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The future of Australian property prices

Discussion in 'General Investment and Economics' started by Joe Blow, Nov 15, 2009.

  1. Joe Blow

    Joe Blow Administrator

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    This new property thread replaces the previous property threads which have now been closed. Hopefully this new thread will also signal a new beginning in the level of courtesy shown to others.

    Please feel free to post your research, analysis, relevant information or opinions on Australian property in this new thread. However, please do not deliberately provoke or personally attack or insult other thread participants.

    The moderators and I will be closely monitoring this thread and we urge those participating in it to use the "Report a Post" feature to report any posts that are in violation of site rules or are overly disruptive.

    Looking forward to some polite and constructive debate. :)
     
  2. robots

    robots hello

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    hello,

    good evening brothers, a wonderful day

    apologies for the late reporting:

    melbourne clearance rate 81%, massive run now with i think 18 weeks of above 80%

    paradise

    peace out to all

    thankyou
    professor robots
     
  3. nunthewiser

    nunthewiser Well-Known Member

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    Would this have anything to do with it Docfessor Robots?


     
  4. nunthewiser

    nunthewiser Well-Known Member

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    I did find this prediction rather funny though :D
     
  5. Gordon Gekko

    Gordon Gekko Well-Known Member

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  6. wayneL

    wayneL Rotaredom

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    As far as I'm concerned the future of nominal house prices is no longer clear due to the Keynesian "stimulus" outrage. I'm sure that real prices will reduce over time, but if inflation gallops off into the sunset, it will take nominal prices with it.

    There is still argument over whether there will be deflation or high inflation and I think we are on the twilight zone end of chaos theory as far as predicting the final outcome.

    In other news, Britain's most high profile buy to let gurus, Fergus and Judith Wilson, are in serious arrears and appear to be in deep doo-doo.

    http://www.dailymail.co.uk/news/art...uple-rode-buy-let-boom-estimated-350-000.html
     
  7. robots

    robots hello

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    hello,

    what a great start to the thread, this is fantastic

    thankyou
    professor robots
     
  8. theasxgorilla

    theasxgorilla Problem solved... next bubble.

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    The future of Australian property prices? Up, up, up and away.

    We will be proud to call ourselves one of the most expensive countries to live on earth, and foreigners will say, "I've heard it's really expensive in Australia, but the people are really nice and the weather is great, and I think you get paid a lot".

    Love to know if anyone can see a real trend bender here, but I'm afraid I just can't. Inspite of obvious asset and consumer price rises Australia is still cheap.
     
  9. theasxgorilla

    theasxgorilla Problem solved... next bubble.

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    Indeed! I thought the formula was becoming clear though:

    1. Borrow
    2. Inject
    3. Inflate (ie. reduce debt base)
    4. Spread the remaining liability over many years (ie. increase taxes)
    5. In parallel to steps 1-4, boom, bust, boom, bust, boom, bust to coda or ad finitum, whichever comes first ;)
     
  10. explod

    explod explod

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    Yep. off to a good start.

    Ole Pal, can you please explain to me what high clearance rates have got to with property prices? and the future of?

    To my mind it is an even sum game. For every willing buyer there is a willing seller. High clearance rates could be seen as sellers capitulating and accepting less and vice versa of course. So the emphasis on clearance rates per se appears meaningless unless we analyse the locations propety types (encompassing demograhpics in fact), adinfanitum???
     
  11. billv

    billv Well-Known Member

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    Melbourne is in bubble territory IMO.
    From memory, last time the Melbourne market was so hot a significant price correction followed.
     
  12. drsmith

    drsmith Well-Known Member

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    Trot into the sunset might be better or at least a pace that does not require a rapid response via interest rates.
     
  13. Beej

    Beej Well-Known Member

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    Auction clearance rates are an historical leading indicator of what's going on in a particular residential property market, based on the "sample" of total sales at a particular point in time that are reported immediately as auction results are. There's actually a good article on this today in the (printed) Sydney Sun Herald news paper.

    For Sydney, usually a sustained auction clearance rates of 60%+ provide a leading indicator that prices are rising strongly. Rates < 50% normally indicate falling or stagnant prices. This has applied for as long as I have been following property (20+ years), and if you look at what happened last year and this year to both auction clearance rates and prices (both last years falls and this years rises), the pattern is clear. The low clearance rates last year preceded the stats indicating falling prices. The high clearance rates that started to emerge from Feb/Mar this year preceded all the stats that confirmed rising prices from that period on. The auction median price is also a good indicator of the market segments where all the action (or lack of it) is.

    PS: Sydney preliminary clearance rate for this weekend was reported as 68% (175 sold / 259) with a median sale price of $745k (indicating lot's of sales in the mid/upper price ranges - auction median has been steadily rising in Sydney over the past 12 months from mid $500ks up to the current median). This suggests to me that Sydney prices at least are still rising and the stats that come out for the spring quarter over the next few months will all indicate that. The ABS median may rise quite strongly as the bias of sales is shifting from the FHB end to the mid range and upper end.

    Cheers,

    Beej
     
  14. theasxgorilla

    theasxgorilla Problem solved... next bubble.

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    Further to that, in my opinion you can adapt a little bit of the volume analysis approach in share markets to real estate markets. In an uptrend (yes, that which the Melbourne property is in), stagnation or a slight retreat in prices on lower volume (transactions) is healthy... lets call it consolidation or simply "taking a breather". Higher clearance rates (high volume) in an uptrend suggests a market that is steaming up, up and away.

    And all this information is telling us is something about the current sentiment in the market and the ability of buyers to offer up the finance that get deals over the line at prices acceptable to both seller and themselves.
     
  15. GumbyLearner

    GumbyLearner Well-Known Member

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  16. Mofra

    Mofra Well-Known Member

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  17. robots

    robots hello

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    hello,

    good evening, just got home from pedaling the bike to and from the city, great evening, plenty out and about, snuck in a couple of ruski's, new Australians everywhere, just great

    enjoying the place

    just some analysis on the Melbourne scene:

    up, up, up and up it goes

    word out to MrBurns hope all's well and we havent lost a fabulous contributor at ASF

    look out to the stars tonite

    thankyou
    Doctor Robots
     
  18. satanoperca

    satanoperca Well-Known Member

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    Good Evening All,

    Was also out on the bike with my little man on the back riding around the docklands, beautiful evening. New buildings everywhere.

    Just caught a week old article thought was of interest.

    http://www.theage.com.au/business/fall-in-housing-starts-to-impact-prices-20091110-i7qk.html

    Saw Michael Hudson speak at the Melbourne town hall.

    Cheers
     
  19. Vizion

    Vizion Well-Known Member

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    An excellent post santa that reinforces my own opinions 100%. :)
     
  20. Dowdy

    Dowdy Well-Known Member

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    excellent article.

    The problem with today's market is that people look at the prices and think that's the way things are meant to be. Where there are markets in which higher prices justify higher prices, they always come crashing down
     
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