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Isn't it better for prices to fall so you can buy more for less? Capital gains will come, its just a matter of timePersonally, I'm keenest on buying more stuff that is priced well below the median.
And now for some counter balance...an excerpt of Money Matter's retort:
Yep, house prices in Sydney and Melbourne are considerably more expensive than other major cities. And, whereas prices-to-income ratios in other major cities have largely stabilised, in Sydney and Melbourne the ratios have gotten much worse.
But how does that gel when we claim house prices have already started to fall?
It’s simple. Right now, many sellers falsely believe house prices will recover. So they’re holding on… for dear life. They’re still in a dreamland thinking they’ll get the same price that sellers were getting two or three years ago.
But soon enough they’ll start to sell, and those figures will filter through to the dodgy house price indices. And eventually the numbers will even start to show in the Demographia survey.
That’s when sellers will figure out the glory days have gone. And that’s when you’ll get the rush to the exit. Especially when the fabled baby-boomers start flooding the market with their un-mortgaged properties.
What do they care whether they sell for $600,000 or $500,000 when they bought the house for $50,000 thirty years ago? OK, they will care, because it’ll be a big chunk out of their retirement savings. But the point is, once they get it that house prices don’t always go up, they’ll sell as soon as you can blink.
But, The Age article did get one thing right:
“Australian house prices are expected to finish this year flat, amid signs that a slowdown in price gains could become ‘entrenched’, according to ANZ.”
The bit they got right is the ‘entrenched’ part… not the house prices finishing flat this year. House prices will finish the year lower. There’s no doubt about that.
What will become entrenched is the realisation that house prices don’t always go up. Investors and buyers have already started to figure that one out. And the longer prices stay where they are, the more convinced buyers will be that there’s no rush to tuck into the market.
That’s happened in the UK and US where property buyers no longer see housing as a get-rich-quick money-making goldmine.
i agree with you on some aspects but each city and suburb is different. Take balwyn in melbourne for example -there is a waiting list of buyers every year just waiting on decent properties so they can get into the school zone. Where else you head to clayton, melbourne - and that's not much activity. Doesn't mean the price to income ratio has gotten worse, - everything would fall, people will just move out to outher suburbs or take long train rides to work.
Balwyn now commands premium suburb prices - yet if you're someone who can afford premium prices would you really need to send your kids to a public school?
LIke you probably already know - chinese like to group together among chinese - so balywn is ideal. quick drive to doncaster or box hill for some food and also possibly mingle with other overseas chinese.
There was that china lady who bought 3 mansions in brighton coz her kids studied there.
Lots of naysayers on this thread, and they all purport to understand the dynamics of medians.
Medians can be skewed one way or the other when there are a very small number of total sales. However, this is not the case for a whole city where there are many, many sales.
Like it or hate it, the median for Melbourne is still very strong. It is mendacious to suggest anything else. I don't claim to know where its headed next - personally I'd prefer if it would fall. But it looks increasingly likely that there will be no fall, maybe some flat-lining at best
I wonder how many of the participants on this thread own more than one IP?
Yeah guys, I too wish prices will fall so we can grab a few more cheapies. But it doesn't look like its going to happen anytime soon.
Prob & Stats domain is now my professional specialization... currently brings in multi six figure package...
I believe a little self reflection is in order.
Of course, you will refute every word, not that it will bother me per se, because my response is only to provide balance to the discussion.
Medians can be skewed one way or the other when there are a very small number of total sales. However, this is not the case for a whole city where there are many, many sales.
Originally Posted by Ausprop
And now for some counter balance...an excerpt of Money Matter's retort:
Yep, house prices in Sydney and Melbourne are considerably more expensive than other major cities. And, whereas prices-to-income ratios in other major cities have largely stabilised, in Sydney and Melbourne the ratios have gotten much worse.
But how does that gel when we claim house prices have already started to fall?
It’s simple. Right now, many sellers falsely believe house prices will recover. So they’re holding on… for dear life. They’re still in a dreamland thinking they’ll get the same price that sellers were getting two or three years ago.
But soon enough they’ll start to sell, and those figures will filter through to the dodgy house price indices. And eventually the numbers will even start to show in the Demographia survey.
That’s when sellers will figure out the glory days have gone. And that’s when you’ll get the rush to the exit. Especially when the fabled baby-boomers start flooding the market with their un-mortgaged properties.
What do they care whether they sell for $600,000 or $500,000 when they bought the house for $50,000 thirty years ago? OK, they will care, because it’ll be a big chunk out of their retirement savings. But the point is, once they get it that house prices don’t always go up, they’ll sell as soon as you can blink.
But, The Age article did get one thing right:
“Australian house prices are expected to finish this year flat, amid signs that a slowdown in price gains could become ‘entrenched’, according to ANZ.”
The bit they got right is the ‘entrenched’ part… not the house prices finishing flat this year. House prices will finish the year lower. There’s no doubt about that.
What will become entrenched is the realisation that house prices don’t always go up. Investors and buyers have already started to figure that one out. And the longer prices stay where they are, the more convinced buyers will be that there’s no rush to tuck into the market.
That’s happened in the UK and US where property buyers .
Not always. One suburb I know very well (mine ) had a median jump of 26% last year, based on similar sales to the year before.
FHB numbers diminishing in many suburbs, I believe it can affect a city median. .
Aussie dwelling values tread water in DecemberBased on more than 357,000 sales in 2010, the market-leading RP Data-Rismark Hedonic Home Value Index reported modest 4.7 per cent growth over the 2010 calendar year across Australia’s combined capital cities, which was in line with Rismark and RP Data’s original forecasts.
Melbourne dwelling values led the way in the December quarter with 1.1 per cent capital growth
The Melbourne December quarter growth of 1.1% reported from the RP Data-Rismark index and the 6.9% figure reported from the REIV reveal the problems that can happen when using median data.
The other real problem is anything published by REIV. Their only agenda is to keep pushing prices so REAs can rake in more $$$s