Australian Property Market - 2011
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Golly, such an open-ended question.
My thoughts are that CG will be minimal, interest rates rises will sort out the 'wheat from the chaff' (in terms of people who over-committed) & there may indeed be bargins to be had.
Those who have a buffer will be fine & those that don't may be pushed to sell for lower prices.
I believe long term, there will be much more of a divide between the 'rich' & the 'poor' in Aus.
My thoughts are that CG will be minimal, interest rates rises will sort out the 'wheat from the chaff' (in terms of people who over-committed) & there may indeed be bargins to be had.
Those who have a buffer will be fine & those that don't may be pushed to sell for lower prices.
I believe long term, there will be much more of a divide between the 'rich' & the 'poor' in Aus.
It should accelerate the crash of this bubble.
I personally don't believe there will be much difference in established areas.
In the past few months, I've observed a slight drop in areas like wyndhamvale where there has been an over supply of land, however established areas such as Carlton have not really changed. No significant growth but no drop either.
I believe it's generally people who bought in the new areas who will be struggling when the interest rate hit whereas people in the established areas may have already paid all or most of their existing mortgage.
In the past few months, I've observed a slight drop in areas like wyndhamvale where there has been an over supply of land, however established areas such as Carlton have not really changed. No significant growth but no drop either.
I believe it's generally people who bought in the new areas who will be struggling when the interest rate hit whereas people in the established areas may have already paid all or most of their existing mortgage.
Property will boom
Property will crash
Property will be flat.
Now there will be many many areas that will fit into all three but i personally believe that we will see a flat market. maybe a 5% to 10% correction in some areas.Rents will sneak up but so will holding costs( interest).
If things slow too much we will see stimulus in the form of lowering rates or grants. To think that this would not happen is head in the sand stuff.
People on the line will struggle.
People with buffers in the form of cash or wages will carry on as normal.
And money will be made.
I believe any significant gain/boom in prices will be many years off.
The cycle of investing life continues.
Property will crash
Property will be flat.
Now there will be many many areas that will fit into all three but i personally believe that we will see a flat market. maybe a 5% to 10% correction in some areas.Rents will sneak up but so will holding costs( interest).
If things slow too much we will see stimulus in the form of lowering rates or grants. To think that this would not happen is head in the sand stuff.
People on the line will struggle.
People with buffers in the form of cash or wages will carry on as normal.
And money will be made.
I believe any significant gain/boom in prices will be many years off.
The cycle of investing life continues.
I will be interested to see how inner city Melbourne preforms in February. The rental market there is heavily supported by foreign students. (Not appealing with the high AUD)
A lot of inner city apartments are sold of the plan with short term rental guarantees, and capital growth built into the purchase price.
I believe the rental market in the inner city area is already possessively distorted by the off the plan rental guarantees, and therefore so is the rental return and the real value of any property.
I am keeping an eye on this area as an early indicator if the market is going south, property ripples either travel into the city or out from it usually
A lot of inner city apartments are sold of the plan with short term rental guarantees, and capital growth built into the purchase price.
I believe the rental market in the inner city area is already possessively distorted by the off the plan rental guarantees, and therefore so is the rental return and the real value of any property.
I am keeping an eye on this area as an early indicator if the market is going south, property ripples either travel into the city or out from it usually
I say that is true for inner ring melb, it leads rises and falls.
Not for inner city though it runs its own race, not many owners occupiers and not many real investors buy inner city, mostly overseas suckers and naive locals thinking they r getting an otp bargain with "growth" rental g'tee and depreciation, all fools gold!!
I think we'll see a correction of 30% over the next 2 years. The RBA will move again on interest rates in March (leaving Feb at 4.75%).
Interest rates will continue to rise, unemployment will go up, and the economy will slow.
The export of China's inflation to the rest of the world is already starting (as predicted).
There are spikes in commodities (eg coal), at a time when the world has not recovered (which together with PIIGS and the US), will push everyone into another dip.
Sorry, the outlook is grim for property in the short term. I'm looking forward to bank interest rates hitting 10% by mid 2012
. The pain, the over-leveraging. Will be interesting to watch it all.
We're heading into 2011 with:
- Stock on market almost double what it was heading into 2010
- Clearance rates under 50%
- Mortgage delinquencies on the increase
- Increase in days on market and price discounting (Brisbane, Perth)
- Interest rates higher than 12 months ago and increase further
- New home sales looking weak
- Prices falling nationally with prices back to May 2010 levels
More detail in my predictions here:
http://www.bullionbaron.com/2011/01/gold-silver-stocks-property-predictions.html
I think YOY we will see negative growth nationally. Probably only a few percent, but likely higher if rates continue to increase.
- Stock on market almost double what it was heading into 2010
- Clearance rates under 50%
- Mortgage delinquencies on the increase
- Increase in days on market and price discounting (Brisbane, Perth)
- Interest rates higher than 12 months ago and increase further
- New home sales looking weak
- Prices falling nationally with prices back to May 2010 levels
More detail in my predictions here:
http://www.bullionbaron.com/2011/01/gold-silver-stocks-property-predictions.html
I think YOY we will see negative growth nationally. Probably only a few percent, but likely higher if rates continue to increase.
The collapse will start with the mortgage belt then creep inwards.
I'm looking forward to bank interest rates hitting 10% by mid 2012
Wow, you seem to have a negative outlook on many aspects of the world.
Are you doing it for the attention?
Your last sentence displays a quite clinical, uncaring attitude, like a scientist watching an experiment unfold.
There are real people involved in what you're talking about.
I just don't get people like you
Predictions should be objective. Why should someone not predict something bad just because it might hurt people? As an investor, objective is exactly what you want to be. Just because rate rises, for example, will hurt a lot of people doesn't mean it won't happen, or you shouldn't consider it. While I personally am not predicting 10% rates or big price falls, I don't get emotional about it. I evaluate the probability and decide whether it's high enough that I need to prepare for it. If other people don't, and it happens (which it might, but might not, that's what probability is all about), then it happens.
I'm all for different opinions being expressed...that's what makes this forum work so well.
However, this & other of bluestorm's posts have me imagining she/he is sitting on a very high horse waggling his/her finger at all us poor mortals & saying 'I told you so'. It's just getting a bit much, especially with regard to the floods.
I don't believe I'm alone in having this opinion? (Jump in anytime now guys & gals
)That's all I'm saying alexlee.
It's ok for landlords on here to look forward to rental increases and comment as such (renters are people to!), but not ok for those looking forward to rate rises increasing mortgage costs (which may result in lower prices)?
Doesn't mean he's right, and even if he is, what does it matter? In investing, it's all about the results.
I don't believe I'm alone in having this opinion? (Jump in anytime now guys & gals
My own opinions are my own opinions, whether other people agree or disagree with it. I don't need support for them.
I don't agree with Bluestorm's predictions, in fact. But I don't see it as any different from some of the relentless optimistic bullish predictions, which I don't agree with, either.
You're right alexlee, I guess I'm just one of those emotional suckers that cares about more than just results.
That's my choice, it may not be the same as yours & that's ok.
Once again, we're all different & we all have different approaches to investing & that's why it's great we can share those approaches on here.
That's my choice, it may not be the same as yours & that's ok.
Once again, we're all different & we all have different approaches to investing & that's why it's great we can share those approaches on here.
I think fortunes will be made or lost by investors
You just got to have what it takes to take big risks, do something and then stomach comments about you failing. There's always people who disagree with you. Imagine if politicians took it too personally, they'd all kill themselves. If you've made a calculated assessment and have conviction in your beliefs, no one's comments should bother you. If you do fail, well least you took a calculated risk.
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