7:30 report discussion on a possible housing bubble ready to burst
- Thread starter b simpson
- Start date
If Koshie says so it must be true
Doesn't matter if it is true or not, but the sheep will follow what he says cause he is koshie...
Agree with you 100%, I was being somewhat facetious.
Unfortunatly there are enough Sunrise watchers out there who do take what he says as gospel.
and also enjoy his jokes
Let me just start by saying that I wish I had the same control over the english language as you do belbo.
Regarding continuing my post\replies which I deleted, I did so because I feel there is little point (for both parties) and those reading on for such a mundane topic to continue given it provides such little value. To be honest its also because I felt it was such a black\white issue I just felt stupid arguing something akin to whether or not the sun will rise tommorow.
It was never my intent to embark into a thesis on the relevance of median price\rpdata.
My views on Dutch Auction? Unfortunately we live in a society were we accept whats known to us over what is best. Given this I dont think we will be seeing the wide spread use of this method anytime soon. There are entire books, tv shows etc dealing with open cry auctions despite its use being so prevelant and in my view so straight-forward. So imagine trying to educate the public on Dutch Auctions... it just wouldnt fly. However this is not to say its not a better system.
Personally I dont like auctions in general because it reduces the number of people prepared to make an offer on your property. For instance personally I spend a lot of money on due diligence (development sites) which I simply cannot fathom doing prior to an auction on the chance I am the succesful bidder therefore regardless of how good I think the site is I just wont turn up or be interested.
People may wish to alter some aspects of the contract, settlement, conditions etc. All these people wont attend either.
In short an auction (in my view) reduces the people interested to those cashed up (dont even need the bank) and today these people are limited. Sounds great in theory but I personally feel that via negotiation you will acheive the highest price albeit not the best conditions.
Therefore if its a "quick" sale you want then auction is best but if you want the highest price I dont think it is.
Therefore my sceptism when agents jump to auctions as their immediate preferred method of sale.
Lastly I am glad you share my view that its better to write with conviction than to try and earn brownie points or argue for argument sake. I many times question myself why I write at all, perhaps I feel its a better way to spend time than watching blankly at the TV. I do however feel recently discussion has moved away from wanting to learn or improve ones ways or methods and instead turned adverserial and a forum to prove one is right over the other (I am no saint here).
Regarding continuing my post\replies which I deleted, I did so because I feel there is little point (for both parties) and those reading on for such a mundane topic to continue given it provides such little value. To be honest its also because I felt it was such a black\white issue I just felt stupid arguing something akin to whether or not the sun will rise tommorow.
It was never my intent to embark into a thesis on the relevance of median price\rpdata.
My views on Dutch Auction? Unfortunately we live in a society were we accept whats known to us over what is best. Given this I dont think we will be seeing the wide spread use of this method anytime soon. There are entire books, tv shows etc dealing with open cry auctions despite its use being so prevelant and in my view so straight-forward. So imagine trying to educate the public on Dutch Auctions... it just wouldnt fly. However this is not to say its not a better system.
Personally I dont like auctions in general because it reduces the number of people prepared to make an offer on your property. For instance personally I spend a lot of money on due diligence (development sites) which I simply cannot fathom doing prior to an auction on the chance I am the succesful bidder therefore regardless of how good I think the site is I just wont turn up or be interested.
People may wish to alter some aspects of the contract, settlement, conditions etc. All these people wont attend either.
In short an auction (in my view) reduces the people interested to those cashed up (dont even need the bank) and today these people are limited. Sounds great in theory but I personally feel that via negotiation you will acheive the highest price albeit not the best conditions.
Therefore if its a "quick" sale you want then auction is best but if you want the highest price I dont think it is.
Therefore my sceptism when agents jump to auctions as their immediate preferred method of sale.
Lastly I am glad you share my view that its better to write with conviction than to try and earn brownie points or argue for argument sake. I many times question myself why I write at all, perhaps I feel its a better way to spend time than watching blankly at the TV. I do however feel recently discussion has moved away from wanting to learn or improve ones ways or methods and instead turned adverserial and a forum to prove one is right over the other (I am no saint here).
What is a burst?
Property prices may fall slightly, but with inflation on the rise, as are wages, it creates a ballancing effect, in which will create price rises after about 2 years.
Over the last 100 years, property has risen on average 9% each year.
If property price fall, who will sell their propety? unless they can't afford it, it which case the bank will case them for the remaining monies
unlike USA we can't just hand over the keys
I cant see a burst
I can see a steady market.
Even so, compared to 1 year ago, right now is a great time to buy
Property prices may fall slightly, but with inflation on the rise, as are wages, it creates a ballancing effect, in which will create price rises after about 2 years.
Over the last 100 years, property has risen on average 9% each year.
If property price fall, who will sell their propety? unless they can't afford it, it which case the bank will case them for the remaining monies
unlike USA we can't just hand over the keys
I cant see a burst
I can see a steady market.
Even so, compared to 1 year ago, right now is a great time to buy
You will be labled a perma-bull for such sentiments, watch out its heresy to say anything other than what the media is blurting out
If you ask Koshie the oracle of wisdom he interprets 3-5% falls as and I quote "free-fall".
When prices are rising people think its a good time to buy because somehow its more likely prices keep rising rather than plateauing or falling??
When prices are falling people think its a good time to sell because somehow its more likely prices keep falling rather than plateauing or rising??
People also love to apply the logic "if it happened over there then it will happen over here" i.e. since prices fell in the US or UK it will happen here. This despite the fact that "over there" unemployment, economic growth, war, instability, continent contagion and their trading partners are all vastly different from our own.
