Confidence in Australian Housing Market

Is now a good time for you to purchase property in Australia?

  • Yes

    Votes: 59 28.4%
  • In some states,not others

    Votes: 74 35.6%
  • No

    Votes: 53 25.5%
  • Unsure - so not purchasing

    Votes: 22 10.6%

  • Total voters
    208
  • Poll closed .
High valuations relative to income supported by a lack of supply means the market will probably go sideways for a number of years.
 
My opinion is the economy will have a great year in 2011 and the stock market will rise on the back of a continuing commodity boom.

Accordingly the RBA will raise interest rates and keep the property market flat at best.
 
^That is my view also. The general trend will be flat & some areas will fall a bit.

However, no matter how much I talk down the local market in general, it's occurred to me in the last week or so that a particular suburb is under-valued. It's a lot harder to pick a winner in this climate & who knows when it will take off, but there will still be good pockets that will appreciate in the near term (2-3 yrs).
(sorry, I've tried to pessimistic about everything but I can't help myself).
 
overall a big thumbs up for loss making property then. Surprising but there you have it

i would've put the second option as "in some areas - but not others" as there are markets within markets within states.

i've just bought two units on the outer fringe of the inner ring of a major city, both will be negatively geared by around $20/wk (after all costs) ... but should be positive with another 2 rent rises, and, heaven forbid if interest rates go down and/or values go up!

not a great loss maker in my opinion.
 
i would've put the second option as "in some areas - but not others" as there are markets within markets within states.

i've just bought two units on the outer fringe of the inner ring of a major city, both will be negatively geared by around $20/wk (after all costs) ... but should be positive with another 2 rent rises, and, heaven forbid if interest rates go down and/or values go up!

not a great loss maker in my opinion.

good effort - if you can find deals that cost you next to nothing then I cant see how you can lose (short of market armageddon)
 
I remember the 90's well where property prices were flat or falling just about everywhere for almost the whole decade after a late 80's boom.

Where we are now feels very similar to me. Except yields were much higher then but so were interest rates.
 
I remember the 90's well where property prices were flat or falling ......Where we are now feels very similar to me. Except yields were much higher then but so were interest rates.

So.... apart from the fact that in the 90's where:
1. Yields were higher
2. Interest rates were higher
3. Prices were much lower (than 2010)
4. We'd just had a late 80's boom (which was nothing like the mini-boom we had in very selective areas of Sydney in 2009/10 which pushed prices past where they were 7 years ago in 2003)
.....this time now, feels the same as then? :confused::p

My opinion is the economy will have a great year in 2011 and the stock market will rise on the back of a continuing commodity boom.
On this point I do agree with you though!
 
My opinion is the economy will have a great year in 2011 and the stock market will rise on the back of a continuing commodity boom.

Accordingly the RBA will raise interest rates and keep the property market flat at best.

Accordingly the RBA will raise interest rates to try and stem inflation but the income effect from the booming economy will see the property market increase regardless of what the RBA does...

Cheers,
Michael
 
Accordingly the RBA will raise interest rates to try and stem inflation but the income effect from the booming economy will see the property market increase regardless of what the RBA does...

Cheers,
Michael

The only way is up for inflation, interest rates and house prices... 54 billion investment in the mining industry alone this year, which is set to double by 2014. That's serious growth over 3 years.

http://www.watoday.com.au/business/resources-go-boom-boom-20101118-17zc5.html
 
I would say "no" generally, but "yes" if you can manage the holding costs/cashflow. The danger is interest rate rises turning a good deal to neg cashflow. Fixing could fix this problem.
 
Accordingly the RBA will raise interest rates to try and stem inflation but the income effect from the booming economy will see the property market increase regardless of what the RBA does...

Although inflation leads to increases in incomes, this may be offset by:

- interest rate increases
- general living expense increases
 
Although inflation leads to increases in incomes, this may be offset by:

- interest rate increases
- general living expense increases
Tends not to happen though. If you look back through history there is no correlation between interest rate rises and house prices. In fact, prices tend to increase at the same time as interest rates are rising which makes sense as rates rise when the economy is strong and prices rise when the economy is strong.

Also, with a floating AUD, our living expenses for discretionary goods tend to go down when our economy is hot. At parity, all those Chinese imported goods such as fridges, TVs, computers and what not are a lot cheaper. Some of our living expenses are going down in a high inflation environment but on balance the "basket of goods" is going up.

Still, its a fair point. But I think that once the economy kicks into gear the RBA will be hard pressed to control inflation and that property prices will wake up with a vengence. They've been napping for too long, particularly in Sydney.

Remember, interest rates only affect 1/3 of property in Australia. Total resi lending is about $1Tn of the $3.5Tn in total resi property. So, 2/3 of the property value in Australia is impervious to mortgage interest rate increases. That's not 2/3 of houses but 2/3 of value. Some individual properties will be 100% lend while others obviously zero. But the impact of interest rate increases only has an impact on 1/3 of our property by value. Another way of looking at it is that if we were all amalgamated into one super borrower then our LVR would be 30%...

Cheers,
Michael
 
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If you close your eyes and chant "you can never lose on property" repeatedly, its a great time to buy.
What sort of answer is that? I could post: If you close your eyes and chant "its going to crash 40%" repeatedly, its a great time to be in cash. But that wouldn't make my case any more than your stupid little dittie makes yours.

Goose.

Cheers,
Michael
 
Remember, interest rates only affect 1/3 of property in Australia. Total resi lending is about $1Tn of the $3.5Tn in total resi property. So, 2/3 of the property value in Australia is impervious to mortgage interest rate increases. That's not 2/3 of houses but 2/3 of value. Some individual properties will be 100% lend while others obviously zero. But the impact of interest rate increases only has an impact on 1/3 of our property by value. Another way of looking at it is that if we were all amalgamated into one super borrower then our LVR would be 30%...

Cheers,
Michael
Don't quite understand this, most need to borrow & borrowers are afraid of further rate rises.
 
Don't quite understand this, most need to borrow & borrowers are afraid of further rate rises.

I would think that those who borrowed a while back and have built some equity are much less concerned about interest rate rises.

My son has just signed for his first purchase, and he will probably fix for a year because he is worried about rate rises.
 
Remember, interest rates only affect 1/3 of property in Australia. Total resi lending is about $1Tn of the $3.5Tn in total resi property. So, 2/3 of the property value in Australia is impervious to mortgage interest rate increases. That's not 2/3 of houses but 2/3 of value. Some individual properties will be 100% lend while others obviously zero. But the impact of interest rate increases only has an impact on 1/3 of our property by value. Another way of looking at it is that if we were all amalgamated into one super borrower then our LVR would be 30%...
It doesn't accurately represent how people are affected by rate rises so why bother using it?

That same overall LVR figure was around 10% back in the 1990's.

So if you want to swap ridiculous figures that don't mean anything then how about this one:

Our housing is 200% more leveraged today than in the 90s.

Keep it up MichaelW, very entertaining.
 
Our housing is 200% more leveraged today than in the 90s.
Hobo-jo, can you please explain this?
Do you mean that total housing stock of $3.5t or whatever has an LVR of 80% compared with the 90s where total stock (say, $1t) was only geared 27%?
 
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