The Housing Industry Association says housing affordability is at a 24-year low.
Yet economists are divided over whether Australia's troubled economy will work for or against those struggling to buy a home or maintain a mortgage.Economist Steven Keen has claimed Australia is heading for the worst recession since the Great Depression, and predicts housing prices will drop by over 40 per cent.
The ANZ’s Saul Eslake warns this is a dangerous assumption, while economic journalist Ross Gittins believes we are in uncharted waters, with household debt at an all-time high.The above was take from Insight SBS forum. With so many educated opinons on the board witch do you beleive? Im about to buy land to build on but am starting to get cold feet and Ive seen many investers holding back. With all the above being true why cant I pick up a bargan? Why has my builder given me a price increase of 9k since his first quote? Land has not gone down in price, if so not in my area. The experts (so called) can they be wrong what is the true forcast for the Aust. property market?????
A drop by 40 % seem to good to be true. Worst than the great depression. I some times wonder how people can come out and say these things to the puplic on TV as its a bold statement.
Anyone got any comments on the Insight programe on SBS also available at there web sight, Let know what you think.
Cheers
T……………people always assume a 40% fall is impossible, yet just look at bank shares which have fallen 75%. everyone said that couldnt happen.
we have had 30-40% falls in houses during previous recessions, so why would it be unlikely now?
Dont forget these so called falls are from the absolute top of values to a expected absolute bottom( The worse case scenario). From that low they will go up again eventually. If you bought at the top and sold at the bottom then you are very very unlucky. What houses are worth in ten years is what concerns me. Not next week.
Many say wait till the bottom then buy but when is the bottom and also how many of us have the guts to buy in a environment that most are just worried about keeping a job and nothing else.yes some crappy times are coming. so pay your bills,keep your job and get ready for some good buys at the other end.
crashy wrote:people always assume a 40% fall is impossible, yet just look at bank shares which have fallen 75%. everyone said that couldnt happen.we have had 30-40% falls in houses during previous recessions, so why would it be unlikely now?
Not impossible, just not very likely. With bank shares they may have $5/share worth of assets yet trade at $50/share and there isn't much stopping them issuing a few more if they needed extra cash.
With houses you have to look at the cost of that piece of dirt plus the cost of developing it then add the cost of building the house on it . Add all the taxes and charges accumulated along the way and you have the support price for a house. Could you shave 30-40% of these costs without going in red ? If the answer is yes then you could have a sustained 30-40% fall.devo76 wrote:Dont forget these so called falls are from the absolute top of values to a expected absolute bottom( The worse case scenario). From that low they will go up again eventually. If you bought at the top and sold at the bottom then you are very very unlucky.Also unless its the same house that sold at the top and bottom or at least a similar house on the same street its hard to measure falls . The fall in prices could just be the result of more properties sold from the lower end of the scale. Just over a year ago I was looking at reiwa's site for some stats on my suburb and we had this massive 50% jump in prices in just one month. Got all excited and ready to call the agent to put the house on the market before I had a closer look at what happened. It turned out that only one house sold for that month and it was a riverfront property. Of course the following month when only one average priced house and a fibro-shack were sold prices crashed 60% .
Steven Keen is 100% right, The whole western ecconomy is built apon so much debt its almost impossible to comprehend, Fractional reserve banking is a cancer that has brought us to the brink of a total western collapse, The western world dosent even produce enough food to feed ourselfs and we don't produce anything, We are consuming based ecconomys, and rely of the East to survive.
Central banks are all privately owned by elitists who have no one to answer too, Our own government has no power over RBA, They can do what they like and its there social intervention of artificial interest rates which has caused our housing bubble that is so big, It alone could totally collapse our whole ecconomy. Not only that credit card debt is australia is now over 50 billion, double that of only a few years prior, So to round things up People have 300k+ mortgages car loans, boat loans, bike loans, credit card debt, my god, people even own money for there TV and Washing machine, Basically we have nothing, Our wealth is all an imagination and we don't produce anything, If our food exports stoped tomorrow we would stave.
While all this false wealth is being circulated banks are creating more false money out of thin air and lending out 10x there deposits which are sold as securitys, which is used as assests to borrow out even more false money, even thinking about it makes me sick, yet everyone on this forum believes we are so wealthy
In America companys that have been around for 150+ years are going broke, companys which lasted through the great depression, yet people still swear there is noooo ecconomic trouble, everything is fine, stop thinking and keep consuming.
