Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Here come the stories out of Oz - the sh*t is hitting the fan. http://www.theage.com.au/news/Business/Hig...0064248504.html Quote Link to comment Share on other sites More sharing options...
Realistbear Posted February 17, 2006 Share Posted February 17, 2006 Here come the stories out of Oz - the sh*t is hitting the fan. http://www.theage.com.au/news/Business/Hig...0064248504.html Isn't this part exciting: The housing bubble has burst and investors who jumped into the housing market 12 to 18 months ago are now seeking advice regarding problems with mortgages, says Sydney accounting firm Hall Chadwick partner Geoff McDonald. OZ, Both Coasts in the US moving inexorably Eastward to the UK! Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Not that I have finished work on designing my 'I told you so' banner, but didnt I tell you so? Quote Link to comment Share on other sites More sharing options...
Jason Posted February 17, 2006 Share Posted February 17, 2006 Not that I have finished work on designing my 'I told you so' banner, but didnt I tell you so? Can we see the banner? Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Can we see the banner? If you show me yours, I'll show you mine. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted February 17, 2006 Share Posted February 17, 2006 Isn't this part exciting: The housing bubble has burst and investors who jumped into the housing market 12 to 18 months ago are now seeking advice regarding problems with mortgages, says Sydney accounting firm Hall Chadwick partner Geoff McDonald. OZ, Both Coasts in the US moving inexorably Eastward to the UK! Is it really crashing in Oz, or is this another false alarm? If it is a crash, how does Oz "affordability" in terms of salary multiples and interest rates compare to the UK? Billy Shears Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 http://www.theage.com.au/news/national/res...749.html?page=2 If it is a false alarm, why is there so much negative property news in the press? Surely they would still be ramping. http://dailytelegraph.news.com.au/story/0,...5001021,00.html http://www.theaustralian.news.com.au/commo...5E25658,00.html Quote Link to comment Share on other sites More sharing options...
BillyShears Posted February 17, 2006 Share Posted February 17, 2006 http://www.theage.com.au/news/national/res...749.html?page=2 If it is a false alarm, why is there so much negative property news in the press? Surely they would still be ramping. Are you suggesting that the press always reports what's true? If you're in the UK, do you remember an epidemic of articles about that flesh-eating bug when it was a very rare illness. Before I accept that a crash is in progress, I want to see sizeable sustained drops in prices documented by a reliable method. I'm not saying that prices aren't crashing, but have been bitten by too many announcements of crashes before. Billy Shears Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted February 17, 2006 Share Posted February 17, 2006 Not that I have finished work on designing my 'I told you so' banner, but didnt I tell you so? Bit of advice. Keep it well wrapped up to preserve it for the day you display it. Otherwise it might have faded a bit by then... Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Are you suggesting that the press always reports what's true? If you're in the UK, do you remember an epidemic of articles about that flesh-eating bug when it was a very rare illness. Before I accept that a crash is in progress, I want to see sizeable sustained drops in prices documented by a reliable method. I'm not saying that prices aren't crashing, but have been bitten by too many announcements of crashes before. Billy Shears OK, I bought house in Oz in 2002, tried to sell in 2004. 12mths and 100k reduced later and still no sale. That was a 20% drop. Took us back to only about $10k more than we paid. In the meantime, the price has dropped even more. All the houses for sale around us were experiencing the same thing. Our house, like all those around us, was only 2 years old, immaculate with pool and definitely not overpriced. We also looked extensively when we bought and paid less than market price at the time. Go figure. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted February 17, 2006 Share Posted February 17, 2006 OK, I bought house in Oz in 2002, tried to sell in 2004. 12mths and 100k reduced later and still no sale. That was a 20% drop. Took us back to only about $10k more than we paid. In the meantime, the price has dropped even more. All the houses for sale around us were experiencing the same thing. Our house, like all those around us, was only 2 years old, immaculate with pool and definitely not overpriced. We also looked extensively when we bought and paid less than market price at the time. Go figure. I'm sorry to hear about your personal difficulties. It's true that my future depends on the housing bubble bursting here in the UK, but I'm not the type to take pleasure from other people's difficulties. Billy Shears Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Just trying to provide a reliable and sustainable example. Many people I know in Oz (on the ground) are well aware of the state of the market. Everyone can decide for themselves. I am just trying to contribute and have some light banter. At the end of the day, I don't really care what opinion people on this forum form of me. My situation is not that bad, I don't have a serious illness, I can walk, I have a roof over my head. I'm just trying to say that things are not as rosy as they may seem. Whatever happens, we can't control anyway! Bit of advice. Keep it well wrapped up to preserve it for the day you display it. Otherwise it might have faded a bit by then... Then I'll make another one, bigger and better. Quote Link to comment Share on other sites More sharing options...
