Boom Crash Opera folks [cap]
http://www.theaustralian.news.com.au/common/story_page/0,5744,9454466%255E25658,00.html
“While the figure was dragged down by the normally sluggish Easter weekend, it hovered around the doomsday 40 per cent mark, which would signal a crash.
“Anything under 40 per cent and things are looking pretty scary,” said Louis Christopher, research director at Australian Property Monitors.
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Well, there’s something I was looking for. According to the article, 40% means a crash!
Here’s a crash face: [weird]
kay henry
Originally posted by kay henry:
Boom Crash Opera folks [cap]“Anything under 40 per cent and things are looking pretty scary,” said Louis Christopher, research director at Australian Property Monitors.
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Well, there’s something I was looking for. According to the article, 40% means a crash!
Here’s a crash face: [weird]
kay henry
strange, I wonder how auctions clearance rates would indicate a crash?, surely looking at selling prices would be the only way to measure price falls?
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This reply was modified 10 years, 6 months ago by
paul_s. -
This reply was modified 9 years, 4 months ago by Jinghong Chiu.
Guys and gals if we all had the same opinions all the time not much would get done in a hurry. Lets respect each others views and if you cant say somethig positive then just let it go. It is not worth all the agro.
A difference of opinion is healthy, worrying about if, maybe, might, possibly etc will just make you unnecessarily sick.
Breath deeply and move on.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
DD, There hasn’t been any aggro for 15 posts. People have been discussing the economics of what a crash might be, as per topic.
DD- how’s the market where you’re investing? Do you think the property market might crash? or merely cool?
kay henry
Hi all,
I have been reading many posts regarding this topic and i feel that there is to much panic and not enough thought.
I can look at the market in the area that i have been investing and i will see that for decades it seems that prices rise to double what they were inapprox 2 years then for about 6-7years everything sits at almost the same price however the rents seem to steadily rise…..then all of a sudden the rents seem to hight then ……pow up we go to double prices again.
I have not bought propery for 1 year as i stopped buying when i believed that it was overpriced in the area that i was looking at. I can say bugger that i stopped,as prices have gone up another 40% but i made the choice to stop as i had reached my safety point. Yes i will still be in trouble if intrest rates reach 15% but i think that there are many out there who will be much worse off than i am.
Market crash is not likely however i feel that a 20% loss will be forthcoming in many unit delvelopments however in residential houses i see that there is always demand for 3 bed houses close to beach.
I hope my crystal ball is right cause i am now starting to look for property again but only to see what is out there!!
[wacko][wacko]Sooner or later the man who wins is the man who thinks he can
Sorry Kay, just a small dose of calm in a very large pond of this discussion.
I have seen a correction where I invest and not a crash. Based on last years figures which were unsustainable to say the least, there has been a stop to house growth. This is due to a massive surge in the last 2 years and nothing can sustain that kind of growth for long. So what I have done is lock in growth by making a few strategic sales in qld where I was a little top heavy anyway.
A block with a 3 bed home, 2 bed home and a pool I have sold and it cost me $192K in Jan last year and I sold it for $270k last week. The other i bought for $100k last feb and sold for $185Klast month. This was necessary as we are currently buying our new home in Coffs. Cash for deposits is good. What we are doing is relocating our small clumps of growth into our home there, worth more than double our sydney home, paying the bugger off by chrissy, then going ok, $600k loc on it as deposits. muhahaha!!
Lookout bigpond we have to cross to get “mainland” cheese. DD is coming soon.
Perth where we have 2 is slow but growing steadily, tassie is doing a QLD last year fo us thanks. Qld itself has just released another $190k after giving us $210k as deposits last year. This is on 6 IPs on the one loan too. Our other Qld stuff is with 5 leders so a bit harder to have specifics off the top of my head.
More recently we had a property on the market for $175k, dropped it to $165K then to $160K and only got a joke offer of $150k which we declined. Yes there is a correction, yes prices have fallen in some areas so there we decided to hold until later this year.
Looking at the world with tainted glases is dagerous. We accept where prices are at and deal with it. We dont go crazy and sell for the sake of it and we dont hang on to things that are financially unviable either. So yes Kay thinks arent as rosy as last year but theres a whole lot of long term growth to come.
Townhouses and units are playing catchup now to house prices and will level out about $60k below the most basic houses.
There are always opportunities.
Have fun
DD
Don’t sweat the small stuff,and it’s all small stuff!!
“The Looming Property Crash, by Clive Maund”
I would take the above article with a grain of salt.
Most of Clive’s “predictions” are based on media hype during the build-up to an expected economic depression last year.
The depression did not occur – the US economy is on the rebound, which is likely to continue at a faster rate if/when a democratic administration takes power.
As for the property sector, although there has been a moderate adjustment in a few markets, specifically less populated out of the way locations where increased unemployment [which is now down over consecutive months] had more of an impact, or overinflated markets such as San Francisco, on a broader scale property values in the United States have continued to increase – but at a slower rate.
