Everyone has i different idea of where we are heading so post here what you think we are in for. Can be based on facts,rumors,opinions or what ever just keep it short.
My guess
#Labour wins election
#Interest rates rise a few %
#Resources boom holds of recession until 2008.
#Property has a soft,ish landing due to continued mining activity strong economy and rental demand( Some areas suffer more than others)
#Property in general bumps along until 2009-2010
#House value to wage and debt balance starts to improve in 2010
#Interest rates reach lower end of cycle again
# rental returns look atractive again #Property improves markedly in 2012
#Property boom 2013.The above is a total guess but im sure you get the idea. What are your thoughts?
The boom is on. RBA might be having something to say about that though.
Some figures coming out the Sydney market today put what yesterday was a slim chance of a rate hike much more likely. In an election year too. A labour win, well a "Glorified political staffer" running the country, unlikely.
Public Policy, broadly the cost of housing increasing beyond the average wage earners reach is a hearts issue even if the minds are much further behind. Thats gotta be on the radar. Demand in particular areas in Australia could result in social displacement. People on the streets. They are already there, they just haven't made the weekly news cycle. If interest rates are on the rise some of these displaced Australian's (battlers) will become household names.
Government intervention – the process has begun with a greater focus on the freeing up of land for development. Are we looking beyond the trends and towards the intervenors for answers?
Intervention – Government policy can be unpredictable and have unwanted outcomes that then require greater intervention/correction. First Home Buyers Grant a case in point. Let the market be. That ain't going to happen though.
Every time the Govt gets involved in trying to influence the Property Market either of 2 things happen:
1. They try to improve affordability and there is a surge of interest and the boom occurs (F.H.O.G).
2. They try to stifle the market to improve affordability or curb the investors and a slump occurs (1987 cancellation of neg gearing benefits).Either way, it is good for me; rising prices is good for my equity and rent returns as people can't afford to by so more renters out there, or a slump means I can go shopping for some cheap properties. Go Johhny, go! (or Kev! – god I hope not).
My prediction;
Liberal wins; steady as she goes as has been the case for 10 years or so. Johnny is annoying, but a very smart politician and has steered the Country quite well so far.Labour wins; higher interest rates and housing slump. This is because their focus is on the 'battlers'. They keep giving them handouts, and of course, they just spend it on crap, a deficit occurs, inflation rises so the interest rates must follow to curb the inflation, affordability plummets yet again and bingo! recession and slump.
Devo, your prediction would be perfect if it came true. I would have atleast 2 IP's by the supposed 2013 Boom, excellent. Maybe even three.
The only big problem I'm having is that I hope that the boom holds off at least till the start of 2010. Please, please. then when I buy my next one, shortly after i hope there is a boom and i'm sitting pretty for now.
Chris.
I agree with LA Aussie tho if it turns out Costello is in the running, libs won't stand a chance.
As Opportunity mentioned, the govt is bent on freeing up land for development. ON ABC radio (Brisbane) yesterday they talked of how more land would be released and the red tape that developers face at council level should be cut through much faster. THey had many commentators predicting that this increased supply should drop the price of houses by about $20k. I believe that was Anna Bligh's (Qld) prediction. Now I dunno if that 20k is on an million dollar property or something cheaper but I'm guessing they are aiming at 20k less for $300000 homes.
of Course this is not good news for me because I'm reliant on capital growth. I would like to see a big reduction in stampduty cos as LA aussie inferred, it would increase demand, encouraging a boom. I suspect the lib govt doesn't really want to see a drop in prices. We have a large amount of overseas investors that they want to continue to encourage.
If Labour get in, which i think is most likely to happen unfortunately, the property market will slow dramatically.
rob2626 wrote:If Labour get in, which i think is most likely to happen unfortunately, the property market will slow dramatically.Why? The PM (John Howard) says that house prices will jump 3% if Labor (note:no u) are elected.
Hmmmm…
Would house prices rising, be a negative for the average Australian that is knocking John Howard back due to the change in IR laws?
Yes it would be.i read that 51% of renters are wanting to purchase within the next 12 months while only 16% believe that it will be possible for them.
Perhaps that is why John Howard is saying that housing prices will rise if Labour get in. To win a few votes back
On the other hand i also believe that the housing market will slow if Labour get in until everyone finds out how Kevin Rudd plans on running the country.
What is the historical trend in housing in election years after an overturn in parliament?