Battenberg Posted February 17, 2006 Share Posted February 17, 2006 Are you suggesting that the press always reports what's true? If you're in the UK, do you remember an epidemic of articles about that flesh-eating bug when it was a very rare illness. I actually lost a whole nights sleep over that. I kept the radio on all night next to my bed awaiting the latest news flash 'cause I thought it was going to big and we were all doomed. Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 I actually lost a whole nights sleep over that. I kept the radio on all night next to my bed awaiting the latest news flash 'cause I thought it was going to big and we were all doomed. - me too - was convinced I was going to get it (that's my OCD!) Quote Link to comment Share on other sites More sharing options...
Hino98 Posted February 17, 2006 Share Posted February 17, 2006 (edited) Hi BS, I'm in Australia, south of Newcastle NSW. I'm an ( accidental ) STR, looking to buy as soon as I feel the market is right. So I feel I'm pretty much up to speed with house prices in this area. I don't know what you mean by "a reliable method". But I've been monitoring the house prices locally, and in this area we've seen falls in the order of 30-40% over the last couple of years. I live in a small town and my wife has been in Real Estate for over twenty years, so not only do I have a pretty good insight into the local market, I also know all of the local EA's personally. The EA's are having to lay off staff, reduce their advertising and outgoings and two agents at least, are advising prospective vendors, if you don't need to sell, don't try to sell. About the only properties that are selling are at the bottom of the market in FTB territory. Here in New South Wales, FTB's get a grant of $7,000 from the government, so they can walk into a lower priced property, without laying out a cent of their own money. Across the street from me is a brick and tile two bedroomed cottage with good lake views. It's a deceased estate, and first went on the market over a year ago for $395K. The house is on a small, sloping block, without a garage and is exposed to a lot of traffic noise. At that time the market was definitely softening and the asking price was too high, though with a bit of luck, it was still achievable. Now the price has dropped to $340K and in the present market, it must be $100K off the mark. In these parts, $240K will give you a choice of dozens of brick and tile two bedders, with garage, on a decent sized patch of dirt, in a good area. Though without the lake views A hundred yards down the road, is what used to be my BiL's place. He sold it to a developer for $750K. it's large block, with a upward slope from the street leading to a crest where the original house was built. From the crest of the block, there are great lake views. The developer put in plans for twenty townhouses and units to be built on the site with almost all of them to have lake views. In order to achieve his vision he had to change the whole topography of the block. Hundreds of thousands of tons of dirt were removed, to change the slope of the block, downwards towards the lake. All the dump trucks had to drive past my place, which is on top of the hill, and they would be on the go from 7AM until 5PM, so I got to know the trucks pretty well :angry: The proposed units were originally offered for sale through the most prestigious EA in town, though when they failed to find buyers, the properties ( $500K min. ), were then moved to another agent. Soon I noticed that the builder had changed earth moving companies, and then changed companies again. I spent many years working on building sites, and one of the first signs of impending disaster, is when the builder, starts to swap 'subbies'. So I figured things weren't going quite to plan. Now all activity on the site has ceased, all equipment has been removed, and two days ago, the 'porta-cabins' and toilets went. The job has well and truly stopped. It must have cost an easy $2M to get this far with probably another $3M needing to be spent on the site, to bring it to completion. No sales means no cash flow means no completion. The subbies get stiffed, the builder get stiffed, anyone who has placed a deposit gets stiffed, the investors get stiffed, the neighbours get stiffed, the local council gets stiffed and the developer moves on to his next project. This site is only one of many building units and townhouses in this area. There is a clause in the local planning laws that allow developers to force through developments for people over 55 years of age. As a result, the whole area is flooded with units and townhouses. The EA's have so many on their books, that they don't even advertise them. Some will publish a list of areas where they have units for sale, others have separate advertising pamphlets listing all the units they have for sale. No photographs, precious few details apart from the number of bedrooms, the price and the address. Three years ago, you wouldn't have been able to buy a 'chook hutch' in this area for less than $250K. Now I can buy a three bedroom timber cottage in good condition, in a nice area and sitting on a quarter acre of dirt for $150K Reliable enough ? Edited February 17, 2006 by Hino98 Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Hi agian Hino98 - long time no hear. As my property is located not far from Newcastle I would just like to say a big 'too-shay' to all you doubting thomases! Ya can't say I didnt warn ya! 30-40% ouch. Of course, it will never happen hear because prices NEVER go down. Quote Link to comment Share on other sites More sharing options...
