By: steveb_wilson
26/05/2009
5:13 am |
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By: sly_guy_nsw
25/05/2009
9:36 pm Yahoo! Profile:
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So true craigaharwood!
I urge everyone to read your post below.
"At a finance breakfast in Perth last..."
The young and the innocent are indeed being sold down the river... Their dreams played upon in order to stimulate them to action... their futures destroyed...
SICKENING! |
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By: puyi
25/05/2009
10:04 am Yahoo! Profile:
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Source: The Australian newspaper
By Nick Tabakoff and Joe Kelly | May 25, 2009
THE average loan size for first-home buyers has risen by $52,000 - or 23 per cent - in the past two years, raising fears that government incentives for young buyers are artificially inflating the market.
A report commissioned by Brandmanagement, a market research firm specialising in the finance sector, says the average size of loans being taken up by young home buyers is jumping by an "unsustainable" amount.
Brandmanagement's principal, Andrew Inwood, said the statistics - which indicate that property prices are rising in line with loan sizes - have raised questions about whether the grant was simply being used by consumers to buy into a bubble.
"What the government incentives appear to have done is transfer the money from the people who are borrowing money to buy their first homes into the pockets of those who are selling at a more attractive price," he said.
Mr Inwood hinted that this mini-boom in the price of properties would not go on forever.
"There'll be a collapse in those prices again," he said.
Australian Consumers Association spokesman Christopher Zinn said the rapid growth in loans to first-home buyers against the backdrop of the government incentives carried certain moral obligations for banks.
Even real estate agents admit that the government incentives are creating an unsustainable bubble at the more affordable end of the property market.
Legendary Sydney luxury property agent Bill Bridges said yesterday some agents on entry-level real estate were "loading the prices up" to capitalise on the first-home buyers scheme.
Mr Bridges is also pessimistic about the ability of many people taking up first-home buyer grants to service loans into the future.
He expressed concerns that if people are stretched beyond their means through incentives, "it will all end up like (the sub-prime mortgage situation in) America". |
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By: jtleeoz
23/05/2009
12:22 am Yahoo! Profile:
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pedromoralesau,
I would accept your example as proof of the grant raising house prices except for the fact that your base year is 3 years ago, which doesn't really prove a thing except that house prices do in fact increase over time.
While you put forward a good argument it would have been better if you could have compared your recent sales to valuations from 6 months or even a year ago (ie. before the grant was introduced). Anyone else got some data?
Also, at the end of the day as r1cq1 has rightly pointed out, first home buyers should check to see whether their circumstances are right for buying a property now. If so, then go for it but if not (or the grant is the only money you have to put down on the deposit, then now is probably not the right time to buy a property). Save up some money first. |
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By: craigaharwood
22/05/2009
7:47 pm Yahoo! Profile:
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At a finance breakfast in Perth last week a Westpac economist ( Bill Evans) stated that the current batch of first home buyers using the grants and high LVR's were going to be "our Sub Prime market" and that the bank was progressivly tightening lending criteria in response.
I don't think it can be any clearer than that.
They know whats going on and these people are being dragged in to stimulate debt and money creation in an effort to fend of deflation.
The banks know it, the government knows it, but its better to run the risk of sacrificing a few younger people who have time to recover from the mess than stand back and let the whole financial system collapse.
Damned it you do - Damned if you don't |
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By: martin.family_qld
22/05/2009
7:29 pm Yahoo! Profile:
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Hi Everyone.
I note that the news is not good with regards to the state of the property market...
JUST AS STEVE_B_WILSON PREDICTED in earlier POSTS ..
HOUSE PRICES ARE NOW FALLING.. Many people are now reportedly having to significantly reduce the asking price in order to secure a sale almost all accross the nation.
And why some might ask do these people reduce the asking price in order to make a quick sale?
Well! Only those who have no clue as to what the answer to THAT QUESTION is woudl even consider purchasing a property at this time.
IF YOU ARE ONE OF THE PEOPLE CONSIDERING TAKING A BITE OF THE CARROT OFFERED BY THE GOVERNMENT...
I urge you to take a good long look at the real state of the economy and your own financials before you do so.
