Interesting was an article in Money magazine July issue, titled “Property markets”. Within was a house price prediction by BIS Shrapnel.
City June 2005 June 2008
Sydney $500 000 $465 000
Melbourne $375 000 $357 000
Brisbane $318 000 $323 000
Adelaide $270 000 $260 000
Perth $280 000 $287 000
Hobart $273 000 $267 000
Canberra $352 000 $340 000
Darwin $270 000 $295 000Sorry if the table is a little hard to read. But these predictions are most interesting, a drop in every state capital besides Brisbane, Perth and Darwin. And only Darwin has reasonable gains over the 3 year period, of 9.3 per cent.
I personally think these forecasts are very bearish, and thi sis because BIS Shrapnel believe rates will recah 9 per cent, by the end of 2006. Which is well above current rates, the majors offering 7.32%.
Theres a lot of predictions here and of course its difficult to get them exactly right, but it is at least interesting to hear a major company’s view. Feel free to comment, on any of this information here.Just as when the gurus said property doubles every seven years often enough and loud enough the masses beleived it was gosphel, if enough “experts ” predict the stagnation of Sydney and Melbourne it will happen. (economics aside ).
Also real supply and demand must eventually even out. Right now my clients are saying “decided ” not to sell the home I just built (was always intended for sale ) as I will wait for the market to pick up next year.
Reckon a huge amount of investors are waiting on next year, especially with the REA spin of “everythings fine NOW ” that gets churned out regularly every month.
Personal I dont believe in property forecasts, they are all predictions by so call experts.
“The best time to buy was yesterday” one of my favourite quote.
People say sydney market is crazy, it really is, they say price is so high you couldnt afford it. Then How come I could find a 3brm brick house in suburb in sydney for 205k? a little negociation of course but that is cheap.
I believe every cities has bargains, you just have to spend alot of times looking, hours, days, months, if not years. I have spent the last couple months looking, searching internet and doing inspection and for that short amount of time, I have learnt so much about the area. You would see me on the 3 main property listing sites almost everyday. A new posting and I would know. Alot of people might not have the time but its all about research.
During this time ppl are scared or are staying away from the market. But I say this is the best time, when no one is buying. You dont have competitions. If you have many buyers on one property, why bother.
I want to say it again ” The best time to buy was yesterday”[cap]
Have a good day all,
I know I am unexperienced but that is just my opinion.MR2
BIS Schrapnel seems to get lots of publicity for their forecasts which is curious since they are invariably wrong.
The last time one of their predictions was right was the end of the property boom in 1989.
Have a look what they said last year and the year before and how they predicted huge drops in property values in Sydney and Melbourne – these haven’t occurred.
Then have a look at the forecasts by Residex and you will see they have an enviable track record.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auha ha! it really is amazing… an economic forecaster that builds their reputation on incompetence.
http://www.megainvestments.com.auJohn Carroll
I agree with MY – People love BIS however in my limited experience they are usually way off.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by MichaelYardney:BIS Schrapnel seems to get lots of publicity for their forecasts which is curious since they are invariably wrong.
<snip>
Have a look what they said last year and the year before and how they predicted huge drops in property values in Sydney and Melbourne – these haven’t occurred.Ok, will do. Last year:
August 6, 2004
Melbourne property prices are tipped to tumble about 8 per cent over the next two years, slicing nearly $29,000 off the price of a median property after inflation.
<snip> The twice-yearly PMI survey is conducted by property and economic forecasters BIS Shrapnel.Source The Age
10-May-2005
Melbourne’s median house price dropped 4.9 per cent over the March quarter to $352,000 down from $370,000 in the December quarter 2004.Source REIV
Originally posted by MichaelYardney:they predicted huge drops in property values in Sydney and Melbourne – these haven’t occurred.
[blink] Uh… I think if anything their predicted falls are looking rather conservative.
The last time one of their predictions was right was the end of the property boom in 1989.A pretty crucial correct prediction then. What did residex predict? They didn’t exist then did they?
Then have a look at the forecasts by Residex and you will see they have an enviable track record.Residex produce the most laughably incompetent ‘analyses’ I’ve ever read. They do provide – for an enourmous price – information that should really be freely available, but which can be quite useful providing their ‘growth predictions’ are ignored.
F.[cowboy2]
If these commentators know so much about forecasting property trends then why are they still working 40+ hours a week in the finance industry? Surely they should have retired by now – being able to predict the future! Its like a story about property investing on ACA tonight – the editor of Money Magazine was giving investment tips on how to pay off you mortgage more quickly etc. If she is such an money expert then she would be kickin’ it the Caribean sipping on cocktails – not printing stories written by more so called experts.It’s a bit harsh I know but I think the really successful people mostly keep to themselves and continue to plod along investing in ways that they know work for them.
