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Thucydides

Property Values Plummet Across Australia

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http://www.theaustralian.news.com.au/story...16-2702,00.html

"The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards has warned of tough times ahead.

"It looks like we're moving into a one-in-100-year event," Mr Edwards is quoted as saying."

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http://www.theaustralian.news.com.au/story...16-2702,00.html

"The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards has warned of tough times ahead.

"It looks like we're moving into a one-in-100-year event," Mr Edwards is quoted as saying."

Not so long ago I was hearing idiots talking about 16% increases coming to the property market in certain states. They were warned, but as ever, these fools know best.

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Guest Winnie

This is sooner than we thought...though clearly ineviatble.

Aussies do look closely at the motherland and of course the UK is now hurtling towards disaster. Confidence and sentiment combined with a sneaking suspicion that China, their new mothership is due for a significant growth pause, will be the clincher I guess.

About time - overpricing on a spectacular scale for a faraway land. The original settlers were all, by definition "entrepreneurs" to euphemise. - and it is in the Aussie blood to be uber-commercial and gung-ho......... This has led to a massive bubble, just as in the UK. :blink:

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This is sooner than we thought...though clearly ineviatble.

Aussies do look closely at the motherland and of course the UK is now hurtling towards disaster. Confidence and sentiment combined with a sneaking suspicion that China, their new mothership is due for a significant growth pause, will be the clincher I guess.

About time - overpricing on a spectacular scale for a faraway land. The original settlers were all, by definition "entrepreneurs" to euphemise. - and it is in the Aussie blood to be uber-commercial and gung-ho......... This has led to a massive bubble, just as in the UK. :blink:

Couldn't agree more. Australian housing stock ridiculously over-valued for years now, with average wage/house price ratio one of worst in world. A giant bubble pop inevitable I'm afraid, and long over due. I disagree about its "far away" status having a bearing though; the country has a very high standard of living (far exceeding UK) and prices reflect this, but like in UK, they are far too high and I am seriously expecting a third off minimum, in both nations. Those $500,000 beauties are going to be going for $350,000 MAX.

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Also, certain cities like Perth are overwhelmingly English and a large amount of properties bought there are bought with British equity. This is drying up faster than a puddle in the outback, and the consequences will add to the problem. But I wanted to comment on your first sentence about how quickly thius is happening. I am amazed at how quickly thisd thing is catching fire in Australia - I wasn't expecting it to take off for at least 6-12 months after pommyland went down.

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Also, certain cities like Perth are overwhelmingly English and a large amount of properties bought there are bought with British equity. This is drying up faster than a puddle in the outback, and the consequences will add to the problem. But I wanted to comment on your first sentence about how quickly thius is happening. I am amazed at how quickly thisd thing is catching fire in Australia - I wasn't expecting it to take off for at least 6-12 months after pommyland went down.

The housing market will be drier than a pommies bath towel before you know it :lol::lol::lol:

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Guest KingCharles1st

And to think that six months ago the dyed i nthe wool middle aged british plumber who did my my block of four houses emmgrated to Oz because of the influx of Polish labour here and could no longer make a decent living...

Poor ******er

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http://www.theaustralian.news.com.au/story...16-2702,00.html

"The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards has warned of tough times ahead.

"It looks like we're moving into a one-in-100-year event," Mr Edwards is quoted as saying."

Perhaps Mr Edwards would have more credibility if, instead of using his mouth to hoover caviar and champagne wrapped in $100 bills and staggeringly immoral mortgages, he'd opened it earlier to prevent prices rising 20% a year and getting everyone into this mess in the first place.

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http://www.theaustralian.news.com.au/story...16-2702,00.html

"The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards has warned of tough times ahead.

"It looks like we're moving into a one-in-100-year event," Mr Edwards is quoted as saying."

Interesting article.

Some observations:

-The quality of housing data in Australia is very low. Different surveys seem to contradict one another here so it is hard to get a clear picture of what's going on: the UK is much better served. This report does feel right, though. Having said that, you have to realise that the suburb-by-suburb approach in Sydney doesn't work to well, particularly in Palm Beach where supply is always thin and impossible to case-adjust.

-This article looks to be positioning itself to talk down the chances of rate rises

- I'm looking to trade up in the eastern bubs of Sydney (so am not in the business of talking up the market). The houses I would look at are passing in like they did in the last down market in the area that I can remember (end 02) but then are selling toot sweet way above their meaningless auction reserve (which they also hit at auction - the old EA trick). Others are sticking, though.

BTW one of the few market observers who is consistently correct from an economic standpoint is Bill Evans from Westpac. He presents often to groups where I work and has been on the money most times with IRs, ForEx etc. He's consistently described the housing market as being overpriced and has stated baldly that prices will come down in each presentation. From memory, Sydney is the least exposed of the capital cities from a PE perspective by a fair amount. However, if you subscribe to that point of view, you should also accept the rest of his analysis which describes a serious housing shortage caused by immigration etc which is found to be contentious by many on this site.

