Have you seen the Home Price Crystal Ball video story ?

http://video.msn.com/?mkt=en-au&brand=ninemsn&tab=m164

If you haven't do so yet …Enjoy.  

You're welcome,  if you're still hanging around with the losers on the other site you could pass them the link so they too have a reason to smile.  I hope you'll  keep smiling after good old ABS catches up with the latest data.and the FHBs stop distorting the prices
The story was about the lucky suburbs with t he highest growth so not your average suburb growth.  Would have been nice to buy in a suburb mentioned in that story but even the typical Western Sydney cheapie didn't do too bad if you bought in Aug-Sept last year. I recently sold my second dump there and after all expenses I ended up with $54K for 7 months of growth, the other one sold in March  for a quick $38K profit and would have done better if I waited a bit longer but my tenant was itching to buy.  While  its no even close to the 75%  mentioned in the story it was better then keeping the money in the bank.  I hope you are proud of me for not being greedy and allowing a couple of FHBs to fulfill their dreams and provide them with affordable properties.  LOL

Taking in consideration everything that has happened over the past 6-12 months  I'd say good but not as great as the top suburb in Perh http://reiwa.com/res/res-suburb-profile.cfm 
Apparently my ppor had 0% growth last year which really sucks because it lowered the average growth for the past 10 years to just 15.4% P.A .    

Didn't bother with valuations on my oldest IP's  since I have no plans to sell them but according to the data one had   -4.9% (10 yrs +12.8 p.a ) while the other one a couple of streets away in the next suburb was up 6.1% (10yrs +12.5 p..a)  so no -10% there either.
 
The only 10% I had to deal with in WA was the rental return, but that was +10%p.a  so I can't complain. 

I could also get a +10% return on the dump I recently bought in Safety Bay, but I'm looking for 15%. Have to see what happens over the next 2-3 weeks and then I'll probably get rid of it soon.   The PM thinks my tenant is looking at buying a place before the FHOG gets the chop so maybe I'll ask the PM to send him an incentive (in the form of a rent increase notice)  then sell it to him. .   

How are things in Canberra, still waiting for something priced right to come along ?  

Bears would say that wouldn't they but how many of them really believe it ? Its like with the crash that was supposed to happen. The rates came down, the  FHOG got increased and half the bears bought a house so they wouldn't miss out again. 

Translation = they make the numbers up using some magic formula and then revise them later when they get the real numbers from the VG.  Also from ABS :

Regardless of where the median prices are going to end up the reality is that prices in the low end of the market has moved up. Do you really care if the $15M market has crashed 40% in the past year if you find the $500K market unaffordable ? If this segment is  going up at  10%+ p.a  and your savings are only growing at 5% p.a – tax  then that dream is getting further away from you. 

How is the $15M house now selling for $10M going to make housing affordable for you if you are looking in the $500K market which is actually going up ? Besides, not all the upper market properties are going down.

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You know, though, that I would preffer to give up the dream of home ownership than pay more than what I think is fair price.
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Be careful not to cut off your nose just to spite your face.

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As a renter, I am currently saving 25%+ of my gross income. That's a decade of saving to buy at the bottom of the market. If prices double again in the next 10 years, I agree that I get priced out (without getting a loan).
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Are you saying that prices will stay this low for a decade ?
In percentage terms you may look like you are saving but look at it in dollar terms. Look at the amount of $$$ you really saved in the past 12 months and then look at how much houses in your price range would increase if population growth didn't play a part and prices only kept up with inflation. 

How original.     I've been reading the same thing for a long time now, only back then the years began with 199X and it was Howard bankrupting the country.

This is a great thread. Has been following the debate between Harb & ummester. 

I am a novice with PI and is still learning everyday. I can only comment from life experience.
Back in early 1983 when we've arrived in Australia my mother worked 10 hrs a day 7 days a week (mainly cash jobs) saving to buy a 2 BR flat in Western Sydney. 
Back then it'd cost around $50k to $80k depending on the age of the flat.  I was in my early teen then. 
My mother chose to wait till she has saved up 50% to put as deposit as no bank would lend her enough to buy the flat being a single mother.
By the time she saved her 50% deposit it was late 1984.  In early 1985, she approached the same agent to offer to buy the same flat the we had rented
and was shocked that the owner now want $25k more.  My mother could have bought the flat then in 1983 for around $50k and in early 1985 the same flat
was priced at $75k. 

