Scoff if you like, but this is how fast things can change:
http://www.guardian.co.uk/business/2008/jun/05/housingmarket.houseprices
Only late last year UK market was booming, high immigration, low vacancy rates, sound familiar ?
Property crash not likely: David Koch
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Scoff if you like, but this is how fast things can change:
http://www.guardian.co.uk/business/2008/jun/05/housingmarket.houseprices
Only late last year UK market was booming, high immigration, low vacancy rates, sound familiar ?
Joe, that was a very interesting and informative article. Yes, that does sound very familiar, we will have to see how things pan out. Only time will tell.
More the reason why they will want to come to the Gold Mountain Down Under to earn multi times salary, get wonderful flexible working conditions, breath much better air and buy the dirt cheap housing on offer!
Hi all,
Depending on the number of sales in an area over a period of time, one sale can effect things.
For example, taking the opposite view of the 28% discount. A few years ago (4 I think) we were trying to buy a farm near here. The going price for land at the time was $3000-$3500 an acre. We were prepared to go to $4,166, thinking that prices were rising and we wanted this block of 180 acres ($750,000 was our limit).
We missed out, the sold price was $811,000 or $4505/acre.
This one block set a new price for the area, and subsequent sales followed suit. This was the standard.
Now in a situation where the opposite happens, a fall in price, the same thing could happen. It all depends on the follow up action and the amount of turnover in the area.
bye
Depending on the number of sales in an area over a period of time, one sale can effect things.
For example, taking the opposite view of the 28% discount. A few years ago (4 I think) we were trying to buy a farm near here. The going price for land at the time was $3000-$3500 an acre. We were prepared to go to $4,166, thinking that prices were rising and we wanted this block of 180 acres ($750,000 was our limit).
We missed out, the sold price was $811,000 or $4505/acre.
This one block set a new price for the area, and subsequent sales followed suit. This was the standard.
Now in a situation where the opposite happens, a fall in price, the same thing could happen. It all depends on the follow up action and the amount of turnover in the area.
bye
china property
property prices in China and Vietnam are in a speculative bubble. I have not seen anything like it. It may still go up with hot money flowing into China. There is a LOT of hot money flowing into china as everyone knows the currency will have to revaulue upwards. This will fuel inflation and eventually blow up their economy.
The chinese have kept their currency low by a currency peg, they recycle dollars into foreign denominated bonds. This has driven the price of sovereign bonds lower than in the last 30 years elsewhere and resulted in cheaper credit to the western world, a credit binge, low interest rates and a worldwide property bubble. In australia it is worse as CGT on asset appreciation is taxed at 50% MRT !!!
Wow there is a commodity boom. Well after that there is a commodity bust. Oil is now higher in real terms (inflation adjusted) than at any time in the history of industrialisation !!! It could go to $200 and back to $20.
The property market at 10+ times average yearly earnings looks like a bubble, smells like a bubble, hell it might even be a bubble. That's what people thought about the internet bubble. And they burst. Who knows when. I have 3m in property in Australia at the moment. It may go up. I can't predict the future so stay invested and diversified but do I think it overpriced ? YES
property prices in China and Vietnam are in a speculative bubble. I have not seen anything like it. It may still go up with hot money flowing into China. There is a LOT of hot money flowing into china as everyone knows the currency will have to revaulue upwards. This will fuel inflation and eventually blow up their economy.
The chinese have kept their currency low by a currency peg, they recycle dollars into foreign denominated bonds. This has driven the price of sovereign bonds lower than in the last 30 years elsewhere and resulted in cheaper credit to the western world, a credit binge, low interest rates and a worldwide property bubble. In australia it is worse as CGT on asset appreciation is taxed at 50% MRT !!!
Wow there is a commodity boom. Well after that there is a commodity bust. Oil is now higher in real terms (inflation adjusted) than at any time in the history of industrialisation !!! It could go to $200 and back to $20.
The property market at 10+ times average yearly earnings looks like a bubble, smells like a bubble, hell it might even be a bubble. That's what people thought about the internet bubble. And they burst. Who knows when. I have 3m in property in Australia at the moment. It may go up. I can't predict the future so stay invested and diversified but do I think it overpriced ? YES
You do realise that there are 20+ million people in Shanghai in an area the size of Brisbane. And while many people are paid poorly, the wealthy Shanghaiese make us look like paupers.
actually it's a commodity boom followed by a commodity "soft landing".
there'll be no bust.
they don;t just stop digging and call it a day.
there are trillions of tons of tails to re-refine. that size job would take about 10 years.
gee, what a "Crash"!
there'll be no bust.
they don;t just stop digging and call it a day.
there are trillions of tons of tails to re-refine. that size job would take about 10 years.
gee, what a "Crash"!
I should clear up a bit of the what i was saying earlier.
What i purchased was a block of land in an estate not a house. I purchased the block from somebody who bought through the developer and on settlement found they couldnt handle the loan/afford to build/whatever. I know what the other blocks are selling through the developer for and they have another stage of the estate coming up for sale in a month or two. The funny thing is i had all but given up buying in this area because it was out of my price range, the block is intended to be used for my PPOR. The offer i gave the RE was a bit of a joke, when he came back to me saying it had been accepted i was gobsmacked.
