By: ferratuss
13/11/2009
1:28 pm Yahoo! Profile:
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| house prices=3xave wage as rule in aus-now 9x ave wage due to lack of supply it,s a big fat bubble that has all levels of gov. collecting heaps while supporting their mates to boot.realestate is the economy and it props up goverments with20th century revenue streams and when it goes wrong as it will hello ireland iceland and latvia |
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By: mentawaisurf
13/11/2009
11:37 am Yahoo! Profile:
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The scene is set for a home construction boom after a record number of Australians rushed to take advantage of the First Home Owners Boost in September before the scheme was wound back from October.
In September more than 49,000 Australians took out mortgages for purposes other than refinancing, a seasonally adjusted record...
http://www.theage.com.au/business/boom-in-new-home s-on-the-way-20091109-i5d7.html
'Lambs to the slaughter' Meaning; In an unconcerned manner - unaware of any impending catastrophe.
All the FHOB (first-home owners bribe) has done is spark a short-sighted buying mania that has raised Australia's mortgage debt level to a new record high. |
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By: lasty49
13/11/2009
10:53 am Yahoo! Profile:
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Communistevil,
Its going to be very difficult for me giving up Yum Cha. |
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By: communistevil
13/11/2009
10:35 am Yahoo! Profile:
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Now is the time to acknowledge the dangers associated with our entertaining the idea of doijng business witht he evil and corrupt government fo the P. R. of China.
Recent as yet unconfirmed reports indicate that the P. R of China has been investing heavily in the property market so as to help inflate the property bubble which we all se growing at an ever increasingly alarming rate.
With fists full of USD, this cash rich COMMUNIST giant is now manipulating the property market here with only one clear intention in mind.
To help create a bubble and then burst it so as to destroy our economy and way of life.
"Ridiculous! Makes no sense!! C'mon. Why would they even think of doing such a thing?" I hear some ask.
The reason is all too clear to those who will STOP & THINK!
The evil & corrupt government of that communist state will create an economic disaster here of such proportions so as to benefit from it!
Yes!Benefit!
For when the disaster which we all know will soon occur doesindeed come to pass, ONLY they shall be cash rich and ready to pick up the pieces at bargain basement prices. And ONLY they shall be in the WINNERS corner.
They will ahve control. And we shall be at their mercy!
SAY NO TO DOING BUSINESS with the P. R. of China. STOP them from investing in our industries and prevent them from buying more property than they already own.
Alarm! Alarm!! |
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By: s_step000
11/11/2009
2:50 pm Yahoo! Profile:
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"No if borrowed bulk of money as rent would go into interest & principal + owners additional contributions"
Return is defined on profit/capital outlay. Say you buy a house 500k. Say if you borrow 80% of total cost and all rents plus 3% pa of your capital go to interest payment and other expenses.
The original capital return of 60% still becomes 150% (since you lever by 4 times and spend extra 3%pa of your capital). This is even better than paying cash since your outlay is smaller. |
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By: pegasus2203
10/11/2009
7:22 pm Yahoo! Profile:
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HI all!!
RBA and treasury agree on one thing:build housing
Is this the end of people rediculously expecting that housing prices will keep going up forever?
http://au.pfinance.yahoo.com/b/michael-pascoe/524/ rba-and-treasury-agree-build-housing |
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By: hdmausguy
10/11/2009
5:25 pm Yahoo! Profile:
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| step - Of course we are'nt adding in costs like rates,repairs,insurance,l ost income through vacancy, agents fees (if you use one). If you had $420k would it be a better deal to take the average dividend of shares in the commonwealth bank for example, @7 -8%pa plus any capital gain? Certainly no contest when it comes time involved with the investment. Minimal with the CBA shares, lots more with a house etc. According to jay and others here, these investment houses are run at a controlled loss on borrowed money taking advantage of negative gearing. This allows taxation offsets on their other positive income. |
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By: hdmausguy
10/11/2009
4:53 pm Yahoo! Profile:
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| step - good point. Yes 160% return if paid cash up front for house. No if borrowed bulk of money as rent would go into interest & principal + owners additional contributions. |
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By: s_step000
10/11/2009
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"Say the present owner bought the house now for $420k renting it for $380pw and in 15 years found that house values had slowed and his gain was only 60%. "
Out of curiosity. Is the gain of "60%" include the rental return? In general the rental yield is about 5% pa. This rental return itself give you about 100% return in 15 years. Combine with capital gain become 160% return. |
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By: jaymarcel
10/11/2009
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It's a tricky one as somethings cause inflation to go up & somethings go up due to inflation, there is a bit of a chicken/egg arguement here.