But why would they remain in line with wage growth ?  Here is something to toy with , what if population growth keept a lid on the wage growth and fuelled the growth in property prices ? 

Why is that? We had a flat period in the 90s and simply made up for it. How about the 80's , was that an aberration as well ?

Yeah, been around for a while now. Which is why I know that prices can also go up, usually when they are the least suspected to do so.

You can bet against the government but just remember who's got the printing press before you put your money on deflation or stagnation.

Which is why the government is probably not going to extend it and  I don't believe they will lose revenue by giving the buyers a tax break.
Its possible they will take the tried and tested First Start Shared Equity scheme used in WA by Keystart and modify it to suit the results they want to obtain. Instead of a 95% loan the  FHB would only need to borrow 60%-80% of the valuation and the government would be in control of prices by simply adjusting the amount of equity available to them.  As a bonus of using some of the Future Fund money to invest in the scheme they are also guaranteed some stability in case of another stock market crash.
Now that is something to give the bears recurrent nightmares and cause them to wake up in cold sweats.

Here in Perth house prices jumped from around 30K in early 0s to 100k+ by the end of the 80s.m not sure about the rest of the country since I wasn't following that at the time.  I hate crowds, why would I want to live in Monaco ?

And the government owns the RBA.

No renting involved, you buy the house in partnership with the government. They come in with their 25% share of the valuation (used to be 40% in the beginning) and take 25% of the selling price. You only need to borrow 75% from the bank and even less after the FHOG. To buy them out you have a valuation and pay them their 25% share. Just like getting into property investing with your cashed up Big Brother.
I forgot all about the scheme until I saw one of your fury mates bring it up recently and the more I thought about it the more it looked like a good idea and a real alternative to the FHOG. The government can stop handing out free money without upsetting the crowd and can gradually balance the Future Fund portfolio with property investments. The extra property sales and increasing prices would also increase fed and state revenue which they desperately need. 

Same thing that would happen now, only your repayments are 75% of what they would otherwise be, Why would the owner want to sell  at a loss when the repayments would be lower then renting the place ?

Sure does,  just different kind of bells to yours. To WA it wouldn't make much difference but Sydney and Melbourne could benefit from it. Could push Sydney median prices back to the old 2x Perth median prices . 

Haven't looked at the 1900 figures but I'm sure that you did.
I'm guessing that you used the median prices to work out the growth ? 
Prices were cheaper then now in the 80's but I seriously doubt you could find a house on a few acres block along the river in say Mosman Park for $30K.  By 1980's your 1900's median Perth property would have been worth 7 figures and possibly 8 if in the CBD area. By 1980's it was probably subdivided a few times or  had a multi-story residential apartments block or office building on top of it. But nice try.   

They start a lot lower then that,  here are a few examples that a quick search uncovered :

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105148226&f=10&p=10&t=res&ty=&fmt=&header=&cc=&c=35026723&s=nsw&snf=rbs&tm=1241860130

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105693564&f=10&p=10&t=res&ty=&fmt=&header=&cc=&c=35026723&s=nsw&snf=rbs&tm=1241860130

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104888609&f=10&p=10&t=res&ty=&fmt=&header=&cc=&c=35026723&s=nsw&snf=rbs&tm=1241860130

And there is plenty more where that came from. 

You may want to think that but who (employed) appointed Glenn Stevens to the board ?

And who is the RBA accountable to ? 

You must have missed this page , http://www.rba.gov.au/AboutTheRBA/governance_and_accountability_of_the_rba.html#accountability_to_parliament

If I employ you and and demand that you report to me twice a year you are not independent, you work for me.

Not for the government. You'd be the one in debt and they want you in debt so you can continue to go to work every day for the rest of your life and pay them taxes.
Of course if you weren't so precious about locations and just wanted your own home you could have used the 14K grant as a deposit on  one of the beauties I gave you above as examples. Even if you had to take out a loan the repayments would be minuscule and you could live happily ever after on unemployment benefits or take a part time job if you got bored. 

Of course there is, the city expands and with increased population comes increased demand and competition for limited and desirable space.

Catch is, the property will only make you rich if the majority of people working in the city are still relatively poor. As soon as the majority of people can no longer afford to stay or workplaces are de-centralised to accomodate employees being able to work from affordable locations, the illusion of that wealth will fade because demand will drop.

But the majority can afford to stay.  You seem to ignore two facts,

–  prices got so high near the city because buyers could afford to pay that much and people were prepared to pay more to live in their chosen location.

