Glenn Stephen's comments this week

[Sunfish]

Perennial bulls ?
Haha SF you know us better than that.

No I don't.

Our position over the years has been varying depending on market conditions

Only one of two positions can be right:

A/ It is time in the market
or
B/ It is timing the market.

The above post indicates that you believe "B" is true. There have been precious few posts ANYBODY has made warning that it might not be the best time to invest "there".

The perma bulls believe "A". I believe "B" but also believe it is easier to change/correct course (which a believer in "B" needs to do) with an exchange traded equity.

I read very little here now and may have missed where you rubbished "median" prices. 'Tis interesting that you agree that they do not necessarily reflect the real world. Will you refrain from using it as a stat in future?

 

[jaycee]

i'd settle for that!

seriously, vic park is well on its way. would like to know what that buyers agent suggested.

He suggested I sign up with his very good buyer agent staff of course ! Everyone's situation is different and they'd work that all out with you and for you and find you the best property. Only suburb i remember him mentioning was David Jones building out in Whitfords if I remember correctly.

Vic Pk is well located to become something isn't it ?

 

[BV]

I read very little here now and may have missed where you rubbished "median" prices. 'Tis interesting that you agree that they do not necessarily reflect the real world. Will you refrain from using it as a stat in future?

Sunfish

I think we are slightly off topic
I've said before that the median price is not representative of the true market picture but we can't stop using it because it's what the official stats are based on.
Should we be careful on how we use it?
Certainly

 

[Shadow]

"Median" is not apples for apples.

My Casa would have been above median when I bought it, being only a few years old and built to the standards of the day. If you were to drive past today you would say "Good block! What can we do with the old house on it?" Has "median" had a boost because the FHB influence has waned? Can you expand those stats to PROVE that, like for like, there has been a 12.8% increase? Bet you can't.

You can always find a statistic to prove whatever you want it to prove.

BTW Could you post a chart/graph of ABS data for a decade? Cherry picking a good year is misuse of statistics.

The RPData figures comes from their hedonic index. You expressed some disbelief in RPData's statistics (suggesting they were biased), so I mentioned that the ABS index gave roughly the same figure for Sydney (slightly higher even). The ABS results can be found below...

http://www.abs.gov.au/ausstats/[email protected]/mf/6416.0

 

[steveadl]

Housing should be for shelter first and foremost, not for investment. But I think I'm fighting a losing battle with that line, I mean what a ridiculous concept right?

Yes housing should be for shelter, and it is - that doesn't equate to you having the right to own it as opposed to renting it. We as a society have the right to live in shelter, but many in Australia confuse this with the right to own said shelter - owning isn't a right, and there will always be many things in life you would like but can't afford. For some reason people can accept this with luxury cars, yachts, Monnaco holidays but can seem to accept it with their desired property.

I can afford to live in the inner west, I am just borrowing to my maximum if I want to live in a house. I do not need to move further out. An inner west townhouse/apartment is easily affordable.

So what exactly is your problem? Just that you can't live in a big enough house for your desires in the location you want it to be in? Tough, get over it. I'm still not living in the house I want to but I'm not complaining to all and sundry about the fact that prices continue to increase where I do want to live.

 

[SYDB]

So what exactly is your problem?

I don't have too many to be honest. Very happy with life in general. I'm a glass half full kinda guy.

My problem as an Australian citizen and voter is that the government continues to sell out the youth of the nation.

I guess all I can do is vote for the other guys and hope they might change some of the disgusting rules that deny young Aussies a fair crack of the whip......mate.

What are your thoughts on the rules of engagement - objective thoughts I mean.....??

Peace

SYDB

 

[Amadio]

My problem as an Australian citizen and voter is that the government continues to sell out the youth of the nation.

Agree. It's only recently that I've come to the same conclusion, and it was when my own children started thinking about buying property.

Here's an olden days reflection:

In 1978 I had an annual gross income of $10,000. There was a 2 BR house in North Adelaide on Mackinnon Pde overlooking the Uni playing fields - in other words prime location 8 minutes walk from the CBD, and I thought about buying it. The price was $10,000.

Correct me if I'm wrong and this is impossible, but I'm pretty sure of my memory because of the round figures of both income and price.

I think we had it pretty good then - most people on most salaries could afford a house close to the city, usually needing a bit of work and certainly not lavish, but in a good location.

Much has changed since to have the situation wildly in favour of investors over the FHB.

 

[keithj]

Much has changed since to have the situation wildly in favour of investors over the FHB.

That's the solution then..... every potential FHB should become an investor first. If you are capable of being a FHB then you are also capable of being an investor - twice as much $$$ available for servicability.

Instead of the current house ownership lifecycle of FHB -> upgrader -> downsizer -> retirement village.... it's replaced with Investor -> FHB -> .....

 

[JIT]

That's the solution then..... every potential FHB should become an investor first. If you are capable of being a FHB then you are also capable of being an investor - twice as much $$$ available for servicability.

