- Originally posted by gmh454:[
When you travel internationally, you will find that even Sydney ( or Australia) doesn’t rate on the world stage as being newsworthy.Hmmmmmm …. guess thats why when you look at LA ,NY, Tokyo, Paris amd London, one of them has dropped out of the the five most expensive cities in the world to make way for Perth
(Based on income to med property price)Not quite my point.
If Sydney doesn’t rate on the world stage, then Perth as a ‘backwater’ rates even less so…We’re on an isolated island and Perth is the most isolated city in the world….. we’re only newsworthy on the world stage lately, as a result of our involvement in Iraq in coalition with GB anf the USA.
But our economy ( and population) is tiny in global terms…
kp
Originally posted by gmh454:ABC current affairs dedicated their first 45 minutes (1 hour ) of the Midday bulletin covering the crash in Sydneys outer west.
Not a slump a crash, property selling for 850K at castle Hill by owners eventually sold for 680k by Bank who would no longer wait.
Some agents say 50-90% of auctions are Mortgagee but banks are instructing agents not to disclose the fact,
One agent said worse he had seen at the fairfield area in 32 Years.
Another agent in Bankstown said he had seen more forecloseures in 6 months than in previous 16 years.One agent said foreclosures is his main business now, done 25-30 in last 6 months but only 15 sales.
Properties selling for half of the boom price is a recurring theme.
Sheriff turning up with locksmith and agent and simply putiing people in the street, with the clothes they are wearing and what they can pack in less than an hour.
40K families are in arears with their loans and most are refinancing hoping the market will turn.
Banks are mostly okay as most covered by loan insurance.
ABC were asked to leave two pre auction inspections.
AND ………………………. we will probably get a new rise tomorrow, just heard job vacancies are up. Got to cool the economy somehow.
Reminds me of 1991. The 17% was actually on felt by a few, a lot were happily sitting on 11% and were benefiting from the effect 14% inflation had on houses.
Not a lot hurting, but enough to kill Sydney market.
Are we there yet…think we are.
Scary statistics and good to know about them as well !!
It would seem that its being hushed up with the banks going into damage control.
After all, they let these people into these big mortgages in the first place.These poor buggers are just the casulties of war.
I’ll bet the picture is much rosier in the eastern suburbs …kp
Originally posted by gmh454:Originally posted by kingbrown:Perth bust = AUSTRALIA BUST.
Yes, …. your point is ????????????
I really can’t make it any simpler than an “equals” sign with just two words on each side.
In regards to your “point”, here is another way to look at it:
Here’s Mercer’s 2005 city rankings. Perth is lower down the list (93), than Sydney, Melbourne, Adelaide, and Brisbane. Your “statistic” is great for, say, Today Tonight or a Current Affair, but not very useful in the real world.
World’s most and least expensive cities
Source: Mercer Human Resource Consulting, 2005 Cost-of-Living Survey2005
Rank City
1 Tokyo, Japan
2 Osaka, Japan
3 London, United Kingdom
4 Moscow, Russia
5 Seoul, South Korea
6 Geneva, Switzerland
7 Zurich, Switzerland
8 Copenhagen, Denmark
9 Hong Kong, Hong Kong
10 Oslo, Norway
11 Milan, Italy
12 Paris, France
13 New York City, United States
13 Dublin, Ireland
15 St. Petersburg, Russia
16 Vienna, Austria
17 Rome, Italy
18 Stockholm, Sweden
19 Beijing, China
20 Sydney, Australia
20 Helsinki, Finland
22 Douala, Cameroon
22 Istanbul, Turkey
24 Amsterdam, Netherlands
24 Budapest, Hungary
26 Abidjan, Côte d’Ivoire
27 Warsaw, Poland
28 Prague, Czech Republic
29 Taipei, Taiwan
30 Shanghai, China
31 Bratislava, Slovak Republic
32 Düsseldorf, Germany
33 Luxembourg, Luxembourg
34 Singapore, Singapore
34 Frankfurt, Germany
36 Dakar, Senegal
37 Munich, Germany
38 Berlin, Germany
39 Tel Aviv, Israel
40 Glasgow, United Kingdom
41 Athens, Greece
41 Brussels, Belgium
43 Barcelona, Spain
44 Los Angeles, United States
