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I think those moving into retirement would be very worried about their super and, for a great many of them (as boomers and jones are the most property rich), property values.
I think those who are long since retired are more worried about government support for the aged.
Bubble or no, I reject the notion that Australian's love their houses, or the dirt they are on, more than anywhere else in the world. I think each homeowner, globally, loves their house more or less equally overall. I do think that Australian's have learnt to love what their house is worth more than many others in recent years, however.
I did a search on the whole 'do Ozzies love their houses more' thing and the only reference I could find was on Bubblepedia:)
Quote:Australians love their homes more than other nationalities
This is silly. Ring a random American and ask them if they love their home. Of course they do. Their house prices are far lower than ours in relation to incomes and rents, and falling fast.Given the American example I would agree that American's still love their houses as much as we do (personally I think most of them are better constructed) but they don't love what they are currently worth – unless they brought in the last couple of years, of course.
So we have an emotionally sustained property bubble?
Do Australians love their houses more than anywhere else in the world?
It's like I said a few posts earlier – it really is different here, we are more full of it.
Anyways, if they aren't going to move until they die, what do they really care what it's worth? It's not like they can take the value of their homes to the grave, is it?
Only real difference I see between Australia and Germany is that Australia hasn't grown up yet. Compared to what Germany has been through, our country is a petulant child that still has a lot to learn.
I'd be happy with 4 x average wage (68k or so) as the median house price country wide (270k or so).
Anti speculation laws may help but I'm still placing money on the thing correcting because of it's own debt burden.
Thing is, bottom end prices are still expensive compared to middle/upper prices. It's like every Australian is convinced that whatever their first housing purchase was it's the most valuable ever built – it really is different here – we are more full of ourselves:)
So fword, where are the undersirable parts of our country? Or is all Australian housing uniquely desirable?
Personally, I consider all of Sydney and Melborne extremely undesirable – too many people all clustered together for my liking.
fword, I get how you are saying land is unique and mass produced consumer goods are not but
1) Why is land in Australia still worth more than land in America, or Ireland, or so on?
2) Why is food so cheap? Each carrot that grows is unique to the next. Why does no-one care about a carrots uniqueness?
3) Why is labour so cheap in many markets? Each human being is arguably more unique than land or carrots.I agree, falling house prices are not a good thing in the short term. They suck for economies that have become dependant on them, like America's was and ours is. But long term, surely an economy that is independant of a single asset class is more valuable because it is more unique.
fWord wrote:Since when was this ever a 'goal'? People set out to make life easier and better for themselves, NOT make life miserable for everybody else. Don't develop a complex here.Flipside is, the easier the lives of people around you are, the easier yours will also become.
Imagine where everyone just worked a single job to afford their house and then imagine how much more pleasant service you would get from untired workers in customer contact/service roles.
Imagine where the primary investment oppurtunities for people with that bent, like yourself, were productive. Say you choose an inventor to invest 400k, who develops a product that benifits society as a whole.
Imagine an Australia not so occupied with property prices.
I'm gonna end up posting a John Lennon song:)
xdrew wrote:The market HAS bottomed .. and before it starts up again its going to need a supply of people able to get loans. IF as predicted the credit markets overseas seize up .. then even with cash, equity and baseball cards .. you wont be able to pick up a loan from the banks for love or money. That'll plug the flow of cheap money. And as people compete for getting whats available .. that will raise interest rates by several notches.Given that, how can you logically say the market has bottomed?
If only a few can get credit to buy and there is a lot for sale, then those few can haggle further down. And if IRs go up, some more will have to sell.
Papers post whatever sells.
If doom and gloom is selling – tey'll post that. If rising house values are selling, they'll post that. It is however a kind of positive feedback loop. Papers sell based on what the public wants to read and they read what the papers post. So bad news generates bad vibes which generate bad news and vica versa.
To the OPs question – I am in a similar position. You have to make a descision on what you believe about the area you want to buy in. Do you believe prices will go up beyond the 3-5% that posters mentioned earlier or not? No-one can tell you for sure, you have to do your own research and decide for yourself.
fWord wrote:ummester wrote:Your in now, make the most of it. Trying to get out could actually turn out worse. If you have your finances in order, you should be fine.Interesting that we mention getting out of the market. They say the road to hell is paved with good intentions. However, I've planned not to get out of my properties for at least 10 years after purchase. There's agents ringing me up every few months and asking if I want to sell. Surely they must be disappointed to hear that I'm not selling. On the whole however, the agents are telling me to hold the properties and not sell now unless I absolutely have to.
I don't quite understand why agents would want to get more to list when many markets are in oversupply ATM.
Being in for 10 years, so long as you haven't leveraged stupidly since 2004 or so, you should be sitting pretty anyways and be able to handle most downturns.
I guess people should not confuse the fact that I am bearish on property values with saying that property investing can never be worth anyones while. In the end it's no different to any kind of debt, right? If you can comfortably handle taking it on and aren't relying purely on capital growth, it's just a financial descision that you make and hopefully works out fine for you. Wreckless debt and speculation are dangerous but it's not my place to discourage sensible investing.
I think the biggest problem for our property markey now (and I was talking to an RP data analyst about this a couple of weekends ago) is our banks ability to lend. Confidence is bad but not entirely shot. Some people still want to buy homes. It's just how much more our banks are willing to risk on a property market that the rest of the world is wary of. Still, if I was running a bank ATM, I'd be taking only safe bets on.
That's why I mentioned I'd buy when the banks want 20% deposit – not because I can't handle my own money but because I'd want to feel assurred that the lender I choose can handle it's loans.
fWord wrote:mattsta wrote:''This has potential to be significantly worse than the Lehman Brothers collapse and the subprime crisis because now we are talking about nation states,'' Mr Norris told BusinessDay.That's quite concerning. I guess I may have to brace myself for the oncoming GFC2 – What are you all doing to protect yourself (or at least be cautious)?
