Will Australia's next property boom be the greatest boom we've ever seen?
- Thread starter Shadow
- Start date
Back onto Shadow's theory of Sydney outperforming in the near future, looking at these graphs I can see how prices could rise there, particularly if commodities drop off and people and money flow back to Sydney.....
These are median housing costs as a percentage of income, by city. Home owning costs are based on 100% loan for a median house, renting is based on the average 3br house rent. We can probably pick holes in the chosen criteria, but it does provide some indication as to how close we are to peaks in affordability, on a city by city basis.
This chart was provided by Foundation, he has been known to make mistakes on the rare occasion, but he does provide some useful stuff.
Same chart with real dollars instead of percentage of income:
It seems to me Sydney and Melbourne can go higher, Darwin and Perth seem to be reaching their limits, not surprising really. It also shows rents have been dropping in real terms, renters should be able to afford more.
Perth and Darwin are both packing a punch .
Perth is not surprising but wouldn't have thought Darwin. Looking at their angles , the most unrealistic and least sustainable long term of the lot , especially with their localities on top of that.
Cheers
I didn't vote. Just voted now. Strangely enough the number for that one moved to 3!
I can't believe 5 people have already voted for continual stagnation for the next 10 years!
Express Elevator to Hell...Goin' Down
Sorry folks, but the party is well and truly coming to an end. Sub-Prime in the US is just the tip of iceberg that the world economy is in the process of colliding with.
I believe we are heading not for just a recession, but the second Global Depression which will be longer and harder than the first one. Changing Boomer demographics will soon exhaust the supply of investment funds (this prediction from 4 years ago is unfolding now http://www.thegreatbustahead.com/pi_article_feb2004.pdf). Peak-Oil will exhaust the supply of cheap easy energy and the $100 barrel we are seeing is nothing compared to what's coming. Not forgetting the almost 7 billion people infesting the planet, many of whom a striving for 'middle-class' aspirations and will soon exhaust the tiny remaining margins of food, water and everything else.
But it's not all bad news. Well, no, actually it's not all bad news for me. I really would like to thank everyone here for making this wonderful housing bubble happen, I really really do! But I always knew it would end and am really surprised it has lasted as long as it has - greed is such an amazing economic engine. During 2007 we have cashed in all of our boom time investments - our fully paid inner-city PPOR (which made a mind blowing 6-fold increase of what my wife paid in 1993), our 2 GC houses (which each made a nice 30% over the couple of years we had them) and even my rather conservative stock portfolio. By October we walked away with enough to outright purchase our dream home on 23 acres of lush fertile secluded land that is still within commute of the city (which doesn't really apply as I telecommute 3 out of 5 days) . We still have plenty left over and that has been going into taking us off the utilities grid as much as possible and setting up extensive self-sustaining Permaculture on our 10 best acres. The leftover will be going into bullion.
I'm breathing easy for the first time in my adult life - I now have everything I want and feel absolutely zero need to try reach that magic waterfront showboat home that so many of my peers are killing themselves to get to. I'm dept free with a wonderful family and ultra low-cost lifestyle -Just in time to celebrate the big 4-0 this year and then sit back and watch (from a nice safe 150kms) the fun unfold.
As for anyone still in the city and with evaporating equity and believing they will be able to service unsustainable debt in a soon-to-be declining employment market, well sorry but no amount of positive talking or denial from the sprukers here is going to change the fact that you are in for some serious trouble ahead.
Sorry folks, but the party is well and truly coming to an end. Sub-Prime in the US is just the tip of iceberg that the world economy is in the process of colliding with.
I believe we are heading not for just a recession, but the second Global Depression which will be longer and harder than the first one. Changing Boomer demographics will soon exhaust the supply of investment funds (this prediction from 4 years ago is unfolding now http://www.thegreatbustahead.com/pi_article_feb2004.pdf). Peak-Oil will exhaust the supply of cheap easy energy and the $100 barrel we are seeing is nothing compared to what's coming. Not forgetting the almost 7 billion people infesting the planet, many of whom a striving for 'middle-class' aspirations and will soon exhaust the tiny remaining margins of food, water and everything else.
