State of Australian housing market

[hobo-jo]

With some interesting data out this week I thought it would be worthwhile summarising some of the more interesting points and more into a blog I wrote tonight. You can view the blog here: Australian Housing - RBA Raises Cash Rate

Or if you like being spoon fed here is the cliff notes (also listed in the article):

To sum things up:

* The FHBB was removed, reducing the free deposit for first home buyers
* FIRB laws were retightened making it more difficult for foreigners to buy in Australia
* Rates are on the increase via the RBA and independent moves by the banks
* New home sales are down 14% for the September quarter
* Auction clearance rates are dismal in most cities & not great in Melbourne or Sydney
* Listings are on the increase with a significant rise seen in the latter half of this year
* Mortgage lending figures are down on last year and other recent years
* Most capital cities are now seeing stagnating or falling prices


It's looking pretty dismal for the property market at the moment.

 

[Intrinsic_Value]

With some interesting data out this week I thought it would be worthwhile summarising some of the more interesting points and more into a blog I wrote tonight. You can view the blog here: Australian Housing - RBA Raises Cash Rate

Or if you like being spoon fed here is the cliff notes (also listed in the article):

no argument from me, i have always said that one of the biggest investment risk that investors make is to extrapolate near term historical results into the future. I feel there has been much too much extrapolation of the last 30 years.

 

[pickle pickle]

After the Melbourne capital growth from May09-May10 (which was an absoulte shock to me) I still think Melbourne prices have been holding on quite steadly over the last 6 months. It's no surprise the real estate is having big capital growth at the moment. I'm surprised at how well real estate seems to holding up.

 

[hobo-jo]

That's a great way of putting it IV. I see a lot of investors expecting the status quo to continue without giving much thought to the consequences if they buy an over valued asset and it doesn't (not just property). Past gains are no guarantee of future returns.

 

[Intrinsic_Value]

After the Melbourne capital growth from May09-May10 (which was an absoulte shock to me) I still think Melbourne prices have been holding on quite steadly over the last 6 months. It's no surprise the real estate is having big capital growth at the moment. I'm surprised at how well real estate seems to holding up.

who knows how Mr Market will price an asset.
I honestly dont think that property prices in the main cities will crash and burn, because of a fundamental under supply.

But just because an asset class doesnt crash, doesnt mean that investors in that asset class will receive a suitable rate of return on their investment.
(there is a difference here).

 

[BPB]

With some interesting data out this week I thought it would be worthwhile summarising some of the more interesting points and more into a blog I wrote tonight. You can view the blog here: Australian Housing - RBA Raises Cash Rate

Or if you like being spoon fed here is the cliff notes (also listed in the article):

Thank you for sharing.............

 

[devo76]

So if the market is booming then its a bubble about to burst.

If its gaining speed then its unsustainable.

If its flat then its about to fall.

With rates where they are and a flat market. There are still plenty of .25% options to pick it back up IF required.

I think a breather right now is a good thing. Thats what many wanted wasnt it ?

 

[Deltaberry]

Market is not healthy - been calling this for ages. Anyone want to buy my overpriced Australian home and ips?

 

[Propertunity]

Market is not healthy - been calling this for ages.

I suppose if you keep calling it, then one day, just like our Prof. Keen, you'll get it right

Meanwhile I see the property we purchased in the Inner West around $420-430K this time last year is selling at $520-530K now.....and still the quality properties are in high demand.

I do however agree, that the lower / av. quality stock is staying on the market longer and not achieving their overly optimistic asking prices. (But we don't buy this stuff anyway).

 

[Aaron Sice]

DB - submarkets inside markets dont follow trends.

for example.

a new 4x2 in Kelmscott is still pulling what they were asking 18m ago, but all the 3x2s have lost about 10-15% of their value. why? new 4x2s are rare as, most 4 bed stock is older 60's/70's 4x1s.

which is why you can't just look at a median or "comparitive sales figures" because they don't represent the niche you should be trying to exploit.

 

[Deltaberry]

Fair enough, not ages - just the last 5-6 months.

Anyway agree with both of you to an extent: some prices continue to surprise me so it's pretty mixed at the moment. Got this inner city double storey terrace not long ago. Now I can't even get a single storey terrace in need of a reno, a block down, for the same price.

 

[tcocaro]

"been calling this for ages" so on your own admission you have been wrong for ages? Confusing statement sounds more like stubborness than anything else.

Regarding your properties, lets make a deal. You post how much you think the property market will fall by and I will pay you market price less half of what you think you will loose. So lets say you think it will fall by 20% I will pay 10% less than todays market price. Good deal right given the end is near? - "again".

Market is not healthy - been calling this for ages. Anyone want to buy my overpriced Australian home and ips?

 

[Blitzkrieg]

So it's a buyers market then? More motivated vendors, more cheaper deals in the offing.

First home buyers put off for a while (stay renting)

When rental vacancy rates increase, I will put on my worried face.

Sounds like a good time to be entering an acquisition stage

 

[hobo-jo]

"been calling this for ages" so on your own admission you have been wrong for ages? Confusing statement sounds more like stubborness than anything else.

