Values more likely to rise, contrary to warnings from lunatic-fringe economists.

BoatBoy · 9th Apr, 2009

Values more likely to rise, contrary to warnings

HOTSPOTTING: Terry Ryder | April 09, 2009

Article from: The Australian
THE only function of economic forecasting, economist J.K Galbraith said, is to make astrology look respectable.
Right now in Australia, astrology is looking very respectable indeed as a gaggle of publicity-hungry economists predict dire outcomes which are later contradicted by actual events.

I wonder who Mr Ryder means?

As a writer on real estate, if I want an expert view, I seek out Michael Matusik of Matusik Property Insights, Rod Cornish of Macquarie Bank, Adelaide property lecturer Peter Koulizos, author Margaret Lomas or Tim Lawless of RP Data. These are all experienced practitioners with specialised expertise. None of them is foreboding a massacre of property values. It's all coming from lunatic-fringe economists.

Tell us how you really feel Mr Ryder

More here http://www.theaustralian.news.com.au/business/story/0,28124,25309563-30538,00.html

Dave

josko · 9th Apr, 2009

Mortgage defaults have been relatively minor when we were told to expect carnage.

Construction activity rose when a decline was predicted.

Music to my ears and candy to my eyes.

The next 6 months after the financial year will be very exciting. I am starting to think Blue Card was correct and we have seen the bottom.

Although we can be sure unemployment will rise, we are forgetting that in 2000, Australia was booming and our unemployment was quoted as being the lowest it had been in 10 years...at 6.3%

I watch....and I wait.

Regards JO

AUSPROP... · 9th Apr, 2009

apparantly ANU released quite an upbeat assessment for real estate but I can't find it and the media conveniently ignored it - anyone know where it is?

AUSPROP... · 9th Apr, 2009

here's some of it, will try google some more...

31 March 2009

Projection of Housing Demand 2006 - 2021

Research from Australian National University

Australian Demographic and Social Research Institute

An interesting report that looks at the changes to households in the coming years. A brief snapshot of the findings over this period include:

Western Australia to grow faster than other parts of Australia. Western Australia set to receive 14.5% to 17% of net migration whereas Western Australia has approximately 10% of Australia's population at present.

Migration to Perth will be higher than regional Western Australia.
Migration to Brisbane and Perth will be the highest with population increasing 32% to 35% in the period 2006 to 2021.
Lowest population increase will be Sydney, Hobart, Adelaide at 14% to 18% and Melbourne at 25%.

Lone person households will grow faster than any other household demographic category.

Housing Demand

Demand for flats in Perth (+52%) versus the balance of Western Australia (+36%).
Demand for both flats and houses will be higher for Perth than the balance of Western Australia.
Within Australia, the highest demand for a flat will be in Perth (1st) and South-East Queensland (2nd).
Within Australia, the highest demand for a house will be in Brisbane (1st) and Perth (2nd).

craigb · 9th Apr, 2009

the fhb grant has launched the market , and all of these un experienced buyers are racing each other to the finnish line.
When the GST was introduced the vals increased by 10% this fhb thing is doing just the same , i would thing this will continue untill the rates get to about 6 < 7 %
If i was able too and i had looked at this in this way i {once again } wished i grabed a couple of IP's at that time.
For those of you that have ENJOY THE RIDE!!!

AUSPROP... · 9th Apr, 2009

http://www.fahcsia.gov.au/housing/housing_demand_australia/default.htm

Aaron Sice · 9th Apr, 2009

thanks josko - it's nice to have a weeeeeny bit of support once in a while.

i just see what's happening at THIS end of construction - not the end that most people are buying into.

7% UE is not the end of the world - it's a reasonable historic average. i also remember those UE figures in 2000....whaich makes me not care about rising UE by 0.5% quarterly...

Witzl · 9th Apr, 2009

to quote my extremely wealthy boss (the sole owner of Jaycar Electronics).....

.... "i really dont know what all these idiot economists are on about, i'm seeing absolutely no evidence of an economic downturn. WHAT F**KEN RECESSION??"

Aaron Sice · 9th Apr, 2009

AUSPROP... said:
here's some of it, will try google some more...

31 March 2009

Projection of Housing Demand 2006 - 2021

Research from Australian National University

Australian Demographic and Social Research Institute

An interesting report that looks at the changes to households in the coming years. A brief snapshot of the findings over this period include:

Western Australia to grow faster than other parts of Australia. Western Australia set to receive 14.5% to 17% of net migration whereas Western Australia has approximately 10% of Australia's population at present.

