What do you believe will happen to Australian property prices in the next 3 years?
- Thread starter Aceyducey
- Start date
Hi Acey
You're on a roll with these polls lately.
Ever thought of taking up tea leaf reading instead?
I don't think there has ever been a time when people have been confident that values will increase, or continue to increase.
There has always been periods of greater and lesser growth.
I personally don't think we've been in a boom, but it is the buyers who decide, not the sellers. Construction costs are a separate issue - I am referring to the established market more than the new market.
However, I see no reason why values won't continue to increase above 9% per annum as a general indicator across all property types across the whole market.
But one twelve month period to three year period is a very small sample period. The minimum span should be five years, with 'now' (any 'now' ) as year three in the cycle. In fact, seven or nine years would be a better and more accurate indicator.
Anything shorter only measures the blimps and is not necessarily reliable data.
Ask me again in four years time.
Cheers
Kristine
You're on a roll with these polls lately.
Ever thought of taking up tea leaf reading instead?
I don't think there has ever been a time when people have been confident that values will increase, or continue to increase.
There has always been periods of greater and lesser growth.
I personally don't think we've been in a boom, but it is the buyers who decide, not the sellers. Construction costs are a separate issue - I am referring to the established market more than the new market.
However, I see no reason why values won't continue to increase above 9% per annum as a general indicator across all property types across the whole market.
But one twelve month period to three year period is a very small sample period. The minimum span should be five years, with 'now' (any 'now' ) as year three in the cycle. In fact, seven or nine years would be a better and more accurate indicator.
Anything shorter only measures the blimps and is not necessarily reliable data.
Ask me again in four years time.
Cheers
Kristine
Hi all,
Acey, I couldn't answer this poll, as the many facets of property make an average non sensical to me.
OK I know I have used an average house in a Melbourne suburb as an example for some of my points, and I would have to choose 1-5% growth for that type of property. But inner apartments would be in my "fall" predictions(of course depending on which city), houses in Brisbane would be different again to the average house elsewhere. Regional properties??? well they have probably had their run and may go quiet for a few years.
bye
Acey, I couldn't answer this poll, as the many facets of property make an average non sensical to me.
OK I know I have used an average house in a Melbourne suburb as an example for some of my points, and I would have to choose 1-5% growth for that type of property. But inner apartments would be in my "fall" predictions(of course depending on which city), houses in Brisbane would be different again to the average house elsewhere. Regional properties??? well they have probably had their run and may go quiet for a few years.
bye
B
brains
Guest
The way i see it is thus:
If property historically increases in price by average 10% per year (or something like that).
Taking into account the boom of the last 3 to 5 years. To keep the above average its only natural for property to go negative - nett of inflation - for a few years and then probabaly no growth after that until the next price boom.
Its not possible for prices to continue to rise because if they did they would outstrip the historical average andbeside that no one would be able to afford to buy property. (they hardly can now)
In the meantime rents wil rise to a level similar to just before the recent boom.
My plan is to look for houses just before the next price boom as close to Sydney with the highest yields i can find and then be cashed up and buy...buy...buy
If property historically increases in price by average 10% per year (or something like that).
Taking into account the boom of the last 3 to 5 years. To keep the above average its only natural for property to go negative - nett of inflation - for a few years and then probabaly no growth after that until the next price boom.
Its not possible for prices to continue to rise because if they did they would outstrip the historical average andbeside that no one would be able to afford to buy property. (they hardly can now)
In the meantime rents wil rise to a level similar to just before the recent boom.
My plan is to look for houses just before the next price boom as close to Sydney with the highest yields i can find and then be cashed up and buy...buy...buy
IMHO:
Since much of the boom was fueled by investors' EXPECTATIONS of future CG of 15-25% pa, now we see these expectations disappear. The question to be asked now hypothetically is - would most people buy RE investment while knowing (assuming) there is no CG for the next 3-5 years. If the answer is negative - then there is less demand. Less demand=lower prices. Lower prices=less public expectations for CG in the near future. And so it goes on (down) until the next boom.
IMHO
One little question from me;
Are these % supposed to be annual, or a total over the 3 year period?
