Sorry,
Just had to post this.
http://www.moneymorning.com.au/20100608/house-prices-at-maximum-risk.html#more-3296
Always a good read is the moneymorning post.devo76
Canada is not in dire financial troubles, it is like Australia in many ways, both have high housing costs, both are reliant on mining, both have hots of space with nothing ( ours is hot desert, their's is cold desert ).
Oh OK you mean like America sorry. OK go along with that first bit.You now assume they will recover……..maybe in 20 years or 15 if they are lucky.
Your guess is reasonable and makes sense if all plays out as in the past, but I myself think Australian Properties will fall by 20 -30% over the next few years. But it's my guess so has no possibility of happening….L.O.L.
America etc prices will recover if the economies recover, but I think that the world will slowly start to realise that we do not need a Mc Mansion to live in and be happy, and we will ( Australia included ) start to buy smaller and more modern and environmentaly friendly housing, So will need less land and hopefully mean less housing costs, less money from wages so we have more money for living. You know less electricity, water, gas, pollution etc etc.. But hopefully, not more and more flats..
It's time we decided Mc Mansions are too expensive to build, to look after, and are wasting to many resources of which less and less are available to us…. You know peak oil, wars over clean water theats etc…Yes thats a distinct possibility. I for one do not buy mc mansions. Im concentrating in a bit closer to cbd hubs. Regional mind you. Havent got to the cities yet. But i am assuming here that growth does return. Big assumption i know but it will happen one day.
How do you see the different markets traking if this happens.WJ Hooker wrote:Sorry,
Just had to post this.
http://www.moneymorning.com.au/20100608/house-prices-at-maximum-risk.html#more-3296
Always a good read is the moneymorning post.devo76
Canada is not in dire financial troubles, it is like Australia in many ways, both have high housing costs, both are reliant on mining, both have hots of space with nothing ( ours is hot desert, their's is cold desert ).
Oh OK you mean like America sorry. OK go along with that first bit.You now assume they will recover……..maybe in 20 years or 15 if they are lucky.
Your guess is reasonable and makes sense if all plays out as in the past, but I myself think Australian Properties will fall by 20 -30% over the next few years. But it's my guess so has no possibility of happening….L.O.L.
America etc prices will recover if the economies recover, but I think that the world will slowly start to realise that we do not need a Mc Mansion to live in and be happy, and we will ( Australia included ) start to buy smaller and more modern and environmentaly friendly housing, So will need less land and hopefully mean less housing costs, less money from wages so we have more money for living. You know less electricity, water, gas, pollution etc etc.. But hopefully, not more and more flats..
It's time we decided Mc Mansions are too expensive to build, to look after, and are wasting to many resources of which less and less are available to us…. You know peak oil, wars over clean water theats etc…mate that’s like saying people will realize they don’t need Louis vuitton suits and Chanel jewellery…a big house in hawthorn is a status symbol, not a living requirement. And people will always be vain. And how do you propose lower density living in the inner suburbs without more units??? There will be more apartments and townhouse but I will be a long time before Aussies don’t want a large house. I’m just out of uni and 95% of people I finished uni with and my mates from high school want modern 3-4 bedroom houses with all the mod cons! I want one but I’m smart enough to know that u can’t start at the top, plus there was no way I was gunna do a hour commute just for a backyard.
As for kris sayce,well I subscribe to his asi newsletter and I think he knows his stuff on shares, however property wise I don’t think he really knows. He just bags property when he has nothing better to write about to try and getore people buying shares, most likely the ones he recommends, hence pushing up their price.
And if you really believed it you’d be selling your houses and buying gold coins??
Yep WJ I think you haven't really had a good look at what councils are approving at the moment, all apartments. If you are not building boutique apartments you are missing out. What will people live in if they wont live in mcmansions or apartments? The street?
What are you basing a drop of 30% on? No really? Because unless something drastic happens, like WA splitting off and forming it's own country or The AUD being worth nothing then it ain't gonna happen.
What do you live in WJ? House, apt, townhouse? And do you rent, so you don't have to worry about the 30% drop in price, or have you bought?
