Comments (27)
ABC (Moderator):
29 Oct 2010 12:08:09pm
What are your tips and predictions for the housing market?
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the yank:29 Oct 2010 12:19:39pm
Tips? Location, location, location.
Predictions? Flat to low growth gaining speed in the later half of the year.
Could all depend on whether governmenet's release more land for building and whether or not teh world is hit with a seconod dip recession.
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Disillusioned:29 Oct 2010 12:45:11pm
Land supply is not the problem. Just wait to see what happens when negatively geared property investors decide it's time to bail because their promised bounty of capitalized gains is withdrawn from the table as prices flatten, let alone fall.
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Last Word:29 Oct 2010 1:12:57pm
Totally agree, there's no shortage of land, nor is there a shortage of houses - the majority of surplus assets is temporarily held by a large majority of Mums and Dads who were lured into the property market to assist with their superannuation needs. There will always be smart investors who have the capacity to ride out a property value fall of 10-20% but there is a significant group of novice property investors who will have to bail out when the inevitable property value re-adjustment arrives ..... won't be any supply worries then!
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Peko:29 Oct 2010 12:16:20pm
It will probably take around 18 months for reality to bite but house prices are in for a downward correction.
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Charles Ponzi:29 Oct 2010 12:18:20pm
The Australian Housing Bubble is clearly popping. I predict that many real estate investors will be rushing for the exit at the same time and our "housing shortage" will quickly turn into a housing surplus.
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Disillusioned:29 Oct 2010 12:42:56pm
Charles, few people in Australia believe that....yet. Give it time, job losses in the eastern states due to an over-priced dollar, rising interest rates from the RBA and/or the banking oligarchs, and a realisation that negative gearing is a ponzi accelerant that can work in reverse too, then I'm sure you're right but expect to be ridiculed until then.
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dogbin:29 Oct 2010 12:26:40pm
bubble will burst, next depression will happen, housing prices will plummet.
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Boz:29 Oct 2010 12:30:56pm
Something of a misnomer to describe Canberra - which had the highest rise - as "the best performer".
Surely "best or worst" depends on whether you are a potential buyer or seller?
Reduced but still high levels of immigration and low starts for the last few years mean that any dip will be small and the upward trend will resume for some years yet.
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Jobo:29 Oct 2010 1:35:44pm
Agree. The only people who should get excited about house prices booming are those planning to sell. That's a fraction of the people who hope to, or have given up hope of entering the housing market.
As a Canberra home owner, i couldn't give a rats as to the value of our house. High house prices just make me feel bad for our friends that, for whatever reason, 'missed the boat'.
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Greg:29 Oct 2010 12:32:17pm
In absense of a shake - long slow growth on par of below the inflation.
It should be pointed out that affordability issues simply cannot be resolved under current taxation and planning regimes; simply because there are too many entrenched interests to tax property development on all three level of government and a failure to support (actually, just not hinder will be enough) small and medium size developments.
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gerard1:29 Oct 2010 12:33:34pm
What a lot of people in the country do not understand is that inflating home prices are not a sign of a more affluent community as it means that locals are less likely to be able to afford a home and new overseas landlords inflate rent prices to allow them a more luxurious lifestyle.
I personally have not had an increase in my income for five years and if inflation is taken into account, then I have had a drop in real wages by over fifty percent. I believe I am not alone in this situation and it has been a long time since the MOUTHS have been able to blame the working person for asking for more money, at least five years.
GREED is the sole reason for increase in home prices and if I may remind people of two places and times in history which were made into historical times by that self same greed. 1776 FRANCE and 1917 RUSSIA.
Please for our children's sake, get the message!
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Bill Anderson:29 Oct 2010 1:44:19pm
Add 1850's Britain to that list. A huge property bubble ruined a large portion of the British Aristocracy in this period. Aclose look at THIS period will tell you what will happen eventually to Australian property investors. Get ready for VERY CHEAP houses within the next ten years. 3/4 of the value at present is PURE SPECUALATION.
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Trump:29 Oct 2010 12:43:01pm
We're in for a huge dip at some point, it's quite fragile, the next economic shock will go straight to the housing market, then watch out.
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stever:29 Oct 2010 1:11:12pm
People get a grip. In the early nineties when interest rates were in real terms very high and unemployment very high did house prices go through the floor? No.
Why would they now? Conditions are much better now, tax laws are similar, rental properties are in short supply and our population is larger with no massive new land releases in that time. As far as I am concerned the only moderately unknown factor is the death of the baby boomers in the next 20 to 30 years but really that is a steady decline over the next 20 to 30 years. Not the next 5 or so. If we have some big crash then I will happily sell my house at market value.
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Bill Anderson:29 Oct 2010 1:50:36pm
You won't be able to. No-one will be able to afford it once the REAL CREDIT CRISIS hits. Australians are on borrowed time and money. Sooner or later we will run out of credit. We have been ducking and weaving our way out of trouble for 2 years now. But all that has done is exacerbated the problem. We are now on the hook for about 50% more than when the last crisis hit, and we have used up all the ammunition. When the next crisis hits our credit will be revoked, everybody in finance knows it is just amatter of who blinks or folds first. Then the fit will hit the shan.
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John:29 Oct 2010 1:13:10pm
It will go up and down, but it will never crash as some predict, there will not be the boom of the late nineties, but there will be a climb of around 5% a year for the next twenty years its just if you look at that climb on a graph it will look pretty rocky. But you have to get in the market or you will never own your own house, the reality is we all fit in somewhere.
