what is happening in the 2nd half of the year

[aul]

Okay,
A lot of articles I read where they interview so called experts or agents or analysts say that these people believe first 6 months of the year will be flat or slightly -ve and after that, in the 2nd half of 2011 the market will be back in full swing.
I don't understand their reasoning. What is going to happen in the next quarter to change people's attitudes.

Inflation is expected to be higher
Interest rates are expected to be higher
Cost of living is expected to be higher (flood levy, carbon tax would officially be announced as yay or nay, electricity costs to soar)

In NSW, its a given that the Libs will get in so people have already taken that into account, if it makes any difference for them.

I hear them going on about how the "fundamentals" will still be strong.
Are they talking about supply shortage? Is that the only "fundamental" they are arguing their case.

I do not want to make this a bear vs bull thread as there are enough of those.

To me it just seems like spruiking -get in now before they go up again in the 2nd half of the year.



PS: In comparison to above, received a brochure in the mail today from an RE agent saying that "now is the best time in 10 years to sell your house" as prices are at their highest.

 

[dan c]

I can't see how it will be back in full swing in the second half of the year. I expect it to be flat, especially if rates rise as expected.

There was an article in the Weekend AFR a few weeks ago about the large amount of stock on the market, in all capital cities. Until stock is reduced, creasting more demand, I can't see large gains in the short term.

 

[dan c]

PS: In comparison to above, received a brochure in the mail today from an RE agent saying that "now is the best time in 10 years to sell your house" as prices are at their highest.

This made me giggle. That same agency would be telling prospective buyers what a great time it is to buy.

 

[tom32]

I do not want to make this a bear vs bull thread as there are enough of those.

A prediction on the future, but not tainted by an individuals sentiment?

OK

I think it is best to take each day as it comes when it comes to actually pushing the button on buying. Sure plan to buy but in my local area I would not buy as it stands right now.

While the stock on market in my area remains as it is now I think the only compelling reason to buy is if you are buying well below the advertised prices of other places. Few are selling now and stock levels continue to grow so the pressure on prices is slowly negative.

If stock on market changes before the second half then so to would my outlook.

It might change especially if the government moves in with another grant of some sort but why not wait till such change happens. While there is this much stock on market the turnaround will not happen quicker than you can buy a home.

I would keep your options open for sure. Make your decision when the time comes and when doing so weigh up how many houses are on the market and this gives you a good idea at that time as to which direction prices will be travelling in the short term.

Sure it does not give you much idea long term but why buy at a time when their is no pressure on prices. Better to buy when at least you know what the short term outlook is. The only caveat is if you pick up a house you think contains a discount that validates some months of negative movement anyway, a keen and motivated seller who has to sell now.

Of course stock on market will change for different areas within cities and between states so this is not necessarily the case for all areas, just do your research on the area you are looking to buy into and don't buy till stock levels are at a level which supports house price growth.

Edit: Sorry read Dan C above. I should have just said I agree.

 

[Aaron Sice]

A prediction on the future, but not tainted by an individuals sentiment?

whoa! ease up - can't use the "s" word around here, it's not measurable or indexed to include in stats so it has no effect on prices whatsoever.

 

[aul]

hi all by the way, I just wanted to say I am not really asking YOU "what is happening in the 2nd half of the year",

I am more-so trying to ask "what is happening in the 2nd half of the year" that has got agents/analysts etc talking things up from Q3 2011.
I mean, why not 2012, or 2013.
Are they just speculating? spruiking? do they know something we don't? is it wishful thinking?

I will give you some examples:

http://www.skynews.com.au/finance/article.aspx?id=553105&vId=

http://www.couriermail.com.au/prope...d-until-mid-2011/story-e6frequ6-1225979559196

http://www.waproperty.net/news-details.php?id=49

There are more articles but they pretty much repeat sentiments from the same 3 sources - BIS Shrapnel, Commsec and APM.