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Interesting article.

Some observations:

-The quality of housing data in Australia is very low. Different surveys seem to contradict one another here so it is hard to get a clear picture of what's going on: the UK is much better served. This report does feel right, though. Having said that, you have to realise that the suburb-by-suburb approach in Sydney doesn't work to well, particularly in Palm Beach where supply is always thin and impossible to case-adjust.

-This article looks to be positioning itself to talk down the chances of rate rises

- I'm looking to trade up in the eastern bubs of Sydney (so am not in the business of talking up the market). The houses I would look at are passing in like they did in the last down market in the area that I can remember (end 02) but then are selling toot sweet way above their meaningless auction reserve (which they also hit at auction - the old EA trick). Others are sticking, though.

BTW one of the few market observers who is consistently correct from an economic standpoint is Bill Evans from Westpac. He presents often to groups where I work and has been on the money most times with IRs, ForEx etc. He's consistently described the housing market as being overpriced and has stated baldly that prices will come down in each presentation. From memory, Sydney is the least exposed of the capital cities from a PE perspective by a fair amount. However, if you subscribe to that point of view, you should also accept the rest of his analysis which describes a serious housing shortage caused by immigration etc which is found to be contentious by many on this site.

You may find your pommy buyers drying up soon though as they are all going to be in deep shit soon and wont be able to get on the boat!

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There are already troubles across the channel. I am seeing lots of places that are clearly in the middle of a renovation where someone has downed tools still holding a plaster bat as they walk out. I saw one where there was clearly a decision to take the money. Went from 80K to 41,950. I reckon where-ever brits have formed property colonies will be feeling the crunch as mother england slowly snaps her back.

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Any of you guys interested in coming along to a HPC meet up in Brisbane ?

We have a few takers for Wednesday 21st August at Plough Inn 6pm.

Perhaps Mr Edwards would have more credibility if, instead of using his mouth to hoover caviar and champagne wrapped in $100 bills and staggeringly immoral mortgages, he'd opened it earlier to prevent prices rising 20% a year and getting everyone into this mess in the first place.

Ruisort yes very true you have to wonder about this guy as his entire business is about advising investors where to buy residential investment property. A recent article was quoting John predicting price drops in Sydney and then telling investors to be ready to swoop on the low prices in the same article. Not quite sure about his motivation here maybe just to try and make the case for no more IR rises.

I'm looking to trade up in the eastern bubs of Sydney (so am not in the business of talking up the market). The houses I would look at are passing in like they did in the last down market in the area that I can remember (end 02) but then are selling toot sweet way above their meaningless auction reserve (which they also hit at auction - the old EA trick). Others are sticking, though.

Many contrarians working the eastern suburbs would be very happy with this article.

From memory, Sydney is the least exposed of the capital cities from a PE perspective by a fair amount.

Generally speaking given the below average perfromance of Sydney since 03 it could hardly be called a bubble and therefore least susceptible to a slump so I would agree with that one aussieboy.

Also, certain cities like Perth are overwhelmingly English and a large amount of properties bought there are bought with British equity. This is drying up faster than a puddle in the outback, and the consequences will add to the problem.

Thucydides do you think that UK equity contributed to the WA property boom, do you have any data I would be interested to see what impact that it has had.

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Thats funny - my Aussie cousin was over visiting last week - said the housing market in Melbourne was 'stabilising'. I guess that was just code for crashing.

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what is this "one in a 100yr event" the Aussie meeja and politicians keep referring to? Aus. had a shocking recession in late 80's early 90's. <_<

They certainly did but that did not correlate with a HPC though.

In Brisbane 95 the median house price went down a whopping 2%, we are bracing ourselves for worse or better this time round depending on your perspective.

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Ruisort yes very true you have to wonder about this guy as his entire business is about advising investors where to buy residential investment property. A recent article was quoting John predicting price drops in Sydney and then telling investors to be ready to swoop on the low prices in the same article. Not quite sure about his motivation here maybe just to try and make the case for no more IR rises.

Nothing maybe about it, unfortunately: "It points to a situation where unless the government and Reserve Bank take action Australia could move into a recession."

Again, Mr Edwards, as I have learnt from this site, we'd all be a lot better off if you had the integrity to say something when the madness is happening and stop prices from going crazy, rather than demanding public money to prop up your selfish industry when it is clearly unsustainable.

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They certainly did but that did not correlate with a HPC though.

Very little does. Unlike the UK, there is no correlation between mortgage approvals and HPI +6m. The data is on another site with a similar focus to this for those who only believe raw data.

Edited for typo.