1. Stability of job & income
2. Enough savings to meet mortgage repayments for 30 months or more
3. Parents are additional 'last resort' safety net with enough savings to easily bail me out if I failBTW, point 3 was a joke. Parents, loving as they are and regardless of how much they are prepared to sacrifice, are not there to be used or taken advantage of. Their savings are theirs to spend, not mine to inherit.
Bottom line is, I'm not selling out of my properties just because the GFC is coming. That's like having a deep love of living near the sea but deciding not to buy or live there because there MIGHT be a tsunami. If you spend life worrying about EVERYTHING, you'll end up doing absolutely NOTHING.
Hey, I agree with you here fword.
Your in now, make the most of it. Trying to get out could actually turn out worse. If you have your finances in order, you should be fine.
And I plan to buy near the ocean – tsunami's be dammed:)
That's quite concerning. I guess I may have to brace myself for the oncoming GFC2 – What are you all doing to protect yourself (or at least be cautious)?
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Not buying a house:)for 15k, what does it matter? Some televisons cost more and most of us pay more in tax:)
If you buy it outright you would be positively geared to the tune of $80 PW – how will that work with your tax (I don't know the ins and outs of it). What are the holding costs and stuff? Does the local council have any out of the ordinary requirements of homeowners?
Is the town nice? If I had the 15k hanging around and I liked the town, I'd buy it for the hell of it. If nothing else it's somewhere to get away to for les than a caravan:)
Has been a boom for buyers who got in before 2004:)
Wonder if there are any of them out there who were smart enough to buy upbig before 2004, sell it all off since and stay out?
Investment Guru wrote:Australian Properties will be doing a rebound from recent drops. Goverment steps are being done in order for the drop to stop or be at moderate levels. Anyway it's still a Buyers Market out now. cheersWhat steps?
And, if they do take them, all they are doing is kicking the can further down the road. This may impact on the delayed boomer sales that fword suggests.
I don't disbelieve there are plans afoot (it's like the government to be late) but I am seriously interested in knowing what they are?
Who says the end is coming? World didn't end after the great depression – there was a war but after that things really took off in a good way. I don't think of it as an end but a prerequisit for new, more sustainable growth.
And no, I don't have property, or much gold or shares. Just a healthy deposit and a reasonably secure job. I plan to use my deposit on the best thing it can afford me when the banks start asking for a minimum 20% down again.
Some are selling property, I think. Some are not. Doesn't really matter, if you can afford to hold it, no matter what happens to it's value over the next decade or so, it will eventually be worth more than whatever you paid for it again.
In light of the Euro debt crisis, it could be timely to remind everyone what happened to Australia in the last great depression.
From wiki
Australia's extreme dependence on agricultural and industrial exports meant it was one of the hardest-hit countries in the Western world.[58] Falling export demand and commodity prices placed massive downward pressures on wages. Further, unemployment reached a record high of 29% in 1932,[59] with incidents of civil unrest becoming common. After 1932, an increase in wool and meat prices led to a gradual recovery.
We were hit later and harder than many places, as an exporter. Are we that different now? Replace GFC 1 & 2 with depression agriculture with rocks and I don't see too much difference… oh, other than that we have a bigger build up in property/residential land values this time around.
sapphire101 wrote:Just remember, being a landlord ain't easy. You have to manage the manager and it's very proactive when they don't get things right.So why not just manage it yourself? Save money and get things done the way you like.
Many REAs try on more than what they are legally justified to do with rentals. All tenants should get to know their own state law with regards to rent increases, inspections, property maintainance and so on – I think most would be pleasantly surprised by what they find out.
Personally, I'm wonderring if some of the big RE firms currently have performance based reviews in place for PM, looking towards future staff cuts. Seems to be a lot of PM activity ATM.
fWord wrote:That's right, or perhaps the forum is quiet because the property market is quiet.I agree with you again – wonder of wonders:)
I also, obviously, post at a bear forum and it is remarkably quite also with regards to housing. Busy with global economics and stuff. The housing market is going through a massive calm before the storm, I'd wager. Either it gets stimulated and it holds on a bit longer, or it doesn't and it drops. Vendors queing up, buyers being wary and credit becoming cautious. It's exciting but in a dull way:)
fWord wrote:but this is key: sell when the news is exceedingly good, and buy when the news is exceedingly bad.That I totally agree with fWord.
Late 2009/Early 2010 – what an awsome time to sell. things were on the up and up from 2008. 2007 likewise.
As for buying, I recon the news has to be worse than 2008. Fundamentals are worse but news (and price falls) aren't yet.
I know this is all retrospective and each has to make their own judgement call on wether things will get worse or better next year – no one can know for sure, can they?
I think the OP mentioned they weren't desperate to get out, so that means they have to decide what they think will happen to the market over the time they have to sell. I'd say research what is likely to happen to Australian home lending over the foreseebale future – that could have the biggest impact. Then consider how many homes are likely to be listed and what is likely to happen to IRs. All of these things are still just assuming but at least you can console yourself with an educated assumption.
khorask wrote:Her plan atm is for a new start.. not a 'quick getaway asap'. Why sell it for 50k less when she could get 50k more and just wait for the best time to sell ? Also, how would she know the 'prices' of the houses in the street to begin with ? (there are none on sale)Sorry, I confused area with street. You did mention prices in the area.
khorask wrote:This is more like the kind of information I was seeking, BUT without explaination… WHY ? will it be easier to sell now compared with this time next year ?Rising stock, decreasing credit and lower valuations.