In short property, like shares and any other asset go up, down, sideways in terms of prices there is nothing exciting about it unless the media use words such as "free-fall" or "tip of the iceberg" etc.
In my view its a good time to buy because most vendors are NOT investors and will be guided by media sentiment and think "omg 3-5% this year in falls it might become 30-50% tommorow even Koshie thinks so!" and this may allow you to get an underpriced property on good terms.
As a developer its a very good time to get "good sites" because activity is thin on the ground as we are no different than most i.e. we get scared and sit on our hands too and wait to "see whats going to happen".
Anyways if price fell even 10% in median price terms meaning some places fell by more and some less I would like to think I am competent\experienced enough to have bought well enough (price) with good terms and in good areas were such falls are less and either way havent altered the feasibility of any of my projects. To date that has been the case.
If you ask Koshie the oracle of wisdom he interprets 3-5% falls as and I quote "free-fall".
When prices are rising people think its a good time to buy because somehow its more likely prices keep rising rather than plateauing or falling??
When prices are falling people think its a good time to sell because somehow its more likely prices keep falling rather than plateauing or rising??
People also love to apply the logic "if it happened over there then it will happen over here" i.e. since prices fell in the US or UK it will happen here. This despite the fact that "over there" unemployment, economic growth, war, instability, continent contagion and their trading partners are all vastly different from our own.
In short property, like shares and any other asset go up, down, sideways in terms of prices there is nothing exciting about it unless the media use words such as "free-fall" or "tip of the iceberg" etc.
In my view its a good time to buy because most vendors are NOT investors and will be guided by media sentiment and think "omg 3-5% this year in falls it might become 30-50% tommorow even Koshie thinks so!" and this may allow you to get an underpriced property on good terms.
As a developer its a very good time to get "good sites" because activity is thin on the ground as we are no different than most i.e. we get scared and sit on our hands too and wait to "see whats going to happen".
Anyways if price fell even 10% in median price terms meaning some places fell by more and some less I would like to think I am competent\experienced enough to have bought well enough (price) with good terms and in good areas were such falls are less and either way havent altered the feasibility of any of my projects. To date that has been the case.
Based on what data is this?
We would have to have seen 9% inflation for the last 100 years for both your statement and the below chart to be accurate (at least for the first 90 of the last 100).
I find that figure hard to believe. Where have you seen this? I could believe it since about 1970, especially with the high inflation period then, but there was a long time of low inflation earlier.
Lets just say an average house is worth $400,000 today? At 9% compound return an average house was worth $70 or 35 pounds in 1911.
$70 compounded at 9% for 100 periods equals $400,000.
Were average Australian houses worth 35 pounds in 1911? Maybe they were? Anyone know?
See ya's.
If Koshie says so it must be true
If Kochie says so, it WILL be true. Note the above ref to "self-fulfilling prophesy". The MSM fed the frenzy on the way up and they will have just as much fun pulling the rug out from under.
Nothing personal, mind. Just business.
In the Great War our diggers were "six bob a day heros". That's two quid a week. I'm fairly sure they couldn't buy a house with a few month's pay.
Kochie appears to be really enjoying this slump in house prices. He must be cashed up.
See ya's.
i think Koshie has a shares based research company
Andrew, would you consider the 4 that your firm sold to be special, rather than ordinary category properties? I drove past it today- I think there was always going to be a fight for it as its in scotch hill, it is 1920-30s with a good facade and it looks on the river- if it was priced correctly at the start, then I would expect it to go out the door.
In the last 2 months, the price went up, not down for an above average property on our street- the one that was average though, did sell, but didn't do too well.
In the last 2 months, the price went up, not down for an above average property on our street- the one that was average though, did sell, but didn't do too well.
Fringe Sydney development sites are one piece of real estate I am bullish on but have been struggling worse than most of late on the patch I watch.
No micro analysis needed. We have a liberal state government again in NSW. We have had half the completions in Sydney over recent years compared to Melbourne. It is the only part of Australia where I believe there is a genuine shortage based on rental prices and public policy I think the government has to make a move.
These fringe councils from the central coast to western Sydney have been told they have to start releasing more land. The mix fringe v consolidation has been moved from 70/30 to 50/50. That is nearly double the amount of fringe development required going forward.
Even if prices collapse in housing generally the government in Sydney has the luxury of paring back state gov developer levies to create an investment boom in this one area to create jobs etc.
This does not bode well necessarily for Sydney property generally IMO but for those with the cash now I reckon buying a greenfields site with potential in the next 3 years is a good buy at current low prices.
In a nut shell, Sydney fringe land compared to other capital cities is cheap in patches. I suspect it is because Labor has been at a state level for so long. Now that has changed I hope as policies change so to will demand for fringe land.
http://au.tv.yahoo.com/sunrise/video/-/watch/25320393/property-price-plunge/
If you're holding on the Gold Coast, ouch!
Not a huge problem if you can afford to hold.
I wonder though if all property types had price corrections or if its mostly expensive properties and executive apartments
I agree...burst away...so we can get in on that action.
The word 'burst'...very interesting word that when applied to property.
For me a property 'slowdown' or 'flatlining' or shal we say 'correction' at the very worst.
Sure the US has had what you might call a 'burst'...but not right through the whole 52 states and every city, town and village.
What a burst 'sounds' like to me....something that empties out completely and there is nothing left.
Anyway, burst away folks...love it very entertaining.
Hm... if the RBA still go ahead in increasing the rates + Carbon Tax applied + soaring high AUD then the result can be fatal (-_-)"
It would be fatal to retail businesses for sure but I don't think it would be fatal to property because as soon as the RBA sees that they've stuffed up (once again
) they'll quickly pull back interest rates.
