It's a Great Time to Buy a New Home
- Thread starter keithj
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- hia affordability
Sorry, i don't get the analogy. As a famous political wannabe once said "please explain?"
not if the IR go up
If they are fixed it will make no difference.
Australians don't have many fixed mortgage rate, well over 90% of new mortgages are variable and even the fixed rate is just for few years. Change in interest rates in Australia have massive impacts on mortgage holder.
They have to reset to a variable rate sooner or later. And when they do whats the bet its much higher then the fixed rate. The bank rarely loses the 'fix your rates bet'.
I don't get the analogy as well.
Perhaps its a question that will never be answered by the Government/Real Estate Agents etc, just like a wife basher is going to avoid answering the question (and probably abuse the questioner in the process).
"Hi Evand
Great question,
"What do you think is holding the market up and what will happen when that is removed/finished?"
much the same as
When did you stop beating your wife?
Cheers
Pete"
Perhaps its a question that will never be answered by the Government/Real Estate Agents etc, just like a wife basher is going to avoid answering the question (and probably abuse the questioner in the process).
"Hi Evand
Great question,
"What do you think is holding the market up and what will happen when that is removed/finished?"
much the same as
When did you stop beating your wife?
Cheers
Pete"
Hi Evand
With the question of ,
"when did you stop beating your wife."
To answer this you are agreeing that you are beating your wife and it's a no win question, the answers being either xx hours ago or I still am.
With the question of,
"What do you think is holding the market up and what will happen when that is removed/finished?"
The assumptions are
the market is up(timeframe? source of stats?)
something is holding the markets up
that it will be removed/finished.
To answer this you have to agree with the assumptions.
Cheers
Pete
Pretty weird/cryptic analogy. Anyway, what if i answer "i dont beat my wife"
Back to the point. It has been common consensus on the forum that property prices have stayed stable or risen slightly of late. And my post referenced that. Not like i made it up that houses prices are rising and people have to agree with me.
I don't think its a loaded question as you make out.
Back to the point. It has been common consensus on the forum that property prices have stayed stable or risen slightly of late. And my post referenced that. Not like i made it up that houses prices are rising and people have to agree with me.
I don't think its a loaded question as you make out.
Don't worry - Some of us didn't find your post cryptic at all, Pete - and got a laugh too. Nice point.
(BTW, i don't mean laughing @ evand, nor necessarily disagreeing with his view)
Thanks Ms Jade, I don't neccessarily disagree with Evands view either.
Just thought that it was great the way he loaded the question with his bias.
Cheers
Pete
Hi Evand
My point is you didn't have a time frame (which I see you have now added) and I don't think there is a consensus that prices are stable or have risen.
I have seen numerous posts where the poster feels bottom of market up,
middle stable, top end dropping.
Other posts where price movements are geographically dependent.
Also further posts by uber bulls and bears.
There are also statistics by organisations such as ABS which were,
"A 2.2 per cent drop in the weighted average for capital city house prices in the March quarter, and a 6.7 per cent drop for the year to March."
and statistics by RPdata which were,
"Median home prices in capital cities rose 2.8 per cent in the four months to April, nearly erasing a 3 per cent fall registered in 2008."
The statisticians haven't even reached a consensus.
Perhaps thats due to a bias in their stats.
Cheers
Pete
Hi Evand
I'm just fine, thanks for your concern.
It was a simple question but it is based on your view(bias) that there is a consensus on this forum that prices are stable or have risen, as you pointed out here,
Evand "Back to the point. It has been common consensus on the forum that property prices have stayed stable or risen slightly of late. And my post referenced that. "
My view(bias) that there is no consensus, the reasons for my view are in my last post.
Evand " Not like i made it up that houses prices are rising."
The people at RPData would probably agree with you, those at the
Australian Bureau of Statistics would probably disagree with you.
Cheers
Pete
Mate, you'd be hard pressed to find a post, question or reply on here that isn't biased in some way.
Everyone on here pretty much has their beliefs about property and spends an inordinate amount of time trying to convince others to their view.
My point was that without all this artificial market manipulation with stimulus this, bonus that, record low rates etc you would think the market would have to be lower than it is now at the beginning/middle of a world recession.
Why is that Australian property is some of the most overpriced in the world (in an affordibility sense) yest it is holding up remarkably well. (notably in non immigration areas)
I don't think you need to be Einstein to figure that one out. So, logically, what will happen when the factors holding it up are removed or finished? And unemployment is higher, possiblly rates are higher.....
Straight forward question i would have thought.
I'd like for someone to have ago at answering tho.
Beside that, its all good.
Everyone on here pretty much has their beliefs about property and spends an inordinate amount of time trying to convince others to their view.
My point was that without all this artificial market manipulation with stimulus this, bonus that, record low rates etc you would think the market would have to be lower than it is now at the beginning/middle of a world recession.
Why is that Australian property is some of the most overpriced in the world (in an affordibility sense) yest it is holding up remarkably well. (notably in non immigration areas)
I don't think you need to be Einstein to figure that one out. So, logically, what will happen when the factors holding it up are removed or finished? And unemployment is higher, possiblly rates are higher.....
