Australia Faces Its Demons

[jackalope]

Yes I really like Hobart, it reminds me of the old country with the steep hills running into the river. Last time I was there we were on one of those rare holidays where everything goes well. Got into Hobart on Christmas Eve to find that we had been upgraded to the penthouse at Salamanca Place what a great Christmas the family had. It was my wife first visit and we looked at some houses at Nelsons Point and she fell in love and wanted to move there. I said that I would consider it only after she came down in mid-Winter and still felt that way.

To answer your question form an investment perspective buying in affordable markets is very low risk and some would argue that those markets give the best growth and quite often higher yieldds. My information would prefer Launceston over Hobart in localised areas. I would argue that Adelaide is the most affordable city and also poised for major growth if you think its too late for Gladstone. The Huntrer Valley towns , Orange and places like that are looking very strong. Over your way both Geraldton and Bunbury still have relatively affordable houses with plenty of upside. Come to think of it there is so much opportunity everywhere the real risk is doing nothing.

Interesting info, thanks. I'm going over to Tasmania next month and was thinking about taking a speculative punt on an acreage block and sitting on it for a few years before I decide to build on it.

[JonoP]

Gas projects boost housing demand

The Real Estate Institute of Queensland says the Federal Government's approval of two multi-billion dollar liquefied natural gas plants has had an immediate impact on the housing market.

That is a credible source of information. If I was you, I would go and borrow lots of money and invest it where they tell you as I am sure they have your best interests at heart.

[Tiger Woods?]

Today is Wednesday and I had two phone calls about work in principal, on Monday I had another. Two of them were for work associated with Gladstone LNG one of them was about something completely different. It is well known that Gladstone has a housing shortage even before the latest announcements. So the number of enquiries have spiked and so has my job offers in the same market is that coincidental?

You can chose to believe what you want but I would say that the Gladstone housing market and the LNG markets is completely foreign to you.

Enjoy looking at the lights on the pier...'cause that's all there is to do in Gladstone.

[blue skies]

"From RPData's press releases, Perth has had 11 months of falling house prices, and is now sitting at -0.3% year on year ending in September. For the last quarter it hit -5%. August figures have been revised up.

And note that due to the hedonic index used by RPData, these number's aren't as useful as you might hope. Using just monthly changes you get a 8.8% year on year drop in September (as opposed to -0.3%, a massive difference).

It's also important to note that the most recent figures are indicative, and are generally based off half of the final data. On average they have been off from the final value by about 1%."

Yes and dont forget that Perth is a mining town.

[blue skies]

It isn't either actually.

The only thing not to forget is that Perth is just coming off from the mother of all booms.

Perth was nothing untill the gold rush and it is mining that is the grease for the wheels, who are you to correct me? :angry:

I have lived in Perth for half a century , How long have you lived in Ausralia?

And the thing you can not get a grip on is this "the world is comming of Peak Credit"

[douggggy]

`Perth is not a mining town`......

er, FiFo`s !

[geed]

Perth was nothing untill the gold rush and it is mining that is the grease for the wheels, who are you to correct me? :angry:

I have lived in Perth for half a century , How long have you lived in Ausralia?

And the thing you can not get a grip on is this "the world is comming of Peak Credit"

trust me, Bardon knows more than anyone, ever, so there. Dazzling lights come to mind

[Ruffneck]

It isn't either actually.

The only thing not to forget is that Perth is just coming off from the mother of all booms.

in what? housing or mining?

because if you read the papers here they seem to think the boom is back on for both mining and housing

Perth house prices down 4.5% in September quarter , rate rise very likely on Nov 2nd , perfect time to buy (No , i'm not making this up i read it yesterday on perthnow)

Edited October 29, 2010 by Ruffneck

[canny man]

Oh Dear

Gold Coast not travelling too well.

Mansions glut on glitzy Gold Coast island

LOOKING for a luxury mansion with waterfront views on the Gold Coast's exclusive Sovereign Islands? You don't have to look too far if you want to live like a king or queen.

More than a quarter of the properties on the exclusive island are currently listed for sale with realestate.com.au figures revealing 193 individual properties - homes and land - currently on the market.

http://www.couriermail.com.au/property/mansions-glut-on-glitzy-gold-coast-island/story-e6frequ6-1225945367545

Queensland property dream built on shifting sands

The latest Midwood Report on property trends and prices shows that average sales volumes of houses on the Gold Coast declined 25 per cent in the September quarter compared with the June half year. Prices, however, rose by more than 8 per cent in the same period.

