Australia Faces Its Demons

[UncleKev]

Its hard to see what will drive OZ property prices up by 50% once the artificial taxpayer funded stimulus is removed.

Top end Gold Coast properties marked down

OWNERS of prestige property on the Gold Coast are being forced to settle for almost 20 per cent less than the asking price.

Home owners at Surfers Paradise and Paradise Point have taken the biggest hit, while unit owners in Main Beach, Hope Island and Broadbeach are also being forced to accept reduced offers to offload top quality stock.

During the past 12 months there have been 54 sales in Surfers Paradise with the median house price at just over $1.2 million - an average discount of 18 per cent from the original price.

In Paradise Point there have been 115 sales in the past 12 months with a median price of $825,000 - 16.4 per cent less than the asking price.

There were 170 units sold at Main Beach in the past year at an average $615,000, representing a 13.6 per cent drop in value.

The median price for a Hope Island unit stands at $688,000 - a 12.3 per cent discount based on 243 sales in the past 12 months.

http://www.news.com.au/business/money/story/0,28323,25895587-5013951,00.html

[Guest DissipatedYouthIsValuable]

Flaming Koalas! The Aussie recession is over!

[UncleKev]

The world has gone mad ......

Demand soars for budget real estate

SOARING demand for affordable residential real estate is prompting buyers to pay tens of thousands of dollars more than the advertised price on websites and has even sparked a punch-up at an auction in Sydney's Parramatta.

http://www.news.com.au/business/money/stor...5013951,00.html

Thats right, Ozzies are punching each other in the rush to buy over priced property and get into ridulous levels of debt.

Total madness. I believe the last days of the tulip bubble in Holland saw a similar feeding frenzy as the last of the bigger fools piled into the ponzi scheme.

[Guest DissipatedYouthIsValuable]

And how much is the average wage up, somewhere in line with the absurd growth in houseprices?

[Guest DissipatedYouthIsValuable]

Affordability is back on the long term trend when it comes to disposable income. Cheaper to buy than rent in many suburbs its a no brainer

You're a milker of humans.

[Te Mata]

Affordability is back on the long term trend when it comes to disposable income. Cheaper to buy than rent in many suburbs its a no brainer

I'd like to know which suburbs that is in.

Care to name a couple?

[Guest DissipatedYouthIsValuable]

I think of it as a provider of shelter, jobs and economic stimulus....all at my risk, my country needs more risk takers like me

i had a nice bottle of red last night it was called "Mothers Milk"

Do you sleep like a baby?

[mattydread]

You're a milker of humans.

Nah. He's the Sibley of Oz - deluded fukker.

[Guest DissipatedYouthIsValuable]

I think the evidence would show that the bears with their forecasted big drops may be construed as the delued angry ones at the moment.

No, I'm just sobbing as I face the embittering reality that I'm just not good enough to live on this planet.

*Offs self*

[Te Mata]

I'd like to know which suburbs that is in.

Care to name a couple?

*BUMP*

Bardon, where are these suburbs where it is cheaper to buy than rent?

[mattydread]

I think the evidence would show that the bears with their forecasted big drops may be construed as the delued angry ones at the moment.

Apologies Bardon - GF is Aussie.

Ramp it down, please.

[Guest DissipatedYouthIsValuable]

I read something in a book once.

It wasn't true.

I used to cry....

But now, I siiiiiiiiiiiiing, siiiiiiiiiiiiiing liiiiiiiike a biiiiiiiiiiiiiiiiird

Biiiiiiiiiiiiiird in the skyyyyyyyyyyy

I don't know whyyyyyyyyyyy

But I'm singiiiiiiiiiiiiin

[mattyboy1973]

There is to many to mention, I would crash this site if I were to list them all, one that is close to home that looks particulary opportunistic is Fortitude Valley.

http://www.theaustralian.news.com.au/busin...1-36418,00.html

but those figures are total nonsense Bardon - I hope that's not your best example!

For a start they are using the raw median of 11 sold homes as they themselves say " this median price is low because the 11 houses that were sold are mainly from the bottom end of the market" - so lets add that 32% back on (as according to you, prices haven't really dropped at all over the last year). That near a 50% increase takes us back to $600k if we are to compare apples with apples.

IO mortgage - OK, fair enough, and the rate of 5.8% is fair enough. But what about rates, water, repairs, building insurance? All of those are included in the rent.

Get real - the house I live in now yeidls under 2% gross using my rent and the sales cost of the house next door (last year).

[Te Mata]

There is to many to mention, I would crash this site if I were to list them all, one that is close to home that looks particulary opportunistic is Fortitude Valley.

http://www.theaustralian.news.com.au/busin...1-36418,00.html

Bardon, You cannot look at medians.

Here is a unit in the Valley at $355k "boasting" of a guaranteed rent of $365 per week.