Straight forward question i would have thought.
I'd like for someone to have ago at answering tho.
Beside that, its all good.
Hi Evand
Interest rates will go up as inflation goes up, for inflation to go up generally unemployment would be reducing, inflation going up means that goods and services have gone up, that includes property. Property in the past has done reasonable well in a high inflationary environment. So to answer your question interest rates will start gping up when things are better and not until then so interest rates will remain low until there is an improvement in the economy and demand for goods and services improves. And prices start increasing ie property.
cheers
Interest rates will go up as inflation goes up, for inflation to go up generally unemployment would be reducing, inflation going up means that goods and services have gone up, that includes property. Property in the past has done reasonable well in a high inflationary environment. So to answer your question interest rates will start gping up when things are better and not until then so interest rates will remain low until there is an improvement in the economy and demand for goods and services improves. And prices start increasing ie property.
cheers
this is a very good point.
This is genearally right, but in the 70's wasn't like that (in developed countries), many are saying that the 70's labour market wasn't flexible and inflation was because of the union etc but it wasn't just that.
In the 70's inflation and recession/slow growth and high unemployment were all on at same time. the 70's wasn't boom time at all with nothing going up in real term (not sure if australia was part of the developed world back then or still a bit isolated). The 70's are similar to what is happening now in the way faith in currency wasn't high and price of oil fuelled inflation that stayed high as interest rates didn't quite got high enough to bring inflation back down (till Volcker in USA in 1980 brought rates at skyrocket high to get the recession needed to get inflation back down). This time you get commodity taking the role of oil in the 70's but I don't think this time will happen like the 70's as CB know once inflation goes up they've got to act decively. For example, it is not that if inflation goes up 1% rates need to go up 1%, that is not enough. On the other hand CB control well only short term interest rates and big part of the economy doesn't borrow on short term rates. If those interest rates goes up like it is happening right now they'll slow the economy even before it start getting better (infact data showing business borrowing is still going down).
Also, if US is in big trouble with inflation and with their government debt and they need to rise interest rates, that will push all other countries to do the same no matter what the economy is doing. Also australian foreign debt put australia in the situation that foreign investor set interest rates (or at least have a big say on them)
Yes, this is the text book theoretical version of rates rising to slow inflation and its probably the most likely scenario. There is also another version called stagflation.
And even if we don't see stagflation all the events you mention don't all happen at the same time. They can be staggered over quite a time frame.
And even if we don't see stagflation all the events you mention don't all happen at the same time. They can be staggered over quite a time frame.
there are currently two different trends with prices. prices for 600k+ properties are going down and prices for under 400k gone up.
the only thing that makes lower end go up is FHOB. Currently there is no other reason for bottom end to go up. If there is still no other reason in the future the prices will inevitably fall down as there will be significant drop in demand.
now with regards to me assuming that a lot(by a lot i mean higher percentage than normal) of people who used FHOB will sell their homes, mind you not necessarily default, I base my assumption mainly on the projected unemployment increase and the fact that a lot of buyers who used the grant wouldn't be able to even afford the deposit, so with the slight change in their financial circumstances they might have to sell.
The fact that there is unsatisfied demand for properties due to immigration/population grows doesn't mean anything unless there are people who can actually afford to buy houses.
Of course my prediction is just as good as anyone else's out there, and it might be completely wrong
the only thing that makes lower end go up is FHOB. Currently there is no other reason for bottom end to go up. If there is still no other reason in the future the prices will inevitably fall down as there will be significant drop in demand.
now with regards to me assuming that a lot(by a lot i mean higher percentage than normal) of people who used FHOB will sell their homes, mind you not necessarily default, I base my assumption mainly on the projected unemployment increase and the fact that a lot of buyers who used the grant wouldn't be able to even afford the deposit, so with the slight change in their financial circumstances they might have to sell.
The fact that there is unsatisfied demand for properties due to immigration/population grows doesn't mean anything unless there are people who can actually afford to buy houses.
Of course my prediction is just as good as anyone else's out there, and it might be completely wrong
Hi Strannik, can you re examine your statement that the only thing that makes lower end houses to go up is FHB. Work out how much it costs to build a 3BR home that currently sells for $350000.
Then try & answer this question. Assuming most FHBs are 25-35, and that when unemployment or other stress factors hit, they are forced to sell. Assume too that this takes place 1-2 years after they bought.
Where then do they live? They will be 26/27-36/37 years old. Go home to parents?
KY
Then try & answer this question. Assuming most FHBs are 25-35, and that when unemployment or other stress factors hit, they are forced to sell. Assume too that this takes place 1-2 years after they bought.
Where then do they live? They will be 26/27-36/37 years old. Go home to parents?
KY
there will be a financial reason for FHB in trouble with mortg. payment.
Renting will get back cheaper then having a mortgage. You can see already sign of rent decrease in the latest inflation figure and rental vacancy are ar 4+ year high in sydney and 3+ year in melbourne.
but this shift would be hard to predict as a big shift towards renting will push rent back up, probably a reasonable yield for property owner is the long term equilibrium (even if not in the short term)
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