Migration to Perth will be higher than regional Western Australia.
Migration to Brisbane and Perth will be the highest with population increasing 32% to 35% in the period 2006 to 2021.
Lowest population increase will be Sydney, Hobart, Adelaide at 14% to 18% and Melbourne at 25%.

Lone person households will grow faster than any other household demographic category.

Housing Demand

Demand for flats in Perth (+52%) versus the balance of Western Australia (+36%).
Demand for both flats and houses will be higher for Perth than the balance of Western Australia.
Within Australia, the highest demand for a flat will be in Perth (1st) and South-East Queensland (2nd).
Within Australia, the highest demand for a house will be in Brisbane (1st) and Perth (2nd).

this would imply a continuation of the resources industry.

hmmm....Sunfish - what were those stocks again?

AUSPROP... · 9th Apr, 2009

imply? I reckon anyone that reckons resources are dead must think we (or more precisely the developing world) will be living in caves. Or they have discovered a new and cheap method of producing power.

muppetFHO · 9th Apr, 2009

Witzl said:
to quote my extremely wealthy boss (the sole owner of Jaycar Electronics).....

.... "i really dont know what all these idiot economists are on about, i'm seeing absolutely no evidence of an economic downturn. WHAT F**KEN RECESSION??"

Ha! Let's ask my employer (bluescope steel) if they think we're in a recession.... If you've even bothered to ask anybody in the construction industry i'm sure they would've painted you a very different picture...

keithj · 9th Apr, 2009

AUSPROP... said:
http://www.fahcsia.gov.au/housing/housing_demand_australia/default.htm

The other one worth reading is National Housing Supply Council State of Supply Report 2008

Code:
Executive summary
The National Housing Supply Council’s first State of Supply Report focuses on:

projections of underlying demand and of land and housing supply over 20 years from 2008 to 2028

the gap between housing demand and supply and implications for submarkets, with particular attention on affordability issues for lower income households

a number of current influences on supply and demand, as well as the need for research to better understand how these impact on the housing market

discussion of data collection and methodology, including the need for more sophisticated modelling, and the need to improve data collection and analysis, particularly on land supply for residential development.

The Council’s information gathering and consultation with the housing industry and State, Territory and local governments took place from mid-2008. This was a period of fundamental change in the economic environment, from a period of high interest rates and sustained high levels of economic growth to the sudden and major disruption of the global financial crisis.

The Council has endeavoured to factor some of the possible effects of the global financial crisis into our projections of housing demand and supply.

.....

State-by-state estimates of population and medium growth projections as at 30 June 2008 and 2028 are as follows:

Code:

Medium growth projections of underlying demand (households) State/Territory 2008 2028 increase New South Wales 2,692,000 3,471,000 779,000 Victoria 2,063,000 2,780,000 717,000 Queensland 1,661,000 2,521,000 860,000 SA 661,000 823,000 162,000 WA 853,000 1,272,000 419,000 Tasmania 206,000 249,000 43,000 NT 77,000 108,000 31,000 ACT 135,000 182,000 47,000 Australia 8,347,000 11,407,000 3,060,000

csc · 9th Apr, 2009

muppetFHO said:
Ha! Let's ask my employer (bluescope steel) if they think we're in a recession.... If you've even bothered to ask anybody in the construction industry i'm sure they would've painted you a very different picture...

absolutely...........building industry is sinking into a big hole right now.

i have close friends and relos in senior positions in the paint, concrete batching, steel industry...trade businesses.......all are dying in the ar$e badly so people can toss up any spin they want about how well the housing market is or that its turned around and heading north..the bottom line facts dont lie at the front.........the battle is being lost and quickly..surrender is imminent!

take that anyway you want but the trend is down and no "real" recovery is in sight right now...sure there are pockets going ok but overall in Aust the housing market is r/s..only a matter of time before the gloss merchants realize it and give up their glossy positive spin....its normal and healthy for any market of any kind to take a breather, retreat a bit before advancing again when conditions are right.

if you think the market as a whole is super strong currently please remove your blindfold....throw me whatever figures from the r/e industry you like...new house sales is what is important along with jobs.