One thing I will agree with you is rent as a rule is tied to property prices but as we know things are changing & with property becoming more & more out of reach this could cause a further rise in rents, even if property prices reach their affordable limit. |
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By: hdmausguy
10/11/2009
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| jay - I would imagine that rents would be tied into property prices yes/no? Take a rented house in my street in the suburbs west of Parramatta(central west metro Sydney) Mostly these 3br fibro/clad houses rent in the $360 - $380pw range. Recent sales around $420K. Similar 3br houses in low or negative growth country towns rent for $150 - $160pw & many sell for $180k or less? So surely the value of the house is the main factor in the price the property owner charges for the rent. Using the house in my st. as an example. Say the present owner bought the house now for $420k renting it for $380pw and in 15 years found that house values had slowed and his gain was only 60%. His rental income was then $610pw. General inflation had gone up by 100%. Over the previous 15 years should he have been increasing his rents in line with inflation so that he would then be receiving $760pw? |
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By: jaymarcel
10/11/2009
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hdmausguy, I would say no, but I'm sure a few would have a go at using that method of calculation.
Don't forget rents would have gone up with inflation too, wouldn't they? |
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By: tesseract91
10/11/2009
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House prices to drop 40-50% ???
I don't know what this guy is smoking but I wish that he would share it with the rest of the class! |
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By: lasty49
10/11/2009
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hdmausguy,
It depends if wages have kept up with inflation and what actually is the driving component of the inflation.
The cost of utilities and grocery prices have increased yet inflation has fallen.
Ask a pensioner are they seeing any relief from deflation? |
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By: stevebwilson1
10/11/2009
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There is a place for dreams.
There is a place for reality.
The facts speak for themselves.
Though stimulus measures introduced worldwide have indeed managed to prevent a more destructive economic collapse than might have otherwise ocurred to date.These same "STIMULUS" measutres have FAILED to stimulate a REAL RECOVERY.
And so, it is only a matter of time until the market conditions adjust to a level which may be supported by the real economy.
Such an adjustment shall occur as the measures implemented by government are withdrawn and the economy like a new born is left to stand on its own two feet.
What a shame it is that those two feet are not strong enough to support the weight of the economy!
EXPECT HOUSE PRICES to DROP dramatically.
It is inevitable. |
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By: hdmausguy
10/11/2009
11:54 am Yahoo! Profile:
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| I'm not into economics but if say in 15 years time inflation has risen 100% & properties have gone up 60% in that same time period,does that mean property values have effectively fallen 40% ? |
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By: hdmausguy
10/11/2009
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| Two references to property in Australia. Elite traders send me a weekly market wrap sheet. Part of their blurb was a reference to failed property group City Pacific. 12 months ago they had an office block on the market for $15 million which has just been sold for $9.5 million. It then mentioned "Plenty more of these time bombs waiting to go off"? & "Commercial Real Estate market in Australia is just as sick as America's'. On 2UE radio they made a brief reference from THE ECONOMIST that property prices in Australia would decline 40% over the next 15 years? I could'nt find the article as THE ECONOMIST is a subscription outlet? |
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By: sly.guy_nsw1
7/11/2009
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Robert Prechter Warns
Take a look!
Good night.
Hopefully, your dreams will be sweet..... |
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By: billy_tiut
6/11/2009
7:52 pm Yahoo! Profile:
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I would like to add here, I agree that the house price will not fall, reason is simple -> getting a finance in Australia is quite hard.
I had a finance approval and let me tell you the way that you need to convince the lender and get the loan is really hard. There are so many paperwork and they even check your credit rating, for instance if you once get unemployed and get the money from Centerlink you will not get approved even you already back to normal and get the job, because centerlink bring down your credit rating.
