Don't flatter yourself DB, you aren't the first to make this prediction
BIS Shrapnel see Victoria Flat for 5 years..
- Thread starter Trippy
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Don't flatter yourself DB, you aren't the first to make this prediction
what's happening in 5 months Sanj? assuming we make it past the end of the Mayan calendar?
I remember when were there that Buffalo was often mentioned in the news as one of those areas suffering a steep decline, high unemployment, closing businesses etc - similar to Detroit and other areas nearby.
Buffalo was also featured in the movie by MIke Moore (911 I think it was) where the Army sent their recruiters because of the apparent easy signups of all the disenfranchised, disillusioned and unemployed youth wandering around the place.
So I'm not sure that Buffalo is a good example.
But I agree with you about Vic; still a lot of fall out economically to come, and that'll translate into flat housing in most price ranges I'd say.
I keep hearing a lot of mining jobs are being shed, so this would mean a lot of Vics who'd traveled west and north may be back in Vic looking for work that isn't here...
I wonder if they might be able to spin the unemployment figures after that happens; I mean; at the moment they make it sound great, but I don't see anyone hiring extra full time permanent staff around the traps...maybe the odd casual and possibly part-timers.
And when the superann goes up to 9.25 Employer Contributions in July, that'll keep the brakes on folk who were maybe thinking about hiring for a while longer.
Of course; not all areas are struggling, and no doubt someone will respond with; "Whaddaya torkinabowd ya Donkey?! - we're doin' ok!!", but the wider picture is not so flask.
john, i think sanj is having a lend.
In 5 months time, people like this guy would have bought up the whole of the inner ring. Leading to further outrage regarding how it's unfair it is that FHB can't afford a double terrace in South Melbourne.
http://www.theage.com.au/national/melbourne-life/so-misses-seat-but-buys-house-20121210-2b5eu.html
This guy will be lucky to sell these things for $600k each after 5 months. I probably wouldn't buy it if he offered me. I remember not long ago they were only selling for $400k each.
I heard that the guy got the FHB bonus for this place as well, spending hard earnt tax payer money to speculate.
Instead of losing $1.8m he'll lose $1.79m then.
With a few exceptions, the discourse about this has now reached the lofty heights of the Herald Sun comments' section. 
Nothing more erudite than someone saying, you mark my words, armageddon is coming. And then saying it again in another post, but just changing the words.
As for the topic at hand; BIS. Well I have read so many of their predictions over the past 8 years, they have both under and over stated the property market across all states and territories.
Challenges in Vic for sure, but 5 years? Let's mark the calendar at 13/12/2017 and come back to discuss then...
Nothing more erudite than someone saying, you mark my words, armageddon is coming. And then saying it again in another post, but just changing the words.
As for the topic at hand; BIS. Well I have read so many of their predictions over the past 8 years, they have both under and over stated the property market across all states and territories.
Challenges in Vic for sure, but 5 years?
Let's mark the calendar at 13/12/2017 and come back to discuss then...
BIS is usually overly optimistic, so if they are saying flat/slightly negative growth, then Vic is probably in for a pretty significant downturn in prices.
According to this price data it took Melbourne 8 years to recover to new highs during the last significant price down turn (page 8):
http://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf
And I suspect this occasion will be worse, probably in severity of price falls and length of correction. It could easily take 10 years from the peak (around late 2010/early 2011) to return back to those price levels, if we're looking at 2020'ish before prices return to their 2010 peak then we might not see a bottom until 2016-2017. Of course this is only guess work rather than a prediction, but given that Perth has been basically flat for 6.5 years it's not a stretch to consider Melbourne could see a similar stagnation in prices.
Looking at the stats paints a dire picture and I think that prices will head a fair but lower in Vic over the next few years (data around 6 months old, but some of it has worsened since this writeup):
- Prices boomed by an unsustainable 35% over 2009/2010
- Stock on market is above GFC highs and around equal to record levels
- Sales volumes have collapsed
- High levels of new construction will add to oversupply
- Supply glut of new apartments not due to peak until next year
- Vic net mortgages actually fell in May (more mortgages discharged than created)
- Prices have fallen over 8% past 12 months, over 10% since peak and falls appear to be accelerating
- Even after above price falls yields are shockingly low from historical view and compared with other Oz cities
- Property vacancies are estimated to be around 2.5x REIV's figures based on water supply usage
http://www.bullionbaron.com/2012/06/chart-guide-to-melbourne-property-crash.html
it's awful of him to take advantage of legitimate, offered incentives.
Well there is a $750k threshold if you didn't know. Then again they do say people believe anything, especially it they read if on the internet.
I've been advocating a flat market in Melb / VIC for the last 2 years and I still believe we have a long way to go before any credible growth returns. Sure, certain pockets will do well, but we are talking macro-market here....
