Hi peoples,
Just wondering if I could get some thoughts of people in the know regarding house price trends,
Thanks in advance for the time.Do you think its a FANTASTIC time to buy now, Or do you think prices will continue to fall? I’m entitled to the FHOG, BUT prepared to give up the chance to use it, if house prices are likley to fall a lot over the next year or two.
Reason being I don’t want to kick myself if I don’t buy know when there is all these incentives, plus crazy interest rates atm.Recession trends.
Does anyone know the general trend (if any) of house prices during/following a recession. BTW are we in recession now, or is it still looming? I have heard that house prices should drop by 40% by end of the year early next, but the source is only somewhat reliable, lol.Thats pretty much it,
Cheers
Joe
Assuming that the FHBG additions arent continued in June, prices will definitely be much cheaper at the lower end of the market, simply due to reduced demand. This probably wont be realised by sellers till Aug/Sept though and won't start to appear in statistics till Oct / Nov. The cost reductions will more than outweigh the FHBG benefits, unless you were relying on the additional grants to get your deposit together.
Hi Mattnz,
That absolutley makes sense, I didn’t think of it in that way. Cos no FHOG – less demand- downward pressure on $$$. I probably won’t need the FHOG for deposit, So ill probably give it a miss and see what happens with prices.
TA
Joe
The government will choose to extend the grant if they can.
If you knew for certain waiting until after to buy if it was not continued could yield you discounts compared to the current market.
i see it as it ALL DEPENDS what your looking for, i see demand for 1 bedrooms 200-300K ALWAYS in demand, everyone can afford these. in hard times and good. however once you step into the 350-400+ range, it gets a little difficult
if you see something at a good price, (and think the grant WONT last) dont let this to persuade you to not buy it.
thats just silly.
As pointed out above, property in the lower price ranges (sub $400k) has been in higher demand from FHB (it may be considered that many FHB have brought forward their purchases by 12-24 months and that if the grant (or the additional incentives esp in NSW) are withdrawn, then there will be some downward pressure on prices). If FHB have been using the grants to bolster or make up their deposits, this will have an even greater downward pressure on demand and price, especially if as many articles have noted that prices have been inflated by the FHBG.
Consider both your upside and downside risk when entering the market prior to June 30.
Thanks everyone. I think the logic of people buying earlier because of the FHB is true, and that when it stops (if it stops) the lower end of the market won’t have as much interest at least for a little while.
I think we decided to wait it out, we don’t NEED the FHB for deposit and don’t want to rush into it if prices will fall again shortly.Cheers
Take care
Joe
You are asking all the right questions. But nobody has the 100% correct answer for you. If it was that easy I would be asking for next weeks tattslotto numbers and forget about housing. I'm sure someone will give them to you if you ask but as I said they may not be correct. It really is up to you and why you are buying. Is it a PPOR or Investment?
Do you think its a FANTASTIC time to buy now, Or do you think prices will continue to fall?
Look at it this way its not a FANTASTIC time to sell, if that helps ya. Does it have to be a FANTASTIC time before you will buy a home to live in. Joe, you may be better off moving back in with family or renting for a long time before it will be a FANTASTIC time to buy.
You are considering the facts, and that's the right thing to do. These facts may also impact on you & your ability to pay the home off. Job loss, falling prices, higher interest rates etc. Its an OK time to by if you get the FHOG need to borrow at record low rates and need a place to live. It also helps if ya can find someone who has to sell. So say you get it for 20k less that they needed (or than it will cost you to build it)+ FHOG + current low interest rates = an OK time to buy the right place at the right price.
As to the big question will the FHOG boost drop off in July, well K Rudd seems to like spending our money and handing it out to stimulate the economy and it needs a shit load of stimulation now & in the future because its not at its worst yet, not by a long shot. If it does drop off it will put alot of FHB out of the market. Make the sub 300k place sell slower and the 300k & above sit or come down. You may also see builders offering to build for less, special deals, products made to suit the economic climate.