njwd Posted February 17, 2006 Share Posted February 17, 2006 (edited) A question to those in the know with the AUS market. What have been the overwhelming factors to start the crash and can you see parallels with the UK? It is often touted that interest rates need to be the catalyst, but I'm not so sure. Debt levels, sentiment, and the general economy (unemployment, inflation) will be huge factors this time round. Edited February 17, 2006 by njwd Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 I have been trying to tell everyone that it is following EXACTLY the same path here. Its just that it started in earnest in Aus in around late 2004. That is when sentiment began to turn as people realised that prices DO NOT go up forever. OK, so there has been about 18mths of soft landing talk, EA's making all the excuses under the sun until they ran out, flatteing, correction, rebound - sounding familiar. And finally, whammo, prices going down, down, down. Many people who priced property too high found themselves chasing the market down. My house appeared on the front page of the local newspaper property section with a big feature inside (agents trying everything) - no one came to look. Buyers were cottoning on and offering ridiculous prices. Sellers were digging heels in. Standoff. First to go were new build apartments etc. Million dollar + market was still doing well for a while. The much touted 'spring bounce' equivalent just led to an oversupply. Anyway, driving factor (even though rates are still relatively low as is unemployment) is that FTB's can't buy so the chain stopped. Ratio of earnings to house prices also factor. Investors pulling out as yeilds became less attractive (as prices rose). My EA's (young) were flumoxed - never had to try and sell a house before you see, they just walked off the shelves. I had two different agents at different times and both times the agent for my house left the job. Anything sounding similar??? I want to know why people think the UK is going to be different? Please do tell, because if prices aint gonna drop here I'll concentrate on paying off my mortgage! Quote Link to comment Share on other sites More sharing options...
njwd Posted February 17, 2006 Share Posted February 17, 2006 Cheers. It's good to hear the first hand experience of the situation in other countries. I hope it sorts itself out for you. Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 17, 2006 Share Posted February 17, 2006 Cheers. It's good to hear the first hand experience of the situation in other countries. I hope it sorts itself out for you. Thanks. Looks like I'm gonna be stuck with that pile of bricks and mortar for a good few years yet! I wonder if we will hear people in the UK saying the same thing one day.. Quote Link to comment Share on other sites More sharing options...
Hino98 Posted February 17, 2006 Share Posted February 17, 2006 Hi WaL I live in Toronto on the shores of Lake Macqarrie, and I think the lake has really been the downfall of the local market. Sydney people come up here, see the local prices and think they have died and gone to heaven. The Sydney money and the development money really added to the recent 'boom' in prices. Realistically there is very little to drive the prices in these parts. There is very little employment, and most of the employment available is low skilled, low pay. The "Housing Commission' soaks up most of the bottom end of the market, though recent changes to the Commission rules, mean that some of their tenants are now becoming FTB's. We have a large retiree population, but I know that many retirees who move here from Sydney, quickly regret the decision. There are precious few medical facilities in the area. There are plenty of GP's, but a specialist or hospital visit, usually involves a half hours drive...... if you have a car. If you have to rely on public transport, a ten minute appointment at a local hospital, might well take you all day. Toronto has really grown since the freeway was built, when I first came here, the main street didn't even have Kerb and guttering Now we are almost Northern Sydney suburb, yet the town has very few facilities, no cinema, no decent restaurants, no decent pubs. We have two supermarkets, but no specially shops, if you need anything you wouldn't normally find on a supermarket shelf, then you are probably up for at least an hours drive ( round trip). As our house market was driven by all the Sydney money rushing into town, so the local market downturn has also been exaggerated by so much Sydney money leaving. The local people seem to have accepted that the housing 'boom' was a 'one off' and they are the ones willing to sell at whatever the market decrees is a fair price. But the Sydney 'investors' and the 'Johnny come lately's' are the ones trying to hold onto a price to the bitter end. I suspect because they are so far in debt, that they cannot afford to sell at a lower price. Not too many "mortgagee in possession" sales yet, but enough to tell the tale. The EA advertisements are full of "desperate vendor", "bank says sell", "keeping this is not an option" type ads, and the auction clearance rate is less than 50%. I wouldn't urinate on a developer if I saw one on fire, but I have no wish to see the younger people who are guilty of no greater crime than buying at the wrong time get hurt. I really do think that this is only the start of this downturn. The property in general, and investment property in particular image, has become as transparent as the Kings magic suit of clothes. No capital gains, inadequate returns from rents, depreciating asset, and the likelihood of interest rate rises....... All offers considered What area is your place in ? Quote Link to comment Share on other sites More sharing options...