Just looking at that, it will be unlikely the house price will fall. It will go up at a slower pace, because remember Australia a resource driven country and we are tight to China and India now which is good.
And we are in oil and gas boom rather than mining boom and my friend look at Chevron Gorgon project, that field alone has life of 50 years, it will add more prosperity into Australia and WA in particular. Plus Uranium and massive NWS gas project by Woodside, INPEX, and Shell.
I believe Australia is very unique because it's a western country but have more Asian influence. |
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By: glh40
6/11/2009
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Nov. 4 (Bloomberg) -- Jim Rogers,
Rogers said the only bubble he sees in the Western world now is in U.S. bonds.
âI cannot conceive of lending money to the U.S. for 30 years,â he said.
So lets Connect the Dots...Bond bubble bursts due to His second comment above...Interest rates rocket up.. Outcome...great trouble for mankind, and nothing left but DEBT...and the Continuation of the Theft of Prosperity...Demographics have nothing to do with future prices...Its all about Interest rate Swaps in OTC derivatives or in English....VERY CHEAP MONEY which Ends on the Bonds Bursting due to the continuation of 1% rates in the Major Countries,Euro,Dollar,Yen while producing Excessive amounts of QE...World Currencies WILL Devalue when the Reserve Currency comes under attack ..which will ocurr Soon due to the above....Buy a Bar of Gold to protect yourself from this Political Economic maddness. |
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By: funkyjoeisno1
6/11/2009
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| You are kidding. How stupid can you be. Overall house prices are not going anywhere but up. Sure some citys suburbs etc might go down but Australia as a whole is going up and up. Place like Canberra and Darwin (usually not mentioned in national statistics or new columns due to there status as a Territory rather than a state) are powering ahead. These places also ahave higher than average wage (Canberra has the highest in the country) both have extremly low rental vacancy rate (less than 1 %)and no where near the housing supply required. Perth has contracted but with mining prices rising again as is housing demand. Anyone who thinks prices are going to go down 1% nationally is a complete fool. let alone 40 - 50%. The yank's & pom's dont have the percentage demand that we do. Nor do they have the mentality that Aussie have. Most Aussie want to buy thier own home and there are more and more investors each day. Pom's and particulary america are happy renting. It is seen as teh norm. |
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By: eesanft
6/11/2009
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We can look at wider comparability issues and they are interesting but they do not determine market prices in the short run, supply and demand does. If we are looking at house prices in SE QLD, then the facts are:
1. It costs $200,000 upwards to build a house incl. basic landscaping etc
2. Three developers currently have a stranglehold on the supply of new blocks to the market, none of these companies is in a weak financial position so they have the ability to maintain the flow of blocks to market at $220,000 to $250,000 per block minimum
3. Adding these two costs together, a new house will cost $420,000 to $450,000 or around 7 times the national wage.
Can anyone tell me where the savings are going to be made? The only one possibility I can see is that if GST was dropped, there might be a saving of around $40,000 but that is not huge. |
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By: mentawaisurf
6/11/2009
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| Australian house prices need to fall (and will fall) to levels of affordability based on income, regardless of what the government or central bank try to do to re-inflate our housing bubble. These short-sighted efforts to prop up prices are costly, they will not work (prices will fall to where they are headed anyway) while they will only delay any sustainable recovery in the future. |
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By: jaymarcel
6/11/2009
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| You are correct in your facts rodney but I believe we have a long way to go before australians are forced into learning a lesson in debt, it appears the UK & USA have been punished for their debt management skills or lack of but have yet to learn any lessons. |
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By: babybearheat
6/11/2009
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I am no financial wizz but I would also urge caution.
as one of the immigrants that are supposed to be driving the potential rise in house prises I can tell you are now probably the most expensive country in the world to buy property. I have lost 40% of the value of my property in the UK hence I now have very little/no finances to start buying here.I AM NOT ALONE IN THIS!!
Many of those intending to come here have seen huge losses in capital or are deciding to stay put as moving here is no longer an option.Due to the weak pound/ strong A$ this is making the move even less attractive.
On top of this to protect jobs here and prevent immigration scams the rules for immigration are changing and the numbers allowed to enter are being reduced. Therefor fewer people to buy with potentially lower funds!
Just something to consider. |
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