Perspectives on the Brisbane market - Prof Keen eat your heart out

[evand]

Mate, i used to put a lot of faith in the price and prediction reports etc from various companies but i have found nothing replaces on the ground feeling for sentiment and current sale prices.

Property market sentiment can change in a month and the reports from RP Data et al just dont reflect the changes.

A couple of months can be a long time or a short time on the property market. At the moment its a short time.

Heres an example: In the period of say 2001 to 2003 property prices were rising fast just about everywhere. I was actively looking for property. I spoke to lots of agents in that period and lot of them were listing property at inflated prices. I was inquiring about this and a common line was "we price it above the market an wait for the market to rise to the price and sell"

This would happen within weeks, or a month and this tactic went a long way to fuelling the price boom i'd say.

Now, if i was relying on reports a couple months old i would have been mislead as property prices were rising so fast i would have put in offers and missed out (which exactly what happened as i was trying to get bargains)

I ended up paying asking price (or even a little over) most the time. Crazy times indeed.

At this point, the reverse could be happening. I don't know as i'm not active in the market. But i think prices are falling fast in a lot of areas. Too fast for a lot of reports.

Evan, I don't think TC is being unreasonable asking you to come up with a few actual figures as opposed to just saying you know what's happening cos you're in the market experiencing it. So am I, but I can throw some specific figures out there when it's needed.

 

[MJD]

I think the market is slow but no bargain at all. I 've looking for IPs in Adelaide and Darwin area for last few months, those I put offer around 25K-30K under asking price , I could never get it and it's gone to another buyer shortly after, the only IP I picked up was the one in Christies beach and paid just a little bit under asking price
I am still looking around for bargains to jump in , any ideas about where to pick up the bargain?? very much appreciated
Thanks
MJ

 

[steveadl]

Market has fallen. Hard to see if you have your eyes closed stevie

Nice of you to post more than once for a change.

As I said, still seeing growth in some of the one's I'm watching. Here are some actual examples as opposed to just 'watching and experiencing the market' which a lot of people seem to be very good at around here (not that I really give a rats about the median):

Enfield SA; median for June Qtr 08 $346k, median for Sept qtr $350k

Eliz Nth SA; median for June qtr $177k, median for Sept qtr $183k or if you want a specific house from around $175k to $185k.

Davoren Park SA; median in June qtr $185k, median in Sept qtr $190k, real life property pretty true to the median for a change.

 

[steveadl]

Mate, i used to put a lot of faith in the price and prediction reports etc from various companies but i have found nothing replaces on the ground feeling for sentiment and current sale prices.

What can I say Evan? I know what's going on in my markets as well, but I can also back it up with actual stats. and not just feelings.

I was right there with you when prices were rising and even asking prices were being underestimated.

Don't get me wrong, I'm aware as you mentioned stats can lag and can often be useless in fast moving markets (in either direction). As well as the fact that what the hell do 'median' figures really mean to individual properties anyway, even if they do prove a point - SFA.

The point I'm trying to get at is, we're hearing a lot of people saying prices are falling, for example Brisbane in this thread, I'm yet to see many (any?) figures backing up all the doomsaying. The doom and claims of falling prices were around 2-3 months ago as well, so surely there must be some hard figures to back up the claims by now? The D&G'ers love all their stats and figures, but I'm yet to see much actual evidence of the house price drops.

Anyway, I should probably butt out, this thread is about the Brisbane market of which I have no idea. You may be spot on, all I'm saying is would be nice to see some stats. - the same way I can say the Adelaide market is still holding up well and some areas are still rising without backing it up.

 

[josko]

feel free to attach the graph you prefer me to use. Perhaps you have a graph that has 2009 on it?

** added this when i noticed you quickly deleted your comment **
(Josko, why delete your comment? you just noticed the data was current till September? - and then people wonder why I have tired debating this issue)

Hi TC,

I wrote the explanation for my deletion, but must have not clicked the right button...don't know anyway, yes....I saw your graph showed stats to Sept....then saw the drop it showed in September......and didn't have the time to start debating it back and forth.

My point is: If you had to place your property on the market.......in most cases.....there would be a rude awakening for many people.

Evan:

Mate, i used to put a lot of faith in the price and prediction reports etc from various companies but i have found nothing replaces on the ground feeling for sentiment and current sale prices.

Property market sentiment can change in a month and the reports from RP Data et al just dont reflect the changes.

A couple of months can be a long time or a short time on the property market. At the moment its a short time.

Heres an example: In the period of say 2001 to 2003 property prices were rising fast just about everywhere. I was actively looking for property. I spoke to lots of agents in that period and lot of them were listing property at inflated prices. I was inquiring about this and a common line was "we price it above the market an wait for the market to rise to the price and sell"

This would happen within weeks, or a month and this tactic went a long way to fuelling the price boom i'd say.

Now, if i was relying on reports a couple months old i would have been mislead as property prices were rising so fast i would have put in offers and missed out (which exactly what happened as i was trying to get bargains)

I ended up paying asking price (or even a little over) most the time. Crazy times indeed.

At this point, the reverse could be happening. I don't know as i'm not active in the market. But i think prices are falling fast in a lot of areas. Too fast for a lot of reports.

Evan, You say it how it is. I was the same....I used to race straight for the RP Data quarterly reports ini API and take it as gospel. I have learnt through buying and now selling that they are hugely unreliable.

Prices are falling fast in alot of areas. A week in this market is a long time. I would have said that my Beenleigh property had held it's own before I placed it on the market.

