RPData - House prices falling (nation wide) - Q2 2010

[hobo-jo]

RPData - House prices falling (nation wide) - June 2010

It's been a long time coming, but finally seeing a nation wide fall starting again.

It will be interesting to see whether any actions are taken again by government to try and "prop up" prices (again). Hopefully they learned from the boost that by meddling they only make things worse.

It's likely going to be a long cold winter for housing investors. Welcome back to 1990!

Will be interesting to see ABS figures early next month given they often have sharper moves than RPData's index.

I welcome the return of affordable property, a long way to go from here though.

RP Data – Rismark Home Value Index Release

• Capital city dwelling values down 0.7% in month of June with no growth over June quarter
• Largest fall since April ’08
• Rest of State dwellings also realise no growth in June quarter

 

[DEC]

Wow. 0.7%
You must be well panicked seeing as gold has fallen 15% since June

 

[Bigtone]

Wow. 0.7%
You must be well panicked seeing as gold has fallen 15% since June

good call!!

 

[Propertunity]

House prices are not falling (nation wide)

Excuse me please, but house prices are not falling (nation wide).

This is the sort of irrelevant statistic that you get when you average "the Australian market" - which does not exist as a single market.

From the same article:

Dwellings in Sydney (+0.5%), Melbourne (+0.2%), Brisbane (-1.3%), Perth (-2.5%), Darwin (-0.1%) and Canberra
(-0.8%)

So prices rose (again) in Sydney & Melbourne. And it is pretty obvious from the numbers, that the falls in Perth asre skewing the average.

Yes they fell in the other capitals - on average. But I bet that there were suburbs in those capitals that rose as well, whilst others fell.

 

[buzzlightyear]

I think we have had this debate before haven't we.

Similar predictions of a return to 'affordable pricing', what does that mean really? We have had these discussions/debates/battle of the graphs before iduring GFC I in 2008, 2005 when we had a pause in rising house prices, 2003 when the downfall of Henry Kaye was going to bring the OTP market to its knees, 2001/2 after S11, the Asian Financial Crisis in 1997 and now increasing interest rates to break these 'stubbornly' high property prices, along with the rise of proletariat to and even a return to to 1990? Really?.....Seriously.....

Well aside from a Colingwood premiership, that will be the only similarity.

But what do I know, I am just a little Aussie battler who buys property to try and make a little extra money, which is still at the heart of the intellectual elite's fundamental belief, that its an anathema to make money from housing.

 

[D.T.]

Well aside from a Colingwood premiership, that will be the only similarity.

Never!

 

[hobo-jo]

Propertunity, check the June month figures for All Dwellings. They fell nation wide for the month of June.

DEC, but I thought property was best leveraged? Assuming a 95% lend a .7% drop would be a 14% erosion of equity

 

[devo76]

CRAP. I'm selling everything. I wasn't told that prices could stabilise or drop a bit after a boom......... Hang on a minute. I wasn't told because just like most investors, I know it is something that is considered part of a normal property cycle. Maybe I should sell my last one as I was told I shouldn't by it due to a crash..... No wait, that one is worth a lot more than I paid.not selling that one.well maybe at a minimum I should rethink my buy and hold stratagy....... Nope that's still a good plan also. As you were soldier. Back to the pub I go.

 

[DEC]

DEC, but I thought property was best leveraged?

Did I say that?

Assuming a 95% lend a .7% drop would be a 14% erosion of equity

Is that the sound of goalposts shifting?
Assume that my ppor is fully paid off, then a .7% drop would be a .7% drop.

Should I be panicked?
Were you when gold dropped 15% ?

 

[Propertunity]

Propertunity, check the June month figures for All Dwellings. They fell nation wide for the month of June

My apologies . I was talking June Qtr and you were talking the month of June.

But really, I would not look to buy on a rise in any one particular month anymore than I would look to sell on a fall in any one month. I'd be looking at a 5-7 year trend not the day-to-day or month-to-month movements in medians (which is flawed anyway as no 2 properties are alike).

