This week’s housing-finance report suggests that investors too now are starting to buy residential property again, perhaps sensing that the trend in prices already is in the process of turning up. More-disciplined lending and tighter monetary policy Of course, the Chicken Littles forecasting 30-40 per cent drops in Australian home prices always were wrong, because they failed to notice the profound differences between the US and Australian situations. Highlighting just two of the key differences will suffice. First, nothing like the extraordinary levels of reckless lending and borrowing behaviour seen in the US happened in Australia. Today, fully 13 per cent of all US mortgages - more than one in eight – are either delinquent or in foreclosure. The figure in Australia is less than one in 50; indeed, it’s probably closer to one in 100. This matters because Australia is avoiding the forced home sales and downward pressure on prices that dominate the housing story in America. Second, while the predominant US mortgage rate hovered either side of 6 per cent over the 2000s, our rate was increased gradually from 6 per cent to 9-1/2 per cent (see chart). That is, the RBA’s steady fight against developing inflation pressures over the 2000s produced a big rise in funding costs that limited the overall rise in Australian home prices. If Australian mortgage rates instead had remained steady near 6 per cent, like US mortgage rates, our home-price boom would have been much bigger, as prices adjusted more fully to rising employment, rising wages and record levels of immigration. Accordingly, the RBA's dramatic reversal of its long tightening cycle has allowed local home prices to stabilise quickly, confounding our housing Chicken Littles. The behaviour of Australian home prices in this episode so far seems broadly in line with that observed in the early-1990s recession. Back then, as now, the downward pressure on home prices from falling employment tended to be offset by sharply lower mortgage rates (see chart). http://www.businessspectator.com.au/bs.nsf...G3?OpenDocument Quote Link to comment Share on other sites More sharing options...
aliveandkicking Posted June 14, 2009 Share Posted June 14, 2009 An insulating factor for Australia NZ and even China is the fact that interest rates were pretty high before this crisis really got going. Importantly China was fairly seriously fighting massive inflationary pressures prior to September 16th. China had rates of 7.47% and bank reserve requirements at a record high level of 17.5% until Sept 16th 2008 *************ind...st&p=448980 NZ had rates at 8.25% http://www.housepricecrash.co.uk/forum/ind...t&p=1625734 Australian Rates were at 7% in september from 7.25% in march 2008. http://www.news.com.au/business/money/stor...5016110,00.html Quote Link to comment Share on other sites More sharing options...
Patfig Posted June 14, 2009 Share Posted June 14, 2009 An insulating factor for Australia NZ and even China is the fact that interest rates were pretty high before this crisis really got going.Importantly China was fairly seriously fighting massive inflationary pressures prior to September 16th. China had rates of 7.47% and bank reserve requirements at a record high level of 17.5% until Sept 16th 2008 *************ind...st&p=448980 NZ had rates at 8.25% http://www.housepricecrash.co.uk/forum/ind...t&p=1625734 Australian Rates were at 7% in september from 7.25% in march 2008. http://www.news.com.au/business/money/stor...5016110,00.html Interestingly though house prices in NZ were and still are high compared to average wage Quote Link to comment Share on other sites More sharing options...
aliveandkicking Posted June 14, 2009 Share Posted June 14, 2009 (edited) Interestingly though house prices in NZ were and still are high compared to average wage True. Something odd is happening or the fall is delayed. One thing to observe is that NZ is no longer the community it once was where for example people would get together at the local club to fix things and improve the surroundings. An accountant friend suggested to me that instead of wages being based around a common equal amount more or less as it was say in the 1970's now there are higher earners as a group and then there is the poor as a group. So possibly the poor group are renters and the richer group are owners rather than their being a large middle group owning houses as there was a few decades ago. Average income then does not mean what it might mean? This trend is then further distorted by the rich having rental properties which the poor get state benefits to live in. Edited June 14, 2009 by aliveandkicking Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted June 14, 2009 Share Posted June 14, 2009 Mostly about the Kiwi and Loonie but some relevant snips that highlight the macro headwinds (hence relevant to this thread, too)... http://www.bloomberg.com/apps/news?pid=206...id=a_zFs8TEwxFk Policy makers already have started trying to talk down their currencies, sparking speculation central banks may lower interest rates, print money or buy their own legal tender to curb the gains.: Australian Treasury Secretary Ken Henry said June 3 that “if today’s exchange rate were to continue, that would imply some downside risk.†: There may be little Australia, New Zealand and Canada can do to restrain their currencies as long as U.S. stimulus efforts keep its dollar weak with record budget deficits, a near-zero benchmark interest rate and money-printing. “The Reserve Bank of New Zealand is already out there trying to jawbone the currency lower, but we don’t think that will necessarily work,†said David Forrester, a currency economist in Singapore with Barclays Plc’s Barclays Capital unit. : The Australian dollar’s rise hurt its trade balance, which unexpectedly turned to a deficit in April as lower coal and iron ore prices led to the biggest drop in exports since 1997. BHP Billiton Ltd., the world’s biggest miner, cut spending, fired workers and closed mines as the global slump curbed commodity demand. Profit at the Melbourne-based company, which constitutes 14 percent of Australia’s benchmark stock index, fell 57 percent in 2008’s second half, its worst since 2004. Higher Unemployment The company will find it harder to revive profit growth as the Australian dollar holds down the value of its earnings and iron ore and coal prices drop from last year’s records. Each U.S. penny rise in the Aussie reduces BHP’s full-year net income by $80 million, the company says. “We are not out of the woods yet,†Australian Prime Minister Kevin Rudd said June 3 in Canberra. “We will face higher unemployment in the Australian economy, and we are not guaranteed that we won’t see negative growth in the future. These are tough times.†The Aussie has been bolstered by signs of the country’s own recovery. Its statistics bureau reported June 3 that gross domestic product unexpectedly expanded in the first quarter. The country lost fewer jobs than expected in May, increasing speculation that Reserve Bank of Australia Governor Glenn Stevens will increase rates within a year, making its currency even more attractive. Quote Link to comment Share on other sites More sharing options...
