I have a bit more faith in Aussie banks credit policies. Unemployment on the other hand is a different story.
Sydney's hot , Vote before you read
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I have a bit more faith in Aussie banks credit policies. Unemployment on the other hand is a different story.
I must admit my comment on properties doubling ever 10 years was generalising which I know is dangerous, but I have found in most cases over long periods this is the case. I understand we can pick a 10 year period where this did not happen, but in the same breath there are also as many examples where properties have tripled in 10 years or less.
Brisbane inner city 1970 $15k now $600k even a double every 10 years would only be around $350k
Even my home town in the north east of England (NOT LONDON)
1967 (parent moved in when I was born) £3k New build 3 bed terraced house.
Now £90k
Almost to the ££ a double every 10 years and that's after the last decade of the sky is falling down over there.
Going back further I found a story in Jan Somers book Story by Story page 174 an Aussie in the UK purchased a house in 1975 for £8500 which he happened to find the original receipt under the floor boards when the house was new in 1896 for £87. Was not in my little northern home town of poor ship yard and mining folk.
now even I'm getting dizzy with math but I think the 10 year double close again. It also stated that around 2000 it was worth around £65k.
Anyway I am also interested if there are any stories from members of properties in Australia that are not ghost towns were properties have been well below this growth over a long term say 30 - 50 years.
Brisbane inner city 1970 $15k now $600k even a double every 10 years would only be around $350k
Even my home town in the north east of England (NOT LONDON)
1967 (parent moved in when I was born) £3k New build 3 bed terraced house.
Now £90k
Almost to the ££ a double every 10 years and that's after the last decade of the sky is falling down over there.
Going back further I found a story in Jan Somers book Story by Story page 174 an Aussie in the UK purchased a house in 1975 for £8500 which he happened to find the original receipt under the floor boards when the house was new in 1896 for £87. Was not in my little northern home town of poor ship yard and mining folk.
now even I'm getting dizzy with math but I think the 10 year double close again. It also stated that around 2000 it was worth around £65k.
Anyway I am also interested if there are any stories from members of properties in Australia that are not ghost towns were properties have been well below this growth over a long term say 30 - 50 years.
I suppose I am talking about OO making the choice themselves to sell due to overcommitments, not just bank forced selling.
With the number of ads out there from banks and mortgage brokers about property investment, there could also be some sales from newbie investors who are neutral/slightly -ve geared at today's interest rates, only for the property to become more -vely geared with the higher interest rates and those newbies say 'bugger this' and sell out.
Most people don't like admitting they've made a mistake , so most will hang on rather than get out early . They'll be saying
The rates will come down , the rates will come down.
Cliff
Just watched Alan Kohler on ABC news
He showed a graph of house prices in Australia over the last year or so.
Alan seemed amazed at how prices have increased when compared to several other countries. He doesn't seem to think prices will continue to rise. Get Real.
See
http://www.abc.net.au/news/2013-08-15/australian-dollar-bounces-back/4890560
He showed a graph of house prices in Australia over the last year or so.
Alan seemed amazed at how prices have increased when compared to several other countries. He doesn't seem to think prices will continue to rise. Get Real.
See
http://www.abc.net.au/news/2013-08-15/australian-dollar-bounces-back/4890560
Try plotting a graph of USA GDP vs Australian GDP. While we are at it, plot also Chinese GDP and house prices.
There's a reason people call this the Asian century.
There's a reason people call this the Asian century.
Richard
That's an interesting Graph
What I draw from it is , the peak / Notch in 2003 ( Sydney peaking ) , the run up after and the plateaux after around 2010 when Melbourne stopped. I think the increasing graph represents different places moving at different times in the cycle.
Personally I think that graph in a year's time will show a further up tic as the price increases in Sydney flow through.
Cliff
That's an interesting Graph
What I draw from it is , the peak / Notch in 2003 ( Sydney peaking ) , the run up after and the plateaux after around 2010 when Melbourne stopped. I think the increasing graph represents different places moving at different times in the cycle.
Personally I think that graph in a year's time will show a further up tic as the price increases in Sydney flow through.
Cliff
I find it mildly amusing that "Double in next 6-8 years" would be considered "Steady long term growth".
I was keen to have a vote here, but there was no section for me. I realise that Sydneys already had a bit of a boom, and I think it will probably go up a bit more yet, and then other areas will follow, but as to doubling in 6-8 years in our current low inflation environment, well that is just being silly.