But it's not all bad news. Well, no, actually it's not all bad news for me. I really would like to thank everyone here for making this wonderful housing bubble happen, I really really do! But I always knew it would end and am really surprised it has lasted as long as it has - greed is such an amazing economic engine. During 2007 we have cashed in all of our boom time investments - our fully paid inner-city PPOR (which made a mind blowing 6-fold increase of what my wife paid in 1993), our 2 GC houses (which each made a nice 30% over the couple of years we had them) and even my rather conservative stock portfolio. By October we walked away with enough to outright purchase our dream home on 23 acres of lush fertile secluded land that is still within commute of the city (which doesn't really apply as I telecommute 3 out of 5 days) . We still have plenty left over and that has been going into taking us off the utilities grid as much as possible and setting up extensive self-sustaining Permaculture on our 10 best acres. The leftover will be going into bullion.
I'm breathing easy for the first time in my adult life - I now have everything I want and feel absolutely zero need to try reach that magic waterfront showboat home that so many of my peers are killing themselves to get to. I'm dept free with a wonderful family and ultra low-cost lifestyle -Just in time to celebrate the big 4-0 this year and then sit back and watch (from a nice safe 150kms) the fun unfold.
As for anyone still in the city and with evaporating equity and believing they will be able to service unsustainable debt in a soon-to-be declining employment market, well sorry but no amount of positive talking or denial from the sprukers here is going to change the fact that you are in for some serious trouble ahead.
Seeing as you have had that name (EOTWAWKI = End of the World As We Know It) since 2005 I take it you must have thought it was all over then as well.
How wrong you were.
Don't think you are totally insulated up there in the hinterland EOTWAWKI.
You will be more affected by rising fuel prices with all that mountain driving to get anything, tradies coming up will charge more due to travel etc etc
But hold on !!! what happened to the
http://www.somersoft.com/forums/showthread.php?t=21332
But hey, congratulations on your success anyway.
Dave
How wrong you were.
Don't think you are totally insulated up there in the hinterland EOTWAWKI.
You will be more affected by rising fuel prices with all that mountain driving to get anything, tradies coming up will charge more due to travel etc etc
But hold on !!! what happened to the
http://www.somersoft.com/forums/showthread.php?t=21332
But hey, congratulations on your success anyway.
Dave
Don't forget the guns and other weapons ...
Shadow - loved your little write up on Newport. I loved my IP up here so much I moved into it! I live in poor man's Newport but it still only takes 8 minutes to walk to the beach and I look at the ocean every morning from my dining table over breakfast! All this for sub $1mm. Still can't believe the value.
If this is my "express elevator to hell", I sure am going to enjoy it.
If this is my "express elevator to hell", I sure am going to enjoy it.
Yawn.....goodnight everybody...
Geez eotwawki - you need to stop sculling those heavy beers at this time of the night.. sounds like you had far too many... Sky is falling down, the end is nigh, oil to be $1,000 a barrel, no water, no food and humans breeding like rats to consume whatever is left of our planet..!
I think after you have sold whatever little you had and cashed out, you are hoping that you did the right thing and expecting the rest of the world to go under... Even worst naysayers would cut a bit more slack than what you are hoping to happen.
but then again as Boatboy pointed out with your id, we couldnt have expected anything better from you !
An awful lot of response for someone who has had 5 posts in the last 2 years...
"Home values will also plummet, destroying much of the homeowners’ equity, or all of it for those who buy homes in the years leading up to 2012-13."
Well, here's another prediction:
The ancient Mayan long-count calendar — a calendar that spans more than 5,000 years — comes to an end on Dec. 21, 2012. This coincides with a galactic alignment in which the sun will align with the center of the Milky Way galaxy, an event that occurs once every 26,000 years, which could have potentially catastrophic consequences. The galactic alignment has the potential to create a shift in the Earth's poles, which would cause disastrous environmental events.