Bill Morris, the principal of the Midwood Report says: "The Gold Cost market is severely down in sales volume in the November quarter".

The volume of unit sales in the second half of last year was about 2500, half its long-term average.

"It is due to a lack of credit generally and is not just a problem facing the Gold Coast," Mr Morris said.

Gold Coast property is not travelling well.

"There are questionable fundamentals that surround the Coast and questionable financial practices and questionable valuation practices," one property company director said. "The real question is, however, how did these developers get the money in the first place and get into trouble?"

The global financial crisis, a string of major property financing company collapses and over-zealous promotions – particularly the spruiking of units to overseas buyers – has left the Coast reeling.

Parts of the Ray Group were this week placed in receivership, joining a long list of developers and property financiers that have hit the wall over the past two years.

City Pacific, MFS (later Octaviar), Resort Corp and Raptis are a few of those that no longer exist.

Raptis went down owing almost $1 billion to creditors.

Octaviar collapsed owing $1.8 billion.

For Resort Corp the figure was about $300 million.

In the case of City Pacific, $900 million in investors' savings was frozen at the time of the collapse.

http://www.couriermail.com.au/business/queensland-property-dream-built-on-shifting-sands/story-e6freqmx-1225837502813

[Tiger Woods?]

Oh Dear

Gold Coast not travelling too well.

Sunshine Coast is weakening too. I've noticed that some of the agencies have started cutting prices in the windows. Sometimes multiple times. Of course the houses could have been initially promoted at unreasonable prices (relative to the usual level of unreasonableness), but from my knowledge of the market over the past year or so, the intial prices seemed about par. Things don't seem to be moving here. There are plenty of houses in the local area that have been for sale for over 12 months.

[blue skies]

trust me, Bardon knows more than anyone, ever, so there. Dazzling lights come to mind

Yer Bardon and I are both wrong!

Perth is a drinking city. With a mining problem!

[jackalope]

The only thing not to forget is that Perth is just coming off from the mother of all booms.

I don't think the imminent LNG boom will be quite so Perth-centric. Northern WA is where the stellar growth will be.

[Ruffneck]

The City of Perth has no active mines.

so the mining boom had no effect on perth house prices?

[blue skies]

Let me give you the benfit of my experiance, Perth is just another mining town. Wealth from the mining the machines and labour are all comming to and from Perth. The other income earners are agriculture, tourism and education . To say other wise is to show a profound lack of understanding.

[blue skies]

Perths claim to fame is that it is the most isolated city in the world.

It has a extremely poor harbour and because of that was second best to Albany which posses a fine harbour.

Once gold was discovered in coogardie and than calgoolie the perth harbour was improved and so the place boomed and boomed.

I went to a mining town Mount Parmer the gold was long played out and the place completly abandoned.

It was hard on my thinking to understand the transiant way of change.

[blue skies]

Swan slams CBA's 'cynical cash grab'

By online business reporter Michael Janda and staff

Updated 19 minutes ago

The country's largest home lender will lift its rates on variable home loan accounts by 45 basis points to 7.81 per cent.

The country's largest home lender will lift its rates on variable home loan accounts by 45 basis points to 7.81 per cent. (ABC News: Giulio Saggin, file photo)

* Related Story: What you'll pay after RBA rate rise

* Related Story: Reserve Bank surprises on Cup Day

* Related Link: Infographic: track official interest rates

* Related Link: Statement from RBA governor Glenn Stevens

The Commonwealth Bank has been the first to react to the Reserve Bank's interest rate hike, raising interest rates by 45 basis points.

The Reserve Bank announced this afternoon it would increase rates by 25 basis points, taking the official cash rate to 4.75 per cent.

CBA announced to the share market just before 4:00pm AEDT that its standard variable mortgage rate would be rising to 7.81 per cent per annum on Friday November 5.

That will add $88 a month to a $300,000 standard variable mortgage on a 25-year term, according to CBA's own mortgage calculator.

However, its deposit rates are only rising in line with the RBA's 25-basis point increase.

Federal Treasurer Wayne Swan says he is disappointed with the Commonwealth Bank's move.

"This is a cynical cash grab by the Commonwealth Bank - there's no other way to look at it," he said.