Australia still has a lot of money around. It just means you don't or will not get as much for it as you used to, but real estate, housing is a must have item so there will always be a market for it. The main thing now is to get the right place at the right price & now is the time to bargain the price. You cant afford to over pay in this market Joe.
Look at it this this way Joe we all know they are not going to go up 20 % pa. Most likey a price reduction but not a 40% fall in 12 months, lets be real. If you are buying for an investment you should be asking if they are going to go up not down.Anyway hope that has helped a bit, if not made it harder to make a desishion. Good luck and I hope you find a bargain.
Cheers
T…………..Hi Joe,
I concur with everyone elses comments, really. I would love to buy, if I could find something where the numbers stacked up well enough for me. But they don't, at least not in the district I am carefully watching. I can only hope that the govt will choose not to extend the FHOG boost, and that an opportunity will present itself later in the year. Till then, patience, patience.
SThanks Tony and SHales for the reply.
I will just wait till K Rudd stops the FHB, and hopefully prices will come down.
Its not really like im trying to find the diamond in the rough, I just don’t want to buy a house and it go down in price.For the time being I will continue to rent or should I say pay of some guys mortgage while he smokes a nice cuban cigar and drinking wine. Can’t wait to return the favour to someone who needs accommodation in the future lol.
KNowing my luck K Rudd will not only contiue the FHB but he will probably double it lol
Ciao
JOe
My suggestion would be to keep an eye on the market, if you find a fantastic opportunity, grab it, otherwise wait till there is less competition. You may want to look at ways to buy property that no-one else will realise is on the market. Anything that is reasonably priced on domain or realestate dot com you will have significant competition for, but not everything is listed there.
I've certainly noticed when looking around at properties here in the Eastern suburbs of Melbourne that people are going crazy in the $350 – $540 FHB market….we pulled up to one inspection and I thought "Pink" must have been appearing such was the mass of cars….
Whether the FHB is extended or not extended the "rush" at this level should hopefully ease a little….the current June deadline is a real estate agents/marketers dream at the moment….nothing like the pressure of a "DEAL" about to expire to really get things heated up.
If they do extend the FHB deal suddenly the pressure to "buy now or miss out forvever" will ease a little…well you'd hope so anyway.
Hi all
It true the FHOG is doing it job. I have seen an increase in traffic at display homes. FHB out looking not to miss out. The sales staff love it. They even tell people the FHOG will stop in July that's not true. Its only the boost of 14 or the extra 7 that will end. Im in the same boat, I intend to buy soon, but as a PPOR no as an investment. Because the numbers don't stack up (as said). I even expect to loose money if I sell it with in 5 years. But I need a place to live. Rud is not telling us about an extention, Like was said it may even be put up????? They want us all to go out and buy now before the end of June. Not sit on our cash and wait. They then will have helped the building industry when it needed it.
They they may say we will extend it. I mean why don't they, someone tell my why, they are doing other things to waist money and we according to them need more houses. Man, I not know. I do know is now is the time for negotiation on price, try it you will be surprised.
Good luck to all.
T…………………..A lot of people will buy using FHOG Boost money and then live there for 6 months. After that, most of people will rent it out…. (i.e. just to get freebies).. will see how the rental market and property value stack up in 2010
god_of_money wrote:A lot of people will buy using FHOG Boost money and then live there for 6 months. After that, most of people will rent it out…. (i.e. just to get freebies).. will see how the rental market and property value stack up in 2010That's an excellent point. Maybe I'll be waiting longer (I'm always waiting longer and longer).
Good point but they are still first home buyers. I think the case for an extention is good say for another 6 months. We also had a drop in intrestes last Tues. Soulding a bit like the USA ????? There was a program on TV sergesting the FHO Boost is stimilating a sub prime crash. Bank et al are still lending up to 90% but as bad as 110% but with unenployment on the way up, could spell trouble. We may follow the USA into the s-it.
Maybe I'll be waiting longer (I'm always waiting longer and longer).