Project1080 · 9th Apr, 2009

Music to my ears and candy to my eyes.

You talkin' 'bout me Josko? LOL!

Perhaps I've been immune to the GFC myself or I live in my own little world. I went walking through our city Myer complex yesterday and couldn't find the shop I wanted. Gone. Many others gone too. An eye opener for me.

I've said it on SS before and I'll say it again. The biggest problem in Oz at the moment is confidence. There is an element of self-fulfilling prophesy out there atm. There is a story floating around about "the impending recession". If someone has it please post.

Let's all be more confident. The worm will turn soon and we can all be on our merry way again. History has shown the market will recover and surpass the previous highpoint and march further north. The big issue is the timing of when you want/need to cash out. Unfortunately the baby boomers are experiencing bad timing at present. There are winners and losers in every market and always a bargain around the corner. Just got to work a little harder at present to unveil the gems.

I'm not looking to be greedy and have time on my side. Patience is my biggest enemy. I WANT IT NOW! My strategy hasn't changed and still sticking to my plan. Cashing up presently and watching both stock and property markets for signs of turnaroud. If I see a bargain that fits my plan, I'll pounce. As the old saying goes, "the trend is your friend". Use it to your advantage.

It's all about how you perceive the current situation. To me, the future's looking rosy.

Project 1080

The project: 10 IPs in 80 mths.

letiha · 9th Apr, 2009

I'm building at the moment..well let me correct that trying to build. The builders are saying they are SO SO SO busy. I am having bigger delays thatn when we were trying to build in the boom.

If you sit at your local display home village they are packed. I think the down turn is a thing of the past and that the flow on effect from th interest especially FHB, $21,000 for a new home thats a lot. That only came in in October, takes a few months to find land, get a loan and start building.

sparky23 · 9th Apr, 2009

Yes I agree its just a matter of waiting for the approvals from councils for the house and land packages that have been selling to get underway and then it will be full on again out there.

Witzl · 15th Apr, 2009

muppetFHO said:
Ha! Let's ask my employer (bluescope steel) if they think we're in a recession.... If you've even bothered to ask anybody in the construction industry i'm sure they would've painted you a very different picture...

Im not in construction... so i dont know about that industry.
This is a large AUS+NZ retail and wholesale importation business.... and our growth figures in 2009ytd are nothing short of astounding.
Im a product manager for this company, and sales in my range of products have grown by over 13% YTD (up from $28.9mil to $32.8mil)

Opportunities abound.

Pushka · 15th Apr, 2009

Pessimist maybe, but companies run on debt and it will take some months for the credit crunch to hit them as they probably havent needed to refinance their business loans just yet. But that process will pick up soon, and if credit remains difficult to get, then businesses will go under which will result in unemployment. Which will mean mortgage sales.

I would like to be confident but it is just too early to call a bottom yet. In our business, we are seeing business opportunities disappear overnight. From good, solid companies.

Propertunity · 15th Apr, 2009

Pushka said:
.... if credit remains difficult to get, then businesses will go under which will result in unemployment. Which will mean mortgage sales.

Well not for 12 months after that - if they get the 12 month repayment holiday that K Rudd negotiated with the banks. And IF they have no cash reserves and IF they cannot afford the repayments (many of which would be less than or equal to rent anyway) on the dole and IF they don't get another job within 12 months and IF they don't choose to sell themselves rather than MIP. Then maybe......

Pushka said:
In our business, we are seeing business opportunities disappear overnight. From good, solid companies.

Yes, I see that too. But just as some opportunities disappear overnight, new ones emerge too. Just a case of how you see the glass - half full or half empty

ffc1883_1996 · 15th Apr, 2009

muppetFHO said:
Ha! Let's ask my employer (bluescope steel) if they think we're in a recession.... If you've even bothered to ask anybody in the construction industry i'm sure they would've painted you a very different picture...

I have!

I’ve got a mate who works at Austral. He says if you’re in need of bricks you’d better be prepared to wait until late 2009 or early 2010.
Another mate is a builder who’s forward order book is “fine – busy” in his words.
I’ve a plumber fixing the spouting on one of my IPs today. He told me yesterday that he’s “as busy as ever”.
I’ve a tiler coming in next week to reno a kitchen and bathroom. His current waiting list is three months long.

Just my observations.

If you ask your employer (bluescope steel), I think they’ll tell you that the USA is in recession.