45 White Plains, United States
46 Madrid, Spain
47 Birmingham, United Kingdom
48 Zagreb, Croatia
49 Hamburg, Germany
50 Hanoi, Vietnam
50 San Francisco, United States
52 Chicago, United States
52 Beirut, Lebanon
54 Riga, Latvia
54 Kiev, Ukraine
56 Ho Chi Minh, Vietnam
57 Miami, United States
58 Algiers, Algeria
59 Casablanca, Morocco
60 Tallin, Estonia
61 Lyon, France
61 Honolulu, United States
63 Shenzhen, China
64 Abu Dhabi, United Arab Emirates
65 Guangzhou, China
66 Lisbon, Portugal
67 Amman, Jordan
68 Melbourne, Australia
69 Auckland, New Zealand
70 Houston, United States
71 Jakarta, Indonesia
72 Kuwait City, Kuwait
73 Dubai, United Arab Emirates
74 San Juan, Puerto Rico
75 Almaty, Kazakhstan
76 Wellington, New Zealand
76 Ljubljana, Slovenia
78 Washington, D.C., United States
79 Boston, United States
80 Morristown, United States
81 Sofia, Bulgaria
82 Toronto, Canada
83 Atlanta, United States
84 Brisbane, Australia
85 Leipzig, Germany
86 Manama, Bahrain
87 Vancouver, Canada
88 Riyadh, Saudi Arabia
89 Jeddah, Saudi Arabia
89 Adelaide, Australia
91 Vilnius, Lithuania
91 Accra, Ghana
93 Perth, Australia
94 Denver, United States
95 Mexico City, Mexico
96 Lagos, Nigeria
97 Cairo, Egypt
98 Calgary, Canada
99 Santo Domingo, Dominican Republic
100 Limassol, Cyprus
101 Detroit, United States
102 St. Louis, United States
103 Seattle, United States
103 Bucharest, Romania
105 Kingston, Jamaica
105 Mumbai, India
107 Montreal, Canada
108 Guatemala City, Guatemala
109 Cleveland, United States
110 New Delhi, India
111 Pittsburgh, United States
112 Portland (Ore.), United States
113 Bandar Seri Begawan, Brunei
114 Panama City, Panama
115 Monterrey, Mexico
116 Johannesburg, South Africa
117 Kuala Lumpur, Malaysia
118 Lima, Peru
119 Nairobi, Kenya
119 Winston-Salem, United States
119 São Paulo, Brazil
122 Ottawa, Canada
123 Lusaka, Zambia
124 Rio de Janeiro, Brazil
125 Bangkok, Thailand
126 Tunis, Tunisia
127 Dacca (Dhaka), Bangladesh
128 Santiago, Chile
129 Tehran, Iran
130 Blantyre, Malawi
131 Tianjin, China
132 Colombo, Sri Lanka
133 Bogotá, Colombia
134 Harare, Zimbabwe
135 San José, Costa Rica
136 Karachi, Pakistan
137 Quito, Ecuador
138 Chennai (Madras), India
138 Caracas, Venezuela
140 Montevideo, Uruguay
141 Bangalore, India
142 Buenos Aires, Argentina
143 Manila, Philippines
144 Asunción, ParaguayThe most expensive countries in the world:
U.S = 100 (see source)
1. Japan (138)
2. Norway (123)
3. Denmark (116)
4. France (116)
5. Hong Kong (113)
6. Switzerland (109)
7. United Kingdom (109)
8. Iceland (106)
9. Austria (104)
10. Finland (103)
11. Netherlands (100)
12. Sweden (99)
13. Singapore (98)
14. South Korea (97)
15. Germany (95)
16. Ireland (94)
17. Australia (93)
18. Belgium (93)
19. Russia (92)
20. China (90)
Source: This cost of living index is compiled by the Economist Intelligence Unit (www.economist.com) for use by companies in determining expatriate compensation: it is a comparison of maintaining a typical international lifestyle in the country rather than a comparison of the purchasing power of a citizen in the country. The index is based on typical urban prices an international executive and family will face abroad. The prices are for products of international comparable quality found in a supermarket or department store. Prices found in local markets and bazaars are generally not used. New York City prices are used as the base, so United States equals 100.Sorry kingbrown, but still don’t get your point
China slows down = Perth slowing down = Bust
Property market topping out = building slowing down=negative wealth effect=bust
I can go on and on.
Busts tend to follow booms, still can’t get why your point is relevant.
My figures based on income / med price, Perth is way over priced
Dosn’t mean that it may not double again next week, but right now, it is overpriced,
Interesting discussion…
So it comes down to ‘IF’
If China slows down, etc.
I think the market is a bit bigger than China.RIght now the Chinese are having to compete with the Japanese and Koreans for resources, including both commodities and natural gas.All this competition is keeping the prices up.