Instead of the current house ownership lifecycle of FHB -> upgrader -> downsizer -> retirement village.... it's replaced with Investor -> FHB -> .....

Interesting thought... I've been a RIP investor for 5 years now, in part 'cos holding a PPOR was too expensive for me, and am still a FHB now, and still eligible for the FHOG. Still saving up for that first home deposit, though it's a bit easier now with a higher salary (+ debt recycling strategies), and I could always sell one RIP if I really had to, which could give me the 30-50% deposit that upgraders often have.

 

[steveadl]

I don't have too many to be honest. Very happy with life in general. I'm a glass half full kinda guy.

My problem as an Australian citizen and voter is that the government continues to sell out the youth of the nation.

I guess all I can do is vote for the other guys and hope they might change some of the disgusting rules that deny young Aussies a fair crack of the whip......mate.

What are your thoughts on the rules of engagement - objective thoughts I mean.....??

Peace

SYDB

Govt's (on both sides) will always play around and tweak the rules to change the game as they see fit, or increasingly nowadays whatever will make them more popular for the day. I don't really care and don't spend too much time thinking (or complaining) about it.

The 'rules of engagement' are just that - deal with it as best you can, don't sit their in inaction screaming to all and sundry how this or that isn't just and needs to change. But that's because I'm more interested in my own families well being, not social justice for all
and sundry.

As far as FHB's go, thousands are still doing it every month, so it's still possible so I don't believe there IS a problem (still plenty of properties available under the median). Having said that, I agree with Keith and others above which brings me back to my first point - even if the lowest properties were unaffordable (a situation we're far off), I still believe you get on with the game the way it is. Can't buy a property you want to live in yet? Plan ahead and buy an investment first. I admire people who move forward despite hurdles in their path, not stand in front of it complaining to the umpire that it needs to be set lower or they should be given a step ladder to get over it.

 

[SYDB]

I admire people who move forward despite hurdles in their path, not stand in front of it complaining to the umpire that it needs to be set lower or they should be given a step ladder to get over it.

And I admire the same. Which is why when the hurdles in your path are the crooks meant to represent you, I admire those who stand up to these bullies, as opposed to those who wallow in the continuing disintegration.

If you really care about your own, think about the world they are being brought up in and the values you are teaching them, not just the size of their inherited bank balance.

Peace

SYD

B

 

[Intrinsic_Value]

That's the solution then..... every potential FHB should become an investor first. If you are capable of being a FHB then you are also capable of being an investor - twice as much $$$ available for servicability.

Instead of the current house ownership lifecycle of FHB -> upgrader -> downsizer -> retirement village.... it's replaced with Investor -> FHB -> .....

Or just have patience.
Every asset class has its cycle, so will residential property.

 

[Deltaberry]

And I admire the same. Which is why when the hurdles in your path are the crooks meant to represent you, I admire those who stand up to these bullies, as opposed to those who wallow in the continuing disintegration.

If you really care about your own, think about the world they are being brought up in and the values you are teaching them, not just the size of their inherited bank balance.

Peace

SYD

B

People here always complain but don't realise how much the social system is already doing for them and how lucky they are. I can think of a few developed socieities that have weaker social systems, more expensive houses and lower salaries.

Tall poppy syndrome is so widespread here. If you think this govt is your hurdle, then I can safely assure you you'll never be satisfied and will bicker all your life.

 

[SYDB]

People here always complain but don't realise how much the social system is already doing for them and how lucky they are. I can think of a few developed socieities that have weaker social systems, more expensive houses and lower salaries.

Tall poppy syndrome is so widespread here. If you think this govt is your hurdle, then I can safely assure you you'll never be satisfied and will bicker all your life.

Tall poppy syndrome, oh please......you think I want to cut you down? I can assure you there is no jealousy here, certainly no tall poppy syndrome. Having a political and moral compass should be applauded, but in this country, particularly by the wealthy and vested interests, it is frowned upon as "whining".

I am extremely satisifed thank you. My dissatisfaction would arise only if I sat on my hands and said nothing as young Aussies were denied a fair crack of the whip. That would be the most dissatisfying thing I could do. Sit on my minds and cop it sweet. I guess that's why I love this "democracy" we call Australia.

Demanding a fair go from government is something all Aussies should do, but as the grain of this country changes, we get more and more lethargic and prepared to accept being screwed over. We become less Australian. We lose the values this country was built upon.

I'm sure if government removed the FH Vendors Grant, removed negative gearing, removed the FIRB rules that allow temp residents to buy up homes before young Aussies, and taxed capital gains on your PPOR, "investors" would be squealing like stuck pigs.

I find it funny how those for whom the rules benefit, tell others to "suck it up" etc etc. As I asked, and no one has answered, what's your OBJECTIVE opinion of the rules. It is of course hard to be objective when your wealth is built upon a Ponzi house of cards.