So much for your little hide away at Mt Tambo
Until then I'll just relax in my magic waterfront showboat home and crack another beer Cheers,
Bazza
Hey Baz, a little off topic here but I was looking into that Mayan prediction, they were astounding astronomers in which modern dayers still cant believe how accurate they really were,
the calendar ends on that specific date (cant remember exactly when) and there is a Nibiru theory, the catastrophic planet to collide with the earth or abrupt the earths atmosphere causing dire consequences and the end of days here on earth but no one can confirm that theory,
the calendar ends on that date because its the end of the cycle and then will repeat over again, looking up nibiru on Youtube produces some scary results but this is just thory and the end of the Mayan calendar is just a galactic cycle in which there isnt any proof to concluse that the world will end on that date.
the calendar ends on that specific date (cant remember exactly when) and there is a Nibiru theory, the catastrophic planet to collide with the earth or abrupt the earths atmosphere causing dire consequences and the end of days here on earth but no one can confirm that theory,
the calendar ends on that date because its the end of the cycle and then will repeat over again, looking up nibiru on Youtube produces some scary results but this is just thory and the end of the Mayan calendar is just a galactic cycle in which there isnt any proof to concluse that the world will end on that date.
Oh, and to the "Im so glad I sold my assets and am now using them all up" guy,
with huge population increases and rising wages, why wouldnt property be a good investment in the long term? have you looked into the expected growth rate for Australian capital's into the future? where will they all live? wouldnt that create a rising residential market? inner city living will always be in demand from renters, owners and investors alike because theres a limited supply,
We have quite a strong economy here in Australia.
Mike Yardney is one name thats pops up for me here, his theory on the future of property here in Australia is based on past trends and future prediction, sure there will be some hiccups along the way but hasnt there always been? there has always been people saying that property is not a good, safe investment, those people have also always been shown wrong and been left out in the cold because they were too scared to get into the market, not my problem..
who knows, in 10 years time you might just find yourself with no savings, working a day job until retirement age and saying to yourself... maybe I was wrong.. it could happen you know
In the mean time, Ill be building my portfolio into a nice little nest egg.
with huge population increases and rising wages, why wouldnt property be a good investment in the long term? have you looked into the expected growth rate for Australian capital's into the future? where will they all live? wouldnt that create a rising residential market? inner city living will always be in demand from renters, owners and investors alike because theres a limited supply,
We have quite a strong economy here in Australia.
Mike Yardney is one name thats pops up for me here, his theory on the future of property here in Australia is based on past trends and future prediction, sure there will be some hiccups along the way but hasnt there always been? there has always been people saying that property is not a good, safe investment, those people have also always been shown wrong and been left out in the cold because they were too scared to get into the market, not my problem..
who knows, in 10 years time you might just find yourself with no savings, working a day job until retirement age and saying to yourself... maybe I was wrong.. it could happen you know
In the mean time, Ill be building my portfolio into a nice little nest egg.
Hi all,
Theres always someone who will say property is too expensive, whether its today, 30 years ago or 30 years into the future...someone will knock property as an investment class, but it has continued to perform over the decades....through all the global economical ups and downs.
My Grandparents paid 1500 pounds for a house high on a hill looking over moreton bay in Wynnum 50 years ago....they said that was expensive.....the land alone today is probably worth 900k!
Friends of my parents built a new home in Wynnum West in brisbanes 35 years ago for $12,000....they said that was expensive.
My wifes parents bought a home for $36,000 in Mulgrave 29 years ago.....they both had to work to service the loan...thier parents said they were crazy going into debt that high.
Think about the number of times you have heard someone say "we should have bought the house/block of land next door aswell x number of years ago", will they look back again in 10 years time and say the same thing about the prices of today....probably (based on what has happened in the past)
It must be human nature to have a very short focus frame of reference (just made that up, not sure if it makes sense....but i will roll with it), and to have a reluctance to accept that the prices of today will be miniscule compared to prices in the future....or that prices in 5-10 years will be 50-100% higher than today
imagine you jumped in a time machine and went back and told my granfather on the day that he bought his house ($3,000) that the land alone would be worth 300 times more than what he paid for it (in nominal terms) in 50 years time....he would tell you in his Latvian accented english "you crazy!" but that is exactly what "has" happened.
People "need" homes, population increases, demand increases, prices increase....
i know i will one day say to my grandkids 50 years from now (hopefully)...ah i remember when we built our first house for $350k...they will gasp in amazement, because they could be paying $11,000,000 for thiers....
Sounds ludicrous doesnt it its happened before, why wont it happen again?
Ramble done
Cheers,
Theres always someone who will say property is too expensive, whether its today, 30 years ago or 30 years into the future...someone will knock property as an investment class, but it has continued to perform over the decades....through all the global economical ups and downs.