fdk Posted February 17, 2006 Share Posted February 17, 2006 But wasn't the Oz crash triggerred by the government introducing some sort of extra tax on investment properties which caused investors to flood the market before a certain deadline had passed ? I'm not saying the UK won't crash because I believe it will - just that the Oz crash was given a bit of a push, something we don't have in the UK at the moment. Quote Link to comment Share on other sites More sharing options...
kinesin Posted February 17, 2006 Share Posted February 17, 2006 (edited) Is the Oz market fully in sync? i.e is there a uniform raise/fall across the country? In the Uk at the moment, the VI spin seems to be that just because The east side of Preston on the two roads surrounding the crack house has increased in value the whole of the UK is experiencing a boom! The locallised drag factors in the UK seems to playing a massive part, with people failing to realising prices are falling in certain areas. Edited February 17, 2006 by kinesin Quote Link to comment Share on other sites More sharing options...
ajh Posted February 18, 2006 Share Posted February 18, 2006 Is the Oz market fully in sync? i.e is there a uniform raise/fall across the country? Short answer, no. Southern/Eastern Australia (75% of population) flat to falling. Northern Territory/Western Australia/Queensland still strong. Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted February 20, 2006 Share Posted February 20, 2006 That only happened in NSW and was abolished. Once it was abolished the market continued to slide, so had to be more than that. But wasn't the Oz crash triggerred by the government introducing some sort of extra tax on investment properties which caused investors to flood the market before a certain deadline had passed ? I'm not saying the UK won't crash because I believe it will - just that the Oz crash was given a bit of a push, something we don't have in the UK at the moment. Hi WaL I live in Toronto on the shores of Lake Macqarrie, and I think the lake has really been the downfall of the local market. Sydney people come up here, see the local prices and think they have died and gone to heaven. The Sydney money and the development money really added to the recent 'boom' in prices. Realistically there is very little to drive the prices in these parts. There is very little employment, and most of the employment available is low skilled, low pay. The "Housing Commission' soaks up most of the bottom end of the market, though recent changes to the Commission rules, mean that some of their tenants are now becoming FTB's. We have a large retiree population, but I know that many retirees who move here from Sydney, quickly regret the decision. There are precious few medical facilities in the area. There are plenty of GP's, but a specialist or hospital visit, usually involves a half hours drive...... if you have a car. If you have to rely on public transport, a ten minute appointment at a local hospital, might well take you all day. Toronto has really grown since the freeway was built, when I first came here, the main street didn't even have Kerb and guttering Now we are almost Northern Sydney suburb, yet the town has very few facilities, no cinema, no decent restaurants, no decent pubs. We have two supermarkets, but no specially shops, if you need anything you wouldn't normally find on a supermarket shelf, then you are probably up for at least an hours drive ( round trip). As our house market was driven by all the Sydney money rushing into town, so the local market downturn has also been exaggerated by so much Sydney money leaving. The local people seem to have accepted that the housing 'boom' was a 'one off' and they are the ones willing to sell at whatever the market decrees is a fair price. But the Sydney 'investors' and the 'Johnny come lately's' are the ones trying to hold onto a price to the bitter end. I suspect because they are so far in debt, that they cannot afford to sell at a lower price. Not too many "mortgagee in possession" sales yet, but enough to tell the tale. The EA advertisements are full of "desperate vendor", "bank says sell", "keeping this is not an option" type ads, and the auction clearance rate is less than 50%. I wouldn't urinate on a developer if I saw one on fire, but I have no wish to see the younger people who are guilty of no greater crime than buying at the wrong time get hurt. I really do think that this is only the start of this downturn. The property in general, and investment property in particular image, has become as transparent as the Kings magic suit of clothes. No capital gains, inadequate returns from rents, depreciating asset, and the likelihood of interest rate rises....... All offers considered What area is your place in ? Howdy H - my place is in Woongarrah, just off Freeway on Central Coast. My husband and I both worked in Newcastle when we lived there. Luckily, we had half the value of the property for deposit and am getting max rent for the area (house has pool, so can put a bit of a premium if someone wants a pool in particular). Our only hope is that when the develop the new town centre in Woongarrah things will get better. Lots of development planned, so hope they actually do it! I was brought up in Sydney, but don't like it at all. I would rather live on the 'mental coast'. Toronto is nice. The ex-CEO of Hunter Health lived there, so can't be bad! Quote Link to comment Share on other sites More sharing options...
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