You cannot treat an investment in housing as a day-trader treats a share.
Cheers, Alan

 

[Paul Do]

Real estate is a long term investment. Therefore, don't worry about the noise from short term fluctuations (months, quarters, and even couple of years).

 

[VYBerlinaV8]

Excuse me please, but house prices are not falling (nation wide).

This is the sort of irrelevant statistic that you get when you average "the Australian market" - which does not exist as a single market.

From the same article:

So prices rose (again) in Sydney & Melbourne. And it is pretty obvious from the numbers, that the falls in Perth asre skewing the average.

Yes they fell in the other capitals - on average. But I bet that there were suburbs in those capitals that rose as well, whilst others fell.

In Canberra it's the outer suburbs softening up a bit - inner city is going great.

 

[LisaP]

Meh - as long as you buy well, it doesn't matter what happens in the short term.

 

[joeExpat]

Meh - as long as you buy well, it doesn't matter what happens in the short term.

famous last words of thousands of US/Spanish/etc.. speculators as they over leveraged into their final property

 

[LisaP]

famous last words of thousands of US/Spanish/etc.. speculators as they over leveraged into their final property

Disagree - in terms of buying well I was referring to buying undermarket value. If the property market takes a big hit (and I do not see that it will), worse case scenario is that the value of my portfolio drops back in line with that of my mortgage.

And in terms of US investors, my step-mum's father is from the US and he has been buying undervalued properties for years. The credit crisis has not impacted him - he is still buying properties and living off the rent - and will continue to do so for many years to come.

 

[random]

It's been a long time coming, but finally seeing a nation wide fall starting again.

It will be interesting to see whether any actions are taken again by government to try and "prop up" prices (again). Hopefully they learned from the boost that by meddling they only make things worse.

It's likely going to be a long cold winter for housing investors. Welcome back to 1990!

Will be interesting to see ABS figures early next month given they often have sharper moves than RPData's index.

I welcome the return of affordable property, a long way to go from here though.

RP Data – Rismark Home Value Index Release

No Gov' handouts this time round sorry and I'd also welcome the return of affordable housing .
Last year in all the clubs everyone's asking , but what difference would a 20% increase just because of Gov' grants make ? Well , their about to find out but personally I think it's best for all concerned .

Strangely enough, I watched the Making of Australia on ABC Thurs night and that episode was about the Aussie property market , anyone else see it ?
I didn't know this but Australia's been through this whole supposed housing shortage crisis and high prices mortgage stress thing two or three times before !
But prices have never been 7 and 8x the av' wage before which is what they really are.
And , they also said as per the belief that Aussie prices don't fall they just flatten and stagnate for periods but this I don't understand as one look at the chart and they cerainly have dropped before . But then, I spose if you'd held through that they have always caught up again later and over taken previous , maybe that's how they meant it !

Cheers

 

[Graemsay]

What's the state of the economy right now?

The jobs market (at least in IT) doesn't seem as buoyant as I thought it would be, and I've heard that credit's tightening up, but Australia doesn't strike me as being on the verge of the sort of recession that would cause dramatic price falls.

That said, house prices can be a leading indicator of economic problems in that they start falling before a recession. For example, they peaked in the autumn of 2007 in the UK, about a year before the GFC came along.

 

[Token Funder]

As an aside, based on chats during the month with other participants in the lending caper, there is a general consensus of activity easing this month.

Based on that, I'd expect the softening to continue in July.

 

[eternit]

As an aside, based on chats during the month with other participants in the lending caper, there is a general consensus of activity easing this month.

Based on that, I'd expect the softening to continue in July.

i think you mean August?

 

[Token Funder]

i think you mean August?

Nope..mean the apparent slowing of lending growth we are seeing in July will likely manifest as a poorer result for the July Rismark Index when it comes out.