Last nail in the coffin of property doom and gloom

[BoatBoy]

I just know that agents submit the auction results to the REI's voluntarily (they don't have to) and they are easily manipulated. Always have been.

Alternatively, if you believe there is currently increased manipulation (to get the rates up to 78%), why are they doing this additional manipulation now, and not a few months ago?
.

I'd be interested to hear this as well.

Dave

 

[evand]

Probably because it coincides with the FHB grant. It would look weird if clearance rates jumped to 70% plus from 30% - 40% in a totally depressed market for no reason whatsoever don't you think. They think that now it has some credibility.

Look at at this way. The sector of the market affected by the FHO grant would be pretty small, say sub $350k. That is a small percentage of the overall market.

Also, the clearance rates being quoted are for the overall market, so how are they reaching 78% if the sector affected by the FHB grants is so small??? That's absolute boom time level auction clearance rates of the whole market, not just the bottom end.

And i dont accept that the price rises are moving up the market price sectors. There's no way it could happen this quick in the numbers they are talking about. I'd like to see reported volume levels. That would tell a truer story. But they're dodgy as well. All the info is dodgy, manipulated and self serving to some organisation, company etc....especially Residex...LOL

We all know RE agents and REI's are old hands at smoke & mirror manipulation of all sorts. How can 'experienced' property investors buy this rubbish?

I'd be interested to hear this as well.

Dave

 

[House_Keeper]

We all know RE agents and REI's are old hands at smoke & mirror manipulation of all sorts. How can 'experienced' property investors buy this rubbish?

Well said!

Cheers,

 

[BoatBoy]

We all know RE agents and REI's are old hands at smoke & mirror manipulation of all sorts. How can 'experienced' property investors buy this rubbish?

I have no doubt that they are fudged somewhat and inaccurate, like the ABS stats have been proven to be and like probably all stats are but my point is, if they can be manipulated, why did they let the previous stats look so bad?

Why not fudge them to make things look better?

Why have it so it looked like it had fallen off a cliff when they could have just fudged them so it looked like a gradual decline?

Dave

 

[evand]

I don't know what they do exactly or why they do things. I suppose if they can't justify an increasing clearance rate, they can't fudge it too much. they have to have an illusion of credibility i guess.

You know how agents love to connect increasing sales to events. After the election sales will pick up, after Easter, after the interest rate drop, after the Christmas holidays, after the grant....blah .blah...its all you ever hear and they are never called on it.

They are truly the dodgiest of all industries*. I don't care if i'm called an agent basher or whatever....its a fact.

*ok...maybe used car salesmen are but its a close call.

Why not fudge them to make things look better?

Why have it so it looked like it had fallen off a cliff when they could have just fudged them so it looked like a gradual decline?

Dave

 

[BoatBoy]

I don't know what they do exactly or why they do things. I suppose if they can't justify an increasing clearance rate, they can't fudge it too much. they have to have an illusion of credibility i guess.

I wasn't suggesting an increasing clearance rate, but if what you say is correct they could have shown the "not dropping off a cliff" figures, less of a fall, but they didn't.




Dave

 

[evand]

Maybe they don't manipulate it to that nth. degree. That would take a bit of work on a constant basis. But they certainly know when to turn it on.

Like i said, i don't get into this minute analysis of property investing or RE's or whatever. It does my head in and i find it unnecessary. I like to look at the bigger picture.

I wasn't suggesting an increasing clearance rate, but if what you say is correct they could have shown the "not dropping off a cliff" figures, less of a fall, but they didn't.




Dave

 

[essence]

Maybe they don't manipulate it to that nth. degree. That would take a bit of work on a constant basis. But they certainly know when to turn it on.

Like i said, i don't get into this minute analysis of property investing or RE's or whatever. It does my head in and i find it unnecessary. I like to look at the bigger picture.

It seems to me that you are implying that everyone arond including REI, ABS, Westpac-Melbourne Institute, Noriel Roubini, Bloomberg are hallucinating.

