House Price vs House Loan

Loans%20and%20house%20prices-420x0.jpg


Will house prices follow the trend?
 
what does the scale on the right indicate? if we move to -2 what happens? (or has happened)

is this weighted australia wide or just sydney?
 
good to see that someone sees the obvious

Whats does it actually represent in real dollars ?

The scale suggests a HUGE swing in prices.........which we know to not be correct.

On medians, anyone know the redn in house prices between Jan 07 and sep 08 ?

ta
rolf
 
good to see that someone sees the obvious

Whats does it actually represent in real dollars ?

The scale suggests a HUGE swing in prices.........which we know to not be correct.

On medians, anyone know the redn in house prices between Jan 07 and sep 08 ?

ta
rolf

6019 post code
i bought last place in 2007 sold in 2008 .same sold feb this year

380k to 545k back to 455k .

i'm guessing something similar to that . but could well get a dam lot worse
 
Loans%20and%20house%20prices-420x0.jpg

Will house prices follow the trend?
ABS loans data is up to April, whereas that index is only showing to March.

If we were to put RPData capital growth over the top of the same chart we would see that capital growth is already following the trend if we include April (e.g. see bottom right graph here). ABS data won't show the index is following until 2nd quarter house price index is released in August.

what does the scale on the right indicate? if we move to -2 what happens? (or has happened)
is this weighted australia wide or just sydney?
It's represents the growth in the quarterly ABS housing index.

It's national data, from what I can gather it's:
6416.0 - House Price Indexes
vs
5609.0 - Housing Finance

And people will turn around and say that they didn't see it coming.:rolleyes:
No doubt, there will be some fools that say it wasn't possible to predict, probably they will come up with lame analogies like the following:
In the world of finance and investment there are thousands of quacking ducks, everyone quacking away on their opinions. Therefore with enough different different views its always possible to go back in time and choose the best quacker.

The scale suggests a HUGE swing in prices.........which we know to not be correct.
On medians, anyone know the redn in house prices between Jan 07 and sep 08 ?
It doesn't represent a huge swing in prices, it represents a large swing in high positive growth to low negative growth. House price index (ABS, weighted average, national) peaked at 131.0 (March 08), bottom was 123.8 (March 2009), which is around a 5.5% fall. In my opinion unless we have government intervention (which saved us from a larger fall last time) then the coming fall will be greater and much longer in duration.
 
It doesn't represent a huge swing in prices, it represents a large swing in high positive growth to low negative growth. House price index (ABS, weighted average, national) peaked at 131.0 (March 08), bottom was 123.8 (March 2009), which is around a 5.5% fall. In my opinion unless we have government intervention (which saved us from a larger fall last time) then the coming fall will be greater and much longer in duration.

interesting those national numbers

The markets I am most familiar, being Sydney and Melbourne have shown at least moderate price growth in that time, with Brisbane maybe softening a little.

Assuming that those individual numbers are correct, what has tanked so "big" time to affect the index in such a way. Remembering that the majority of data would be coming out of the above 3 cities.

What more n Fed gov do to hold up price GROWTH............and should it ?

ta
rolf
 
interesting those national numbers
The markets I am most familiar, being Sydney and Melbourne have shown at least moderate price growth in that time, with Brisbane maybe softening a little.
Assuming that those individual numbers are correct, what has tanked so "big" time to affect the index in such a way. Remembering that the majority of data would be coming out of the above 3 cities.
This should provide a link to the spreadsheet with figures.

Peak to trough:
Sydney - 103.1 (Dec 2007) - 95.6 (March 2009) - 7.3% fall
Melbourne - 143.6 (March 2008) - 136.3 (March 2009) - 5.1% fall
Brisbane - 146.1 (June 2008) - 138 (Dec 2008) - 5.5% fall

Keep in mind that ABS data is house price only (e.g. not units, though believe they are looking to introduce a unit index also).

Explanatory notes on their data here.
 
For those not away if you google the title "Housing nears the precipice" and follow that link you can get to the full article (without registering).

I agree with Steve, we have seen/are seeing the turning point. I don't believe we will see the 40% price fall that he has predicted, but am sure it will be a signficant drop (barring government intervention) and am sure some areas will likely see 40% drops from peak to trough.
 
hobo (and anyone else who cares to answer) how do you see population growth (projected aus population of 35 mil by 2050) will influence property prices in the medium to long term?
 
I think another thing that we have to allow for is Government intervention. It will happen. So as/if prices drop. So will interest rates.
Incentives to buy will return/increase in the form of grants etc.
I dont think it will stop the slide but it will put a floor under prices and reduced rates would allow people to hold more easily.Remember all the positive cashflow properties around a year ago.