For me to vote, I needed an option between column 4 and 5.
Slow long term growth . Over ten years to double.
Here....????
Sideways movement for at least several more years.
For house prices to start to really take off, wouldn't the RBA see this as an obvious bubble? It's not like the 70's and 80's with massive inflation and when a doubling in prices over 7 years was just keeping up with inflation? Also this was when women started entering the workforce and bringing in a second income.
I'd reckon any massive boom in house prices now would see interest rates rise, in an attempt to keep a lid on things?
There were lots of obvious reasons why house prices have done so well the last 40 years or so, as in inflation, second incomes, falling prices for household items, falling real food prices, the end of high inflation and high interest rates, And just recently, the mining boom that bought the whole country massive wealth, but I don't see any of those factors happening that would be needed now to fuel another boom that many here seem to be predicting?
Anyway, that's just how I see it.
See ya's.
I was keen to have a vote here, but there was no section for me. I realise that Sydneys already had a bit of a boom, and I think it will probably go up a bit more yet, and then other areas will follow, but as to doubling in 6-8 years in our current low inflation environment, well that is just being silly.
For me to vote, I needed an option between column 4 and 5.
Slow long term growth . Over ten years to double.
Here....????
Sideways movement for at least several more years.
For house prices to start to really take off, wouldn't the RBA see this as an obvious bubble? It's not like the 70's and 80's with massive inflation and when a doubling in prices over 7 years was just keeping up with inflation? Also this was when women started entering the workforce and bringing in a second income.
I'd reckon any massive boom in house prices now would see interest rates rise, in an attempt to keep a lid on things?
There were lots of obvious reasons why house prices have done so well the last 40 years or so, as in inflation, second incomes, falling prices for household items, falling real food prices, the end of high inflation and high interest rates, And just recently, the mining boom that bought the whole country massive wealth, but I don't see any of those factors happening that would be needed now to fuel another boom that many here seem to be predicting?
Anyway, that's just how I see it.
See ya's.
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I can't see the market doubling in 8 years, except as mentioned above, only certain sections of the market.
I'm assuming this is relating to median prices.
What about extremes of the market, the really low end vs prestige property.
Does historical data show that prestige property can continue to grow at the same rate as the low end of the market, in the long run?
I've been thinking what will be the change that will allow prices to go up significantly and the one I see is the historically low interst rates .
Given the state of the overall economy , the RBA can't put rates up any time soon , so I think they will accept a controlled boom in property as a cost of keeping the economy on track.
I think you've been around long enough to remember 18 % rates so we know what can happen. We jumped at the opportunity to fix rates at 6.5 a couple of years ago as I along with everyone else , couldn't imagine them going any lower ........... Had an estimation of the break costs in that loan and it was over 20 k
My favourite " property investment guru " , alas bankrupt , Kieran Trass , discounted interest rates as a prime driver of the market , but I wonder whether he got it wrong .
Cliff
I think you've been around long enough to remember 18 % rates so we know what can happen. We jumped at the opportunity to fix rates at 6.5 a couple of years ago as I along with everyone else , couldn't imagine them going any lower ........... Had an estimation of the break costs in that loan and it was over 20 k
Possible is not the same as probable. It's that nebulous area between the two where good (or lucky) investment decisions are made.
Sure do. Farmers were on 22% interest rates. We'd just borrowed a half million to buy a farm to expand as I'd just left school and was ready to go. When we bought in 1984, interest rates were 14%, and they quickly jumped to 22%. Nearly lost everything we owned. Quickly put the farm back up for sale but there was no buyers at any price.
Obviously this sort of thing happened to plenty of people, and was why property took so long to boom at the end of the 90's after interest rates dropped. Anyone who remembered that period was just not game to go back again.
Now, it's all good. That farm was bought for $1200 per hectare. Now worth $7000 per hectare, and best of all we luckily snuck in before the capital gains tax introduction. So if I ever sell it, it's capital gains tax free.
See ya's.
There'll be lots of reasons in the next 20 years too. Including Melb and Syd population moving to 7 million in 20-30 years. Who knows yea?
Also to add to that....
I don't think anyone really knows what's going to happen in the current global setting. Currency wars raging, gold and silver are bipolar at the moment, US QE... will it taper or continue because it has to....? Equities start sliding on any hint of QE taper......
Who knows.... Hyperinflation could be just around the corner!
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