I read an interesting essay by Rory Robertson from Macquarie bank about house prices and he postulated that one of the reasons house prices was so high was due to where everyone wants to live. Freeing up land on the urban fringe of large capital cities only tends to reduce prices in areas around there, they dont have much of an affect on the "prime" locations everyone wants to live in. He also mentioned the usual increase in money supply, lower interest rates and sundry. Anyone who thinks interest rates are higher under labour needs to read more history as john winston howard as treasurer had interest rates at 20% at one stage. I think personally that things will trundle on very nicely until about late 2008 or early 2009. Then the share markets will go down hill fast, property will go up as everyone rushes to safetly. As problems arise with jobs and income property values will drop likely rapidly and i think we might have a decade like the 60s which saw little change in share prices or house prices.
Thats my priceless opinion, just like everyone elsesHi, like eveyone else, I worry about my exposure to property prices.
It's in the news that SA govt is freeing up another 20000 new allotments. Quite a few people have commented that it'll improve housing afffordability as it'll bring house prices down.
Qualitatively though, housing is not quite statistics alone. Sure, new houses in these new estates may be in the $230000 range though it's quite doubtful.
However, I don't know a single person who is thrilled that the govt is releasing these allotments. No one I know wants to live in Hackam, Blakeview or Virginia/Gawler.
How can these new allotments compete with the suburbs within 6km of the city?
House prices can and do come down but who can tell me when? Million dollar question, isn't it? I'll be happy with 5% growth pa.
Good luck,
Kum Yin
I think the aging baby boomers will create a massive surge in immigration beyond the high levels we are already experiencing.
In SA alone it is estimated that over the next decade 380, 000 jobs will need to be filled because of the retiring boomers.
The only way these jobs will be filled is by increasing immigration, skilled people who bring a reasonable amount of money with them. So they can afford to buy into the housing market which will feed into supply and demand problems.
The older people I've spoken to have no intention of selling their family home and they are in good health. So they should have many years of happy retirement.
So for me I think this will be the basis for substantial returns on property over the next decade and I guess this will be duplicated around the country.
kum yin lau wrote:House prices can and do come down but who can tell me when? Million dollar question, isn't it? I'll be happy with 5% growth pa.
Good luck,
Kum Yin
Would you really be happy with 5% growth, when your intrest rate on your loan is 8% and inflation hitting 4%,
A very interesting thread you have started here Devo76. Very dangerous to bring Politics into the arena, so i'll leave that alone, but here is a thought that has been going around in my head lately.
Labor insists that for the average Australian home buyer, affordability is almost out of reach. I propose that this is not entirely the case. I see the real reason for the percieved disparity is the fact that our young have been so spoilt over the last couple of decades that they want the Ferrari before they get the Holden. That is, many will not accept that in order to get into the housing market they must first face reality and lower their sights to what they can afford rather than gripe about what they believe the world(Government) owes them and in fact should subsidise them.
Most of this thought process stemmed from a property that I sold a couple of weeks ago. Now granted it was not a palace, but it was solid and with a little TLC could have made a nice first home. Priced at $265,000 for a two bedroom unit within 6k GPO, it was an ideal first home and in fact the enquiry level indicated just that with 85 calls in just 4 days. The open house was like Queen Street with people queing up to get inside, needless to say it sold on the day. The interesting part of the story comes from the follow up calls that I made to those who missed out, the general concensus seemed top be "Oh no I was wanting a newer unit than that with 2 bathrooms and closer to the shops". When I asked if they could stretch their budget to $330,000 in order to achieve their wish, most said No they could only afford $250,000. I guess that there are 83 or so people out there still living in hope.
Interestingly the main reason for wanting to live close to the City was not so much work related but entertainment related, so perhaps our Politicians should consider Developing large Nightclub and entertainment fercilities in the outer suburbs in order to encourage our younger people to take these more affordable areas into consideration.
Jon
I must agree Jon.
Interesting story in this morning's Courier Mail about housing affordability, featuring a young woman who had just bought her first home, a $320K unit at Wavell Heights, (an "in" suburb about 7-8km from the Brisbane city centre). She said that she could have bought a cheaper property, but it would have been further out, and the extra travelling time would have meant that she had no time for a social life. Article also mentioned that she would be paying more than 50% of her income in payments……..
As a somewhat ageing baby boomer (who bought our first home in 1974 when a 33% deposit was required), I just shuddered.
Is it really an affordability issue, or is it a case of "kids" wanting to start out where their "parents" finished?
