Blown up or weather damaged and washed away?
Natural disasters are not new to QLD
We just had it good for a few years and we forgot what the weather can be like up there.
Property market, safe as houses
- Thread starter BV
- Start date
Blown up or weather damaged and washed away?
Natural disasters are not new to QLD
We just had it good for a few years and we forgot what the weather can be like up there.
Those figures are crazy.
many many markets around Australia would have $300 per week average rent but few would have values of around $125,000. Cant build a house for that anymore. Then add finishes etc etc. only thing that could move in that equation would be the rents so rents must go up to in order for it to make sense. Up i say up up up
yes they are crazy indeed, yet people keep buying as investments. I think a bit of noth needs to happen (Cap value down, yield up). Renters get to consume a durable good that is far in excess of what they pay... can't blame someone for taking a free lunch when offered tho.
-You equate new with average. Compare: "You can't make a new sedan for less than $15,000 so it's impossible the average sedan is worth less than $15,000"
-You are ignoring the option of EVERYTHING dropping. New construction prices, wages, rents, existing prices, everything. This would be expected (and did occur in other countries) during a credit contraction following a credit bubble bursting.
The question to ask yourself is, are Australian costs, wages & prices inflated at the moment due to a credit bubble? Is the claim of the bears that we had a housing / credit bubble (the bursting of which was delayed for a few years by misguided government stimulus) seem that far fetched?
I think it is far fetched. The real problems happened in 2007, with fall out ever since. Credit became much harder to obtain, and this seems to have loosened a bit, but is still nowhere near where it was. We've had 4 years of inflation, and government stimulus has mostly washed through the system, I'd have thought. One of the characteristics of a genuine bubble is the 'burst'. Credit has tightened, but it's hardly a bubble burst (like the tech crash of ten or so years ago, for example).
We now have a time when house prices are softening (some areas are falling, but many just aren't growing). The longer this goes on the less likely we are to have a genuine crash. I maintain that if we were going to have a genuine crash, it would have happened by now.
I could well be wrong, but I'll need to see some different conditions before my opinion changes.
I know what you are saying but to suggest a house is a depreciating asset like a car,boat or surfboard isn't realistic(although I did have a car that tripled in value over two years).if you iron out cycle fluctuations I think it's safe to say that building costs and labour will continue a steady climb.transport costs alone are heading one way.What is considered a standard size house/finishes is also changing to more $$$ which drags the lesser surrounding props up.
I agree things do get cheaper in a slow down and people chase work and sale work at gaining customers.
But how much do we expect things to drop. The equation mentioned would require a 50% drop. Is that likely for labour,materials,transport. I don't think so
I agree things do get cheaper in a slow down and people chase work and sale work at gaining customers.
But how much do we expect things to drop. The equation mentioned would require a 50% drop. Is that likely for labour,materials,transport. I don't think so
Hey if they do more stimulus, does that mean it'll be delayed again?
Gee it's so easy - even I could be US President and rescue the economy.
Not sure how Obama and Bush didn't get it right - oh yea they actually got lower marks than me in uni no wonder... Those guys in Greece / Ireland probably didn't even have unis.
Those figures are crazy.
many many markets around Australia would have $300 per week average rent but few would have values of around $125,000. Cant build a house for that anymore. Then add finishes etc etc. only thing that could move in that equation would be the rents so rents must go up to in order for it to make sense. Up i say up up up
The problem is that rents are mostly based on supply and demand not speculation. A renter does not go " I will rent this for $400 and then next week a I can rent it to someone else for $600 " it just does not work the same as property.
These will be only a small part of the overall cost. The most expensive thing is the land. When my folks bought, land was cheaper than the house..
You are wrong because the economy is grinding to a halt, though it has not stopped yet.
If the economy is grinding to a halt, why do we have upward pressure on interest rates? Why do we have good employment figures? Why is it that in Canberra where you and I live IT contractors can name their price? Why do guys on the mines make huge $$?
The economy is cruising along, and has some way to go before we'll see big boom times again, but I'd hardly say it's grinding to a halt. If anything we're seeing the two speed economy.
Got another job as a waiter yet?
VYBerlina i think you don't see the big picture.the economy is in quite bad shape. For Australia’s state governments credit-fueled revenue growth that was 2000 to 2007 is all over.