If so - then I am in good company because I see buyers frenzy at the moment.

Good luck in bending the world to your own liking.

 

[quoll]

Interesting thing. Knowing all the right info and still coming to wrong conclusion.

It's always good to have people with completely different perspective to your own. Very few of us are blessed or cursed with being able to view something from 3 or more different perspectives.

Agents do what you say they do when they flooded by listings, which is not the case now when they forced to fake presence of listings.

What info are you baseing this comment on? The agents I know have heaps of listings, vendors don't want to drop prices to sale level, middle and upper are sitting around with very few people looking at them, cheap is selling and getting good attendance at opens.

Tomorrow is Saturday, I challenge you to go to any open house and ask viewers what the last auction clearance rate was. If half of them will turn out to know what the hell is auction clearance rate - it will be a big surprise.

Think about it this way - Journo read auction clearance rates and writes article based on those stats with big scarely headline that either translates to "buy now pay your max or miss out" or "don't buy resi realestate" nice big scarey headline = sell more newspapers.

Cheers
Graeme

 

[essence]

It's always good to have people with completely different perspective to your own. Very few of us are blessed or cursed with being able to view something from 3 or more different perspectives.

What info are you baseing this comment on? The agents I know have heaps of listings, vendors don't want to drop prices to sale level, middle and upper are sitting around with very few people looking at them, cheap is selling and getting good attendance at opens.


Think about it this way - Journo read auction clearance rates and writes article based on those stats with big scarely headline that either translates to "buy now pay your max or miss out" or "don't buy resi realestate" nice big scarey headline = sell more newspapers.

Cheers
Graeme

In Adelaide boom lags Sydney's one on average by two years. This time lag will be longer because your market is due to the correction due to the aberration to normal flow introduced by resource bubble.

Second bad thing about Adelaide (otherwise beatiful place) is that you have hsitloads of available land, so your property market does not even have stable trend.

In SA I do not touch anything except waterfront land.

Syndey we are talking about - and property boom is in full swing. Everything under $550K goes like hotcakes.

Wait a bit - ripples eventually will reach you. In three years time I fancy buying anything available on the Esplanade from Sellicks Beach to Marion.

 

[quoll]

It seems to me that you are implying that everyone arond including REI, ABS, Westpac-Melbourne Institute, Noriel Roubini, Bloomberg are hallucinating.

No hallucination here, the ABS is about the only group that gathers data and publishes the stats without twisting it to backup the point of view they wish to push.

Every article, report, news story, blog entry, etc needs to be read with the writers agenda in mind.

Our job is to filter "news" so we can utilise the information to accomplish our current goals.

Cheers
Graeme

 

[quoll]

Agents do not care about the price they sell for.

Agree, with a note that good agents do want to maximise the sell price. Just remember NOT the list price, we are talking SELL price.

At 2% commission they get more money selling 3 houses for $500K than 2 houses at $550K.

Agree, your making some good points here.

The only thing they care for is number of listings they have. More listings - more chance to make more sales and more chance to condition vendors into accepting low price.

Disagree, they need listings at reasonable prices, no point have everything 15% above market price they will never sell anything and will have to deal with crap every day from vendors. Agents I know currently want as many cheap houses are possible, they would happily ignore the middle and upper end of the market. It takes a lot of effort to shift a vendors price expectation down when they have had it set 10s of thousands of $$ above the realistic sale price.

cheers
Graeme

 

[House_Keeper]

Syndey we are talking about - and property boom is in full swing. Everything under $550K goes like hotcakes.

Do you have any evidence to back that up?

 

[BoatBoy]

No hallucination here, the ABS is about the only group that gathers data and publishes the stats without twisting it to backup the point of view they wish to push.

But what use is the ABS data if it is incorrect?

Look to the last job figures as an example of this

What else have they got wrong? Maybe the 800,000 empty houses for a start?

