The future of Australian property prices

[young-gun]

My investment property has lost value, at least 10-15% from peak, so what ? I still paid 300% less than what it's worth now. There are heaps of people who were buying investment properties and land when I did and are sitting on heaps of capital growth - they are not in a hurry to sell. Besides, if i sell my house, there is nothing to invest in anyway, stocks - down, cash interest rates - down, so why sell? Sure there are demographics that will be in trouble, but one can't say a crash across the board is inevitable, IMO.

Let's not forget how percentages work. Say your house is worth 400k today, which has fallen 10% or 40k. 40k (assuming you bought at 100k as you stated) is a 13.3% loss of capital gain. If this was to continue downward to say a 30% loss which is 120k approx, thats a 40% paper loss on your gains.

Disregarding the second figure, you have stated that your property has already fallen by around 40k. Does that not bother you at all? Is there a point at which you would say 'enough is enough'?

And surely having your money in a term deposit that is returning something and not depreciating at the same time would be a better option? Sure you're getting rental returns, but have they returned substantially more than 40k since the point in time of which your IP started to decline in price?

I don't mean to single you out, just curious.

On another note, ABS released figures on the number of owner-occupied housing finance commitments excluding refinancing to be down -0.8%. Before you jump down my throat sparticus I don't know how accurate this is, I would say they are able to achieve a more accurate result with these type of figures as opposed to unemployment, but who knows.

 

[white_goodman]

Let's not forget how percentages work. Say your house is worth 400k today, which has fallen 10% or 40k. 40k (assuming you bought at 100k as you stated) is a 13.3% loss of capital gain. If this was to continue downward to say a 30% loss which is 120k approx, thats a 40% paper loss on your gains.

Disregarding the second figure, you have stated that your property has already fallen by around 40k. Does that not bother you at all? Is there a point at which you would say 'enough is enough'?

And surely having your money in a term deposit that is returning something and not depreciating at the same time would be a better option? Sure you're getting rental returns, but have they returned substantially more than 40k since the point in time of which your IP started to decline in price?

I don't mean to single you out, just curious.

On another note, ABS released figures on the number of owner-occupied housing finance commitments excluding refinancing to be down -0.8%. Before you jump down my throat sparticus I don't know how accurate this is, I would say they are able to achieve a more accurate result with these type of figures as opposed to unemployment, but who knows.

its pretty much accurate, they dont have to go to too many financials to get the figures, compared to using sampling for unemployment

 

[Glen48]

I always though an investment was some thing you put money in to and it increased in value so even when you are bankrupt, un employed and underwater and living in the bathroom of your ex mother-in-laws your property is still an investment.

 

[Tink]

Great post as usual Tech, value your posts in here.

I would also say if people were going to buy a PPOR as an investment first, is also a good idea, with the intention of moving in later.

howmanyru, I wouldnt sell either, when are you going to see properties at $100,000 again inner suburbs, unless you have another venture or need the money for something else.

Alot I know are more than 300% in positive.

 

[Mr Z]

Re: PPOR --> Given what has happened around the world, and that our market has some of the worst credit stats, I would think it would be prudent to step back and take a long hard look before jumping at "cheap" realestate. Keeping in mind that in the end all RE markets are basically LOCAL and you may have sound reasons to be above or below trend. For now I'd be concerned about the SE corner of Oz.... save maybe SA to some degree.

The idea that Melbourne became one of the least affordable cities to live in globally was just a major red flag to me, I cannot see any justification for that!

 

[Glen48]

Great post as usual Mr Zee, value your posts in here.
300% positive you are correct.

 

[Mr Z]

Great post as usual Mr Zee, value your posts in here.
300% positive you are correct.

Thanks

I've had to be more than a little patient with this market but we appear to be at a critical juncture.... at least one worthy of close scrutiny. Hopefully we get some blow softening from China's easing monetary conditions... we will see!

Cheers
Z

 

[MrBurns]

Property glut to keep prices falling

Property experts are predicting a further 0.7 per cent decline in house prices across the country amid a glut of properties for sale.

NAB's June quarter Residential Property Index declined from +5 to -11, with Australia's two most populous states recording the biggest decline in conditions.

The report shows the national average house price declined 2 per cent over the quarter.

So much for the shortage

http://www.abc.net.au/news/2012-07-12/property-market-doldrums/4126580

 

[young-gun]

howmanyru, I wouldnt sell either, when are you going to see properties at $100,000 again inner suburbs,

I'm sure stranger things have happened.