–  a vast  majority of owners has only payed a fraction of the current prices, its the Johnny-come-latelies who for whatever reason payed big bucks for the privilege of living in their desired area. You don't need to buy there and its a lifestyle choice but if you want to join them then you have to pay the price.

Canberra is the only capital city that can expand in all 4 directions, has no real industry, produces nothing but hot air and it exists by sponging off the states.  I believe that if we ever have a major and long lasting economic downturn then the pollies would have to cut down expenditure. They would cut down the number of public servants, advisers and contractors in Canberra and I'm guessing a lot of them would have bought their second home in Canberra to save on traveling and  which would now be sold off.  I can't see Australia crashing and Canberra not but I could see how in a crash Canberra would be the worst hit. 

Not sure where you're going with your food argument, are you saying people will drive to Sydney for groceries to save $50 /week ? Perhaps if they drive a taxpayer funded vehicle and they enjoy driving otherwise they would be stupid.  

No market is an island. It's all connected and has to take the lowest income required to keep a region functioning into account. If you prices waitresses out of the market, you have to carry your own coffee. If you price cops, fireys and nurses out of the market you get to arrest you own crims, put out your own fires and change your own bedpans in hospital.

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I'm not sure how familiar you are with Perth suburbs so let's look at Sydney. Are you saying that currently  the customers at Mosman Noodle bar have to carry their own coffes and wash their own plates because the waitress and dishwasher was priced out of the market ? There aren't too many young "cops, fireys and nurses" who can afford to buy a house there but I'm yet to hear of any residents there catching their own crims, putting out their own fires or performing surgery on themselves.
Your "cops, fireys and nurses" can go and buy a property in Campbelltown and look for work there or if there is none locally and they  need the work they can commute to Mosman.  

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105728979&f=10&p=10&t=res&ty=&fmt=&header=&cc=&c=95343403&s=nsw&snf=rbs&tm=1241935899

You seem to use the same twisted logic that your mates do  who think the world owes you a living and a home in your chosen area because you want it really bad.  Well guess what, we don't always get what we want and if you want to live in your chosen location you will have to outbid the competition. Get off your arse and make it happen, and I don't mean pasting bearish news articles on a forum and waiting for a crash to happen. 
If you really believe all that stuff then why don't you put your money where your mouth is, go and buy a place in a region where houses are much more affordable and take your skills there. Like Broken Hill for example, lots of affordable houses under $100k and all in walking distance to shops and town center.
Why do you insist on looking for a house in Canberra, where you have to compete against lots of buyers determined to outbid you and prepared to pay ridiculous prices just because of the location, when for a fraction of the cost you can buy a house in Broken Hill and walk to work ?  
 

I wish I had parents who left me an acre of dirt in or near the city, or even a bit of dirt in a small country town for that matter..Anyway,  its not the size that matters but what you do with it.

But not to worry, if the rumors are true and WA stops the scheme because Swan is taking the First Start nationwide then houses will become affordable to everyone once again.  The scheme was so popular here that it ran out of its first 3 years budget in just 1.5 years, but that shouldn't be a problem if the scheme goes nationwide because there is plenty to go around in the Future Fund.  Lets hope they copy the original 40% limit and make it available to everyone not just the FHBs.

You must be the rare exception on that forum or maybe after waiting for so many years for a crash most of the posters there grew up ? 

I'm sure you are right,  most of the old posters on GHPC who could afford to buy a property probably did so already over the past 9 months as they didn't want to miss out again.  

So you done a bit of research on it .
The black hole had nothing to do with the scheme, it swas just an excuse to break election promises after the GFC reduced their revenues. The scheme itself was a victim of its popularity, they've ran out of budgeted funds in half the expected time.  Because of that they had to pump ,ore money onto it  but reduced the equity to make sure the funds lasted until June.  After that the feds are probably taking it over as replacement for the FHOG and by using some of the Future Fund investments they can run the scheme forever and a day,  diversify the fund and best of all they can look like the working class heroes without costing them a cent. Double dissolution here we come, the Libs will be licking their wounds for at least a decade. 
 Since WA went through 300M in 1.5 years at 40% a couple of billions a year would probably be more then enough to keep the scheme running nationwide at 25%  so I'm surprised they didn't use some of money from the second Stimulus package for that.

Here is was the WA ALP trying to score browny points with voters had to say recently,

http://www.wa.alp.org.au/news/0409/24-02.php

Btw, did you know that we had a FHOG in WA since at least mid 80's ?  Bloody feds are pinching all our good ideas.