Some are saying comments like "on average over 10% each year for the next 3 years "
yet at least one seem to indicate they have assumed a total growth eg: Rise at least 26%
I understand that average for the country is dfficult to even guess at, especially as some areas eg: Sydney, have been on a roill for some time now, yet others, like Brisbane, have only just started to catch up with years of well below average.
Are these % supposed to be annual, or a total over the 3 year period?
Some are saying comments like "on average over 10% each year for the next 3 years "
yet at least one seem to indicate they have assumed a total growth eg: Rise at least 26%
I understand that average for the country is dfficult to even guess at, especially as some areas eg: Sydney, have been on a roill for some time now, yet others, like Brisbane, have only just started to catch up with years of well below average.
Bill I agree - the 'average' residential property does not exist, but the media and researchers still attempt to lump all residential property into a single category (thank goodness they have managed to separate commercial property & vacant land out!!!).
So if they can make predictions about the 'average' property - which are then repeated on the forum by individuals such as L Bernham, who simply don't know enough to understand that the figures are useless, so can we
This poll is primarily to look at Ocelad's belief that the majority of people on the forum support L Bernham's views that there will be a rapid (and in my view near catastrophic) drop in average property prices by around 35% in the next few years (which I took as three).
From the responses thus far, if you can take them as a representative sample, it appears that forumites are in the majority quite conservative in their views, expecting property to trundle along at around the level of inflation, well short of the 7-9% (in metros) that can be demonstrated over the past 30 years....if you look at increases in the magnitude of 3% over the next three to five years, this brings property virtually in line with the longer-term average - so no huge price drops required to get back onto this track
Cheers,
Aceyducey
Hi all,
I can see myself pretty much agreeing with Brains interpretation presented above, only the details are slightly different. It's the top end of the market that would probably suffer the most, whereas the lower end(sub $330,000 for Melbourne houses) will more likely potter along at around inflation levels.
However I wont be surprised if the slowdown takes longer to come around than most expect. It is the nature of booms to defy gravity, so we may be talking about the coming slowdown in a years time after another 4 or 5 interest rate rises.
to quote Yoda on topic of future
YODA: Difficult to see. Always in motion is the future.
bye
I can see myself pretty much agreeing with Brains interpretation presented above, only the details are slightly different. It's the top end of the market that would probably suffer the most, whereas the lower end(sub $330,000 for Melbourne houses) will more likely potter along at around inflation levels.
However I wont be surprised if the slowdown takes longer to come around than most expect. It is the nature of booms to defy gravity, so we may be talking about the coming slowdown in a years time after another 4 or 5 interest rate rises.
to quote Yoda on topic of future
YODA: Difficult to see. Always in motion is the future.
bye
Sim
Administrator
YODA helps Ian Macfarlane (governor of the Reserve Bank of Australia) practice his force sensitivity, while he has been looking for guidance on what to do with interest rates.
In the clearing behind Yoda's house, Ian again stands upside-down, but his face shows less strain and more concentration than before. Yoda sits on the ground below the young governor. On the other side of the clearing, two equipment cases slowly rise into the air. Nearby Johnny Howard watches, humming to himself, when suddenly he, too, rises into the air. His little legs kick desperately and his head turns frantically, looking for help.
YODA: Concentrate...feel the Force flow. Yes. Good. Calm, yes. Through the Force, things you will see. Other places. The future...the past. Old mortgages long gone.
Ian suddenly becomes distressed.
IAN: Hans! Ameleia!
The two packing boxes and Johnny fall to the ground with a crash, then Ian himself tumbles over.
YODA: (shaking his head) Hmm. Control, control. You must learn control.
IAN: I saw...I saw a city in the clouds, somewhere the other side of Goulburn, with lots of roundabouts and roads that go nowhere.
YODA: Mmm. Friends you have there.
IAN: They were in pain.
YODA: It is the future you see.
IAN: Future? Will the property bubble burst ?
Yoda closes his eyes and lowers his head.
YODA: Difficult to see. Always in motion is the future.