ALL THAT GLITTERS IS NOT GOLD |
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By: pedromoralesau
22/05/2009
11:13 am Yahoo! Profile:
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after reading every response, the majority consensus(even the pro property) conclude the grant increases demand and has raised prices. my example shows this to be true. when the grant was proposed last year, i thought it a good opportunity to sell with little prospect for capital gain over the next 3 years.( every one seems to love the sound of negative gearing, though losing $8000 per year after tax benefits is poor investing without a larger capital growth to make up for it-really what is the point of taking the risk etc if it doesn't return at least better than bank interest returns.)
anyway my prorerty in far western sydney was first appraised at $190,000 - $200000 and i exchanged in march for $228,000. and a studio apartment in eliabeth bay which was appraised 3 years ago at $230,000 - $240,000 exchanged in january for $273,500. both to first home buyers.
i have always been fundamentally against the grant for its distortion of the market, many wealthy people take advantage of it and for some people (for the reason of buying things they cant afford or need just because its on special) it will seriously destroy their lives.
after reading someones post, it made me aware it has helped me as a vendor.
shame on the fed. govt. past and present. they are using our collective tax dollars and lives are going to be turned up-side down! |
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By: puyi
22/05/2009
12:07 am Yahoo! Profile:
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Observations on the Cost of Housing in Australia
Anthony Richards
Head of Economic Analysis Department
Address to 2008 Economic and Social Outlook Conference
The Melbourne Institute
Melbourne - 27 March 2008
<<On the demand side, it is now widely accepted that policies that simply give people more money to spend on housing are likely to be capitalised into higher housing prices. On the supply side, efforts to improve housing affordability should be focused on policies regarding land use and on improving efficiency in the supply of land and housing.>>
The first Home buyers Grant does absolutely NOTHING to improve housing affordability and does NOT HELP first home buyers as taxpayers money is simply used to inflate the price of the properties.
Only policies leading to an increase in the supply of properties will help genuinely first time buyers, builders, plumbers, electricians, gardeners, etc. And more affordable houses will lead to more property transactions both from first home buyers and property investors. And more transactions will lead to more jobs for estate agents and more overall tax revenue for state governments.
If products are priced too high, there is a very high risk of a fall in price and nobody would be interested to buy. And this will lead to no job and no commission for estate agents. |
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By: r1cq1
19/05/2009
3:08 pm Yahoo! Profile:
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I am just an ordinary reader who don't see things in a complicated way, but i still do read and observe things to expand my knowledge. In my opinion, FHOG will definitely help FTB to reach their dream as long as they're all understand that they're READY to buy a property. What i mean ready is they save up sufficient deposit n secure job. FHOG is not for those who's actually rushing to get a home just because they want to avoid to pay rent (dead) money or just because they're afraid to miss out their opportunity.
When you're READY to buy your first home, for me, there are 2 things that mainly you need to have a look at. Firstly, know your capacity and strictly limit your budget. Never try to expand your budget just because you have extra money from FHOG and just because you know that current interest rate is low and you have more borrowing power. This will avoid negative equity in the future and less mortgage stress when the interest rate start to rise back, which most likely going to happen in the next few years.
Secondly, you need to work harder doing your homework on good prospect location on the house and do research about the houseprice. When you can grab the opportunity to find a house with a reasonable price and do a litle bit more bargain in addition to it, you will make sure you walk off saving up some money with that FHOG and not end up buying an overprice property.
Buying a house is very important as i agree you will not want to still end up paying your mortgage when you're retired at 65. But it is really important to make sure people understand their condition whether they're ready to buy their properties now. In the case of unemployment, whether you're renting or owning a property, you still have to find your way to pay your rent money or your mortgage anyway. However, as long as those 2 things above were considered, it will make sure you'll be in a much better position to survive. |
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By: j_bynon
19/05/2009
2:14 pm Yahoo! Profile:
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| I stand by my belief that the FHBG should have been allocated only to those who were intending to build their first home. A sad statistic (from the H.I.A) is that, the H.I.A have seen their lowest uptake and retention of apprentices in it's known history. This will only futher exaserbate the skill shortage that we face here in Australia. |
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By: almurrie1@y7mail.com
19/05/2009
2:36 am Yahoo! Profile:
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If you want a cheap house $185,000 there are plenty. You just have to put up with living in a kit house quite a distance from any big city. Demand drives prices and even 10% unemployed won't even dent most capital city markets with rents going up. Plenty of cashed up people see that the prices are low, bank interest low and rents going up. The investors haven't even started to get back into housing and when they do you dummies will have missed out big time.
There will be no big drop other than for the millionaire extravaganzas, for which my heart bleeds. After all everyone deserves a mansion, don't they?
Form a co-op, use family connections but somehow get a house if you are renting. And lock in the rate. Addicts, morons and lazy no-hopers need not apply, you will be a drain on the government housing for ever.