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Bill Anderson:29 Oct 2010 1:59:42pm
The average Australian family can only afford an annual increase of 2.5% at the most. That will be the upper limit that the market will support. It is called supply and demand. Once people can no longer afford them at their present price, they will come down. Pretty simple arithmatic. Except when you get artifically reduced interest rates, government tax cuts and foreign speculation involved. This artificially ramps up SHORT TERM profits. But guess what. We are out of tricks and will be soon out of credit. It won't be different THIS TIME. It never is. The business men are just telling you that so that they can leave the market while the going is still good. Wait until you see the surge for the exit once reality seta in. You will not be retiring on the value of your house. No one will want it.
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Chief Economist:29 Oct 2010 1:17:05pm
PROOF of a housing bubble is shown by the following:
- rents increasing modestly in the past few years, while house prices have skyrocketed. This shows there's no housing shortage, otherwise the 2 would increase at a similar rate.
- terrible rental yields, and little hope of future capital gains. Why would anyone want to buy a house in Australia at the moment? Renting is much more sensible.
- first home buyers need a massive deposit to buy now. Who has $100k to buy a $400k dog box?
HOWEVER, prices will only deflate slowly because:
- buying and selling costs are so high. Only desperate people will sell.
- high transaction costs lead to a "sticky" market.
THE FUTURE:
- low supply and high demand arguments are rubbish in this market - the same arguments were bandied about in the US and other failed countries in previous years.
- look at Japan with 2 decades of steadily deflating prices, and expect the same here.
- the average house price in Australia will be 3% lower next year, 3% lower the next, 3% lower the next, 3% lower the next....you get the drift.
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John Dillinger:29 Oct 2010 1:18:36pm
They had to go to Canberra to find rising house prices that tells you all you need to know about the property market in Australia now, Canberra's prices are artificially skewed as they keep demand high by building very little and then shipping in as many overpaid government desk jockeys as they can.
Tip - sell now quick.
Prediction - Flat > Declining values > Panic > Crash
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Del:29 Oct 2010 1:46:08pm
As a property investor, I believe there has never been a more exciting time to be in real estate, so long as you have done your homework and negative gearing is not your motivation. It's not just 'time in the market' but 'timing' of when to buy and sell.
Sydney, especially, has a chronic undersupply of housing. Also the mining towns in the Pilbara and the Bowen Basin. Investing in these towns offer excellent returns, but any services needed are extremely costly too.
The market may have a 'correction' in prices from time to time but, supply and demand and inflation are facts of life.
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BeirutBomber:29 Oct 2010 1:52:12pm
It's hard to put figures such as 5% or 3% out there in the market place, though looking forward you can see a picture of a struggle in Australia, and it amounts to the following;
Families are being paid to have more Children, Baby boomers are the larger portion of the Australian makeup, and The Y generation is too small, the Pyramid, as it were, is upside down.
The future of the real-estate Property in Australia looks a little lacklustre for the short to long term.
The Baby Boomers will leave properties behind for the Y generation, and there won't be enough of the Y generation crowd to retain the high demand for these properties.
The volume of Sales will increase and prices will fall.
With the World Economy still looking shaky people will be looking at purchasing things of more personal standing and items of short term pleasure.
With all these factors the government has a difficult balancing act to perform, one wrong turn and bang, the market could fall apart.
What does the intervention of the IMF tell you? It says steep curved roads ahead....USE LOW GEAR.
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melapi:29 Oct 2010 2:05:35pm
Having moved here over 5 years ago from Europe I'm still shocked at the level of income to house prices here.
With a resonable level of income from IT Consulting I'm shocked to find the chance of buying a property without massive levels of debt burden is beyond me.
I wonder how Nurses, Fireman & other such trades can afford to buy a property. If the bottom end of the market and 1st home buyers can't afford property how can the rest move up?
Ideally it would be nice to see negative gearing fazed out over a period of time.
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LOL:29 Oct 2010 2:08:36pm
The only people who say prices are going to drop are, as Gordon Gecko calls them, NINJA's - No income, no job and no assets. Well sorry people, but if you look at the facts; 1. 100+ Shortage of home due to curtailing of the urban sprawl etc, 2. Immigration of skilled and cashed up professionals, 3. The robustness of our economy now and during the GFC, you are dreaming if you think we are heading for a crash. There are no indicators to support this argument. Better try and get a better job and save a deposit before the bubble prices you out of the market for ever.
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Howard:29 Oct 2010 2:57:44pm
Sorry buddy, you are far off the mark... Checkout http://en.wikipedia.org/wiki/Australian_property_bubble for figures, particularly studies showing housing being in the unaffordable range.
I live in a regional area 30kms from the Gold Coast with a population of around 12'000 people. The average income in this area is probably around 45k, most people work in retail or at Coles and would be on even less than that. In this town, for $350k all you can buy is a fibro asbestos shack in a flood zone.
Property is severely unaffordable for most and just plain awful value for the rest. I earn about 75k and my money is going into shares for now, no way would I throw it into a 300k mortgage on a fibro dog box in a flood zone.
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Lawrence:29 Oct 2010 2:10:32pm
Predictions
City houses - flat
Apartments - fall
Difficult to see a crash occuring with coming inflation.
As a side note, good quality comments in general so far. Keep it up fellow readers!
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Howard:29 Oct 2010 2:32:19pm
I think there will be another 3-6 years of slow growth, until the market with all of the property investors and funds groups in property realise that the return rate is not what it was 2004-2010. There is plenty of supply but a huge chunk of purchases are from investors.
Most First home buyers can't afford $450k for a home, especially young people, unless they are subsidised by their now wealthy baby boomer parents. Take new home owners out of the market, and with the reduced returns for investors by 2013, the bubble will certainly pop.
The government could speed it up by fixing negative gearing tax rorts.
[ 本帖最后由 Rondy 于 29-10-2010 19:40 编辑 ] |
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