Originally posted by duncthedunc:If these commentators know so much about forecasting property trends then why are they still working 40+ hours a week in the finance industry? Surely they should have retired by now – being able to predict the future! Its like a story about property investing on ACA tonight – the editor of Money Magazine was giving investment tips on how to pay off you mortgage more quickly etc. If she is such an money expert then she would be kickin’ it the Caribean sipping on cocktails – not printing stories written by more so called experts.It’s a bit harsh I know but I think the really successful people mostly keep to themselves and continue to plod along investing in ways that they know work for them.
Dunc – I think paying down your mortgage quicker and being very wealthy can be two very different things!
But you make a valid point – those who can do and those who can’t teach! We should all be careful of the very expensive seminars presented only because the presenter loves to share the info [biggrin]
Cheers and good luck – see you on the Caribbean someday.
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
With 5 year home loan fixed rates at 6.89% from a number of lenders do you think they all expect the rates to be above 9% by 2006?
Bis Crapnel predictions continue their usual standard?
Glen Barton
Mortgage & Finance Broker
Sunshine Coast QldI’m not sure how others feel about market forecasts but I’m of the opinion that unless you are going to buy the whole city, they are of a small consideration.
Each property is its own kettle of fish, sure it will be affected by market swings but no matter what the market is doing, there will always be good individual property prospects. I like to think that if you don’t make a profit on the purchase of a property (buy below market value) you are not getting a good deal.
I’m interested on any thoughts.
Originally posted by duncthedunc:If these commentators know so much about forecasting property trends then why are they still working 40+ hours a week in the finance industry? Surely they should have retired by now – being able to predict the future! Its like a story about property investing on ACA tonight – the editor of Money Magazine was giving investment tips on how to pay off you mortgage more quickly etc. If she is such an money expert then she would be kickin’ it the Caribean sipping on cocktails – not printing stories written by more so called experts.It’s a bit harsh I know but I think the really successful people mostly keep to themselves and continue to plod along investing in ways that they know work for them.
I can see that there is a diverse range of opinions about the state of the market. But I must comment that the above quote is a bit paradoxical. Are truely rich people to be ‘kicking it in the carribean’ or are they to be found continuing to invest in which every way they know how?
In any event you could probably find people from both walks of life, some prefer to make their money and relax and some who continue to drive their business forward. My mentor is the former where as people like the Murdochs, Packers and Lowys are the latter.
With regards to the forcasting given by BIS Shrapnel, they have moved their prediction down from the 10.8% that they stipuated last year. I see that they must have some basis to make these assumptions. Also I work with many finance brokers and property developers who are finding the market very difficult. Added to this the number of mortgagee in possessions that can be found in many of the local newspapers pintered (ironically by the Murdoch and Packer clans).
I think that this could be a good indication of where the market is going.
Luan M Cao
http://www.ampg.com.auRhysadams, the way you think is what I prescribe to as well. I think that if you do your research there are good deals to ne found in all market conditions…
And the fact that some of the majors currently offer 7.3% fixed for ten years… surely they have some accuracy in their economic[cigar] predictions…
Maybe?…Hi All
Kabung! I think you are missing the point of duncthedunc post. I tend to agree with that particular point of view. Why listen to so called expert advice on buying property or shares or anything else if that person as not walked the walk themselves? Why go to a so called financial advisor to get advice on investing if that advisor has never invested in their life? The surest way to turn a big amount of money into a little amount of money is to listen to these so called experts: just ask the people who put their hard earned cash into managed funds a few years ago.
I had a friend who took these experts advice because he wanted to retire a few years earlier. He was advised to put in $100000 in a managed fund; he now has $60000 and the prospect of having to extend his working life by another 5 to 7 years just to get back to even.
What duncthedunc says is quite accurate, if these people are so good then why are they still working in a 9 to 5 instead of relaxing on a beach some where?There are always heaps of doom and gloomers around when things start getting a little slow. You know the type who runs around screaming the sky is falling and these people should be ignored. There is a simple statistic that I came across that states the largest amount of people who became millionaires in any given period of time ever; was in the great depression in the 1920 and 30s? I personally knew one of these self made millionaires from that period, although I was only a child at the time and did not understand until much later.
Opportunity is everywhere if you open your eyes and look.[biggrin]
Kerwyn
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