If prices are going down, how come in my area many three bedrooms are selling for close to record prices ($430,000) even in this "downturn". If the value is there grab it. |
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By: puyi
19/05/2009
12:57 am Yahoo! Profile:
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Jtleeoz, I will simply repeat my previous message:
Observations on the Cost of Housing in Australia
Anthony Richards
Head of Economic Analysis Department
Address to 2008 Economic and Social Outlook Conference
The Melbourne Institute
Melbourne - 27 March 2008
<<On the demand side, it is now widely accepted that policies that simply give people more money to spend on housing are likely to be capitalised into higher housing prices. On the supply side, efforts to improve housing affordability should be focused on policies regarding land use and on improving efficiency in the supply of land and housing.>>
The first Home buyers Grant does absolutely NOTHING to improve housing affordability and does NOT HELP first home buyers as taxpayers money is simply used to inflate the price of the properties.
Only policies leading to an increase in the supply of properties will help genuinely first time buyers, builders, plumbers, electricians, gardeners, etc. And more affordable houses will lead to more property transactions both from first home buyers and property investors. And more transactions will lead to more jobs for estate agents and more overall tax revenue for state governments.
If products are priced too high, there is a very high risk of a fall in price and nobody would be interested to buy. And this will lead to no job and no commission for estate agents. |
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By: jtleeoz
19/05/2009
12:22 am Yahoo! Profile:
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And another one from Rpdata.net.au...
Residential Property Values Bounce Back in March Quarter â09
Australiaâs housing market has continued to defy the sceptics during the first quarter of 2009 with the indicative capital city RP DataâRismark National Dwelling Value Index up 1.6 per cent in the three months to end March 2009. (This result compares the monthly index values at end March 2009 with end December 2008.) Most of the growth in residential property values has come in February (+0.9 per cent) and the March indicative estimates (+0.6 per cent). The month of January was flat.
Australiaâs residential property market has proven to be consistently resilient and follows on from modest circa 3 per cent falls in the value of capital city homes during 2008, which was primarily a result of mortgage rates peaking at 9.6 per cent in August 2008.
By comparison, the ASX All Ordinaries Accumulation Index fell in value by â31 per cent over the 12 months to end March 2009 while the Listed Property Trust Accumulation Index fell by â58 per cent.
RP Data/Rismark International confirmed that improvements in housing affordability are central to what appears to be the start of a slow house price recovery.
AND IF I KEPT POSTING ONE OR TWO OF THESE EVERY DAY YOU WOULD PERHAPS UNDERSTAND WHAT I AM SAYING but I will refrain and let people make their own mind up about my posts instead of appropriating my opinions from others because I couldn't argument my point in my own words. |
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By: jtleeoz
19/05/2009
12:17 am Yahoo! Profile:
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I write one message and already Puyi has posted 2 more cut and paste jobs. Just so you know how annoying it is, here is something from Yahoo Puyi,
Ideal time for first home buyers: survey
Monday May 18, 2009, 6:41 pm
Lower interest rates and flat house prices have created the ideal situation for first home buyers to enter the property market, a leading housing group says.
A survey by the Housing Industry Association (HIA) and Commonwealth Bank of Australia (CBA) found housing was at its most affordable in seven years during the March quarter.
HIA chief executive Chris Lamont says "there has never been a better time to enter into home ownership", despite the economic downturn.
Mr Lamont said first home buyers had flooded back to the market due to the boost to the first home owners' grant and significant builder discounts on house and land packages.
"The grant has been highly successful in creating and securing jobs in the residential construction sector," Mr Lamont said in a statement on Monday.
"It is also assisting in boosting the supply of housing, which we know to be grossly short of the nation's requirements." |
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By: jtleeoz
19/05/2009
12:08 am Yahoo! Profile:
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Puyi, menta, rickyrollins, sly_guy, dr.xingli et al - by cutting and pasting you own posts and content from articles from newspapers you not only insult the intelligence of your readers but also that of yourselves and your credibility. Paraphrasing or quoting bits of messages and articles to support your argumments is okay but not the whole thing AS YOUR ARGUMENT, please!
Also to answer the question at hand...
If you think First Home Buyers are being fooled then it once again shows the level of disrespect you have for the average Australian. If you don't do the research and/or try to buy a property when you really can't afford it then you should not buy a property (with or without a grant). The grant is really only relevant for people who are already in a position to buy their first home but may need a bit of a push to buy now rather than later. And what's wrong with that? If me purchasing a home can keep a few more people in a job and help stave off the effects of this WORLD ECONOMIC CRISIS then great! If the government can help us to help the economy which will be good for us anyway then I say it's a good thing.
