Property crash not likely: David Koch

Average wage in Shanghai I believe is around RMB 700 per MONTH......thats 100 bucks, I am not sure if I believe this, although if you look behind the glitz and all the cool skyscrapers there are people living in pretty ordinary conditions...your average cab driver gets around RMB 4,000 - 5,000 per month (around $AUD 600 - $AUD 1000)..most professionals are getting around $AUD 20K per annum and up, AFAIK.

This is interesting to me as most of the wages are so low, but house prices so very high. A lot of the RE seems to be owned by institutional investors rich Chinese industrialists and a lot of rich Taiwanese business people.
 
^^^ and that's the way it's headed here IMHO.

renting will be HUGE in australia in the next 10 years as the generation under me focus more on their ringtones and wii's than property ownership.
 
Comparisons made country to country are absolutely useless, although they offer good for shock value for jouralists. Every country has massively different markets withing them eg Buffalo as compared to Florida in the US and Sydney as compared to Karratha in Australia. Culture between countries also has a big part, Australia has a far higher percentage of home ownership than most countries and home owners are always going to be willing to pay more than investors.

Its also a bit annoying hearing about the percentage of income that gopes into making loan repayments when a very high percentage of houses are not even mortgaged. When you add to this the number of renters the percentage of mortgaged home owners is surprisingly low. Anyone who wants to check this out for them selves check census data at www.abs.gov.au

Regards
Alistair
 
the_captain said:
. They cannot afford houses close in, so they live a long way away, often a 1 - 1.5 hour commute, on multiple forms of public transport. They are paying the equivalent of around $AUD 450 - $AUD 500K for housing, and it's only small 2 bed apartments.
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Are your mates living 1.5 hrs away in a "good suburb" or are these average prices? If so, where and how do the miads / taxi drivers / police / nurses , etc live?
 
Dis said:
Are your mates living 1.5 hrs away in a "good suburb" or are these average prices? If so, where and how do the miads / taxi drivers / police / nurses , etc live?
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I dont know where the maids live. I do know that the construction workers live in the buildings that they are building. You see washing hanging out on lines in active construction sites all the time.

Rural farmers (semi-subsistence farming) have an income of about US$100 per annum.
 
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joeExpat said:
I don't agree with David Kochs view, the forces against the housing market in Australia are far stronger than those supporting it. Average values of 10 and 12 times earnings are completely unsustainable, I think it's irresponsible of him to claim that 'property is not going to get any more affordable'

When a crash comes, it comes quick. Fear, and dwindling equity, will cause buyer demand to evaporate. A 20% average correction is quite feasible.
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Oh, please.
 
boomtown said:
Well the housing crash isnt here yet. I put in an offer 12% under market today and got told to piss off :p
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I put it an offer on a property 28% below market two weeks ago and got accepted. Exchanged yesterday. :cool: and :( for the previous owner.
 
I put it an offer on a property 28% below market two weeks ago and got accepted.
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Don't you mean you've established market price is 28% below what it used to be?

Today's bargain is tomorrow's market price!
 
evand said:
It correct tho. As with shares, the last sale price is the current market price. No different.
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Yes it is different. Just because you happen to find 1 person desperate to sell in an area it doesnt mean the whole area is. If the same thing happend more and more you would be right but a one off?

Thats money in the can baby.
 
ok180 said:
Yes it is different. Just because you happen to find 1 person desperate to sell in an area it doesnt mean the whole area is. If the same thing happend more and more you would be right but a one off?

Thats money in the can baby.
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Exactly, you can't analyse an entire property market based on one transaction. If similar houses sold for $300k then one sold for $270k, and subsequent area sales were back at $300k - I hardly think it's correct to say the market price dropped by 10% in that area? What, for the week of that sale?!

Case in point, a property was listed in one of my streets for $155k, when similar houses were selling for $170-180k. I couldn't understand it when I saw it, and attributed it to the fact that it was an out of area agent (although that's a pretty pathetic job on their behalf). Sure enough it was snapped up within 2 days at $155k. During this time other houses were still selling at the $170-180k level and are now around the $190k level. Would you say the market price dropped for the 1 day that property settled, or was this just an anomaly (granted, a ridiculous one)?

(At first I thought it might be a marketing ploy to generate interest, but it turns out the agent was just an idiot!)
 
evand said:
It correct tho. As with shares, the last sale price is the current market price. No different.
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I'd agree with ok180. That specific house was bought 28% below market value, so the market value on that date was whatever he paid for it. What will it's market price be when next door sells at only 10% below last months market value.

To say that it's market price is whatever it's last sale price was is wrong. I last bought an IP in 2004 - it's sale price was $345K, today it's market price is a long way from that figure.

Listed shares are completely different - there are billions of identical shares & (generally speaking) they can all be valued at exactly the same market value because they are identical. Houses aren't identical and especially vendors aren't identical.

Well done ok180 :)
 
Point taken guys. But if that house goes back on the market in say 2 months. You're going to check the last sale price and pay not too much different to that, no

Its sets the bar for future sales of that house and houses around it.
 
I see your point Evand, but it depends on the volume as well. If it is one silly sale amongst a bunch of normal sales - I doubt it would effect anyone's thinking much.

Actually now that I think about it - it does effect the people who don't think (read 'valuers' who don't care). :rolleyes: The valuer included that one as a reason to give me a slightly lower valuation that I wanted. He gave me $175k when from memory I asked for $180k using that house as one of the comparables. So it influenced him, but no other agents, buyers or sellers on the actual market.
 
The current market is obviously bipolar across the country. We have a very mixed economy at present, some areas are flourishing because of the boom, some areas are stale & plateauing, while some areas are falling. In general, i think our market is reasonably safe at present, though if economy slides further and rates go up, etc, etc i think everyone should start tightening the belts.

Just my opinion, what would i know?
 
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