property boom or not???

NOT:)

Mackar,

I don't think we'll see a boom anytime soon but I do believe Australia will ride this global downturn out much better than most.

I believe:
– that the US, UK and continental Europe will suffer pretty strong downturns / recessions
– that BRICs and other emerging markets are decoupled enough from the US to continue to grow but at a slower pace
– that commodities will stay high for many years to come due to the growth in emerging markets
– that even though prices will recede from their recent peaks they will stay high (e.g. oil is down from its recent $140+ peak but I believe it will stay in the $70 to $100 range which is much more than most would have believed only a short while ago)
– that robust commodity demand and commodity prices will keep Australia afloat, i.e. not suffer as badly as the US and UK
– that migration will stay high, as recession sets in in the UK there are plenty of people with equity who may well decide that this is now the time to go down under
– that inflation will stay above target so interest rates will only decrease slowly in Australia
– that the census data stating 900,000 houses are empty is misleading and that a very limited amount of this will actually get onto the residential market
– that commodity states like WA and QLD will not suffer a great rise in unemployment but this may well be different in say areas around say Sydney
– that local variations in unemployment, will further increase interstate migration towards QLD
– that some areas may well suffer severe declines in property price, i.e. those areas with higher unemployment where people bought too high and leveraged themselves too far. Some areas like SE QLD and other selected areas may well actually continue to increase slowly.

Oh, and as always, when the inevitable correction in the cycle comes all the media and the public declare property prices lost forever, that prices will drop by 30%, 40%, 50% or more, typically the corections are much smaller and after 7-10 yrs or maybe even 12 yrs we'll have had another cycle… I read an interesting article a few years ago that actually summed up all the popular reasons why people shouldn't invest in property in the 40s, 50s, 60s, 70s, 80s, 90s and so on. If you had followed these common reasons why "now isn't the time to buy" you'd never buy anything …

I believe property will bounce back next year with gains of over 20% per year for the next 5 years. Rents will stay with the price rises with the above very sustainable as incomes starting in the mining sector flow through to the wider comunity. The usa is alsmost out of it problems and i suspect to see strong gains in ther housing in the coming months.The UK will closly follow.
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Only kidding. Just wanted to make a few people foam at the mouth waiting to tear me down

Scamp man,

I am not your enemy on this – I've been a Bear for the last 3 years. But no one knows exactly how bad it is going to crash, how much each state is going to be affected, how much of Australia's property market is over leveraged and so on.

Two dice don't have the human element. No-one can judge exactly how people will respond to given situations so don't pretend you can. I agree with your financial research but you can't garantee what is going to happen in Australia.

Most  people alive in Australia at the moment have never seen really bad times, there is no precedent for how they will react. We may have massive bank runs – the likes of which the world hasn't been seen since medieval times. We may even linch some investors and CEOs The government in this country (doubtful, I know) may be able to have more effect on the banks than in the US. We may all go Ned Kelly on each other, we sure as hell couldn't effectively declare martial law in a place this expansive. The point is, your maths can't predict these kind of things.

House prices are just overpriced. That's all. People all over realize this now, they see people going bust because they overleveraged themselves : They don't want to make the same mistake.

Lower houseprices are good for the whole country.

Mackar : about your comments on the concessions etc. They only apply to FHB's. And those have been priced out a LONG time ago. Only 7% of home sales are FHB's. The rest are investors / second home buyers etc.. They don't get the FHB benefits. The fact that FHB's have been priced out also means that no new 'blood' ( aka , money ) can come into the loop. The investors are now basically fighting eachother. FHB's are ( have to ) wait on the sidelines for 40% pricedrops. It will only get worse as banks will require more and more deposits , which few FHB's have.  ( about 7% of FHB's have deposits… the rest burns it on plasma tv's , subaru impreza's and nokia mobiles ).

mackar,

The obvious answer would be that thier integrity isn't worth as much as thier profits. For a property analyst to useful, there has to be alot to analyse in the property market. An active market is job security for them.

In my time, I have been, amongst other things, a cop and a public servant in the unemployment sector and I tell you, as much as they are a pain in the butt, criminals and dole bludgers were great for my job security.

I will tell you what the analysts do :
– In good times they will spruik and say how good they are
– In bad times they will blame it on everything else except themselves.

There was even one bank who blamed their bad year results on the WEATHER haha… how silly can you get.