A $300k mortgage is $1,885.51 per month (PLUS OUTGOINGS) with gross rent at $1580 per month.

http://www.realestate.com.au/cgi-bin/rsear...p;tm=1250034641

That ain't cheaper than renting.

[mattyboy1973]

Absolutely at the bottom of the cycle, Sydney is such a clear example of this I dont know how one could doubt it.

Dont know how we could organise a bet and yes 50% nominal is very possible.

50% real Bardon - I'll take you on you honour - let's make it a slab of little creatures.

[Te Mata]

Its the daggy ones that are +ve not the new ones.....

If you want to see something really scary I will post some storker cf+ deals later on I am on the road the moment.

I mean these ones are real money makers in so much as the ROI is infinity..

probably good to live in as well if I was a ftb thats where Iwould be buying..you have got be quick though....

the real good deals dont make real estate . com...............

I'm interested to see if there are some deals as you say. Whenever you have time.

[mattyboy1973]

The Governor is not concerned about debt levels and reckons they compare well with our peers. This HPC better hurry up or it will miss the boat.

he also said this, at the same time:

Mr Stevens refused to describe the boost in house prices, prompted by increased government grants, as a bubble.

But he said it would be worrying if policy did not help improve the supply of housing at a time when materials and labour were widely available.

''For a country of our size … and the population we have, it still strikes me a little bit hard to explain why the price of dwellings are at the upper end of what you see internationally.''

yes - he wouldn't use the word 'bubble', but the terms he did use are about as strong as any central banker is ever going to use. Glenn Stevens thinks that houses are overvalued in Australia.

[Guest DissipatedYouthIsValuable]

Australia is already on the moon.

[mattyboy1973]

Mattyboy are you up for the earlier bet ?

OK Bardon but we will need to agree on a reasonable index to use, and the current and projected value at end time.

this doesn't look too supportive of prices in the first home buyers market:

Banks tighten credit to first-home buyers

Danny John

August 17, 2009

SIX OF the country's nine banks have tightened the amount of money they are prepared to lend to first-home buyers in a response to claims that the Federal Government's cash handouts to the housing market are causing a bubble in prices.

The lower limits came into effect four months ago and cover the period in which the first-home buyers' grants for new and existing properties amounting to $21,000 and $14,000, respectively, were providing a boost to sales at that end of the sector.

Most of the domestic banks and selective overseas lenders such as HSBC have been the big beneficiaries of the additional lending which has been fuelled by the substantial cut in interest rates since last October.

Those cuts have enticed tens of thousands of first-time buyers into the market in the hope that borrowing costs will remain low as the Reserve Banks seeks to stop the economy from slipping into a deep recession.

The banks have sought to encourage that with discounted offers on their standard variable mortgage rates - the most popular form of mortgage borrowing - and at the same time take some of the sting out their exposure to the size of loans being taken out.

According to research conducted by Deutsche Bank, ANZ, NAB, Westpac, St George, BankWest, and Bendigo and Adelaide Bank reduced their maximum borrowing limits significantly between last November - when the stimulus from the grants started to flow - and April.

Deutsche adopted a ''mystery shopper'' approach and cold-called the banks about their mortgages, claiming to be a buyer with an income of $70,000 with a full-time job, no dependants and a good credit history.

Its researchers discovered that the biggest cut had been imposed by St George, which had lowered its previous amount by $55,000 to $400,000. Its parent, Westpac, lopped $33,000 off its $479,000 total while ANZ went $13,000 better than that and reduced its limit from $485,000 to $439,000.

BankWest dropped its maximum by $28,000 to $442,000 while Bendigo lowered its lending limit to $420,000 from $430,000.

As for National Australia Bank, it has largely stayed out of the first-home buyers lending race given its previous imposed maximum of $310,000. It then cut that to $290,000 in April.

But the market leader and biggest lender, the Commonwealth, kept its limit at $420,000, as did Suncorp at $450,000. The Bank of Queensland was the sole bank to raise its maximum, by $7000 to $425,000.

There were few changes to the minimum deposits required to be put down by buyers - typically 5 to 10 per cent of the total price of the property. Loan-to-value ratios were also little changed, with the average ranging from 90 per cent to 95 per cent.

But lenders continued to respond to demand for new lending by offering discounts of between 0.5 per cent and 0.7 per cent on their standard variable mortgages which currently range from 5.74 per cent (Commonwealth) and 5.9 per cent (Bendigo).

However, BankWest, owned by the Commonwealth, is still offering a 4.8 per cent rate while the other lenders are hovering around 5.8 per cent.

http://business.smh.com.au/business/banks-...90816-embl.html

mind you the multiples are still out there imo.

[Pelorus Pete]

When the Aussie Govt started this – I likened it to the Sub=Prime in the states.

These 1st home buyers will be slaughtered when rates go back up – which they will. When the governments start pulling support off – via low interest rates etc – it will go back to what it should/used to be.

