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RICS Report for September 2004


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Yet again, the old Holland chestnut is wheeled out in defense of the GSD scenario........yawn. In Autsralia, BTL loans comprise 45% of the ENTIRE MORTGAGE MARKET!!!!!!!!!!!!!! Now that's what I call over-investment.

Totally agree - the aussies have gone BTL mad. The property market has been totally driven by speculation and they are likely to experience a serious correction.

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Consumer confidence resilient in the face of higher interest rates.

Economy

Tentative signs of a slowdown in the economy have increased but activity remains firm

Despite a rise in the cost of borrowing, consumers view their financial circumstances as good, giving little reason to believe that the economy will experience a hard landing in the next year

However, risks to economic prospects remain with the global economy hitting some head winds as oil prices have jumped

Commercial property market

Business demand for commercial property has seen a muted recovery in 2004, in what is still a tenants market

Rents have been slow to respond to better demand because of relatively high vacancy rates

Despite the weakness of rental growth, investment demand for real estate is strong given the steady returns delivered over the past decade and disappointment over the equity market’s performance

Residential focus

Over the last few months most major housing market indicators suggest activity has come to an abrupt halt

There has been speculation that prices are set for an imminent fall, with some commentators suggesting that high overvaluation mean a correction is inevitable

However, more optimistic commentators believe prices are more likely to stagnate— this residential focus goes on to outline the opposing rationales

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I wouldn't give a XXXX to be a BTL'er in Australia if this guy is right.

http://www.channelnewsasia.com/stories/afp.../112191/1/.html

SYDNEY: Australia is heading for a substantial rise in its interest rates followed by recession within three years, a long term analysis by leading economic forecasters BIS Shrapnel have warned.

The report, forecasting economic conditions for the next 15 years, said it was a myth to think that Australia's so-called golden age of moderate growth, low inflation and low interest rates could continue indefinitely.

BIS Shrapnel senior economist Matthew Hassan said the Reserve Bank of Australia (RBA) would be forced to hike official interest rates by between two and three percentage points from its current level of 5.25 in the next three years

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Smeagle,

GSD=Gradual Slow Down, ie property prices reach all-time record highs and then gently float back down to a more sustainable "long-term plateau". As you can probably tell, this would pretty much be the first ever asset class to behave in this way in the history of mankind.

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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