Clive is an example of the many commodity investors who prefer economic doom and gloom because it keeps the US dollar down and gold prices on the rise.
— Michael
If its all so rosy, why is the Fed rate still at 1%. Thats not exactly normal for a country showing strong economic growth.
Theres a lot more going on than appears on the surface.Just my mumblings
Originally posted by Fern:My opinion: For every loss there is a win
Very true, and with all the winning thats been going on over the last three years, there is going to be one hell of a correction.[biggrin]
This may be a catchy saying but it makes little sense….
I want to buy a holiday home by the sea in the next 12 months – but I am not holding my breath for any sort of price decline. I wonder if people are talking up this crash because its a bit like anticipating the Myers Christmas Sale – the dream of getting something discounted?
I think it makes very plain sense.
And I didn’t say anything about 12 months.
Housing inflation has been way out of balance with what has been happenning elsewhere in the economy, a correction goes without saying.
How long it will take is a completely different matter.If you purchase a property representing good value for money, especially if your purchasing cashflow positive investments, then the crash will only be of benefit, because you will be purchasing your investment cheaper.
IMH(and economically speaking unprofessional)O the hardest hit by any stagnation or downturn in the property values will be those that have financed lifestyle, rather than investment, purchases with the equity in their PPOR.
Speculative property investors will be hit hard by a downturn, but if you’re a property investor cut out to ride the wave, this downturn will be beneficial in that we’ll be paying less.
Hi Fern – I guess there were two points to my comment:
1) the saying doesn’t make sense because it disregards things such as: (a) an economy can grow (b) the population can grow (c) value can be created without costing something e.g. a new technology and so on. If the saying were true, then a property’s true value should be the same as it was 1000 years ago (adjusted by inflation) – a nonsense I am sure you would agree. The saying dismisses any concept of growth.
2) The 12 months thing – what time frame are you putting on this then?
Hi Ausprop,
Housing bubbles have severe economic effects.
The magnitude of the price fall is related to the run-up during the boom. This one has been huge, around 100% in 6 years. The average housing bust takes over four years to recover from and by the end of that four years a countries GDP is down by an average of 8%. That doesn’t look good for economic growth.A lot more people own homes than own shares, and housing accounts for more than 50% of all household wealth. You can’t knock the property market around and expect things to be picking up in 12 months, 24 months or even 36 months. Housing will now underperform other asset classes for at least five years IMHO.
You are right on the population, and with less GDP to go around, it just means harder times for everybody.
If inflation rises because of the oil price, and the RBA raises cash rates again, you could be looking at a 30% drop in house prices (see IMF latest “world economic outlook”). Cross fingers, for everybodies sake XX
“Thats not exactly normal for a country showing strong economic growth.”
Strong economic growth?
The US economy is on the “rebound” – nothing more, nothing less at this point in time.
“Theres a lot more going on than appears on the surface.”
Let’s just say I know more about what’s going on “than appears on the surface”.
— Michael
The US fed meets at the end of the month, June. At the moment high oil prices (hit the $42 1983 peak) leading to higher inflation, extremely strong US business growth combined with smaller important issue of consumer debt at record highs should see the fed lift rates.
Our Reserve bank meets at the beginning of July so should be interesting if they follow the US lead..that is being an election year.
I think we can get away without a rate rise until after the election where as the US cannot really wait and must lift rates.
BRING IT ON!!!
Michael R,
being from the US or at least residing there, whilst the fed rates are 1%, what are mortgage rates? Business loan rates??
having spoken to someone in the last year from the US, they were indicating the home mortgage rates were around 6%. This seemed high given fed rates were at 1%.
I was watching CNBC the other night, and a range of experts were saying, that the market (bond and share market) has already priced in at least another 25 basis point rise. Not sure how much effect 25 or 50 basis point increase will have though.
James
Originally posted by georgisj:Michael R,
being from the US or at least residing there, whilst the fed rates are 1%, what are mortgage rates? Business loan rates??
having spoken to someone in the last year from the US, they were indicating the home mortgage rates were around 6%. This seemed high given fed rates were at 1%.
I was watching CNBC the other night, and a range of experts were saying, that the market (bond and share market) has already priced in at least another 25 basis point rise. Not sure how much effect 25 or 50 basis point increase will have though.
James
Hi James the US banks must acheive higher returns on their lending then over here where banks margins are smaller (thats why they get creative with their fees
The market always looks to the future so even a “factored” in 25 or 50 basis points will be an indicator of whats is likely around the corner.
The banks share prices will be hit hard initially(good buying opportunity) before recovering to pre rise share price. SGB prob has the most to loose being the most exposed of the banks to the homelending market.
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This reply was modified 10 years, 6 months ago by
paul_s.
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