Harb,
If the federal governement does put this into effect, I will start applying for an OS transfer. It will destroy the country down the track and the scary thing is, I wouldn't put it entirely passed them.
rayd,
I don't know much about these securitisation markets at all. Only that they are a tool for creating debt based on cash producing assets. Surely, if the assets they are based on are less or not cash productive, then the debt that can be created from them must decrease. Surely this would have the flow on effect of less being lent and then house prices further declining.
rayd wrote:Can i throw something into this debate? Not sure if you have done work on this but no one seems to mention anything about lower funds coming from securitisation markets. Ie NAB/WBC/ANZ fund c40-45% of their loan books (both residential and commercial) through "whole sale" markets, the rest coming from deposits. With the advent of the GFC, this has seen these markets come to a grinding halt (some signs of thawing are emerging).They managed to handle the rush of FHBs reasonable well even at the peak of the GFC and as you said "some signs of thawing are emerging" so it can't be much of a worry. We'll have to wait for the increased FHOG to finish and see what exactly they replace it with. A 40% shared equity scheme using the FF would be nice, even if ummester doesn't think so.
ummester wrote:Harb,If the federal governement does put this into effect, I will start applying for an OS transfer. It will destroy the country down the track and the scary thing is, I wouldn't put it entirely passed them.
I've been hearing this from bears 3-4 years ago, if property doesn't crash in the next 12 months I'm leaving the country , blah blah, blah. Funny thing is not only that years later they're still here but some have even bought houses since then and are now bullish on property. The scheme will initially push up prices for the first few months but after that they will stabilize just like they did in WA and FHBs will be the winners. Lately I've been hearing similar comments about leaving WA from the daylight saving fruit loops. If WA doesn't introduce daylight saving I'm moving to the Eastern states, blah, blah, blah. They are going to lose the referendum so let's see how many of them actually do leave.
harb wrote: I've been hearing this from bears 3-4 years ago, if property doesn't crash in the next 12 months I'm leaving the country , blah blah, blah. Funny thing is not only that years later they're still here but some have even bought houses since then and are now bullish on property. The scheme will initially push up prices for the first few months but after that they will stabilize just like they did in WA and FHBs will be the winners.Of course I'll have to make sure I have a new job first but I've talked to Mrs ummester and she is happy with Kiwi land and possibly Canada (good bike tracks for her and property crashes that are underway for me). It isn't the delayed crash that'll scare me out of Australia, I can handle stagnation. It is the financial risk that a nationwide shared equity scheme would put the country in. Yes, it was popular in Perth but contrary to what you believe, it hasn't made the state governement more stable. WA as a state now has debt in a private market that it can't afford to let loose value (which is happening anyway). Not really a free or private market, or governement, anymore is it?
ummester wrote:WA as a state now has debt in a private market that it can't afford to let loose value (which is happening anyway). Not really a free or private market, or governement, anymore is it?That's because most of mining revenue from WA was used to prop up ACT, NSW and VIC due to the collapse of manufacturing in these states. Anyway it was never a free market , the private lobby groups who push their clients agendas have made sure of that. Failing that you can always lobby your state and federal reps like I did. I'm not sure if the senators took any notice of our previous letters when the FHOG was introduced but we did get positive replies from most of them This time only 2 of them replied so far and both of them were encouraging and supportive of the scheme, but its early days yet and some of them will probably have to research the issue before deciding to support the scheme.In the mean time they are happy to support an extension of the current FHOG scheme.
If you took the time to look into it properly instead of just dismise it off hand you'd find that its a positive step towards bringing affordable houses to FHBs.harb wrote:If you took the time to look into it properly instead of just dismise it off hand you'd find that its a positive step towards bringing affordable houses to FHBs.Not as big a step as a crash
I see nothing in Australia to make it any more special with regards to property than the rest of the world. I see no reason why this credit crunch/depression/GFC thing won't have the same effect here. Just like the American bank bailouts are failing over there, our governments housing bailouts will fail here.
Besides, if you can trust 'em (which I know is a big ask), it seems like the fed may realize that the future I see is inevitable and they are weening us of the boost as a result.
ummester wrote:harb wrote:If you took the time to look into it properly instead of just dismise it off hand you'd find that its a positive step towards bringing affordable houses to FHBs.Not as big a step as a crash
That is a despicable thing to say. You ride around on your high horses preaching idealistic claptrap when in reality you're after a cheap home at the expense of some poor unfortunate family who is forced to sell, perhaps due to some tragic circumstances. You bears are going on about the evil property investors when in reality you are nothing but a pack of vultures preying on the corpses of weak and helpless FHBs. Shame on you.