ExecutiveSlaveBox Posted June 23, 2009 Share Posted June 23, 2009 As the first time home owners grant is being reduced in September with a view to phasing it out and unemployment is creeping up. Was just wondering if any posters on this thread felt this would turn the housing market downwards. Aussies seem as pig headily stupid and keen as ever about getting into a ton of debt to "own" a property. Will this ever change? Quote Link to comment Share on other sites More sharing options...
Panda Posted June 23, 2009 Share Posted June 23, 2009 As the first time home owners grant is being reduced in September with a view to phasing it out and unemployment is creeping up. Was just wondering if any posters on this thread felt this would turn the housing market downwards. Aussies seem as pig headily stupid and keen as ever about getting into a ton of debt to "own" a property. Will this ever change? Not a chance my son, its not the Ozzy's, it the Brits, the Brits are f00king stupid clunts, they luv their 10x2's, the country would be better off without their cousins turning Oz into Little Britain. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 23, 2009 Share Posted June 23, 2009 Not a chance my son, its not the Ozzy's, it the Brits, the Brits are f00king stupid clunts, they luv their 10x2's, the country would be better off without their cousins turning Oz into Little Britain. A six beer posting, Panda, or a ten? In the meantime in may part of Sydney, another buyer's agent calls at my house (three in the last month or so), time on market drops to 37 days from 55 and clearance rates head back to 70%. Pleased there's liquidity back in the market (Q4 08 was poor) but hopefully no price rises. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 23, 2009 Share Posted June 23, 2009 As the first time home owners grant is being reduced in September with a view to phasing it out and unemployment is creeping up. Was just wondering if any posters on this thread felt this would turn the housing market downwards. Aussies seem as pig headily stupid and keen as ever about getting into a ton of debt to "own" a property. Will this ever change? Pretty obvious that neither of those changes are going to put an upward pressure on prices. Quote Link to comment Share on other sites More sharing options...
ExecutiveSlaveBox Posted June 23, 2009 Share Posted June 23, 2009 Pretty obvious that neither of those changes are going to put an upward pressure on prices. True, but it seems most Aussies are crazy property bulls. I'm just wondering if anything will ever change that. Personally I'm starting to have doubts. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 24, 2009 Share Posted June 24, 2009 True, but it seems most Aussies are crazy property bulls. I'm just wondering if anything will ever change that. Personally I'm starting to have doubts. Ross Gittins' balanced article on this today was interesting: http://business.smh.com.au/business/home-t...90623-cvcl.html Quote Link to comment Share on other sites More sharing options...