Thankfully for a country that's being sold down the river we have some key players swimming upstream with the youth of today, the youth and future of your nation. Ken Henry, via little review to be released shortly to the man on the street, and that great man Governor Stephens, will bring some much needed balance back to the game.

Peace

SYDB

 

[BV]

I find it funny how those for whom the rules benefit, tell others to "suck it up" etc etc. As I asked, and no one has answered, what's your OBJECTIVE opinion of the rules
SYDB

IMO the rules are fine, the problem is the high interest rates.

If the government had regulated the lending market so people can't borrow without a 20% deposit and solved the financing problem the developers are facing, property prices would have been lower and properties would have been much more affordable.

 

[markpatric]

Hi all,
This sums up what is happening and the entitlement mentality that some have. It is from todays "Age"....



full article..

http://www.theage.com.au/national/the-rental-pressure-cooker-20100402-rjvb.html

There is someone who went the cheap route of renting, yet could have easily afforded to buy in that area 30+ years ago. Now complaining because rents are too expensive where he wants to live. I'll bet prices were always too expensive and as an accountant just knew that prices had to fall after the booms of the '70's, early '80's, late '80's, late '90's, early '00's, late '00's.... He has been waiting for the crash in prices, patiently waiting, waiting, waiting...

As has been stated many times before on this forum, prices are set at the margins. The current boom in prices is happening to probably less than 1-2% of all property that sells in a year, and the desirable areas that are booming would be only a small proportion of this. However the effect is on all the properties in an area price wise. Most people have no intention of selling, they just enjoy life in the area they once bought in.

The affordability argument is irrelevant as people who do have money are buying at higher prices. Homes don't have to be affordable to the masses.

brty

Oh really tell that to the US.

 

[Deltaberry]

I find it funny how those for whom the rules benefit, tell others to "suck it up" etc etc. As I asked, and no one has answered, what's your OBJECTIVE opinion of the rules. It is of course hard to be objective when your wealth is built upon a Ponzi house of cards.

Rules will always benefit some people, less so for others and be a detriment to the rest. That's just nature, should we say? The rules benefit some because these people learn to 'play the rules' and I did so by working hard, saving up and investing. Some people who are struggling are missing out on a fair go because they're not prepared to play by the rules, nor are they prepared to work hard. No matter what rules we set, the same set of people will prevail because they're prepared to make sacrifices to make the rules work for them. Some young people struggle because they weren't prepared to make sacrifices perhaps. Partying, getting drunk, causing violence like muppets does not really constitute being 'Australian' or vying for a fair go. So can't really complain when they realise wooo the houses are so unaffordable when they're 30.

We can always cut population down to 1000. Then you can have all the land you need. Perhaps you can have Sydney as your home.

 

[willair]

I'm sure if government removed the FH Vendors Grant, removed negative gearing, removed the FIRB rules that allow temp residents to buy up homes before young Aussies, and taxed capital gains on your PPOR, "investors" would be squealing like stuck pigs.



Thankfully for a country that's being sold down the river we have some key players swimming upstream with the youth of today, the youth and future of your nation. Ken Henry, via little review to be released shortly to the man on the street, and that great man Governor Stephens, will bring some much needed balance back to the game.

Peace

SYDB

If you find one of these "geniuses"that can do all that in one go,then you are no different from crossing a street blindfolded in peak hour,the only item which will slow down properety prices is interest rates,the same as last time and the time before that,as for your Ponzi deck of cards,for anyone that bought property over ten years ago would not give a stuff,if you want to make it happen then the only person that can make it happen is you ,in the real world there is no difference between a fraudster and a prostitute only the way they talk and the clothes they wear....willair..

 

[.toe]

Surely raising interest rates and removing negative gearing will result in an increase in house prices in the longer term, not a decrease.

House prices are currently driven by supply side issues, as evidenced by the fact that all the activity is in existing housing, even though the big tax breaks are for newly build housing. So while ever there's a lack of supply, removing money from any potential new home starts will only serve to drive house prices up due to competition for existing stock.

Removing money from the system removes the potential for that money to be spent on new homes, in what will be a protracted population boom. Not a good scenario.

Same thing happened in 2003 when then reserve bank governor Ian MacFarlane raised rates and publically warned home buyers against speculating. House prices went sideways for a while but look where we are now. Glenn Stephens children will be paying more for their future housing as a direct result of his actions.

 

[want2bewealthy]

Hi all.

I read in my local paper yesterday that the RBA is "forecasting" interest rates to be at 10% by 2012. Is it just me or are these cycles moving really quickly as of late?

Looking at purchasing another investment and have a meeting with my bank today, but there will be one big difference: I will not borrow for this next deal unless the bank agrees to give me an additional buffer (I have two buffers at present). 2 years is a long time so I don't believe anyone should be particularly worried just yet, that is, as long as they have a backup plan with rates at 10% or have fixed the majority of their property loans. Will keep you all posted how I go.