Families will still want big houses to pack kids and stuff into, so the planned communities will stay while anyone still has small kids, inner suburbs and urban areas will all end up as apartments purely because nobody wants to live in the Nullabor. Geez I don't know why……
Melbourne especially has a sick obsession with living close to the city so prices will rise and the floorspace will shrink.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeDWolfe & reddahaydn,
Note I said flats, not townhouses or appartments. I was just trying to say "not cheap ugly flats ". I take your points about all new appartments ( this is sort of what I meant to say about modern small living areas ).
I own my own home, its 20 years old, only an average property, but is full of kids, so is energy efficient ( north facing, insulated, etc ).
Agree, that most people want to buy Mc Mansions that are close to transport, beach, city, everything, it's unfortunately the Aussie Dream. This is what I hope will change over time, thus reducing the demand for wasteful use of a finite amount of raw materials. But, as I say it's what I think Australia needs to do, we waste all our money on housing, which leads to more stress and less money for the kids and our own enjoyment. Also puts pressure on marrages, makes us work longer hours, etc….all just to meet the monthly repayments. I think I'm raving on here.. sorry.
People will always be vain… well maybe we all need to change our ways, isn't vain one of the sins of men?? sorry, raving on again.
I think I have said a few times over this blog why houses will fall, interest rates, state of the world economy, etc…we will have to just wait and see if I am wrong.. if so then good I make money if houses go up in value, but as long as people can pay the rent then I don't care too much if they go down, I own most of the houses outright…so no interest to pay.bye
WJ Hooker wrote:DWolfe & reddahaydn,
Note I said flats, not townhouses or appartments. I was just trying to say "not cheap ugly flats ". I take your points about all new appartments ( this is sort of what I meant to say about modern small living areas ).
I own my own home, its 20 years old, only an average property, but is full of kids, so is energy efficient ( north facing, insulated, etc ).
Agree, that most people want to buy Mc Mansions that are close to transport, beach, city, everything, it's unfortunately the Aussie Dream. This is what I hope will change over time, thus reducing the demand for wasteful use of a finite amount of raw materials. But, as I say it's what I think Australia needs to do, we waste all our money on housing, which leads to more stress and less money for the kids and our own enjoyment. Also puts pressure on marrages, makes us work longer hours, etc….all just to meet the monthly repayments. I think I'm raving on here.. sorry.
People will always be vain… well maybe we all need to change our ways, isn't vain one of the sins of men?? sorry, raving on again.
I think I have said a few times over this blog why houses will fall, interest rates, state of the world economy, etc…we will have to just wait and see if I am wrong.. if so then good I make money if houses go up in value, but as long as people can pay the rent then I don't care too much if they go down, I own most of the houses outright…so no interest to pay.bye
It's true that the 'perfect' house is the great Australian dream for many, and often never to be realised, but I think that doesn't stop people working for it. I think its not so much being vain as it is being ambitious. People will work very hard in an attempt to realise their dream. It's also fair enough to say that Australians should take a step back and spend less on their housing.
Trouble is they don't. Interest rates were taken a few steps up and people are spooked, and now retail is the pits. People will prefer to pay their mortgage to keep a spiffy house going rather than buy their kids a new toy, or get a new pair of shoes etc. This is called prioritizing. People always want a roof over their head they can call their own, and most young families still want a spacious, open-plan house opening to a good sized backyard for entertainment and letting their kids play.
Bottom line is, unless you give Australians a damn good reason why they shouldn't be paying their mortgage, then there's no reason why they wouldn't.
Two big ways house prices will come down: increase supply, or reduce demand. Since we can't 'make' anymore of these 'perfect' houses in the places where people want to buy them, then let's look at reducing demand. And that's simple. If you make property such a disgusting investment that it routinely loses money, people will stop buying and prices will fall.
Trouble again is, it's not. At least historically, prices appear to have grown at staggering amounts, more than what most people would earn from their job.
So yeah, let's put our heads together and discuss how we can convince property prices to fall, shall we?
See, no answers. Guess nobody's interested in doing that.
fWord,
Good post, agree with it.