ExecutiveSlaveBox Posted June 24, 2009 Share Posted June 24, 2009 Ross Gittins' balanced article on this today was interesting:http://business.smh.com.au/business/home-t...90623-cvcl.html Good article... <quote> But there's another worry: so many young people are scrambling to buy their first home before the special offer runs out that they've pushed up the price of Ideal First Homes by more than the value of the extra grant. Trouble is, you need a fair bit of economic sophistication to see that's what's driving prices up and realise the best course is to wait out the special offer and buy when prices have fallen back. When all your friends are jumping in, it's hard to resist the temptation to join in. </quote> That's the problem in a nutshell. The amount of economic sophistication of your average person anywhere in the world is pretty poor. All these first home buyers are just seeing the dollars and taking them with no real understanding of how they are getting suckered. In the meantime those of us with a little bit of savings have to wait for all this madness to run it's course. It's getting a little tedious. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 24, 2009 Share Posted June 24, 2009 Good article...<quote> But there's another worry: so many young people are scrambling to buy their first home before the special offer runs out that they've pushed up the price of Ideal First Homes by more than the value of the extra grant. Trouble is, you need a fair bit of economic sophistication to see that's what's driving prices up and realise the best course is to wait out the special offer and buy when prices have fallen back. When all your friends are jumping in, it's hard to resist the temptation to join in. </quote> That's the problem in a nutshell. The amount of economic sophistication of your average person anywhere in the world is pretty poor. All these first home buyers are just seeing the dollars and taking them with no real understanding of how they are getting suckered. In the meantime those of us with a little bit of savings have to wait for all this madness to run it's course. It's getting a little tedious. The issue here is that the grant gives you a chunk of your deposit which you can then leverage five or more fold (depending on your lender) which is bringing a whole new group of non-savers into the market. Quote Link to comment Share on other sites More sharing options...
ExecutiveSlaveBox Posted June 24, 2009 Share Posted June 24, 2009 (edited) Bulls aside I think you will find that the oz property cycle is merely doing what it always has done. It is not subject to the same fluctuations as the UK cycle. A workmate of mine has been attending auctions inner city and keeps getting out bid well over the reserve price.The other factor in considering the market is that affordability is now back on the long term trend line. First home buyers will slow right down when the additional top up grant stops note the full grant wont stop. But rents will start to rise again when this happens. If those bits in bold are true I feel very sorry for Australians as they would have collectively and permanently lost their minds with greed on one massive get rich quick scheme. Australian housing is some of the least affordable in the world and that is not a good thing. Edited June 24, 2009 by ExecutiveSlaveBox Quote Link to comment Share on other sites More sharing options...
Tiger Woods? Posted June 24, 2009 Share Posted June 24, 2009 True. Something odd is happening or the fall is delayed. One thing to observe is that NZ is no longer the community it once was where for example people would get together at the local club to fix things and improve the surroundings. An accountant friend suggested to me that instead of wages being based around a common equal amount more or less as it was say in the 1970's now there are higher earners as a group and then there is the poor as a group. So possibly the poor group are renters and the richer group are owners rather than their being a large middle group owning houses as there was a few decades ago. Average income then does not mean what it might mean?This trend is then further distorted by the rich having rental properties which the poor get state benefits to live in. Yep...brought to you by the NZ Labour Thatcherite government in the 1980s. NZ was able to turn on a dime because it was such a small country. Okay, NZ had a lot of debt, but surely this wasn't the solution?! Quote Link to comment Share on other sites More sharing options...
Panda Posted June 24, 2009 Share Posted June 24, 2009 A six beer posting, Panda, or a ten? Ten, i wish, six and i am pushing it? Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 24, 2009 Share Posted June 24, 2009 Ten, i wish, six and i am pushing it? I'm the same these days... the drinking boots don't seem to fit so well as I get older. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 24, 2009 Share Posted June 24, 2009 If those bits in bold are true I feel very sorry for Australians as they would have collectively and permanently lost their minds with greed on one massive get rich quick scheme.Australian housing is some of the least affordable in the world and that is not a good thing. As Bardon says, that's not an affordability measure. I've never been sure what that multiple measures given the different factors that intercalate between that and a true affordability measure. No arguments from me that property over here is expensive, though. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted June 26, 2009 Share Posted June 26, 2009 I had a new one through my letterbox today, alongside a Richardson and Wrench offer of a freee valuation (wayhey). I've been in this house for the best part of a decade and I've had more of these things in the last three months than in the previous ten years. New thing: A6 flyer from "Keith and Asia" looking to buy "my" property with their mobile number attached. This is the first non-EA spruik that I've seen in this medium. There's bugger all stock round my way. Quote Link to comment Share on other sites More sharing options...
mattyboy1973 Posted June 28, 2009 Share Posted June 28, 2009 over half a million dollars to live in Paramatta, average houeshold income 66k, and property is not overvalued in Sydney? Quote Link to comment Share on other sites More sharing options...
ExecutiveSlaveBox Posted June 29, 2009 Share Posted June 29, 2009 (edited) over half a million dollars to live in Paramatta, average houeshold income 66k, and property is not overvalued in Sydney? Apparently not, buy two I say. One for it's "rental potential" and one to flip as a starter home to some gullible FTB. Double think, "wealth through debt" affordability charts to follow... Edited June 29, 2009 by ExecutiveSlaveBox Quote Link to comment Share on other sites More sharing options...
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