There is no way the developer would sell other blocks for the price i picked it up for because that would be well below not only market price but also their cost.
What i purchased was a block of land in an estate not a house. I purchased the block from somebody who bought through the developer and on settlement found they couldnt handle the loan/afford to build/whatever. I know what the other blocks are selling through the developer for and they have another stage of the estate coming up for sale in a month or two. The funny thing is i had all but given up buying in this area because it was out of my price range, the block is intended to be used for my PPOR. The offer i gave the RE was a bit of a joke, when he came back to me saying it had been accepted i was gobsmacked.
There is no way the developer would sell other blocks for the price i picked it up for because that would be well below not only market price but also their cost.
I think what you should have said is 'This is how fast things can change in the UK'
What I don't think you are taking into consideration is the 'mindset' of the English (and the Americans) as opposed to that of the Australians.
You can quote figures and statistics all day long but it does not reflect the 'underlying' thinking regarding real estate that is going on in the collective 'head' of the people in each country.
I was born in England and lived in London for the early part of my life so I have some experience of how they think.
My grandparents rented the same house in south London for over 30 years and it never occurred to them to buy it or any other house. Why?, rent was about the same as mortgage payments (maybe less then) and was easy.
My parents were the first in the family to buy and that was only because my father liked renovating.
The whole 'buy your own house' thing only became popular in the UK in the mid '70's onward.
Conversely, the Australians view home ownership as the Holy Grail of social success. Property 'booms and busts' are viewed as problematic but don't alter the 'Grand Plan" for the vast majority.
Until this attitude changes, and I don't think it ever will, Australia will probably be the best place on Earth to invest in real estate.
Excellent excellent point. Many investors are above wage earners and many buyers aren't first home buyers and are cashed up the money they've made in other investments.
A loss of CG in a slump or crash is one thing but you don't want to lose your income as well.
Housing downturn is a boon for some renters
http://www.msnbc.msn.com/id/24972314/
NEW YORK - Renters may be the biggest winners in the current housing slump, especially in places like Florida, Las Vegas and Southern California, that have thousands of vacant for-sale and foreclosed homes and condos on the market.
Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos in once red-hot housing markets. And that is making it harder for landlords to raise rents.
Food for thought people...
Housing downturn is a boon for some renters
http://www.msnbc.msn.com/id/24972314/
NEW YORK - Renters may be the biggest winners in the current housing slump, especially in places like Florida, Las Vegas and Southern California, that have thousands of vacant for-sale and foreclosed homes and condos on the market.
Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos in once red-hot housing markets. And that is making it harder for landlords to raise rents.
Food for thought people...
There's not a lot different in the mindsets of these markets, British also aspire to own their own home. What is new there is buy to let (IPs), which has only really become popular in the last 10 years.
I would say Germany/Switzerland the mindset is different, but not Britain, it's not the 70's any more.
The banks there have suffered more in the credit crunch though, investment loans have dried up, 10% minimum deposits, first time buyers locked out, so their crash may be a bit worse that the one to come in Australia. But I firmly believe both markets will drop heavily.
I lived in South London also, & owned a property there, which I just sold, in the nick of time as it turns out.
i like this comment, it seems to be right to me.
mam544 said:
So if (i) a greater proportion rented before the mid '70s and (ii) landlording only became popular in the last 10 years, who owned all the rental homes before the '70s?
'The council' is part of the answer, but there must still have been a substantial private rental market back then.
Possibly private landlording was quite large scale but considered the preserve of 'the rich'. It was probably thought eccentric or mildly exploitative until the 1980s. It was probably only spoken about in hushed tones and not publicised in popular books, papers and seminars.
The fact that ordinary people could landlord probably didn't even enter into the minds of the average porridge-eating pommie trade unionist existing in their damp little rented terrace under the dismal skies.
Unlike the Continentals few English got post-secondary education, and unlike socially and geographically mobile Americans, most poms seemed to accept the class structure and their position in it.
Thatcher pretty much legitimised 'popular capitalism' and made 'individual success' okay. This plus council home sales and easy credit must have transformed the relationship between the population and housing much more than it did here (where ownership has been widespread for longer).
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Very good point, I agree. I think the 'council flat' was the norm.
In England you can buy portfolios of rental properties numbering in the dozens or hundreds, there were agents who specialise in this sort of thing. I remember seeing portfoloios for sale for tens of millions of pounds. I haven't been in the uk since 2001 so not sure if things have changed. The agents I spoke to didn't just have 1 or 2 portfolios for sale either. Some were massive and spread accross the whole country, others were smaller (still 20+ properties) and in small areas.
To get finance you needed to have the rent cover all the expenses plus a decent percantage over. Very cash flow positive. But still needed to come up with deposit. My wife is a pom and we did look seriously at investing there but the market is so unstable. It goes up very quickly and can come down very quickly and has done so for a long time.
To get finance you needed to have the rent cover all the expenses plus a decent percantage over. Very cash flow positive. But still needed to come up with deposit. My wife is a pom and we did look seriously at investing there but the market is so unstable. It goes up very quickly and can come down very quickly and has done so for a long time.
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