Dave

 

[essence]

No hallucination here, the ABS is about the only group that gathers data and publishes the stats without twisting it to backup the point of view they wish to push.

Every article, report, news story, blog entry, etc needs to be read with the writers agenda in mind.

Our job is to filter "news" so we can utilise the information to accomplish our current goals.

Cheers
Graeme

Well said. Now lets see what writer's agenda is. All (or almost all) media writers are salaried employees. In other words, they do what boss said. And they do not do what boss does not.

I woud not comment about integrity of their bosses - what it is is common knowledge.

To assume that media bosses do not have vested interest in share market is at least naive.

In other words, media would do anything that prevents exodus of investors from share market.

Few examples - no jorno who was writing about consumer confidence mentioned this:

http://www.melbourneinstitute.com/research/macro/PressReleaseCSI20090211.pdf

“The lower rates have stimulated further interest in housing. The index tracking opinion
about whether now is a good time to buy a house increased by 7.0% in February. This is

the highest level of the Index since December 2001. Recent evidence of increasing

interest in mortgage borrowing particularly amongst first home buyers is consistent with

this observation."

Links to these articles appeared on news.com only for a window of an hour, then were buried out of sight:

http://www.news.com.au/business/story/0,27753,24977706-462,00.html

http://www.news.com.au/story/0,,24891016-1702,00.html

http://www.news.com.au/dailytelegraph/story/0,22049,24998507-5013110,00.html

And all you can do is to yell "Hooray". They published those stories - but which links to show - it is their discretion.

This is how people like you get brainwashed.

 

[quoll]

Quote:
Originally Posted by evand
I don't know what they do exactly or why they do things. I suppose if they can't justify an increasing clearance rate, they can't fudge it too much. they have to have an illusion of credibility i guess.

I wasn't suggesting an increasing clearance rate, but if what you say is correct they could have shown the "not dropping off a cliff" figures, less of a fall, but they didn't.

Dave

My take on it .. scare the sellers, reduce their price expectation to give the REA a better chance of getting sellers to reduce prices to meet the purchasers reduced spending, they had heaps of listings which where not moving, to move the listings they need to drop the price to market levels, therefore scare vendors into thinking prices could fall further.

my 2c
Graeme

 

[quoll]

But what use is the ABS data if it is incorrect?

All data is incorrect!

Same as any other data, if you have the raw data, you can compare it to a previous sample and view a difference work out some trends, BUT you need to be able to compare the raw data that has been gathered in the same way so it has the same mistakes / issues, once you try and compare similar data the errors / ommissions can really screw up you analysis.

And all good data with give you a varience +/- figure.

At the end of the day if you compare apples to oranges you get a pointless result, unless of course you just want to use these numbers to show that you point of view is correct! and then it's not pointless its just wrong.

But when has the truth ever gotten in the way of a good story?

Cheers
Graeme

 

[essence]

But what use is the ABS data if it is incorrect?

Look to the last job figures as an example of this

What else have they got wrong? Maybe the 800,000 empty houses for a start?

Dave

ABS definition of Unoccupied private dwellings is
"...structures unoccupied at the time of the Census of Population and Housing. Vacant houses, holiday homes, huts, cabins (other than seasonal workers' quarters) and houseboats are counted as unoccupied dwellings. Also included are newly completed dwellings not yet occupied, dwellings which are vacant because they are due for demolition or repair, dwellings to let and dwellings where all members of the household were absent on census night. " (Source:ABS definitions )

In other words, all outdoor dunnies were included in that number. And also if occupants happen to be at pub, footy or holiday their place has suddenly became "unoccupied".

 

[steveadl]

Don't forget the 20,000 govt. houses that were empty because they are in need of repair.

 

[essence]

Do you have any evidence to back that up?

List is in fact a bit longer - with some corrections.