Regarding your properties, lets make a deal. You post how much you think the property market will fall by and I will pay you market price less half of what you think you will loose. So lets say you think it will fall by 20% I will pay 10% less than todays market price. Good deal right given the end is near? - "again".

Oh dear! Not another property bull trying to use a ridiculous bet to lend legitimacy to their view...

It won't work for Christopher Joye and it won't work for you tcocaro.

 

[Luv2Travel]

Market is not healthy - been calling this for ages. Anyone want to buy my overpriced Australian home and ips?

An apartment in my Melbourne Bayside complex went for 26% above reserve last weekend. I'd say that's fairly healthy.

 

[Ms Jade]

Melbourne clearance rate only 61% yesterday and 100 auctions out of 588 with no result reported. That's the worst result for 2 years; unsurprising given the recent heat in the market. There is SO much on the market right now. I think it's a great time to scout around. After years of scouting my sister finally bought a great PPOR yesterday in a blue-chip inner suburb for about $200k less than it would have sold for in April. I bet her that the price would be 'undisclosed' in the paper today. I was right.

 

[lizzie]

could be a good time to be putting low offers in on what was the fhb type stock, especially older units in good cond, that only need a minor reno. these are still in hot demand (in my area) for rent, but not for buying.

my opinion only, but put an offer in on one on friday for 15% under asking price.

"moving up the ladder" homes in okay locations are still going for lots more than asking price, which is why i'm staying away from them.

 

[tcocaro]

hobo-jo

I am a property bull? No don't think so, I just have issue when someone says "been calling this for ages" and then claiming vindication. Predictions don't work on the premise of repeating a stance until its right then claiming you have been right all along.

And nice to mention Christopher Joye as an example given the monkey he bet against actually took up the rhetorical bet and lost.

I didn't expect deltaberry to take up my bet as it was done to prove a point just as I don't think he was serious in his question if anyone was interested in buying his IP. It seems that rarely do people put their money were their mouth is. Deltraberry claimed to be predicting a property decline for "ages" yet didn't sell up? You don't see the illogical stance?

I suspect you don't because your so blinded in your apparent need to have your views justified you don't see anything beyond labeling people "bulls" or "bears".

Even your cute little catch phrase "Not a bear just a realist" explains your true religious like negative zealous approach to property. If you were a "realist" you would be a bear, a bull and in-between i.e. whatever the market dictates NOT a constant.... unless your telling me your changing your little catch phrase to "Not a bull just a realist" or "Not a fence sitter just a realist" as the market goes through its cyclical changes? - haven't ever seen it change.

No point in discussing with you pretty much anything because of your transfixed ways especially given I have said way too many times I am not a property bull nor am I a bear instead I predict we will be in a period of flat prices generally speaking but like any investment there will be areas that go up and down.

Anyways good luck maybe your right "this time" if not just keep claiming Armageddon eventually you will be right.

Oh dear! Not another property bull trying to use a ridiculous bet to lend legitimacy to their view...

It won't work for Christopher Joye and it won't work for you tcocaro.

 

[hobo-jo]

And nice to mention Christopher Joye as an example given the monkey he bet against actually took up the rhetorical bet and lost.

Grantham hasn't even acknowledged Joye's childish antics, much less taken him up on the bet. I don't know too many monkeys that are involved with running companies that have $100B+ assets under their control.

I suspect you are thinking of the Keen/Robertson bet.

Even your cute little catch phrase "Not a bear just a realist" explains your true religious like negative zealous approach to property. If you were a "realist" you would be a bear, a bull and in-between i.e. whatever the market dictates NOT a constant.... unless your telling me your changing your little catch phrase to "Not a bull just a realist" or "Not a fence sitter just a realist" as the market goes through its cyclical changes? - haven't ever seen it change.

I only changed it to that around 6 months ago. I bought property in 2006 (sold end of 2009) and looked at other property related in investments in 2007 & 2009, but decided against. I am not anti-property or expecting Armageddon, but that would be obvious to you if you actually read my past posts/blog before shooting off at the mouth.

 

[tcocaro]

Regarding Keen\Joye they recently held a debate of sorts so yes I did get this confused, I have tried to move on from the Keen issue and forget the players involved but you are right.

hobo-jo you and me have been sparring on the exact same issue for "years" not months, so please don't make this out like a sudden change of heart on your part its not by a long shot.

I didn't call you anti-property I said you are blinded by your own tightly held views. You called me a bull very clearly and I now have to sit here and listen to you to tell me not to shoot my mouth off? Lord the hypocrisy!

Your posts are 90% little snappy side-line cheer squad for the negative like this one, so to continue this little tit for tat discussion is pointless.

Good luck with whatever your view is because I for one am over this school yard level discussion you and me always get into.

Grantham hasn't even acknowledged Joye's childish antics, much less taken him up on the bet. I don't know too many monkeys that are involved with running companies that have $100B+ assets under their control.

I suspect you are thinking of the Keen/Robertson bet.


I only changed it to that around 6 months ago. I bought property in 2006 (sold end of 2009) and looked at other property related in investments in 2007 & 2009, but decided against. I am not anti-property or expecting Armageddon, but that would be obvious to you if you actually read my past posts/blog before shooting off at the mouth.