People with cash will be rewarded and encouraged to invest by getting GOOD returns on investments (not like now) and people who have too much debt will be sunk/gone/out/F~~cked

Just hope it hurry’s up before it destroys all the Western world’s financial structures

[UncleKev]

Relief for renters as rates fall

RELIEF may be in sight for renters who have been hit in the hip pocket by skyrocketing rents over the past few years. There has been a small decrease in rental rates across Australia's capital cities over the June quarter, suggesting rental yields may have hit their peak, leading property statistics agency RP Data says.

Weekly house rents fell by 3.5 per cent nationally over the June quarter while unit rents dropped 0.6 per cent.

The largest fall was in the Canberra market with a drop of six per cent for the June quarter in the housing market, where the median weekly rent fell from $530 in March to $498 in June.

The only mainland capital city to experience a nearly six per cent rise in rent was Darwin, where renters can expect to fork out about $100 more per week than those in Sydney, where rents dipped by about five per cent.

"It now appears that the rental market may have peaked with national weekly median rents falling slightly in each month post March 2009,'' RP Data's Tim Lawless said in a statement.

"And with rental rates now coming off the boil and property values rising we are seeing the first signs that rental rates are eroding.''

Rental vacancies remain tight across the nation with all capitals recording less than three per cent vacancy in stock.

http://www.news.com.au/business/money/stor...5013951,00.html

Comment: Rental vacancies remain tight, but young Aussies are ready to move back into mum and dad's Mc Mansion and the immigrants are happy to live 15 to a room, so who cares about vacancy rates if the price is not right?

[Mmmm]

Hi All

I moved out to Adelaide at the end of last year and have been renting whilst waiting to see how the market turned out. Like many I was expecting prices to fall, for reasons that many of you will all be familiar with, ie if it kind of looks like a huge bubble then it probably is. But with the way the economy had held up here and the general level of public confidence about prices I am beginning to wonder if this bubble will ever burst. So now I'm trying to get my head round the arguments from both sides.

There is something I am confused about. House prices are going up, but rents and rental yields are now going down.

http://www.gcast.com.au/ObjectData/Partner...753e4f/tide.htm

In my ignorance, I am presuming that these two things are incompatible in the long term. Maybe someone can explain?

[Mmmm]

An excellent new investment package is hitting the market with each investor receiving a minimum $8,672 TAX FREE from the Rudd Bank paid directly to you, every year for 10 years. Its called the National Rental Affordability Scheme (NRAS).

I am looking at a deal whereby you buy a brand new apartment in a good location and Rudd will give you the above figure tax free for 10 years provided that you rent the apartment for 25% below the market rent.

If I were to by this on 104 % finance it would make me about $7k a year in +ve cashflow after tax.. So on a $1 investment thats a pretty good ROI in anyones books,

Its a new way of investing the risk is lower and by only charging 75% of market rent how much vacany would you expect to get ?

And yes the growth is cream......

Sorrry to dash your hopes for world domination Bardon but the NRAS incentive is only available to institutional investors, See extract from the propsepctus below. Apart from the fact that it's inequitable. ie it will benefit some renters, but not others which is basically unfair, the NRAS looks like a pretty good policy. At least it will help some people with their rent and can only have a positive effect on affordability for buyers as it will encourage new construction. And I suppose the commercial property trusts need as many tax dollars as they can get at the momment

"The National Rental Affordability Scheme is targeting financial institutions with an interest in this new

class of residential property investment. These institutions may include banks, superannuation funds

(excluding self-managed superannuation funds), credit unions, property trusts listed on the ASX and

unlisted property trusts.

Companies and not-for-profit organisations with relevant expertise in the property and/or tenancy

management sectors may also apply for incentives under the Scheme.

Projects sponsored by a consortium of institutional and/or commercial investors and not-for-profit

organisations are encouraged for the purposes of the Scheme.

The Scheme is not targeting small, individual investors, although they may invest in a participating

investor, such as a property investment trust or a superannuation fund."

http://www.qchc.asn.au/Portals/0/Uploads/A..._prospectus.pdf

[Panda]

Hi All

I moved out to Adelaide at the end of last year and have been renting whilst waiting to see how the market turned out. Like many I was expecting prices to fall, for reasons that many of you will all be familiar with, ie if it kind of looks like a huge bubble then it probably is. But with the way the economy had held up here and the general level of public confidence about prices I am beginning to wonder if this bubble will ever burst. So now I'm trying to get my head round the arguments from both sides.

There is something I am confused about. House prices are going up, but rents and rental yields are now going down.

http://www.gcast.com.au/ObjectData/Partner...753e4f/tide.htm

In my ignorance, I am presuming that these two things are incompatible in the long term. Maybe someone can explain?

I hear it coming? ssssssssssssssssssssssssssssssssssssssssssssssssssssssssPopppppppppppppppppppppp

pppp!

BARDON = ARDNOB!

[ParticleMan]

Bardon me old china, how the merry heck are ya.

... and did you see last week's Bloomberg on China cement v industrial output?