Quote:I see nothing in Australia to make it any more special with regards to property than the rest of the world. I see no reason why this credit crunch/depression/GFC thing won't have the same effect here. Just like the American bank bailouts are failing over there, our governments housing bailouts will fail here.I'm not sure why you think that we are different, We did have property corrections in some suburbs just like they did in US and UK. Not every place in US and UK dropped 40%, in fact if I remember right the average prices correction in UK was about 10% which is close enough with what we had here. And if you believe the OECD ,
"The recession may be over in Britain by August, international experts said yesterday.
The influential Organisation for Economic Cooperation and Development said output was still shrinking but there were clear signs of recovery.
Its predictions were backed up by a range of figures on the economy"
http://www.dailymail.co.uk/news/article-1180363/Recession-August-says-OECD-housing-market-perks-up.html
I had a peek at your site to see the reaction to the budget and since I haven't been there in a while I spent a bit of time looking for old faces. A few bought a house and moved on or mellowed, the bulls got banished for being bullish and the remainder of the "bears" seemed frustrated by the same thing you are – that Australia somehow defies the rest of the world. Well guess what, it didn't but you guys were so focused on your 40% crash that you missed the bottom. Its interesting that out of the 3 mods there a year ago 2 have bought a house and one has gone a step further and is now a property investor. Obviously they were the smarter ones amongst bears because they didn't need some economist to tell them that we've hit the bottom six months ago.Quote:Besides, if you can trust 'em (which I know is a big ask), it seems like the fed may realize that the future I see is inevitable and they are weening us of the boost as a result.Hehehe, you kept your eyes on the FHOG prize and missed Rudd's sleight of hand which will encourages people to invest in property. What effects do you think changing the retiring age and locking people out of super until 67 will have on property investments ? It was going downhill since Howard offered tax free incentives to baby boomers to transfer their wealth into super. The latest budget plus the poor super returns this financial year will reverse all that nonsense and make property investing to provide for your retirement (at whatever age you chose to do it) popular once again. Would YOU put any extra money in super if you can't access or control any of it until 67 or would you rather invest it in something more solid like houses and retire at 50 if you wish ?
I have to admit that I never liked Rudd before or ever voted ALP before but I will next time, which could be sooner then expected. To all the bears who voted for him Thank You..
I know of one GHPCer (FHB) who purchased. FHB had almost 400k saved and brought into the middle of the market – which had experienced some significant falls. Another GHPCer (HG) is considerring building on land be donated by parents subdivision. These cases represent good value for money and no change in the standard of living for the buyers. I would proabbly buy in similar situations.
Who became a PI? Are you refferring to RumpledElf who has a couple of hovels in the outback and can't believe how much REAs are telling him they are worth?
I agree the top of the market in Australia was starting to bottom and the middle was well on it's way. I've said before that I've looked at some 4 beddys on 1/4 acre blocks that I almost consider good value. The bottom of the market here has had no real decline, however, and has, as you point out, increased.
Surely a 2 beddroom townhouse @ 370k is a distortion next to a 4 beddy freestanding @ 400k? The townhouse is selling for what it is because of the FHBG boost, nothing else. Australia is yet to see downward movement at that bottom end of the market.
As for renting, I have always held that there is an upper limit people can afford to pay. I believe we reached that last year. I see rental asking prices have already decreased near me and stock has increased. True, it is that time of year, but there is more going on then that.
FHBs are leaving the rental market in droves (obviously) and young singles are going back with Mum and Dad. What is interesting about this situation is that the perception of an undersupply is changing radically. Many FHBs are going into established places, leaving rentals vacant – so what were these established places doing last year? Chances are we are seeing much of the property that was held empty for capital gains now finding it's way onto the market.
ummester wrote:I know of one GHPCer (FHB) who purchased. FHB had almost 400k saved and brought into the middle of the market – which had experienced some significant falls. Another GHPCer (HG) is considerring building on land be donated by parents subdivision. These cases represent good value for money and no change in the standard of living for the buyers. I would proabbly buy in similar situations.How is the amount saved relevant ? They were either true bears and something changed their mind about the long awaited crash or they were only make believe bears until they found a place to buy. And didn't know about HG.
