Economists - Decade of house pain predicted

[dexx]

Overall, Perth's property market has been flat for 5 years already! Does that mean we're half way through?

 

[TomW]

And the report that rent growths are stalling. I thought rents were going to the moon. http://smh.domain.com.au/home-inves...slowing-in-capital-cities-20110711-1ha8r.html

.

There's a fair bit of evidence (although it's somewhat counterintutive) that a slowdown in property prices leads to a slowdown in rent rises as well. Limited capital gains and limited yield does not make for a good investment. Although admittedly the stock market doesn't look much better at the moment.

 

[AJG]

What about the other side of Warrent Buffet's quote? Were you fearful when others were greedy, eg. in the lead up to the GFC, or were you still as optimistic then?

Didn't invest a penny on the lead up to the GFC.

 

[AJG]

And the report that rent growths are stalling. I thought rents were going to the moon. http://smh.domain.com.au/home-inves...slowing-in-capital-cities-20110711-1ha8r.html

ADJ. My view is that we were in the eye of the storm about 1 year ago and everything seemed calm. I think the storm is moving along and personally I am happy to remain in my bunker than run outside and find out the calm wasn't as it appeared and that things are in fact getting very ugly once again.

I've held the same view for over 2 years now. I think there are opportunities as well in this market but for the majority of people they do not do there homework and just purchase a property because it seems cheap, they read it will have good growth in a magazine or because they lived close to the area and it is "nice". Those people will get burnt in my opinion over the next 10 years and that is the majority.

They are called speculators not investors

 

[ozgal]

Am reading this thread with interest. For those who believe we are in for tougher times, with property values correcting, can you pass on some strategic advice for those of us who are new to the IP game? Currently have one property (PPOR) with about 8% left to pay on mortgage and looking to acquire IP.

 

[devo76]

Am reading this thread with interest. For those who believe we are in for tougher times, with property values correcting, can you pass on some strategic advice for those of us who are new to the IP game? Currently have one property (PPOR) with about 8% left to pay on mortgage and looking to acquire IP.

You will be fine.
You will find many groups with many ideas on where we are heading.All are an educated guess at best.
You appear to be in a good position that is you have plenty of equity to play with and the market has slowed to a trickle which is also in your favour.

I would continue to look for a property that suits your risk profile and allows for a safety buffer also.While doing this continue to watch the market.
You have the advantage at the moment to find bargains and get the price down further.

If the market was going to drop 20 +% with 100% certainty then sure, dont buy.
But what if the market does not drop much and tracks sideways instead or starts to climb again. You may pass by an ideal property.
So basically there is no need to rush but i believe you should still be actively looking and be prepared to chase the right property at the right price.

 

[virgo]

House Prices

Hiya

Am in cooling off period for my latest Sydney purchase; my good friend Mr Conveyancer mentions that he noticed the first home buyers are starting to bite in Sydney....i figured hey! he is at the coalface everyday right??

Funny thing is i next advanced to my mortgage broker and he said the same thing too!

 

[Propertunity]

I am seeing the same thing in the marketplace where we buy.

I was at an Open this Wednesday at 12:30pm. By 1:00pm the agent had 6 requests for contracts and 2 offers - one at full asking price.

Reading the latest Newsletter from Quartile this morning on housing finance:

Housing finance rose again in May, particularly for investors, according to data released this week by the Australian Bureau of Statistics.

The figures show that the number of commitments for owner occupied housing finance rose 4.4 per cent in seasonally adjusted terms, following a rise of 4.8 per cent in April.

Of these, loans to buy new dwellings rose by 4.6 per cent and to build new homes by 6.2 per cent, while the number of loans to buy established dwellings rose by 42,456 or 4.1 per cent.

The total value of dwelling commitments excluding alterations and additions (seasonally adjusted) rose 2.9 per cent in May, following a rise of 3.7 per cent in April 2011.

Loans for owner-occupied housing (seasonally adjusted) rose 2.2 per cent in May 2011 while the value of investment housing (fixed loans) commitments rose 4.4 per cent.

It has been a very busy Winter for us so far and it looks like Spring will be more of the same

 

[HomePage]

I am seeing the same thing in the marketplace where we buy.

I was at an Open this Wednesday at 12:30pm. By 1:00pm the agent had 6 requests for contracts and 2 offers - one at full asking price.

Reading the latest Newsletter from Quartile this morning on housing finance:



It has been a very busy Winter for us so far and it looks like Spring will be more of the same

There was an article in the Canberra Times printed edition about a week ago saying a similar thing about home loan activity, however it touted refinancing to lock in fixed rates in the face of prospective interest rate rises as being the major reason for 'new' loans, not more sales as such.

 

[evand]

I have noticed a lot of articles and releases from companies involved in the property industry saying how healthy the market is.

I dont know what they're on but i want some.

As my role model Paul Keating once said 'always back self interest'.