1. Clearance rates in Sydney 78% (not 75 as news.com lies) Melborne unfortunately had to deal with fires and did not fare that great

2. Rents up by the largest amount in 20 years.

3. Consumer confidence is at boom levels towards the property. Consumer confidence at recession levels towards anything else. Which means:
a. RBA will cut interest rates to 0%
b. Consumers are ready to use money saved elsewhere to compete for property (smart people for purchases - others- for rents)

4. Shares, gold, cash - suck. There is nowhere to park your money apart from property if you have any.
5. greedy compats returning back to Australia at the rate about 20,000 per month. (Times published 7,000 from UK, I assume twice as much from US). All cashed up, willing to buy
6. Immigration program is still at 300,000 a year. Have to live somewhere, not so cashed up, putting pressure on rents
7. Big buck chasers coming back from WA and QLD
8. Unemployment is well under the level of previous property boom. Companies taking the chance to get rid of dead wood, nothing beyond that
9. Bad commercial debt is mounting and there is no other real alternative for lenders to offset the losses but to increase residential lending
10. Credit is becoming cheaper. Central banks saturated institution with liquidity - not long before markets will be flooded again with cheap money
11. Right stats start to flow into media. Days of D&G based on obsolete data from days of interest rate hikes are over
12. Mortgage repayments in Sydney are down from 30% of income back to 21%. Mortgage stress is in the past. Days of fire sales are well over.
13. Increasing number of RE agents report suffering from shortage of listings
Internet full of listings that are not already available.
14. Fuel and goods become cheaper by the day - money will be used to compete for rents. Same with Gov handouts. Expect 25% increase in 2009
15. Property shortage is severe. Occupancy rates are hovering around 1% almost everywhere. Builders are dropping like flies. This means period of property shortage will last longer than usual

I am already tired, but this list is not exhaustive.

Argument on the D&G side -

1. I want 50% drop because I want cheap property
2. I want 50% drop because I feel miserable and desperate for company

Two more points I forgot to include:

16. Given 10-year property cycle, we are roughly 6 years from 2003 peak. It is simply the time to have another boom

17. Dip in median prices in December demonstrates buyer's frenzy (which is now fact of life) at the lower end of the market - indicator of a property boom in initial stages.

1. Number of Cumberland papers report substantial increase of inquiries for properties under $550K

2.http://www.yourmortgage.com.au/news/2841/default.aspx

"A staggering number of aspiring home owners are expected to storm into Sydney's property market over the next few months to take advantage of the government incentives, according to an expert."

3.http://www.bloomberg.com/apps/news?pid=20601081&sid=agWGPe2QDTlU&refer=australia

"Feb. 11 (Bloomberg) -- Australian home-loan approvals rose in December by the most in almost nine years as government handouts and the biggest round of interest-rate cuts in almost two decades spurred first-home buyers.

The number of loans granted to build or buy homes and apartments increased 6.4 percent to 52,974 from November, the biggest gain since May 2000, the statistics bureau said in Sydney today. The gain was almost double the 3.5 percent median estimate of 16 economists surveyed by Bloomberg News. "

4. http://www.melbourneinstitute.com/research/macro/PressReleaseCSI20090211.pdf

“The lower rates have stimulated further interest in housing. The index tracking opinion
about whether now is a good time to buy a house increased by 7.0% in February. This is

the highest level of the Index since December 2001. Recent evidence of increasing

interest in mortgage borrowing particularly amongst first home buyers is consistent with

this observation."

5. http://www.rgemonitor.com/344
It is Noriel Roubini, known as Doctor Gloom - who correctly predicted current crisis:

Australian Housing Market: Affordability Crisis is Abating

6. http://www.news.com.au/business/story/0,27753,24977706-462,00.html

7. http://www.news.com.au/business/money/story/0,28323,25015773-14327,00.html

8. http://www.news.com.au/story/0,,24891016-1702,00.html

9. http://www.news.com.au/dailytelegraph/story/0,22049,24998507-5013110,00.html

10. http://business.smh.com.au/business/record-number-of-poms-moving-to-australia-20090203-7vzb.html


Would that be enough or you still want more?