Many news articles talking about "2013 is the time to buy". The MSM is always used to hype a flat market and I expect many more articles to follow, in an attempt to try and instill some confidence back into the market.
I'm anticipating a flat market out to 2015, with the possibility of longer depending on how the global debt issues are resolved. The current monetization of government deficits is on the increase and nothing good can come of that. Even though Australia is in a relatively solid position, one only has to look at our interest rates trending down to see where we are in the macro economic cycle..... we aren't at the bottom yet, that is for sure!
If we add into the mix the global economic situation and where it is trending, any realist would take a flat market prediction as a good news story. Why? Well if the global markets remain flat & consumption remains flat, then unemployment pressures will surely increase.... that equals less tax revenue & increased social liabilities.... not to mention that we are on the cusp of an unfunded aging population crisis....
So, flat for 5 yrs.... I'll take that as a good news story!
Many news articles talking about "2013 is the time to buy". The MSM is always used to hype a flat market and I expect many more articles to follow, in an attempt to try and instill some confidence back into the market.
I'm anticipating a flat market out to 2015, with the possibility of longer depending on how the global debt issues are resolved. The current monetization of government deficits is on the increase and nothing good can come of that. Even though Australia is in a relatively solid position, one only has to look at our interest rates trending down to see where we are in the macro economic cycle..... we aren't at the bottom yet, that is for sure!
If we add into the mix the global economic situation and where it is trending, any realist would take a flat market prediction as a good news story. Why? Well if the global markets remain flat & consumption remains flat, then unemployment pressures will surely increase.... that equals less tax revenue & increased social liabilities.... not to mention that we are on the cusp of an unfunded aging population crisis....
So, flat for 5 yrs.... I'll take that as a good news story!
I've been advocating a flat market in Melb / VIC for the last 2 years and I still believe we have a long way to go before any credible growth returns. Sure, certain pockets will do well, but we are talking macro-market here....
Many news articles talking about "2013 is the time to buy". The MSM is always used to hype a flat market and I expect many more articles to follow, in an attempt to try and instill some confidence back into the market.
I'm anticipating a flat market out to 2015, with the possibility of longer depending on how the global debt issues are resolved. The current monetization of government deficits is on the increase and nothing good can come of that. Even though Australia is in a relatively solid position, one only has to look at our interest rates trending down to see where we are in the macro economic cycle..... we aren't at the bottom yet, that is for sure!
If we add into the mix the global economic situation and where it is trending, any realist would take a flat market prediction as a good news story. Why? Well if the global markets remain flat & consumption remains flat, then unemployment pressures will surely increase.... that equals less tax revenue & increased social liabilities.... not to mention that we are on the cusp of an unfunded aging population crisis....
So, flat for 5 yrs.... I'll take that as a good news story!
Indifference,
Did you mean you're anticipating a flat market out until the 'start of 2015', or the 'end of 2015'? And by 'flat for 5 years', did you mean 'the last 2 years plus 3 more', or 'another 5 years from now'?
And while your there, who will win the melbourne cup that year?
Melbourne has a rental vacancy rate double that of some states:
http://www.macrobusiness.com.au/2012/12/melbourne-pushes-rental-vacancies-higher-in-november/
As says in the article, there may be some seasonal reasons for the jump, but it was already high...
http://www.macrobusiness.com.au/2012/12/melbourne-pushes-rental-vacancies-higher-in-november/
As says in the article, there may be some seasonal reasons for the jump, but it was already high...
But every clodhopper and his dog knows that there's a supply shortage.
dredfern, my thought is that the bottom for Melbourne in nominal terms is still at least 18 months away, so personally I would wait. But I could be wrong. I was watching a video with Kyle Bass this morning (recommend a watch: http://www.youtube.com/watch?v=JUc8-GUC1hY) and he said something along the lines of the average length of housing corrections in OECD countries was around 6 years, taking around 4 years to get to the nominal bottom... Victoria didn't peak until late 2010 so could be 2014/2015 before a bottom is in.
Yet, Vic population growth is still at solid levels, with a 1.6% growth over the past 12 months, in line with national average. Net interstate migration in the early 90's in Vic was -20,532 (1993-94). Yes everyone was fleeing then, which is in stark contrast to 2010-2011 where it was actually positive, albeit small.
The big sell of under-supply for years was overstated at best and manufactured at worst but largely irrelevant for a market which was +/- a few % in balance. So to will be the current paradigm and mantra of oversupply.
And Australia also scores well internationally. Article is here
The big sell of under-supply for years was overstated at best and manufactured at worst but largely irrelevant for a market which was +/- a few % in balance. So to will be the current paradigm and mantra of oversupply.
And Australia also scores well internationally. Article is here
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