My Grandparents paid 1500 pounds for a house high on a hill looking over moreton bay in Wynnum 50 years ago....they said that was expensive.....the land alone today is probably worth 900k!
Friends of my parents built a new home in Wynnum West in brisbanes 35 years ago for $12,000....they said that was expensive.
My wifes parents bought a home for $36,000 in Mulgrave 29 years ago.....they both had to work to service the loan...thier parents said they were crazy going into debt that high.
Think about the number of times you have heard someone say "we should have bought the house/block of land next door aswell x number of years ago", will they look back again in 10 years time and say the same thing about the prices of today....probably (based on what has happened in the past)
It must be human nature to have a very short focus frame of reference (just made that up, not sure if it makes sense....but i will roll with it
), and to have a reluctance to accept that the prices of today will be miniscule compared to prices in the future....or that prices in 5-10 years will be 50-100% higher than todayimagine you jumped in a time machine and went back and told my granfather on the day that he bought his house ($3,000) that the land alone would be worth 300 times more than what he paid for it (in nominal terms) in 50 years time....he would tell you in his Latvian accented english "you crazy!" but that is exactly what "has" happened.
People "need" homes, population increases, demand increases, prices increase....
i know i will one day say to my grandkids 50 years from now (hopefully)...ah i remember when we built our first house for $350k...they will gasp in amazement, because they could be paying $11,000,000 for thiers....
Sounds ludicrous doesnt it
its happened before, why wont it happen again?Ramble done
Cheers,
While I believe that property goes up over the long term, keep in mind that it CAN fall for years. Those are the times when people lose heart, sell, or are forced to because they bought at stupid yields and can't pay their mortgages. While the stupid prices of yesterday seem like bargains today, you still have to survive through the intervening years first.
Extreme bearishnesses isn't going to make you rich. Extreme bullishness will cause you to take stupid risks. A bit of caution is good, especially in times like these.
Alex
Extreme bearishnesses isn't going to make you rich. Extreme bullishness will cause you to take stupid risks. A bit of caution is good, especially in times like these.
Alex
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Dear Alex,
1. Very well-said indeed.
2. I agree with Alex that "property goes up over the long term... that it CAN fall for years.". This has been the real life experience seen in a number of Asian countries like Japan, Singapore, Malaysia and Hong Kong whose present housing price has yet to recover to its previous market peak after 10 or more years already.
3. I further suspect that we are presently, also witnessing the real time un-winding of the similar housing slumps presently that are happening in the USA, UK, Spanish housing markets etc as well as in the other OECD countries, at this point in time.
4. I have previously asked in this forum on a few occasions why the same thing cannot happen in Australia in the near future, or/and why is the Australian housing markets are so fundamentally different from the other housing markets in other countries which have suffered or are presently in the process of entering into their prolonged housing slump periods.
5. To date, I have yet to receive some "convincing" arguments from the local long term investors in Australian who are advocating the "Buy-Hold and Never Sell" investing strategies why this similar prolonged housing slump would never/not happened in Australia in the near future.
6. For your further comments and discussion, please.
7. Thank you.
Cheers,
Kenneth KOH
I’m pretty sure Hong Kong has recovered since 97. Japan is an extreme case, and reflects both a bigger bubble and government intervention which prolonged the bust.
There is, of course, a matter of degree.
Just because you and I agree that there will be a bust doesn’t mean we agree on the duration, Kenneth. I’m not selling anything that I own. In fact, I’m going to buy more, and I’m going to start soon. Do I see the possibility of a 10 year bust in Australia? I’m not discounting the possibility, but I think it’s slim. Do I have the academic studies etc that you usually ask for? No. It’s a gut feel only.
Alex
*********************
Dear Alex,
1. As you would have probably known, I'm already bought into the Sydney Property market, at this point in time.
2. Despite the global financial crises, I continue to believe by faith, that Australia will remain "lucky" as a "God-Fearing" Nation by God's Grace.
3. At the human level, beside being on a constant look out for any new policies to be introduced by the ALP Federal Govt and the RBA's recent market intervention, I also presently monitoring the Australian Economy, its continued immigration growth patterns/trends and its various housing markets supply and demand situation more closely than before.
Cheers,
Kenneth KOH