RP Data reports are great for a guide to the rough idea of median prices - EXACTLY. But not truely indicative in the upward or downward phase of the cylce when you are active in the market. EMPHASIS on active.

This is my opinion, I can't speak for Brisbane as I have no properties in Brisbane. I don't dispute that some areas may be performing and climbing only that RP Data cannot be relied upon.

Regards Jo

 

[urban cowboy]

I have to back you there Steve - and i can comment on the Brisbane market.

i have been selling properties as an REA quite comfortably in the inner to middle north of Brisbane in the 500-800k brackets.

he number of sales has certainly plummeted, but the actual sales figure hasn't moved much at all - and in some cases is still moving up very slightly...we have been surprised a couple of times lately with sales figures higher than we expected.

as for the future who knows - but right now?? i could use a few more sales volume wise, but the numbers on the contracts are still stacking up.

i'll go looking for some stats and see what i can find...

 

[evand]

Josko,

yes, this is the thing. This is what shows the reality from the theory.

My point is: If you had to place your property on the market.......in most cases.....there would be a rude awakening for many people.

Steve, as always time will tell.

 

[josko]

My 2 bobs worth.

I have several properties in Brisbane - all withing say 15km of the CBD with a heavy bias to the bayside areas.

From my experience, prices have dropped only very slightly - less than 5% and in some cases maybe only 1% from the PEAK of late 2007.

I can report that first home buyers are back in the market. I have a house under contract from first home buyers who have been looking for 6 months and decided to jump in. This house was on the market for only 1 month. The contract is not unconditional yet so who knows if it will go through but the point is we are a long way from doom and gloom. I suspect the cheaper areas may have fallen more but decent quality suburbs near water or the city should have held up well. I expect prices will remain about the same for the next 8 or 9 months but volume will increase significantly. If we really get some serious rate cuts then there is scope for prices to rise 5%+ in 2009 as it may be cheaper to buy than rent in the next couple of years.

The reason I am selling this particular house - to pay down debt on my PPOR and most likely buy again very soon in a more tax effective but still high gross yielding way.

Out of interest for our ongoing debate on RP Data...what does RP Data say your properties are doing? Do you live in the area so are you able to see the prices dropping? How did you come to the rough 5%?

Regards JO

 

[Bluegoose]

Hi Jo,

I have no idea what RP data says about my properties but I can say that I look at actual prices achieved rather than list prices. The property under contract is around about the best price achieved for the type of home in the area. I see a few bargains around but not as many as people would think. The cheaper areas may have been hit harder but these areas will probably benefit more in the near term from first home buyers.

I think 1st homebuyers have an amazing opportunity in the next 8 months. To buy towards the low in the cycle, to get the larger FHOG and to be able to lock in rates for 5-10 years probably around the 6% mark. Those that choose to wait a year to see what happens to the market I think are making a mistake but this is only one opinion.

I will look to buy again farily soon but one step at a time.

 

[gman65]

Really depends on unemployment how prices will go next year. I doubt people will be rushing to buy everything on the market in 2009 if all the talk is over recession and job losses.

1% increase in unemployment would see another 100,000 people without a job. Think how many households that effects. Our current unemployment rate is abnormally low, I very much doubt it will stay this way. It wasn't that long ago we had 6.5% unemployment, and that was considered reasonable.

I want to see how this important period pans out first. Mid-next year things should have a lot more clarity than they do at the moment. With sales volumes being what they are, going to take many months to clear all that stock.

 

[BV]

to the bears in here...

If you've been listening to the news,
homeloan interest rates are falling fast so
have you or Steve Keen revised your positions yet?

 

[urchin]

to the bears in here...

If you've been listening to the news,
homeloan interest rates are falling fast so
have you or Steve Keen revised your positions yet?

I'm not sure where you get the idea that interest rate cuts somehow go against keen's thinking. you will recall a monster thread a little while back mocking keen for predicting 0% interest rates in the relatively near future. keen also predicted a 0.75% cut this time around.

keen's whole argument is that aus. is laboring under an enormous personal debt burden. the solution to this burden would not, then, be to make it easier for people to take on even more debt.

any interest rate cuts will take months to make their true impact felt, so it seems a bit early in the game to start crying mission accomplished. right now i think the fate of the housing market lies almost entirely in unemployment numbers going forward.

 

[murtagh]

keen also predicted a 0.75% cut this time around

Can you provide a link to where he predicted this? I saw a few quotes from him in an article saying he'd predicted it .. but I don't recall actually seeing anything BEFORE the announcement.

 

[BV]

any interest rate cuts will take months to make their true impact felt.

I am actually feeling it daily and I am sure other property investors are feeling it as well...

 

[urchin]

@ murtagh, it was in the australian. you didnt really think i was just making it all up, did you? whether or not keen predicted it is really pretty irrelevant in terms of how the aussie economy develops in the near/mid term.

@ bv, i am not saying it does not make life easier for people paying interest on the heaps of debt they already have. i am saying that an interest cut in an environment with highly negative sentiment will probably not do much to change peoples minds with regards to new debt.

@ everyone else i am happy to have a president (elect) that doesn't make me ashamed to be american granted, after 8 years of bush that isnt a very high bar to clear...

 

[murtagh]

@ murtagh, it was in the australian. you didnt really think i was just making it all up, did you? whether or not keen predicted it is really pretty irrelevant in terms of how the aussie economy develops in the near/mid term.

Thanks. It keeps coming up and I couldn't find a source.