The Chinese are taking a more proactive role, by investing directly in these projects to gain some control and thus guaranteeing their stock for the future. Its a bit unprecendented.
I am still looking towards a 10 yr ‘construction’ horizon and feel that yo can safely invest for the next 2 to 3 and make some decent returns.
kp
Kp, good points, if that is your research and you are comfortable with your investment profile, then that is what it is all about.
Research alternatives, risk anaylysis, comfort level, opportunity cost, greater risk usually equals greater return etc.
Happy investing
gmh – which city are you investing in? why?
As for Perth/WA:
* Only 1 in 20 people work in the resource/mining industry.
* Japan is WA’s largest trading partner (not China).
* The combined exports from WA to South Korea and India = the value of exports to China from WA.North West Shelf signed a contract to supply between 3 and 4 million tonnes of LNG, for the next 25 YEARS. This was to one customer (yes, China), it commenced this year, and is Australia’s BIGGEST EVER single-value export deal.
The WA economy has been the nations fastest growing for over a decade now, and is projected to remain the fastest growing for some time yet. This is not some fifteen minutes if fame – this is years and years of WA gaining a larger and larger slice of the Australian economy. Of course, the boom won’t last forever – but there will be warning signs for all to see before it happens. Just as smart investors realised Perth was undervalued, smart investors will see any bust well ahead of time.
Who is predicting China will bust? When? Why?
I have a question that I can’t get an answer so far.
How is the affordability level in Perth? Is it historically at a very high level or still have a bit to go?
I quess China can go bust but can also pick up. I feel the prices have gone stupid but that could be because I am not used to it. But then again probably it has gone stupid. Personally I don’t know too many people buying property at the moment.Must depend on what circles you mix in then zen,
I know plenty of people who are still buying, but they are not financially challenged by the current interest rate rises.
A far as I am concerned, money is still cheap ( I recall as gmh pointed out, when rates were at 17% and beyond) so I am happy to keep borrowing at current rates.
This continues to be a no brainer market as far as I am concerned, where if you can get hold of t vacant blocks and organise a house to be built, and the as completed market value shows a spread of anything from $70k to $150k, then its pretty simple.
When I can’t do this anymore, then its time to look at other avenues.
kpOriginally posted by zen1:I have a question that I can’t get an answer so far.
How is the affordability level in Perth? Is it historically at a very high level or still have a bit to go?
I quess China can go bust but can also pick up. I feel the prices have gone stupid but that could be because I am not used to it. But then again probably it has gone stupid. Personally I don’t know too many people buying property at the moment.hi zen1,
I think the affordability level in Perth is quite high, but I still think there is more to go. A lot of people in Perth bought property before the price rises and so now they have a lot of equity. If they want to sell, they can still buy an “expensive” house.
For first time buyers they are pretty much stuck with buying an apartment or townhouse and even these are getting too expensive for them. Unless the first time buyers are a working couple on high incomes that is.
I do know of people making money in property in Perth (and other areas of WA) so it is still possible.
Real life example from the past weekend:
House was put up for sale for only 5 days. There was only one “home open” time and there was no for sale sign. Over 30 parties looked through the house and three offers were presented. The final offer was $45,000 higher than the asking price, and the asking price was over $850,000.
Property location is quite close to Perth but I am not sure of the house or land size.Originally posted by kingbrown:gmh – which city are you investing in? why?
Who is predicting China will bust? When? Why?
Sydney, land bank 5 acres 30min from CBD (on a good day)
Commercial, I am the tennant, will sell when I retire (tax free cap gain….) and feed my super fund around 100K per year.As for China. heard a long term econmist, (on ABC I kind of rely on them a lot) one of the guys who predicted the Asian meltdown of the late 90’s, who gave the reasons why China will stall, and that is why the long term foecasters have been predicting rate rises etc peaking around 2007-2009, Also mentioned that cost of Chinese labor had doubled, can’t remember if whether it was one year or two.
Question for you on topic when do you think WA will peak.
More interesting and informed stuff from both gmh and KB..
Thanks you guys.
I think its already peaked and taking a breather. What happens next is the interesting thing.
Does it stall and correct, or continue up for a bit longer, or just level off and stay sustained.I think it will level off with moderate ( below 5%) growth for a couple more yrs.
I’m reading China Inc. ( haven’t finished it yet)
With regard to labour prices doubling, they theory is that the market will seek out a cheaper labour market once China gets too expensive for labour.