I'm not sure why you are not aware of the revenue squeeze being experienced by both the state and federal governments from the fall in household consumption expenditure amid slowing credit growth (‘disleveraging’).
slowing of the housing market, credit growth, and household expenditure, which will significantly lower both GST revenues and stamp duty receipts.
When the government revenue falls you know we will get hit by more tax as that's the only way governments make money. and more tax will further reduce household spending. wait a few months and you will see how bad the situation is.
I really don't think it's as bad as you are making out. We all knew that the property boom had to end at some point. State governments might be having some revenue issues, but this is more to do with crap management and incompetence than genuine need. At a federal level, there is plenty of money*. We are currently being buttered up for a 'horror budget', but frankly I doubt it will really be that bad. No-one's talking about serious razor-gang type public service cuts, rather a stopping of growth for a couple of years.
We still have a commodity boom showing no signs of slowing, and employment is still very good. Government debt is under control and we have strong public pressure for responsible spending.
We are no longer booming like we were, but we are far from screwed.
* I work as a contractor direct to several federal government departments, and right now they are spending so hard the local IT industry has run out of things to bill for. One of my customers just signed with a major telco for 3 years of services paid in advance because they have too much unspent funding. Similar stories coming out of other departments. I have another place paying me a huge sum to write some documents for them on weekends, for the same reason. I've also turned away two $50+k short term consultancies because I simply don't have the time. There are also huge projects underway within Human Services, Defence, Medicare, Health, Tax, Immigration and others. Spending is running into the billions on IT services projects alone.
High interest rates does not mean the economy is doing well, however, often there are high interest rates in a strong economy due to inflation.
Because the economy is multi-faceted and the people you speak of are in the minority.
The problem is that once you cut the growth in executive level positions there are no more buyers left in Canberra. Canberra has a lot of very poor value for money properties purchased by highly leveraged investors, not a good mix.
Government debt is under control? not really..did you know the deficit in 2010-11 is likely to be $44 Billion mainly due to shortfall in tax revenue..why?? actual growth rate is 2.25 per cent, rather than the foretasted of 3.25 per cent.(That's a 30.7% reduction from the original forecast now that looks bad right??)
You know Shanghai is targeting sustainable growth right? as you know they have a property bubble and government has raised interest rates for the 5th consecutive month.china is going to slow down and they have to their inflation is too high.Well we are too dependent on Chinese demand and when china slows down so will our economy.no more rivers of gold!!
Australia's dependence on Chinese demand and the growing inflow of Chinese capital is disastrous in the long run.Now don't forget commodity boom will eventually end and there is competition in the international market.
Some say our wealth has increased that's rubbish. our debt has increased. when prices of houses fall all that phony wealth will come crashing down to earth. that is going to be a huge problem. our economy is a debt fueled economy we do not have savings everybody knows it but most people deny it. Debt causes deleveraging and that's a worse fate than debt my friend.
I'm not too optimistic.
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Yeah me too, thats why i am taking advantage of all this euphoria to increase my exposure to assets overseas.
Buy my AU$ from me, so do you feel lucky punk, well do ya
What would you say our govt debt is, as a percentage of GDP? How does this compare to other countries?
As for savings, one of the main reasons why retail spending is down is because savings are increasing.
There are more people than just public service execs buying property in Canberra. The reason the govt wants to reduce its propertion of execs is because the APS and EL levels are now paid so highly. EL level people can afford a home in Canberra, the issue there is one of aspiration.
Yes, that is what I just said, EL people and no one else can afford to buy.
And it is not just public servants that the government employs, the point is that once you cut that growth of employment (particularly at the high paid levels) you cut the growth of IT contractors, tradesman, consultants ect who also buy property in Canberra.
From what I have heard about what happened to the Canberra economy during the cuts made by the Howard government, things in Canberra are going to grind to halt, real soon.
If that happens, wow wee, all those 750k properties bought because of a shortage of housing, by workers on inflated government salaries competing with each other and against cashed up consultants and tradies, when all that competition is gone and it is two buyers standing there, who is gonna pay 750k ?
I clearly remember the 1990's. Did property come crashing down? No, it didn't. It stagnated for about 7 years, and then took off again.
And this time around we're not talking about big cuts, simply allowing attrition to trim numbers.
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