Cheers
Marg
Your right Jon,
alot of young people have really high expectations, My girlfriends bestfriend was complaining about 2 weeks ago that she hates the fact that she is 26 and still forced to live with her parents because she refuse's to pay what she classes as 'High' rents, and she said house prices so high there is no way she could afford to by a house,
As she was explaining this to me she was conecting her digital camera to the television to show me all the photo's she had taken on her recent trip to europe, and she wasn't planning on working for a while because in 2 months she was going to the usa on another trip and she had enough "savings" to live off till then. so between two trips over seas and weekend benders drinking vodka crusiers there is no way that she can afford to leave home or buy a house, shouldn't the government be doing somthing more to help the poor little battler trapped in this kind of situation.
I
My 2 c worth
I believe affordability is too much marketed as a hearts and minds thing. It is always there if you make some sort of sacrifice.
As a 20 yr old, I bought my first home, which was a glorified dump, but with 25% deposit, and over the next 10 yrs 'fixed it up' and sold it for 6 times what I paid for it.
As a 30 yr old, I raised 6 kids on a single income, and yes, my kids shared a room with their siblings, 2 to a room. We drove shite cars, but had lots of fun and entertained regularly. Our house was always full of noise and action, people and joy. Didn't go out a lot, Why would you when you had more fun at home. Sold that one and moved UP, selling for more than we newly purchased, again.
As a person approaching 50, we are living in our 3rd home, and have a few investment properties, bought with the equity in our PPOR. They were cashflow neutral, but appreciating nicely. (after 1 yr). Have raised the rent, happily still with the first crop of tenants, so they are now positive.
We have always lived within our means. As an example, we have NEVER had a new lounge suite. and may never. At one stage, we had two tv's, One had a picture, and one had sound!. So what!. We made do.
I do not see our generations children being ready to make ANY (ongoing) sacrifice to build capital. They do not want to start low.
They want to start at the top. This applies to employment AND housing, AND cars AND other goods.The result – Residential investors will always make a killing if they invest wisely in desirable areas.
Fringe areas are nowhere for them. Return does not match investment.
The basics of investing will not change.
Won't matter which government is in power.
You people do realise that there are several factors preventing genY from saving 20% deposit (like their parents)?
– a 'dump' now is at least $250k (based on Brisbane prices)
– that means a saving of $50k is required to get that 20%
– house prices have risen much faster than wages, making it harder to save the deposit
– the 'cheaper' fringe areas are now much further away, and don't have good infrastructure or public transportThe way some posters talk they make it sound like every genY family comes home in a brand new car, watches tv on their 235" plasma screen, holidays at 5 star French resorts, bathes in chocolate, and then complains that they can't afford to buy that nice 345 bedroom castle with water views.
Contrast this (of course) to the baby boomers, who: worked 25 hours a day for 10 years to save a 20% deposit. Once they got a loan, they had to walk 50 miles home from work (through snow) to their new house on the outskirts of town. Once home, they sat around on borrowed milk crates staring at the wall (couldn't afford a TV), and eating dirt.
Damn that generation Y, they just don't understand how easy they have it! *shakes fist
Gen y are also living at home with the folks until their mid to late 20's also. If they cant save any money when all their expenditure normally amounts to is petrol for getting to and from work then they can cry me a river!!!!
You must be very out of touch. Anyone with a job in the city certainly wouldn't be driving to work, or they would go broke (seen parking costs lately?).
Plenty of GenY people (myself included), moved out of home at 18. What do you say to us?
Dead Cat,
your first post defending generation Y may having been refering to some of my comments,
I am a member of generation Y myself, I am not some baby boomer looking down on todays generation, I turned 25 in march and have certainly not found it difficult to get into investing in property.
So the market has changed, affordability has decreased,….. So what,
spend less than you earn, and invest in growth or income producing assets to get your deposit, and I guarantee you will get there.
sitting there saying I can't because,……. rents are to high,…… house prices are to high,….. I don't earn enough,….. my partner doesn't earn enough,… I have kids,…. I want to have a social life,….. that house is to far away,…… that house isn't good enough,
I don't like that area,…. I wouldn't be able to go overseas if I saved that much,…. etc etc etc. these are all just excuses.yes the market has changed,….. so change your stratergy,…. stop thinking 'I must save for deposit' and think 'I must invest my money so in 3-4 years I will have a deposit.
Think outside the box there are so may differant stratergies you could use,
You must be logged in to reply to this topic. If you don't have an account, you can register here.