IAN: I've got to raise rates now to slow the property boom before it busts.
YODA: Decide you must how to serve them best. If you raise rates now, help them you could. But you could destroy the economy for which they have fought and suffered.
Ian is stopped cold by Yoda's words. Gloom shrouds him as he nods his head sadly.
In the clearing behind Yoda's house, Ian again stands upside-down, but his face shows less strain and more concentration than before. Yoda sits on the ground below the young governor. On the other side of the clearing, two equipment cases slowly rise into the air. Nearby Johnny Howard watches, humming to himself, when suddenly he, too, rises into the air. His little legs kick desperately and his head turns frantically, looking for help.
YODA: Concentrate...feel the Force flow. Yes. Good. Calm, yes. Through the Force, things you will see. Other places. The future...the past. Old mortgages long gone.
Ian suddenly becomes distressed.
IAN: Hans! Ameleia!
The two packing boxes and Johnny fall to the ground with a crash, then Ian himself tumbles over.
YODA: (shaking his head) Hmm. Control, control. You must learn control.
IAN: I saw...I saw a city in the clouds, somewhere the other side of Goulburn, with lots of roundabouts and roads that go nowhere.
YODA: Mmm. Friends you have there.
IAN: They were in pain.
YODA: It is the future you see.
IAN: Future? Will the property bubble burst ?
Yoda closes his eyes and lowers his head.
YODA: Difficult to see. Always in motion is the future.
IAN: I've got to raise rates now to slow the property boom before it busts.
YODA: Decide you must how to serve them best. If you raise rates now, help them you could. But you could destroy the economy for which they have fought and suffered.
Ian is stopped cold by Yoda's words. Gloom shrouds him as he nods his head sadly.
Yes... very amusing.
[serious mode]
As it turns out, of all the people at the RBA, McFarlane is the one who fully understands the risks of being myopic and raising interest rates by too much too soon.
Apologies to those who have heard me say this before - but is is a matter of public record that (then) Assistant Governor Ian McFarlane was opposed to the extent of the interest rate rises of the late 1980's / early 1990's.
This at a time when the influence of the Treasurer (Paul Keating) over the RBA and over Treasury was arguably at its strongest.
IMHO, Australia could not hope for a better RBA Governor.
[end serious mode]
MB
[serious mode]
As it turns out, of all the people at the RBA, McFarlane is the one who fully understands the risks of being myopic and raising interest rates by too much too soon.
Apologies to those who have heard me say this before - but is is a matter of public record that (then) Assistant Governor Ian McFarlane was opposed to the extent of the interest rate rises of the late 1980's / early 1990's.
This at a time when the influence of the Treasurer (Paul Keating) over the RBA and over Treasury was arguably at its strongest.
IMHO, Australia could not hope for a better RBA Governor.
[end serious mode]
MB
In terms of this goal, I think the poll has proved useful.
However, as other's have noted, giving an overall figure for all property types in all regions is very difficult. If you asked what I thought would be the drop in metro Melbourne and Sydney, I would have picked a more negative answer.
Will the empire strike back
Sim.... the force is strong in you.
The above post best describes the situation. Some will rise others will fall. But if your in it for the long haul you will live long and prosper.
Geez, thats Star Trek.
[Entering Star Trek mode]
The Enterprise (Ecomomy) will still move forward. Maybe not at warp 9 as it still has alot of Klingons on the starboard bow and a rudder that seems to be suck. Going into a place,No Australian has gone before.
After leaving the supernova (Proprtery Boom) and realizing that some of the crew where on Apollo 13 and are in trouble will they help them out (Lowering IR again) or wait until there oxygen is depleted( NO CG) and go back and collect the craft for salvage (BAH=Buy another House).
Continued in next months episode (the RBA morning piss-up...errrr- I meant to say interest rate meeting)
[Leaving the Star trek mode and serious]
A wise man once said to me the following:
"The past is history, the futures a mystery and present is a gift. That why they called it a present"
The eastern seaboard in the next 3 years will have some interesting developments especially in the townhouse/apartment sectors of investment properties. This will be a sort of a benchmark in how other cities and areas will also follow.