As you suggest supply is fairly finite, except if people start selling ( cannot afford repayments and will move back home etc ), this then increases supply, thus reducing housing costs ( people see more houses for sale, less hurry, prices drop etc).
Probably demand is related to the supply and as you say peoples perceptions of future prices and status of owning well located and high quality housing.But as to your question of how to make real estate more affordable, well the experts cannot really get that one.
It's easy for us to say less tax, less red tape, etc but we are looking at it too simplistically. There are lots of people with their hand in the till, waiting for their share ( like federal government, state governments, local governments, suppliers, retail, builders, etc ).
No chance of them all sitting down and having a pow wow, they all need the money..Sorry I have no real answers, and not being in the building game have no inside information. Maybe others can come up with some suggestions ??
There are too many with a vested interest in seeing prices rise. There will not be a drop purely because two lots of govt will step in and throw money at any problem which changes the status quo.
WJ – I don't quite get this whole moving back home thing. If you have kids how on earth would you move in with older parents? The mortgage belt is made up of mostly people who have kids and dogs and cars and jobs and stuff, how would they move 'back home'? Yeah there might be a few youngins that move back in with parents and keep their bachelor pad to rent out, but I don't see where this exodus of people moving back in with parents would happen.
Personally my parents (yes they love me) but they may try to strangle me if I turned up and said yep me and the kids and the other half and our cars and cat and stuff are moving in!
You are right people are pouring money into their mortgages and not spending in retail which makes this a very tough time for retail. People need to create personal wealth somehow and if feeling like they are getting ahead by paying money into a house creates a feeling of wealth than this is a good thing as confidence will again be high and people will begin to spend.
I don't think we will ever see the glory days of retail return where retailers just opened their doors and made money. I think after KRUDD gets the boot people will again begin to spend. It is always a hash in an election year because nobody knows if arthur or martha will win and what they will do after.
KRUDD wont call the election yet coz he is scared but indecision makes him look weak.
I think I have had enough of this circular thread, so WJ I look forward to your posts in another couple of months, we shall see what happens then.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Me64 % auction clearance in nsw this weekend.
This post from Steve Keen maybe the start of some house price action ?? House prices finally turn the corner ??
Steve Keen has no idea.
I will never, ever get those couple of minutes back. I personally liked the "so called investors part"! I wonder if he tars everyone who invests money with that brush? Also does anyone know if Mr Keen will be living off his super?
Good for you Mr Keen and all of your followers, there does need to be an opposition to everything, Good v Evil for instance…
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeAlmost 1 year since posting.
Lets see now
http://www.news.com.au/money/property/house-prices-dip-and-will-fall-further/story-e6frfmd0-1225932622360?area=money-sub-one
House prices down 0.2% see I told you so….LOL… I rest my case…Just joking..but still If inflation is at say 3% then really the loss is 3.2% roughly. So I guess I was sort of right.
Over last year interest rates have risen.
Employment has dropped.
Consumer confidence has risen over last few months.
Australian dollar has risen in value – thus cheaper imports and oil etc.
Huge exports of iron ore and coal etc has improved our balance of payments.So overall economy has strengthened, but for how much longer ? Interest rates probably to rise soon, employment well unsure about that, Australian dollar maybe rise slightly more but usually followed by large drop if history repeats, China demand strong but for how much longer ?
Interesting to note Ireland property has now just collapsed and country now on verge of collapse, Greece and other PIGS in austerity measures with citizens in the streets protesting, US economy held together with sticky tape till printing presses break down…
Interesting times ahead.
WJ Hooker wrote:Almost 1 year since posting.
Lets see now
http://www.news.com.au/money/property/house-prices-dip-and-will-fall-further/story-e6frfmd0-1225932622360?area=money-sub-one
House prices down 0.2% see I told you so….LOL… I rest my case…Just joking..but still If inflation is at say 3% then really the loss is 3.2% roughly. So I guess I was sort of right.
Looks like you rested your case too early and stopped reading the article after the first line.
If you looked further on the second paragraph you would have seen this,Quote:Take out your 3% inflation and you are left with a gain of 5%. LOL
WJ,
LOL!