Quote:Who became a PI? Are you refferring to RumpledElf who has a couple of hovels in the outback and can't believe how much REAs are telling him they are worth?That's 2 more hovels then most of the remaining "bears" have. And she probably calls them hovels so the more spiteful bears won't gang up and have her banned. I was surprised at how hateful of anyone with properties and in particular baby boomers some of your mates have become in the past year. I guess its all that pent up frustration.
Quote:Surely a 2 beddroom townhouse @ 370k is a distortion next to a 4 beddy freestanding @ 400k? The townhouse is selling for what it is because of the FHBG boost, nothing else.Now it may be but wait until the 4 beddy @ 400k is sold and next one is 500K+ on even smaller land. The townhouse would start to look like really good value then. .
Harb,
The amount saved is extremely rlevant to someone who wants to keep their current standard of living. Quite simply, if I borrow more than 250k from the bank and interest rates are back at the long term average of 8%, my standard of living will be less than it currently is renting. I will enter the market when I can do so without decreasing my standard of living. FHB increased his standard of living by buying, though he admitted the property would probably de-value a little over the next couple of years, he now has more to spend than he did whilst renting.
If I am better of buying, of course I will buy. I'm not an idiot and i am not waiting for some mystical number. I'm just not game to get myself in over my head with debt, like the poor buggers rushing in and buying right now are doing.
I don't think RumpledElf has any dellusions about what's going on, which is exactly why selling now is a good option.
You are fun to argue with Harb, but I recon a couple of the less resiliant bulls are getting annoyed with my posts. I should leave it for a while and come back to continue some time in the future.
I noticed today's email from RP Data shows the price drop in median house prices over $1m with several suburbs dropping out of the category but some new one coming in.
I don't believe the stats when they can give a median price increase of 30-50% based on a small number of sales (I like large samples with more information for analysis ie a homogenous sample being 3 bedroom houses or other benchmark).
Yes SNM, I noticed that they obviously feeling the pinch on the North Shore as the bottlo is selling Grange at a per bottle price of $500 (if you buy by the dozen).
ummester wrote:Harb,The amount saved is extremely rlevant to someone who wants to keep their current standard of living. Quite simply, if I borrow more than 250k from the bank and interest rates are back at the long term average of 8%, my standard of living will be less than it currently is renting. I will enter the market when I can do so without decreasing my standard of living. FHB increased his standard of living by buying, though he admitted the property would probably de-value a little over the next couple of years, he now has more to spend than he did whilst renting..
I see you manged to not comment on this " They were either true bears and something changed their mind about the long awaited crash or they were only make believe bears until they found a place to buy." by bringing the standard of living into it. At least you admitted that the main problem is not housing affordability but rather the high standards that FHBs are now demanding.Quote:You are fun to argue with Harb, but I recon a couple of the less resiliant bulls are getting annoyed with my posts. I should leave it for a while and come back to continue some time in the future.No worries but you don't have to leave because of the bulls here. Unlike the bears forum over here you don't get suspended or abused for having opposing views.
Scott No Mates wrote:I noticed today's email from RP Data shows the price drop in median house prices over $1m with several suburbs dropping out of the category but some new one coming in.I don't believe the stats when they can give a median price increase of 30-50% based on a small number of sales (I like large samples with more information for analysis ie a homogenous sample being 3 bedroom houses or other benchmark).
It was funny to see South Fremantle second on the falls list because I have a couple of IPs about 7 Km away and I know the area well. The medians were artificially inflated the previous couple of years when the old Westrail site behind the dog beach got developed. The blocks there were starting from $900K and H&L packages were selling for up to $2M when the average house in South Fremantle would have been more like a $750K cottage then a 2 story beach house. The stats are probably right but without the information behind the jump or fall in median prices they are useless.
Can you name a website, where I get prices of groceries for my home?
I've been hearing this from bears 3-4 years ago, if property doesn't crash in the next 12 months I'm leaving the country , blah blah, blah. Funny thing is not only that years later they're still here but some have even bought houses since then and are now bullish on property. The scheme will initially push up prices for the first few months but after that they will stabilize just like they did in WA and FHBs will be the winners. 
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