 

[bluestorm]

Hiya

Am in cooling off period for my latest Sydney purchase; my good friend Mr Conveyancer mentions that he noticed the first home buyers are starting to bite in Sydney....i figured hey! he is at the coalface everyday right??

Funny thing is i next advanced to my mortgage broker and he said the same thing too!

Your good friend and the mortgage broker are there to do a job and spruik property. That's how they earn their money.
The property industry is starting admit now that things are slowing. So keep dreaming Propertunity that property will not correct.

First-home buyer numbers drop off

THE property industry is shedding first-home buyers at breakneck speed, with a study showing 60,000 fewer buyers forged into the market over the past year.

Research published by RateCity reveals the number of first-home buyers across Australia tumbled nearly 40 per cent in the year to May, down from almost 150,000 to about 90,000.

In Victoria, first-home buyer numbers dropped 37 per cent, from more than 41,000 to about 26,000.

 

[Nathan]

***yawns***

 

[willair]

My Father would tell me all the time money is like rain,if there is none in one place just down the road or over the hill it will be that's property investing in a nutshell no-inbetweens, only these days the baggage from the first phone call till watching the ink dry on the contract,is huge so many people depend on property prices going up,Government-Public Servants-Buyers Agents-Legal people-Accountants-so so many have their finger in the pie down too the man or lady that clean the gutters..
Myself I DON'T GIVE A STUFF..what happens happens and just because you have never seen it happen does not mean that it won't..

 

[bluestorm]

***yawns***

Hey Nathan, given your properties tend to be in more lower socio-economic areas, maybe the yawn will turn around when your lower socio-economic tenants start to struggle more as Australia heads for another recession.
Just a thought. Maybe you'll be wide awake when your vacancies and arrears rise.

 

[devo76]

Hey Nathan, given your properties tend to be in more lower socio-economic areas, maybe the yawn will turn around when your lower socio-economic tenants start to struggle more as Australia heads for another recession.
Just a thought. Maybe you'll be wide awake when your vacancies and arrears rise.

Dont more people look for affordable rentals when things get tuff ?
I think nathan is in the safer part of the market.next step down would be public housing or tents.

On a side note.
I have also noticed that in my area things have moved a bit. Im not talking about values here. Just that i have noticed lots of sold signs popping up again after 6 months of nothing. Central homes that have something to offer and low end stuff is moving again.

 

[Propertunity]

The property industry is starting admit now that things are slowing.

The 'property industry' whatever that is has been banging on about things being slow for the last 6 months. Now all I am saying, is that people on the ground are seeing a pickup which no doubt will not be reported in the media for another few months.

So keep dreaming Propertunity that property will not correct.

I've never said that property does not 'correct'. It does. It has. It will continue to go thru a boom-bust cycle as it always has.

IMO, property corrected in Sydney from 2003-2008. Other parts of Australia are in different parts of their own cycles, just as they've always been.

I'm not a subscriber to the 'this time it is going to be different' theories of people who have no experience of having been thru many cycles in the past.

From http://www.rebonline.com.au/breaking-news/3999-house-prices-to-recover-by-2013-nab

Resident owner-occupiers are the number one buyers of new homes, with 46 per cent of total demand, while resident investors make up the next biggest share with 28 per cent. First home buyers accounted for 17 per cent of the market, with first home buyers most active in NSW (24 per cent) and least active in Queensland (10 per cent).

FHB activity is back to 'normal' levels in NSW at 24% - which is why, I think, the lower priced properties are selling well......in addition to investor activity.

 

[VYBerlinaV8]

Dont more people look for affordable rentals when things get tuff ?
I think nathan is in the safer part of the market.next step down would be public housing or tents.

On a side note.
I have also noticed that in my area things have moved a bit. Im not talking about values here. Just that i have noticed lots of sold signs popping up again after 6 months of nothing. Central homes that have something to offer and low end stuff is moving again.

Agree completely. Holding 'lower end' property is good, because there will always be demand.

 

[bluestorm]

From http://www.rebonline.com.au/breaking-news/3999-house-prices-to-recover-by-2013-nab

FHB activity is back to 'normal' levels in NSW at 24% - which is why, I think, the lower priced properties are selling well......in addition to investor activity.

A Real Estate magazine says that all is good in real estate. Who would have thought.

I think you property spruikers are behind the curve on this one. There will be a correction. Just like the economists are behind the curve in that they can't see a recession on the horizon.

Anyway, I'm off from Somersoft guys. Learning less now with so much property spruiking.
Gonna concentrate on some usefully stuff like more skills for the IT contracts. $800/day is demanding to maintain for knowledge year on year. Need to ramp up on some Treasury Accounting knowledge for a project.

Cheers. See you.
May be back once 2012 is over and the correction has happened. The "experts" will be surprised.

 

[devo76]

Sure your leaving
See you in 2012 no hang on 2013. make that 2050.

 

[turk]

Sure your leaving
See you in 2012 no hang on 2013. make that 2050.

I'm sure he's sure he is leaving AGAIN.