Prices on the rise

[boz]

You know the author is actually involved with one of the "other" indices, don't you?

Yes, I agree with that.
Let's make the ABS system a bit more clear:
ABS guide for HPI

The ABS commenced a review of the HPI in 2004. The objectives of the review were to:
! determine specific user requirements for a revamped HPI;
! identify possible data sources that were consistent and comprehensive;
! assess the costs and the strengths and weaknesses of these alternative data sources;
and
! develop a strategy to deliver an improved HPI.
Arising from the review, there were four important aspects of the data series identified as
needing to be changed or improved:
! the timeliness of the HPI release;
! the time at which prices are recorded – from settlement date to the date of
exchange of contracts;
! the effects of compositional changes – to be reduced by adopting a finer level of
stratification to take better account of compositional shifts: and
! the coverage of the index – to include ‘other dwellings’ (townhouses, units and
apartments), and dwellings covering the regions in each State outside the capital
cities.

THen at the same link you have the reason of the metodology used and why (it make you wonder how APM and RP data can have accurate measure with different system...)

‘Constructing representative real estate price indices is challenging. Difficulties can arise
because real estate markets are heterogeneous, both within and across countries, and
illiquid. There may be no unambiguous market price. Moreover, such diversity and lack
of standardization results in the need to gather a wide range of data to compile indices
that are characteristic of the various market segments; this would contribute to high data
collection costs and may require greater technical sophistication. Representative real
estate prices in residential and commercial markets can be hard to measure accurately
given the small samples that are often available, as there may be disparate prices for
apparently similar properties and prices may be volatile.’
Although the IMF Guide does discuss a number of techniques, the material is not
comprehensive.
The central issue is how to utilise prices for an essentially heterogeneous set of dwellings
to construct measures of price change for homogeneous dwellings. There are three
general approaches that might be used to achieve this: hedonics, repeat sales and
stratification.

...

Source: Australian Bureau of Statistics

I hope this makes things a bit more clear (as usual you've got to go to the source to get the proper informations...)

 

[keithj]

You know the author is actually involved with one of the "other" indices, don't you?

Of course. Joye is seen as a housing permabull & his biases need to be taken into account when reading any of his stuff.... just like 99% of the stuff on the net & in newspapers.

 

[BayView]

The only bear in the room is the spectre of rising unemployment. At the end of the day prices are set by the demand/supply balance.
Cheers,
Michael

You know I'm an uber-bull MW.

But, I agree with you, and further to it, we also have to factor in the market sentiment;

While there are daily media reports of huge companies shedding jobs by the hundreds - Telstra was another one just a couple of days ago, this keeps the majority of people worried about job security.

This surely would have an affect on their willingness to buy in my view.

No buyers means less demand.

 

[Peter 14.7]

There is a distinct difference in trusting any Agent, to trusting one that has developed a relationship with you over time.

Yes I trust Ned. For a REA he is very bearish.

And his vested interest was in convincing me to list and sell. He makes very little as a rental fee but lots as a sale. If he thought he could justify a higher amount he would have turned up at my door with an agency agreement in hand. With the FHO demand it would have been sold in week. $10k easy money!

On the ABS figures I watched the ABC news and they highlighted the diff between ABS and another which said up? Why said Alan Kohler? Well ABS excludes Units. So it weighted to the higher end. And the top end of the market in VIC has dropped heaps.

I amdnot a bull or bear.

I am not a "buy and hold" I am a "buy and sell to a strategy" investor. I amd not personally attached ot any IP or even PPOR ( much to wifes frustration) So I sold all but one IP and PPOR in 2003 when I thought the market was topped out. I was so right but I got lucky as well. I am no guru. I simply throw the dice.

What is your strategy? Thats the question.

If you are buying IP to put away and use as income in 20 years itme when you retire. And the banks is willing to loan you now what you need. You job is secure of even the IP is + geared then what happens in 2, 3 or 5 years is irrelevant. If you are very tightly geared and job is so, so then you have to make very fine decisions.

I bought my first home in 1987 for $72.5k. I sold for $89k in 18 months. No had I keep that home I wand pretty sure it would been renting for $200 a week. $200 a week against $72.5K! What the market does is no issue. In fact is was full face brick as well. Damm the perfect IP, why did I sell??

So my strategy at the moment is set and forget my Melton IPs. This thread has confirmed that. And when I told my wife the plan to sell and buy development site she was not errr,, in favour
So for me I sould simply lock rats for say 10 years and forget. may bee revalue the loan to cover the 20% on the LOC so it one loan for one IP and that is it.

The market movement in the next 5 years affect this strategy very little.

Peter