 

[NedKelly]

There are more articles but they pretty much repeat sentiments from the same 3 sources - BIS Shrapnel, Commsec and APM.

I don't think I have ever read a report from BIS Shrapnel that didn't say prices would rise.

Have a look at what has happened in the US. They have had prices drop 80% in Las Vegas and Florida. I know everyone says it's different here but I am not so sure. The UK is now a property basket case, so is Spain and Portugal. Japan still has not recovered from it's property slump and just look at Ireland.

Why should Australia be any different? I can see no reason for property to increase unless the banks ramp up their lending lend otherwise where are the buyers going to come from?

 

[Ed Barton]

I can't see how it will be back in full swing in the second half of the year. I expect it to be flat, especially if rates rise as expected.

There was an article in the Weekend AFR a few weeks ago about the large amount of stock on the market, in all capital cities. Until stock is reduced, creasting more demand, I can't see large gains in the short term.

and a fair chunk of people withdrawing their properties from sale. this will create a pent up supply that will take a while to clear if demand remains constant.

 

[Beebop]

I don't think I have ever read a report from BIS Shrapnel that didn't say prices would rise.

Have a look at what has happened in the US. They have had prices drop 80% in Las Vegas and Florida. I know everyone says it's different here but I am not so sure. The UK is now a property basket case, so is Spain and Portugal. Japan still has not recovered from it's property slump and just look at Ireland.

Why should Australia be any different? I can see no reason for property to increase unless the banks ramp up their lending lend otherwise where are the buyers going to come from?

Australia WAS very different, but this is being eroded by inflation. If things keep going as they are there WILL be a similar recession in this country.

 

[aul]

from the look of replies and non-replies, It doesn't seem like there is anything to push the case for mid-end 2011 to be the turning point.
Makes me wonder why these 3 (and I am sure other) vested groups are pushing this line?
Scare mongering?

 

[VYBerlinaV8]

Australia WAS very different, but this is being eroded by inflation. If things keep going as they are there WILL be a similar recession in this country.

Inflation is certainly coming, but I'm not sure it will be very bad, at least not to start with. It's been several years now since the start of the GFC, and the longer we just chug along at average or below economic growth, the safer we'll be. House prices are now stagnating nicely, and I predict (hope?) this will continue for a while.

Of course, it could turn nasty and then we'll all have to seek shelter one way or another.

 

[Graemsay]

I reckon it can go one of two ways.

The good news is that Western economies are pulling out of the GFC at varying rates. The US seems to be doing well, whilst the UK is struggling, Germany is storming along, but Ireland is a basket case.

So the pessimistic case would be slow growth as business gets back to normal.

The bad news is that the unrest in the Arab world is feeding into much higher oil prices. I've heard $120 per barrel as being the point at which a recession is expected, and they're close to that now.

The other leading indicator of a recession is falling house prices. They're heading down in the US and UK again, and it sounds like sentiment has taken a turn for the worse in Australia.

The thing is that I don't think anyone can predict what's going to happen next. But my default position these days is "I don't know".

 

[Aaron Sice]

Makes me wonder why these 3 (and I am sure other) vested groups are pushing this line?

1) CBA is pushing CDOs against Aussie Mortgages overseas - they NEED to purport anything that will indicate prices are rising.

2) BIS are blind bulls. they will always find some snippet of information that points to the supply/demand being in favour of the positive - regardless of the macro picture.

3) isn't APM linked with Matusik?

 

[Aaron Sice]

The US seems to be doing well

...."officially"....

 

[Corey Batt]

Don't worry Aaron, the 'Fundamentals are sound!'

 

[mrmonopoly]

3) isn't APM linked with Matusik?

Not sure about Matusik but they are owned by Fairfax.

 

[Graemsay]

If oil is going to be as critical as I think, then this post from the FT is worth a look. Goldman reckon that Saudi has already pumped up its production levels, and doesn't have as much spare capacity as claimed.