IMHO:
the interest rate will rise and fall to limit the CG and the try to stabilise the this ecomony. I will do my research, read the forum and do my numbers to find that next IP worthy of OPM.
In closing, the goverment, the RBA and Ian have a agenda.
(still hard to imagine Little Jonnie as R2D2 .. but he has annoying repitious beeps coming from his mouth "help the australian battler").
I will endevour to follow my own and adjust it to the ecomony on the day/month/year at that particular time.
To all formites good luck in this changing times.
Respect, Peace, out.
OPM-addict
Sim.... the force is strong in you.
The above post best describes the situation. Some will rise others will fall. But if your in it for the long haul you will live long and prosper.
Geez, thats Star Trek.
[Entering Star Trek mode]
The Enterprise (Ecomomy) will still move forward. Maybe not at warp 9 as it still has alot of Klingons on the starboard bow and a rudder that seems to be suck. Going into a place,No Australian has gone before.
After leaving the supernova (Proprtery Boom) and realizing that some of the crew where on Apollo 13 and are in trouble will they help them out (Lowering IR again) or wait until there oxygen is depleted( NO CG) and go back and collect the craft for salvage (BAH=Buy another House).
Continued in next months episode (the RBA morning piss-up...errrr- I meant to say interest rate meeting)
[Leaving the Star trek mode and serious]
A wise man once said to me the following:
"The past is history, the futures a mystery and present is a gift. That why they called it a present"
The eastern seaboard in the next 3 years will have some interesting developments especially in the townhouse/apartment sectors of investment properties. This will be a sort of a benchmark in how other cities and areas will also follow.
IMHO:
the interest rate will rise and fall to limit the CG and the try to stabilise the this ecomony. I will do my research, read the forum and do my numbers to find that next IP worthy of OPM.
In closing, the goverment, the RBA and Ian have a agenda.
(still hard to imagine Little Jonnie as R2D2 .. but he has annoying repitious beeps coming from his mouth "help the australian battler").
I will endevour to follow my own and adjust it to the ecomony on the day/month/year at that particular time.
To all formites good luck in this changing times.
Respect, Peace, out.
OPM-addict
Hi all,
Star trekking(investing) across the universe(Australia)
Always going forward(buying) still can't find reverse(selling)
It's life Jim(apartments) but not as we know it, not as we know it, It's life Jim but not as we know it, not as we know it now.
There's Klingons(interest rate rises) on the starboard bow, starboard bow, starboard bow.Klingons on the starboard bow, starboard bow now.
It's worse than that he's dead(CG) Jim, dead Jim, dead Jim. It's worse than that he's dead Jim, dead.
With apropriate apologies all around.
bye
Star trekking(investing) across the universe(Australia)
Always going forward(buying) still can't find reverse(selling)
It's life Jim(apartments) but not as we know it, not as we know it, It's life Jim but not as we know it, not as we know it now.
There's Klingons(interest rate rises) on the starboard bow, starboard bow, starboard bow.Klingons on the starboard bow, starboard bow now.
It's worse than that he's dead(CG) Jim, dead Jim, dead Jim. It's worse than that he's dead Jim, dead.
With apropriate apologies all around.
bye
SYDNET APARTMENT FEEDBACK
Dear All
FYI on impact on rate raise in sydney see
http://www.smh.com.au/articles/2003/11/14/1068674381140.html
Supports popular theory that Sydney is multimarkets suburb ti suburb, unit to home.
Peter 147
Dear All
FYI on impact on rate raise in sydney see
http://www.smh.com.au/articles/2003/11/14/1068674381140.html
Supports popular theory that Sydney is multimarkets suburb ti suburb, unit to home.
Peter 147
CG WILL NEVER DIE
CG will never die.
It will not go ape-sh*t like it has on the eastern seaboard in the past decade but it will stagnate or have limited growth in some areas.
It may even turn backward a fraction. (IMHO $0-30K).
But that is because some REA and/or developer have overvalued it anyway and most investors will automatically see this and leave it alone.