"I think Australians deserve a lot better, especially on Melbourne Cup Day, than to have this sort of cynical decision from the Commonwealth Bank."

The Federal Opposition's treasury spokesman, Joe Hockey, says the Reserve Bank's increase could have been avoided if the Government cut back on stimulus spending.

"The Government now owns these rate increases," he said.

"It's done nothing about banking competition and it's done nothing to put downward pressure on interest rates.

"Australians should be understandably angry about this."

Funding costs

Major bank chief executives have consistently repeated warnings that higher funding costs mean home loan interest rates will need to rise relative to the official cash rate.

CBA chief executive Ralph Norris has been one of the most vocal.

In August, CBA reported a 20 per cent rise in its full-year profit to $5.7 billion.

The CBA's group executive for retail banking, Ross McEwan, says the bank's funding costs have increased 1.35 per cent since the financial crisis, while it had passed on 1.04 per cent to home loan customers before today's increase.

JP Morgan economist Helen Kevans says today's extra increase by CBA, if matched by the other major banks, will all but guarantee the Reserve Bank can stay on hold in December.

"As we have seen, some of the commercial banks have out-hiked the RBA today, so that will do some of the heavy lifting for the RBA," she said.

ANZ and Westpac say their rates remain under review following the decision, while NAB has no official comment at this stage.

Hmmmm a negitive for house prices

[jackalope]

"I think Australians deserve a lot better, especially on Melbourne Cup Day, than to have this sort of cynical decision from the Commonwealth Bank."

Wayne Swan is a pile of shit in human form but this is lamentable even by his standard. "especially on Melbourne Cup day". Christ.

[blue skies]

Leave poor old Swanie alone. he is just doing his job , have you see Repo Men?

Any way the up side is that maybe just maybe Australia will not be wiped out completly in the comming storm.

[Tiger Woods?]

Wayne Swan is a pile of shit in human form but this is lamentable even by his standard. "especially on Melbourne Cup day". Christ.

You aren't even beginning to come close.

[blue skies]

"The RBA board were very clear after the last meeting;

Quote:

If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target.

The RBA is still fighting the beast of inflation;

Quote:

CPI inflation has been running at around 2¾ per cent over the past year. That looks likely to continue in the near term.

So when last weeks figures were released;

Quote:

The CPI rose 2.8% through the year to September quarter 2010

Inflation fears won. The RBA considers the economy otherwise relatively stable.

I still think the most likely course for the economy is the housing/construction bubble coming to an end in the near to medium term. The natural consequence of this is a 'rush for the exits' for the million or so investors losing money on property.

When that happens, look to the RBA and the government to try to reignite the bubble. The Reserve will lower interest rates quickly and the government will spend more money on stimulus packages.

Overseas experience suggests that this probably won't work once the reality sets in that we do not become wealthier by buying and selling houses to each other at ever increasing prices."

[Panda]

Oz timberrrrrrrrrrrrrrrrrrrrrrrrr.......................You watch the sheep moan, nobody told the FTB rates could go up?

Its a real mess over there, a real mess, and anyone who thinks rates will not hot 8%, is in lalala............ land.

[aussieboy]

Oz timberrrrrrrrrrrrrrrrrrrrrrrrr.......................You watch the sheep moan, nobody told the FTB rates could go up?

Its a real mess over there, a real mess, and anyone who thinks rates will not hot 8%, is in lalala............ land.

That's right. Our economy is in a just terrible shape.

[JonoP]

That's right. Our economy is in a just terrible shape.

Now now, calm down, there is no need to despair :-)

[Panda]

That's right. Our economy is in a just terrible shape.

Mate, thats what you call each other right?

I have been over three times in two years, the last time just recently in the last few months. Its a mess, a real mess. Not enough domestic savings to satisfy the massive demand for credit. Ozzy's are debt addicts, houses are 8, 9 or even 10 times the local real wage. They got no money mate, houses have to fall or Oz go pop.

Rents are at peak rent, no afford no more rent without default so empty BTL, sp no pay mortgage mate.

Its a mess, Oz friggin jokers if you think you will escapre unscathed, All unsundry race to the bottom, you lot over valued currency, over valued houses, highest interest rates in the developed world.......................popppppppppppppppppppppppppp!

Night mate.................

[jackalope]

You aren't even beginning to come close.

Do you mean WS is actually worse than a pile of shit or he's a saint?