As I mentioned elsewhere in these forums, I was planning to buy a new apartment mid-2008. I thought I'd save up a little more and then the Bonus came in. I then bought the apartment in Feb this year. Guess what? Due to the grant I came out $14,000 ahead, so NO, I HAVEN'T BEEN FOOLED as a FHB.
One thing I do agree with however is that I also think that the Bonus should only have been for new homes so then it would more truly have achieved the goal of stimulating the economy.
And as I have said elsewhere, the more I read the above mentioned posters messages the more I believe they are being intrinsically UN-Australian. Does anybody else feel the same way? |
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By: puyi
19/05/2009
12:00 am Yahoo! Profile:
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Observations on the Cost of Housing in Australia
Anthony Richards
Head of Economic Analysis Department
Address to 2008 Economic and Social Outlook Conference
The Melbourne Institute
Melbourne - 27 March 2008
<<On the demand side, it is now widely accepted that policies that simply give people more money to spend on housing are likely to be capitalised into higher housing prices. On the supply side, efforts to improve housing affordability should be focused on policies regarding land use and on improving efficiency in the supply of land and housing.>> |
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By: puyi
18/05/2009
11:50 pm Yahoo! Profile:
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The public policy group Demographia:
<<AUSTRALIA is home to three of the most "severely unaffordable housing markets" studied by an international group that predicts the housing bubble here is yet to burst.
A comparison of median house prices with median household incomes in Australia, Canada, Ireland, New Zealand, Britain and the United States found that Australia had the most cities in the "severely unaffordable" category - where house prices are more than five times the median income.
The Sunshine Coast in Queensland was the least affordable. The Gold Coast came third, behind Honolulu, and Sydney was fifth, behind Vancouver. Melbourne and Adelaide were equal 12th and were still less affordable than New York (14th), London (16th) and Dublin (32nd).
The public policy group Demographia, which conducted the study, said affordability in Australia was worsening relative to Britain, Ireland and New Zealand, where prices had recently collapsed.
Australia would be next, it said. "Sooner or later, the inherent instability that characterises virtually all bubbles will lead to house price declines in Australia."
Alan Moran, director of the deregulation unit at the Institute of Public Affairs, said house prices may have collapsed in Australia over the past few months.
But affordability was a problem, he said. "Adjusted for inflation, the average house price in Australia is now more than twice what it was 20 years ago."
Like Demographia, Mr Moran favours reducing the regulations that govern building in Australia.
"The reason Australia is so expensive is because of the regulatory-induced supply shortage that has pushed up the price of land permitted to be used for housing."
>> |
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By: jbituin1964
18/05/2009
7:44 pm Yahoo! Profile:
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| first time buyers being fooled,no being trapped.I thought Australia and the rest of the world learned a big lesson from USA.We went to USA last year and I saw how they been trapped.Some people who bought a property let say $250000 then had doubled their equity to $500000.The banks encouraged them to withdraw the accummulated equity without realising they increase their loans and repayments,then unemployment comes and foreclosures.We were looking for investment since last year.Since they trippled the grant a A$200000+ last year,it is A$300000+ now.Which mean increase on the grant is an increase on the price of property. |
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By: puyi
18/05/2009
5:22 pm Yahoo! Profile:
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These are a few of the comments made today by readers of a national newspaper:
People really fail to understand what a bubble is. A bubble is full of air, as in the housing market, the price is over inflated. It has achieved this by property development lobby groups who have asked for a bubble called the FHOG. This inflates the true value of the property and the government has been the cause of this. Of course they will not tell you that directly that is why they called it the FHOG so as to help you buy.
Posted by: just the facts mame of melbourne 3:49pm today
I believe it is a terrible time to buy now. Young people are being hoodwinked into thinking that they must buy now at any cost before they miss out. Just about every other county is having dramatic price falls while here in Australia we are told we are different and all will hold at current prices. Make no mistake we will follow the path of USA, Britain, China to name a few.
Posted by: Henry of Perth 3:29pm today
If the FHOG is propping up the low end of the housing market and all other sectors are falling. What do people think is going to happen to the low end when the grant disappears?