Dude just come out and say it……..you were slightly incorrect with a small insignificant prediction, that you may or may not have said….
My opinion,
Property prices are going no where but sideways and up in areas.
I have to say as well, this rot about top end prices losing value etc, does anyone think that it may be, I dunno ..WRONG, to think that a $10 million dollar property should be worth $15 million the next year and then put it on the market for that? Then when all the offers come in and you only get maybe $12 million for it then the real estate agents jump on the "prices are softening bandwagon". Seems like this seems to be more the correct story with quite a few top end properties, rather than properties being worth half the price.
Anything (talking Vic here) around the $350-$400k seems to be doing quite well and there is a shortage of stock to sell. Maybe that's not affordable enough for some people? Maybe a shortage means that the crash will happen now instead? Maybe it means that it is a great time to buy property in "affordable" areas, for anyone!
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Meharb and DWolfe,
I was wrong…there I said it.
Next time I should read it properly ( sometimes it's hard to get any peace in this house – four kids wanting to get onto the computer and the misses plus a grandchild wanting to play – I think you all get the idea ). The heading left out the word month so I presumed it meant over the last year since I guess I was looking for that in the back of my mind.And yes my prediction was wrong. I was sure property would fall going back 12 month's with the reasons I gave, but some didn't come true ( like unemployment rising ).
But don't call victory just yet, the fat lady hasn't sung yet..the world economy is going to catch up with us sooner or later. Lets see how prices are going in another few month's.
I don't wish house prices to crash, I want them to rise above inflation so we can all make money, but alas I cannot see it happening, I really think we have had our lucky streek, and at best we can hope that house prices can stay steady or even keep up with inflation.WJ,
My respect for you has increased, it is a wise man who can admit they were wrong about something.
I think the way forward is not to rely on capital growth and to manufacture profit. If prices track sideways then money can still be made.
Yeah I don't think we are quite out of the woods, prepare for another scare along the way, in which the fearful run for the hills and the brave take a calculated risk. Time to buy some gold too methinks just in case
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeInteresting that in Manly, Brisbane we have so many houses coming on for sale in last 6 months that you can buy in to ANY street you want and still have a choice of few.
90% of the properties been for sale for few months, market around here in not liquid anymore, use to sell in 2 weeks.Um yeah…lets get this straight…According to Residex:
Capital growth in the last quarter for Sydney homes: 2.58%
Capital growth in the last 12months for Sydney homes: 18.81%Capital growth in the last quarter for Sydney Units: 3.24%
Capital growth in the last 12 months for Sydney Units: 11.94%Capital growth in the last quarter for Melbourne homes: 1.92%
Capital growth in the last 12 months for Melbourne homes: 18.81%Capital growth in the last quarter for Melbourne units: 2.46%
Capital growth in the last 12 months for Melbourne units: 16.30%Growth in QLD units last quarter – 0%, Growth in QLD homes last quarter – 0%
Growth in SA units last quarter – -0.48%, Growth in SA homes last quarter – 0.68%
Growth in WA units last quarter – 1.39%, Growth in WA homes last quarter – 1.40%
Growth in NT units last quarter – 4%, Growth in NT homes last quarter – 0.04%
Growth in TAS units last quarter – -0.25%, Growth in TAS homes last quarter – 2.30%And of course there a sub-markets after sub-markets within those figures….
Unemployment is not an issue – and if you showed any country those growth figures across the board post-GFC, they would take them in a heartbeat.
It's interesting reading the posts from 12-15 months ago – IMHO a quality property in a quality area will always win out. Some of those figures above beat the current inflation figures in only one quarter of an entire year…people who already own property have no cause to whinge about the current state of affairs…housing affordability for non-owners is probably a bigger issue.
If this is bad, or soft at best, I'd love to see good market conditions. If you haven't been overseas in the last 12-18 months, or have friends and family overseas…we don't fully appreciate just how lucky we are that we weren't hit by the GFC worse than we are – I'm not offering any reasons here why we avoided most of the pain, we just did.
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