Could be S Africa, or S America, or Bangladesh, or even India.The same way manufacuring went from japanto China, it will eventually move elsewhere and China will just become consumers like the rest of us.
But its going to take a long time for this to filter through. In the meantime, the good times will prevail.
kp
A very interesting read guys.
Im from SA and I am currently developing some property in SA and I believe in keeping things simple and local when it comes to property investments.
A while back it was forecasted that prices in SA were over-inflated and that they would drop or at best level out. 12 months later prices are still increasing in many growth suburbs of SA… however there were those suburbs that were over inflated and did drop.
II think global and national economic factors have an influence over property prices but what about all the factors that occur at a suburb level…? Whats are your thoughts on this?
Going back to my comment about keeping things simple. Well my wealth creation process is basically buying run down places in growth areas and then developing appropriate homes for the people who want to live in those suburbs and then either renting or selling them.
Its been working well for a while, so havent had a need to change the process. Its not easy, but the more you are in tune with whats really going in your city/suburb the more profits you can make.
Keep the posts going on this one, really enjoying it. [thumbsup2]
Have downloaded some datasheets from RBA site. Made this graph to help me to understand/ predict economy movements.
According to what I see, we are on the beginning of the next “Major†interest rise cycle. Any comments anyone?
Bad lack! Cannot post picture here. How to post pictures here anyone???
Anyway, link: http://img387.imageshack.us/my.php?image=untitledpb8.jpgOriginally posted by simple:According to what I see, we are on the beginning of the next “Major†interest rise cycle. Any comments anyone?
Agreed for many reasons.
Problem for western sydney is Property market has been tanking
BEFORE the rates started to move upward.Remember one of the boomers here on the Boards who talked down a correction as not happening before interest rates had moved a long way back upwards. Would love to here his take on western Sydney now, as rates are still below what he would have called a neutral setting.
Interested to see how credit growth and retail go this Christmas
Originally posted by gmh454:Interested to see how credit growth and retail go this Christmas
I wouldn’t be surprised if they showed some strength. Peoples’ attitudes and expectations won’t have changed so quickly, and providing they still have some $ left before they hit the last credit limit on the last credit card, christmas will be ‘business’ as usual.
Look on the national scale – although people bleat and cry poor every time IRs go up, they’ve been more than happy to accumulate an extra $100,000,000,000 in debt over the last 12 months, even though their wages only rose by $17,000,000,000. Certainly a nation of grasshoppers rather than ants! If we, collectively can be so profligate for so long, I doubt bad habits will change overnight. Next year looks to be interesting though. 2008 even moreso.
F. [cowboy2]
Originally posted by zen1:I have a question that I can’t get an answer so far.
How is the affordability level in Perth? Is it historically at a very high level or still have a bit to go?
I quess China can go bust but can also pick up. I feel the prices have gone stupid but that could be because I am not used to it. But then again probably it has gone stupid. Personally I don’t know too many people buying property at the moment.Hi zen1,
A few quotes for you:
Warren Buffet – “I always buy my straw hats in the winter”
Unknown – “follow the less travelled path”.
Rene Rivkin – ‘buy in gloom, sell in boom”.
You are right; most people are not buying property at the moment, but most people are not investors.The only people buying property at the moment are the experienced investors (and maybe some inexperienced one too).
The market is mainly flat or going backwards in most areas, and the interest rates are going up,up,up. YAY!!
Bargains to be had in those straw hats!Cheers,
Marc.
[email protected]Hi GMH,
I think you are right in predicting that there is worse to come for the out west in SYD, my sister in Cambeltown is packing it big time as they have a house today worth $300k (was $400k) and now there debt is $325k.
Hi Foundation,
Yes lets see what people do this year at xmas to their little Aussie or Virgin low interest rate credit card – boy aren’t you glad you have one of those little babies, Credit card debt hit a new time high of 36 billion dollars – so i predict that Aussies will hit 40 billion in credit debt by January 2007 – go Aussie go, you little beauty, but hey why not its been a hard year so at least lets have a good Christmas.
L.A Aussie,
I don’t think the smart people are buying property at the moment, I think the smart investors are waiting till after xmas possibly May/June to start buying – the people and big developers I talk to are sitting on the fence ready to pounce on another 15% drop. Are they right or wrong, well lets wait and see …
D
I am trying to keep a close eye on retail sales figure. I have access to sales $ of one of the upper marker fashion retailer chain ($1000 for pair of shoes).
So far market have not waken up for Christmas spending. Sales are flat.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
