and that's why we have everyone wanting to live here, including the thread-starter, which is why property prices are so high, because we have bugger all of it.
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I personally do not think the recent rise in the AUD against the Yuan will affect the buying decision. Many mainlanders still treat or perceive their own markets, whether it be sharemarket or property market as a casino and so they need/want to diversity their assets to a safe haven (Australian property - whether that be residential or commercial).
What is important to understand is that many mainlanders cannot invest in their own country because people will be asking 'where did you get all that money from'? One way or another, they need to invest, bank their cash somewhere and I doubt externalities will affect this much.
Another interesting point is that the Chinese are buying houses in Melbourne under the mum's name, another house under their son's name, another under their daughter's name, another under the dogs name (only joking here, haha), and they are paying it all in cash...so no serviceability issue. There was a newspaper article recently about how this lady from China bought $20mil of property in Brighton (obviously land banking to the max) and her son goes to Wesley College. Although I don't know for sure, but I anticipate this is how she did it. I also doubt she will be putting tenants in there as well!
....
As a side note does anyone know the demographics of our immigrants? Are we getting in more middle aged / retiring or are we getting younger people? I personally believe that the retiring middle age who will downsize for retirement will also have an impact in the longer term on house prices.
I've got news for you: its happening in Sydney, Newcastle, Brisbane and a few other places around the country too.
In the case of Sydney the last boom was 2003. So here it has been 6 long years of waiting to see growth return.
** sigh**
Your kidding surely? Back in 2007 we (investors anyway) were paying 8% & 9% interest rates. For those of us who still have jobs (the vast majority) and with IRs now 5% something it means we are swimming in cash compared to 2 years ago
So withdraw $3,500 of govt FHOB back on 30 Sept and what happened? The market continues upward. Withdraw another $3,500 on 31 Dec and all the planned govt stimulus to housing is gone - and what will happen? FHBs who are getting the stimlus are only 20% of the whole market.....and that 20% is getting $7K less
Well that is the RBA, not the goverment
Yes, this has been responsible for lots of foreigners buying high end property but this has slowed recently due to the high $AUD and the therefore non-favourable excange rate.
This was a Melbourne centric boom - none in Sydney or Perth in 2007
My suspicion is that IRs will need to rise 2-3% before we see much of anything
No, neither in my opinion.
You do what you feel comfortable with. I hold an opposite view of the market.
Ah then its a completely different ball game. If you already have property then you are more than entitled to fret over 'value' because you already have skin in the game.
I'm in a similar boat, whilst i still believe in property as a long term wealth creation vehicle, i want to use any up coming boom to deleverage.
I plan to offload 2 of the 5 properties within the next 18 months (so long as prices increase). Any further sales would depend on the degree of price acceleration but i dont think i would sell more than 3 as by the 3rd sale i would be pretty much debt free (this includes draw downs used to finance my share investments over the last 18 months). Note also this doesnt include debt direct against the share portfolio (margin debt) and hence my desire to reduce debt, ive got debt everywhere.
To me this will represent a happy medium, if property prices continue to increase i still have skin in the game (however obviously my return is much lower as i have higher equity), and if property does go through i rough patch in the future i have sufficient equity to take advantage of any distressed sales.
My initial comments were directed towards those that have no property exposure at all.
and what do you base the fact that prices should fall back here in Australia? because the dollar's higher and the prices are higher so you can afford less on exchange rates? because of the gap between mortgages and rents. newflash buddy - rents are rising - fast. no gubment is gonna sit by and watch property prices erode for something as trivial as cost differences in payments.
unaffordability can go jump. america is "unaffordable" to their market as well - 5 unit sites, tenanted, CF+ 20% yields for $30k USD? how low do prices have to fall before their local market CAN afford it....?
you forget - as everyone does everynow and then - that aussies will walk to work, carpet their backyard to keep the sand down and eat baked beans on toast to live in their own home.
I can't see any other Western country with such dedication to property ownership.
From an article in the Age
One Melbourne real estate agent, who asked not to be identified, privately worried about what the Chinese demand would do for the chances of local buyers.
He said the topic was a constant subject within the real estate industry, although few agents wanted to question a trend that generated financial benefits for them.
In his view, "the rising Australia dollar has not impacted at all the demand from Chinese,'' he said, estimating that currently in Melbourne about 40 per cent of properties over $1 million in the inner suburbs were being sold to Chinese and Indian investors.
Full text
http://www.theage.com.au/business/d...foreign-property-investors-20091105-hzx3.html
why is it that a nation founded by immigration now has a problem with migrants?
why is he worried? is it bad? how? where is it explained?
OO's are going to be "forced out"....of what? a house going to auction? cry me a river. auctions are set for the highest bidder - it's like TC having the right to sell his grain to the highest bidder - why is it a problem?
The other interesting point from that article is overseas investors are hedging their bets on the exchange rate... if the dollar keeps going up as well as house prices, they're all making out like bandits.
Seems alot of the world is as confident in the aus economy as some of us here, which is some good confirmation bias for us all
Those are investors, I mean they are not only PIs, they trade share, currency....etc. Another common things of those Asian traders is they don't believe the best time to buy is the market bottomed, they only buy in bull markets, the better the market, the more stock they will buy. We haven't heard many Chinese/Indian investor around last Xmas, en?
Here's the slides from a speech given this week (by the bullish Chris Joye). He compares Aus housing affordability with UK, US & various other countries.I can't stand this stuff about Australian property being un-affordable for those in the United Kingdom here.
– Between 1980-2008 house price growth was slightly above median peer - Spain, Ireland, UK and New Zealand outperformed
– Between 1990-2008 house price growth was in line with media peer - Spain, Ireland, New Zealand, Netherlands and Denmark outperformed
– Between 1997-2008 house price growth was in line with median peer - Spain, Ireland, UK, France and Sweden outperformed
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Key conclusion: no evidence of unusually high growth in housing costs
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Quoting the IMF
“In the case of Australia, if the impact of long-term migration on
housing demand is taken into account, the results do not produce
evidence of a significant overvaluation of house prices.”
....
:I can't stand this stuff about Australian property being un-affordable for those in the United Kingdom here. Talk about whining Poms. Just because exchange rates are shafting you guys doesn't mean our property is un-affordable.
So in short one of the key draws of emigrating was that you could come to Australia and end up with a much better home than you had in the UK: no longer true.