Posted by: mike of adelaide 4:23pm today
The Government is using my tax dollars to create a bubble in the economy. We need to deflate all the bubbles in the economy. What is really sad about this, is my tax dollars could have gone into helping people set up businesses instead. When businesses are successful then people have employment and they can pay reasonable prices for their homes. Instead the money is going into making expensive houses more expensive, and there is a wasted opportunity to create jobs and wealth... Sadly the people who will get burnt are the traditional Labor supporters..
Posted by: Willy of Sydney 2:59pm today |
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By: jaymarcel
18/05/2009
2:07 pm Yahoo! Profile:
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| Peter, you only lose that $100,000 on property if you sell which is your choice, with shares the company could go bankrupt & you have nothing, you have no control over that. |
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By: peter_qld
18/05/2009
1:50 pm Yahoo! Profile:
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I take issue for your conclusion that property is the best SMSF you could have. What is the difference between property and share values rising and falling? Answer ... nothing. Prices matter in both cases! If you don't believe me, see how you feel losing $100,000 on a house sale. Feels the same as losing $100,000 on a share sale!
Furthermore, it costs less to get into shares as an asset class, they are cheaper to maintain and service (if anything at all), cost less to sell and usually sold a lot quicker. Particularly if no borrowing is involved. And to top it all off, they provide imputation credits that direct property can't do.
Property best? Not necessarily. The choice is what suits ones investment objectives. |
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By: houseofjoseph2000
18/05/2009
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| I just hope that the Government has made provision for people who loose their jobs or their loan to equity ratio crashes triggering a bank sale... The next 18 months will be quite an experience.. The most danderous time to invest in real estate at a base level and our Government is encouraging it to prop up an over valued industry that needs trimming anyway.. |
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By: j_bynon
18/05/2009
1:15 pm Yahoo! Profile:
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Mentawaisurf,
You are right. The boom and bust of the realestate market in Asian (about 20 years ago) should have been a lesson to the rest of the world. However rather than heed this lesson, the U.S.A the U.K as well as Aus have repeated the same mistake and as a result forclosures are now at an all time high.
Take N.S.W as an example. With some of the highest property prices in the country and now with the highest unemployment rates in the country. With U/E predicted to increase, so inturn will the rate of forclosures. The rate of those claiming bankruptcy will increase. Making it impossible (due to a bad credit rating) for those who claim bankruptcy, to rejoin the market.
This will force people back into renting (paying off someone elses mortgage-dead money) and even worse force some people into becoming homeless.
When people are futher disenfanchised from achieving "the great Australian dream"-"emoh rou" this would seem to reflect a systemic failure.
If the government were serious in stimulating the economy (as a result of the fhbg)than they should have granted it on the condition, that it went only towards those who were building a new home and not to those purchasing an existing home. This would have kept builders and suppliers employed creating a positive flow on effect for the economy.
The current policy has only increased the demand on a limmited supply, which ultimatley has falsely increased the price. The banks will (sooner than later) increase their rates, which will manifest itself in mortgage stress, forclosures, bankruptcy. This will lead to a greater gap between the "haves and have nots" and if history has taught us anything, this scenario has the seeds of creating a situation where anarchy and the break down of social cohesion occurs. If we think times are bad now, they can get worse. It's time the goverment took matters seriously, become pro-active, rather than reactive and stop coming up with ad-hoc policy on the run. |
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By: mentawaisurf
18/05/2009
12:12 pm Yahoo! Profile:
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You don't even have to go pass this very website to find reasons why the FHOG boost is a danger. Read;
http://au.pfinance.yahoo.com/b/peter-boehm/100/bew are-the-boost
"First time home buyers - are you being fooled?"
When marginal buyers enter the housing market it usually signals the last phase before the bubble bursts, as we have already seen with the sub-prime market in the US.
Australian first-home buyers now have the biggest share of the home-buying market on record, enticed by the governments boost to the First Home Owners Grant. Many have brought forward their purchase before the 'boost' ends and most have financed their home purchase on over 90% loan-to-value ratio. With the least deposit and assets and a staggering 92% of these on variable loans, and a growing number of these marginal buyers now at risk of losing their job, we are creating our very own sub-prime market at the worst possible time.
Until now the FHOG 'boost' has been propping up home prices of the lower-end market. With the 'boost' now confirmed to soon phase out the rush to buy from this large housing market will soon be over, and with it a decline in demand and the value of the very homes they all rushed in to buy.
If too many of these marginal borrowers become unemployed over the next year or so then we may have created our own generation of sub-prime mortgage defaulters. |
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By: wealthforlife@ymail.com
18/05/2009
11:57 am |
Message deleted. Reason: Breach of terms of service |
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