So you want to know what to invest into right now ? absolutely not shares, you will loose your money, Also not cash as if hyper inflation sets in it will be worthless.
Metals are good assets as they can't disappear (unless the government steals it off you, which has happened before) land that is on a natural creek or some kind of unsalty water souce will always be valuable, also fertile land will be highly valuable
Last thing, don't believe the misinformed people who will tell you nothing is going to happen, Go research it deeply for yourself and form your own opinion, Learn how our monentary system works and learn the things the government does not want you to know, things that are not shown on the mainstream news.
house prices will not fall, read Michael Yardney's insight on http://www.propertyupdate.com.au
Anyone who tells you positive news about the housing market is deceiving you, the Average house will not be $600,000+ in 5 or even 10 years time.
Wages increase over the past 10 years have been 1.5% pa, The current average australian wage is 55k taking compounding into account in ten years the average wage will be $63,829.75
The average australian on the average wage will not be buying 600 000+ houses, don't believe the bs
hbbehrendorff,
The biggest risk to Australia's future is Australians. If we take the attitude that everything will be doom and gloom and stop investing and spending then we will have a recession. What is needed is responsible investing and spending and not the doom and gloom that some are trying to install in others.
The problem with debt is not those who have it for investments but those who have it to buy depreciating items such as cars, TV's etc. Property values will rise, fall, rise and the cycle will continue. It is how much of each that will determine where the market is in the future. Materialistic possessions comes in all sorts of forms and is not just limited to technologies but to livestock, food and humans as well.
hbbehrendorff wrote:Anyone who tells you positive news about the housing market is deceiving you, the Average house will not be $600,000+ in 5 or even 10 years time.Wages increase over the past 10 years have been 1.5% pa, The current average australian wage is 55k taking compounding into account in ten years the average wage will be $63,829.75
The average australian on the average wage will not be buying 600 000+ houses, don't believe the bs
Mate. Very few people believe there are no bad times ahead. There just sick of people vomiting up the same crap over and over and over only to have them disappear and then reappear under under a new forum name saying the same crap again.
Yes bad times are coming . We all know that. How bad it will be. Not even you know. the media will be full of bad events but they may be far from the average. You actually raise good points that im sure myself and others take on but then you start that end of world shit and you lose all credability. Yes it might be what you believe but for F@#K sake you are on a INVESTING FORUM.
Go back to GHPC or maybe start a new web site
Itsalloversoletsgokillourselvesnowandbedonewithit.com.au
Every decade or so there is a event that will end life as we know it and there are people everytime out and about trying to convince us of just that. Congratulations your part of history.
Point taken ok. let it go.
Here is something we all know: savings rates are down and the average citizen in the US, Uk and Australia has more debt than ever and less wealth then before. Right?
Well, maybe not quite, an analysis by the Reserve Bank of Australia burried in the RBA's Statement on Monetary Policy from May 2006 shows that if you take the traditional definition of savings indeed savings rates have been falling in Australia, but in this definition any growth in investments is not included in savings. But that's deceiving as nowadays many people save by putting their money in investments like property or shares rather than just putting the cash in an interest bearing account. If you do include equity growth teh savings rates are actually pretty solid, hovering between 10% to 20%.
As for net wealth this was $32,000 in 1991 per person of working age to $90,000 in 2005. Even taking a 3.5% inflation into account that is a 60% increase in net wealth.
Bit hey doom & gloom sells better …
Bad times can be good times for the future – they are just rough in the present (and will get rougher).
Does anyone truly believe that houses actually became worth 3 times as much over the last 10 years? if you do, good luck…
Reasonably, the most they could have possibly increased is to have doubled in that time period. That means a 33% shaving from the top of last years peak.
It isn't just folks who brought at the peak who will feel short term pain (10 years or so) it is also those who used peak valuations to leverage extra loans against.
I think the biggest question now is how high can Australian banks raise interest rates? Where is thier balance point between Australian foreclosures and staying afloat in a crashing market?
People shouldn't be so critical of others for having a different view on future prices.
This is a forum. Everybody's opinion helps.
I am a very experienced investor and i believe things are going to fall further and I don't bank on seeing price growth for some years now.
The time is coming to buy again. Ignore what salesmen tell you.
Yet economists are divided over whether Australia's troubled economy will work for or against those struggling to buy a home or maintain a mortgage.
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