Edited by aussieboy

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Well the pommies dont think its all bad for the ozzie housing market

http://www.guardian.co.uk/business/feedarticle/7649891

Australia housing dodges worst of global wreck, Monday July 14 2008

SYDNEY, July 14 (Reuters) - Australia, like many rich nations,is in the throes of a painful housing slump but there are peculiarities here that mean the impact on the domestic economy will be a lot less brutal. Crucially there is no hangover of unsold homes in Australia, unlike the United States where a record glut has been driving prices inexorably lower. If anything, Australia has too few homes to match the demands of a growing population and a record immigration intake, a phenomenon that is keeping house prices near historic highs even as the cost of buying has surged. "Sure, Australia has taken a hit but it's nothing like as bad as in the U.S., UK or New Zealand," said Matthew Hassan, an economist at Westpac. "In fact there's a pent-up demand for housing because construction has been running below average for some years now," he explained. "That's putting a floor under the market and should ensure that any decline in prices won't be precipitous."

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Well the pommies dont think its all bad for the ozzie housing market

http://www.guardian.co.uk/business/feedarticle/7649891

Australia housing dodges worst of global wreck, Monday July 14 2008

SYDNEY, July 14 (Reuters) - Australia, like many rich nations,is in the throes of a painful housing slump but there are peculiarities here that mean the impact on the domestic economy will be a lot less brutal. Crucially there is no hangover of unsold homes in Australia, unlike the United States where a record glut has been driving prices inexorably lower. If anything, Australia has too few homes to match the demands of a growing population and a record immigration intake, a phenomenon that is keeping house prices near historic highs even as the cost of buying has surged. "Sure, Australia has taken a hit but it's nothing like as bad as in the U.S., UK or New Zealand," said Matthew Hassan, an economist at Westpac. "In fact there's a pent-up demand for housing because construction has been running below average for some years now," he explained. "That's putting a floor under the market and should ensure that any decline in prices won't be precipitous."

I am not sure I fully agree wiht this as the supply of poms is about to dry up so there won't be too many pound notes pushing the prices up.

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I am not sure I fully agree wiht this as the supply of poms is about to dry up so there won't be too many pound notes pushing the prices up.

Quite. First, cities like Perth where the immediate metropolitan area alone is over 12% British, will certainly feel the difference when thousands upon thousands of Brits stop bringing $600,000 equity into the market. Second, Australia is not bigger than the world economy. The essential fact is that housing stock is desperately over-valued all over the West and normal working people cannot afford to put a roof over their heads. This simply cannot stand. Worse, Australia has the West's worst average house price/average wage ratio and this fact alone makes it incredulous people can seriously be supporting such over-valued stock. We all know there 's gonna be VIs in any market, but there comes a time when you have to call it a day, and now is that time.

Australian houses are more over-valued than British houses, and it is bordering on the criminal that citizens are expected to borrow eight times their salaries on high Australian interest rates to buy a house. I have said before that IMO the Australian housing market is going to get a much bigger slap than even the British one.

Also, Wayne Cole states that (and bases much of his astrology on) "unlike the United States where a record glut has been driving prices inexorably lower." But this isn't the whole story is it? Prices have been driven down by the credit crunch and that was caused by lending unemployed people enough money to buy five bed houses. Australia cannot avoid the credit crunch, Wayne. I don't know if this guy has laarge portfolio he is trying to protect, but this sort of ramping is irresponsible.

Edited by Thucydides

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I am not sure I fully agree wiht this as the supply of poms is about to dry up so there won't be too many pound notes pushing the prices up.

More poms, less pound notes each, from what I see and read, so the overall effect you describe is spot on.

However, you have ~25 - 35,000 Aussies (copyright, the SMH) on their way home, many of whom have been earning big bucks in financial services in London during the boom times and are cashup up with severance money. I know of half a dozen who have come back to SYD this year, have taken the bath on the exchange rate and are now looking to get the dog and buy the house after having no life for the last five years. Who knows what the effect of that will be on the usual areas where bankers live? (and many will not care...)

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The BBC are reporting today how young Aussies (or maybe just those in Sydney?) are having to live in caravans because the Aussie house-price and rent bubble

http://news.bbc.co.uk/1/hi/world/asia-pacific/7447964.stm

"It is a wet afternoon at the Fairfield West Caravan Park in suburban Sydney and 20-year-old Nathan de Battista is dodging wintry showers to buy cigarettes.

His home for the past two months has been a modest caravan.

Nathan, who is an assistant manager at a large company, is not here by choice but is a victim of a housing affordability crisis.

Decade-high interest rates and a lack of rental properties are forcing record numbers of Australians to live in caravans.

"You're looking at six houses [to rent] on a Saturday and 20 to 30 people were turning up and on the form they ask you how much you'd like to pay for your rent, so you can pay more. It's ridiculous," Nathan said.

"When I found out they had a free van here, I jumped [at it] and I've been here ever since because the rent's cheap."

'Better than a house' " :(

Stories like this suggest a crash cannot be far off

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have taken the bath on the exchange rate

That's the thing, unless they dripped the cash back as they earnt it, they're looking to put down 20% less deposit than they could have done last year.

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  • 395 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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