SHales
Dont wait forever mate, I mean why, what have you to gain? Waiting for a bargain of a life time usually takes a life time to find. If its a PPOR go for it. Depending on your age, I personally feel houses will cool off a bit but not drop 20 -30% over all, in some over priced areas maybe but not across the board.
Unemployment is the real concern here. I can see this getting worse. So, if you can make your payment great. If you cant your @#$%&d. Then you will see that place for the 20 % less. I think we will see a retune of the 80s high rental return and low captial gain. We are also cutting Imagration at last. The Govenment waited till people lossed there job first & then decided to reduce it.We can guess all we like only time will tell us what the right move was. I say dont be gready and go with your gut & be happy.
Cheers to all
T…………………..Forgive my potential ignorance.
At the lower end of the market: Less FHB = Drop in demand = Drop in prices
So all the future first homebuyers will continue to rent, forcing demand up(and $$) in key locations for suitable properties.
This in line with Lower interest rates(yes i realise its only temporary), while there may be capital losses, your increasing serviceability due to higher rent returns seems to be fairly worthwhile especially if you consider the basic principles that were authored by Steve Mcknight.
I appreciate unemployment will become more of an issue(thank god for rental insurance) but I still think that as long as you arent buying with a high Loan to Value ratio and the property is located well you are still fairly well insulated?or am i missing something?
patriotsoldier wrote:Forgive my potential ignorance.At the lower end of the market: Less FHB = Drop in demand = Drop in prices
So all the future first home buyers will continue to rent, forcing demand up(and $$) in key locations for suitable properties.
If there is a drop in prices like your equation states, why would you rent, a drop in prices would mean more first home buys would be able to buy. Specially at current record low interest rates. Just because the Government (at this point) will drop the boost component of the FHOG does not mean all lower end properties will drop in price and all FHB will have to rent, its only $7,000 to drop off the FHOG for established homes.
T………..
Cheers,
i agree, I was trying to work off the assumption that it would get completely dropped(the FHOG) as has been suggested previously in this thread.
The way i see it,
2 Scenarios
Scenario 1. Reduced FHOG, lower property prices and lower interest rates will see more FHB return to the market….. either propping up prices or at the very least softening any further drop in values.
OR
Scenario 2. Elimination of FHOG and more renters out there increasing rental returns.I still stand by my original synopsis
patriotsoldier wrote:but I still think that as long as you arent buying with a high Loan to Value ratio and the property is located well you are still fairly well insulated?I guess my opinion was that even though prices may soften, as long as you buy correctly and with caution ….it isnt such a bad time to buy now.
Cheers again
Don't worry, TonyB, we haven't waited for ever and already have a few properties under our belt. Our trouble at the moment is lots of equity, not enough income to service a negatively geared property loan. So, we are loooking for something very strongly positively geared but in an area that i know well and feel good about. We are looking at Townsville. I think we were right not to buy there last year, even if we could have afforded it. Why wait? Because the deal is going to get better. The numbers are getting better all the time. Why else wait? Because our personal and business circumstances may dictate a relocation across the state in the next year or so, so given the fact that we may want to access our equity then, it is only worth entering the market at the moment for a really truly good opportunity. Unfortunately, at the moment, rental demand is falling across the board as high end renters trade down and other renters enter the market as FHO's. The lower end of the market (where we always buy) is overheated, and the pain from mining company lay offs hasn't really been felt yet because people are still selling their boats etc to make ends meet and managing ok due to the low interest rates. The few that have had to sell have managed ok pricing due to the FHO activity. A few properties have gone dirt cheap but I haven't been well enough positioned to get in there. Sadly, also, a major shopping centre development that would have seen a Myers in Townsville has been cancelled, so my keenness to buy in the relevant suburb has died and hasn't yet been replaced by anything else, really. (Other than ideas about either student or aged accom). We are not merely procrastinating, but I am definetely frustrated with all the signs pointing in the WAIT direction.
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