LB, you should not concentrate on one type of IP base. There are many to choose from. I also believe that these high density apartments are hazardous ventures into real estate and if you ever deal with stratas you will find some are not worth the hassles.
My advise is watch the people incharge of this wonderful nation as they are now trying to fix the brakes on something that lost control of a long time ago. Their actions will affect a wider range off people there trying to control. They should look at the past (1985-1987) before they do something silly in the future.
[URL=http://www.smh.com.au/articles/2003/11/14/1068674383315.html]http://www.smh.com.au/articles/2003/11/14/1068674383315.html
Remember to them its about popularity, not common sense.
No matter how many reports they commision and inqueries they have, (BTW its at tax payers expense)
Have a happy apssive income day.
Respect, Peace, Out.
OPM-addict
CG will never die.
It will not go ape-sh*t like it has on the eastern seaboard in the past decade but it will stagnate or have limited growth in some areas.
It may even turn backward a fraction. (IMHO $0-30K).
But that is because some REA and/or developer have overvalued it anyway and most investors will automatically see this and leave it alone.
LB, you should not concentrate on one type of IP base. There are many to choose from. I also believe that these high density apartments are hazardous ventures into real estate and if you ever deal with stratas you will find some are not worth the hassles.
My advise is watch the people incharge of this wonderful nation as they are now trying to fix the brakes on something that lost control of a long time ago. Their actions will affect a wider range off people there trying to control. They should look at the past (1985-1987) before they do something silly in the future.
[URL=http://www.smh.com.au/articles/2003/11/14/1068674383315.html]http://www.smh.com.au/articles/2003/11/14/1068674383315.html
Remember to them its about popularity, not common sense.
No matter how many reports they commision and inqueries they have, (BTW its at tax payers expense)
Have a happy apssive income day.
Respect, Peace, Out.
OPM-addict
Hi all
I can't get my head around an 'average' anything. The variaton in properties, prices, options, etc, just in the area I live, is amazing. how can that be compared with a unit in Sydney, a waterfront on the Central coast, a run down house in the suburbs, a new development in - etc etc.
The average of 1 to 10 is 5.5 Without stating the obvious, there is a large difference between 1 and 10
The average of 1+1+1+1+1 +10+10+10+10+10 is also 5.5
There isn't even a 2, 3, 4, 5, 6, 7, 8, or 9 in the list ???
But on average, I can't see prices plumeting across the board.
Brains. Heres a question. How do you see it going for you. I'm guessing here. Some of the many properties in Sydney dropping in price, due to forced sales, divorce, financial problems, increased rates, bored with IP's for future and not staying for the long term, etc, and then you get involved due to the difference in price compared to the present levels.? If this is about the scene, then what sort of price variation, on the individual properties, would you be looking at/interested in. Just curious.
OPM addict I think the quote the wise person told you, was along the lines of -
Yesterday is History
Tomorrow is a mystery
Today is a gift, that's why it is called "The present."
BTW Love Yoda - May the farce be with you.
jahn
I can't get my head around an 'average' anything. The variaton in properties, prices, options, etc, just in the area I live, is amazing. how can that be compared with a unit in Sydney, a waterfront on the Central coast, a run down house in the suburbs, a new development in - etc etc.
The average of 1 to 10 is 5.5 Without stating the obvious, there is a large difference between 1 and 10
The average of 1+1+1+1+1 +10+10+10+10+10 is also 5.5
There isn't even a 2, 3, 4, 5, 6, 7, 8, or 9 in the list ???
But on average, I can't see prices plumeting across the board.Brains. Heres a question. How do you see it going for you. I'm guessing here. Some of the many properties in Sydney dropping in price, due to forced sales, divorce, financial problems, increased rates, bored with IP's for future and not staying for the long term, etc, and then you get involved due to the difference in price compared to the present levels.? If this is about the scene, then what sort of price variation, on the individual properties, would you be looking at/interested in. Just curious.
OPM addict I think the quote the wise person told you, was along the lines of -
Yesterday is History
Tomorrow is a mystery
Today is a gift, that's why it is called "The present."
BTW Love Yoda -
May the farce be with you.jahn