 

[young-gun]

So much for the shortage

http://www.abc.net.au/news/2012-07-12/property-market-doldrums/4126580

Nonsense mr b. I have no doubt there is droves of people about to dive into the market, they'll be coming from everywhere, I'm certain! We better start building more houses actually.

In fact I've recently decided that I am going to ignore all the compelling evidence that supports a substantial correction/fall/crash in prices, and everything that has occurred overseas, and I'm gonna buy a house. I just feel that with all this uncertainty in the global economy, not to mention the cracks appearing right here at home, that now is without a doubt the perfect time to take the leap of faith. After all, who has ever gone wrong with a big slab of debt in recent times?

 

[Vixs]

Nonsense mr b. I have no doubt there is droves of people about to dive into the market, they'll be coming from everywhere, I'm certain! We better start building more houses actually.

In fact I've recently decided that I am going to ignore all the compelling evidence that supports a substantial correction/fall/crash in prices, and everything that has occurred overseas, and I'm gonna buy a house. I just feel that with all this uncertainty in the global economy, not to mention the cracks appearing right here at home, that now is without a doubt the perfect time to take the leap of faith. After all, who has ever gone wrong with a big slab of debt in recent times?

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For those that don't know you better young-gun, it's very easy to miss the sarcasm of that post.

needs more smiley faces - maybe some 's, or some 's, or you could go all out with a or haha.

This thread has become much more reader-friendly over the last few weeks - you don't need to dodge the wild streams of piss coming from all the pointless and non-property related pissing contests now that they've subsided.

 

[numbercruncher]

Pretty tame falls last quarter - sure to accelerate for the speculators ....

Australian house prices fell 2 per cent in the June quarter with more falls expected in the coming year, especially in the most populous states of New South Wales and Victoria, according to National Australia Bank.
‘‘Employment security is now the biggest concern for homebuyers as interest rate concerns recede,’’ the report says. The comment comes as the economy shed 27,300 jobs in June, the biggest monthly drop in 2012.
NSW and Victoria have already posted the steepest declines in house prices for the April-June period, showing 2.3 per cent and 2.9 per cent drops, respectively, according to NAB's residential property survey, released today.


Read more: http://www.theage.com.au/business/h...to-come-nab-20120712-21xos.html#ixzz20PEzX13Y

 

[numbercruncher]

\

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This thread has become much more reader-friendly over the last few weeks - you don't need to dodge the wild streams of piss coming from all the pointless and non-property related pissing contests now that they've subsided.

You should of been here a few years ago buddy when all the industry sponsored and brain washed permabulls bagged us realists 24/7 for warning about the enevitable ....

 

[explod]

You should of been here a few years ago buddy when all the industry sponsored and brain washed permabulls bagged us realists 24/7 for warning about the enevitable ....

Well said,

and where's Professor Robots?

 

[Tink]

I'm sure stranger things have happened.

If you getting $4000 a month in rental, I would be happy to leave it there.

 

[young-gun]

If you getting $4000 a month in rental, I would be happy to leave it there.

I would too. But I'm yet to find a rental valued at 400k that returns 4k a month. If that sort of return was able to be achieved prices would increase accordingly.

 

[againsthegrain]

I would too. But I'm yet to find a rental valued at 400k that returns 4k a month. If that sort of return was able to be achieved prices would increase accordingly.

Think he means sitting on the market for months asking 4k rent a month before reality sets in

 

[Mr Z]

I would too. But I'm yet to find a rental valued at 400k that returns 4k a month. If that sort of return was able to be achieved prices would increase accordingly.

Drug gangs are not always the most reliable tenants and they are hard to replace if they default.... + getting back rent out of dead people is a problem as is meth lab insurance.

Just sayin... high risk and all that.

 

[Glen48]

Hope they leave the cooking gear behind you can make your own ,not hard to do a woman was caught cook some in her hand bag in Wal Mart USA.
No GST some Carbon, Tax rest profit.

 

[numbercruncher]

Unit in Sydney or Castle in the US ? (or much of Europe for similar prices im led to believe)

A couple in the US has bought a castle complete with a stone tower, peep holes and secret passageways for just $395,000
Brandon and Kate Smith bought the 724sqm castle in Eureka, Missouri, last month but first heard of it in 2005 when it was on the market for nearly $2 million

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http://finance.ninemsn.com.au/executivesuite/home/8498718/us-couple-buys-395k-castle