I can see a drop happening.
40% here
5% there
Not sure of the Australian wide average but.
 
I think any government intervention will not be to keep house prices up but to keep inflation and employment in check and to keep people from mass defaulting on their debts.

Mind you if they succeed at keeping the economy running relatively smoothly and China continues to perform well then imo. housing prices should not plummet.
 
If I read those charts correctly then most of you seem to be assuming causality between two things that are only co-incidentally correlated.

Number of loans should relate to number of properties transacted. This is completely independent of what the price is.

During the down-turn of mid-08 prices dropped, but also there was much lower volume to the market.

When prices rose again due to buyers returning to the market all of the sellers who had held off during the down-turn came back. We had high numbers of transactions.

Now that the extra sellers and buyers have worked through the system there is both less stock on the market and less buyers. This is only weakly related to prices. In fact the price rises still seen and drop in loans can be explained by decreased stock coming onto the market and there still be enough buyers to keep prices rising gradually.

Summary: Number of loans can be limited by one of two factors. Number of sellers. Number of buyers.

Prices tend to be affected by the ratio of sellers to buyers.

However the number of interested sellers also varies based on the prices. e.g. more people will sell when prices have recently risen.
 
Hi, at last, a sensible assessment, Neophyte!!

KY

I concur.

In my corner of the world, there has been no decrease in house prices.
In fact, here are the sales of the townhouses in my complex where i live... they are all pretty much the same, but with minor differences.

29/3/10 - $539K (worst of the complex)
1/10/09 - $520K
23/03/09 - $495K
04/03/09 - $498K
03/03/09 - $497.5K
20/2/09 - $495K
22/12/08 - $480K
25/11/08 - $485K
27/01/07 - $500K
**nb: these sales below in 2006 were off-the-plan sales.
14/12/06 - $520K (this is the biggest/best in the complex)
11/12/06 - $475K (this is the one that just got sold on 29/3/10)
22/09/06 - $510K
08/09/06 - $500K


So yeah... no tanking market out where i am. Business as usual.
Im still getting fliers in my letterbox from REAs begging us to list our properties for sale.
 
If I read those charts correctly then most of you seem to be assuming causality between two things that are only co-incidentally correlated.

Number of loans should relate to number of properties transacted. This is completely independent of what the price is.
There is certainly a lot more factors than these two (loans/prices), but fewer loans = fewer sales and in an environment where sellers need to get rid of property then it can most definitely lead to lower prices.

You say coincidence...shall I take the ABS data further back than a couple of years and graph it to see if that is the case? What number of years would satisfy you?

During the down-turn of mid-08 prices dropped, but also there was much lower volume to the market.

When prices rose again due to buyers returning to the market all of the sellers who had held off during the down-turn came back. We had high numbers of transactions.
Buyers returned to the market mainly due to the introduction of the FHOG boost which allowed FHBs to leverage higher with up to an additional $140,000 purchasing power at a 95% lend (see my thread on the subject here).

What do you think will be the trigger for buyers to return this time around?

ABS loans data does show a drop over 2008, but not as large as the drop we are seeing now.

Now that the extra sellers and buyers have worked through the system there is both less stock on the market and less buyers. This is only weakly related to prices. In fact the price rises still seen and drop in loans can be explained by decreased stock coming onto the market and there still be enough buyers to keep prices rising gradually.
http://blog.rpdata.com/?p=185
This blog would indicate that there is plenty of stock as would my personal observations (and monitoring other listing data provided by RPData). What data are you basing your opinion on here (e.g. less stock)?

Hi, at last, a sensible assessment, Neophyte!!
Can you please point out the non-sensible posts in this thread and explain the reasons that they are not sensible?
 
Many valid points here. However, I relate this to short term analysis which isnt aligned with what a lot of investors aim at.

Im going to buy 2 IP's by the end of the year, I feel after research I have targeted 2 good areas in QLD. My point is that I plan on holding them for many many years, its a long term retirement thing focusing on both CG and rental yield to pay it off over the years.

As has been said many times before, its being able to ride out a few storms over a few cycles and take the long term viability that makes property investing a good thing. Im 27, and if possible ill hold as many houses as poss till 50.

So whatever I fish out as worthwhile purchase now, to the best of my ability and based on my personal factors & research, then ill go for it. Ofcoarse I could be wrong, whos perfect, but im going to put my money into property when I can, not wait, its those who have waited too long that are most regretful. Long term !!

NO ONE knows when the exact perfect time to buy is.
 
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