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Australian Housing Crash


Jimmy123

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This chart from goldman sachs pretty much sums up the last few years for me from an investment perspective.

 

Some serious crashes have been suffered and some serious gains have been made in various housing markets around the world but here in Oz where my focus has been...I've endured a real mamahuhu market, no great pain inflicted but no material gain made either. Sort of makes me question why I've bothered really... :(

 

http://twitter.com/pkedrosky/status/266651...6920576/photo/1

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I've endured a real mamahuhu market, no great pain inflicted but no material gain made either

 

 

Did you realistically expect anything else as the outcome?

 

Even in the West the great divide between those able to afford mortgages and high rents and those who are totally excluded from decent housing widens, which is understandable since real wages for the average employee hardly increase, whilst the cost of living soars what ever any government tell us.

 

Only two things can happen in the end: Either ordinary wages jump at the same time the cost of living eases, OR housing falls in price until the average house becomes affordable to the average wage earner.

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Dave,

Firstly welcome back.

How did you guess my previous post was about you?

I mentioned how I had missed your posts and how optimistic and reassuring they'd been....normally if i were down, I always looked for your posts as a boost.

 

You asked about industrial property in our neighbourhood? Will I be able to start my build there?

I see you've changed your Avatar....does that mean you'll be more bullish and optimistic than normal ?

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Bullish yes,

 

Looking at everything. Corner house close by so I can put an 8 car garrage on it that looks like a unit. Convert it to a house and flog them both off after I'm too old to care or the wife forces me to live in it. :)

 

Never enough space. House prices doing nothing. All good.

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  • 6 months later...

This thread has been in hiatus for some time. It seems to me that in the last couple of years the status quo has not been threatened either way: there has been no crash but nor have the imbalances in our housing markets been righted. Same old same old as the yanks like to say, our main housing markets remain overpriced using standard metrics, households remain over-borrowed, and as a nation we rely too much on capital gains from our homes for our retirement wealth.

 

Here is a recent update on how we are travelling compared to other OECD economies. Not so good, but not as bad as our Kiwi cousins it seems, and nothing that appears to scream of an impending crash.

 

http://www.oecd.org/eco/outlook/focusonhouseprices.htm

 

But for me it is a bit of a worry that Glenn Stevens and the RBA appear to be relying on the housing sector to fill the gap when the resources investment boom comes to an end. Talk about going into a match with your key playmaker carrying an injury.

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  • 1 year later...

This clip from a post from arty on "the top of this cycle--cash is king thread".....what bets about another GFC type Australian housing crash being inevitable (given US and our interest rates seem more likely to rise not fall), remembering that weekend figures showed 65% of current mortgage holders today show signs of debt stress?

-----------------------------------------------------------------------

 

http://www.abc.net.au/news/2014-06-29/bis-...-crisis/5558292

 

----------------------------------------------------------------------

Clip:

 

""Also shoring up high debt and property prices in Australia have been the Reserve Bank's interest rate cuts, which took the official rate from 4.75 to 2.5 per cent in the space of less than two years between November 2011 and August 2013.

 

This fall in interest rates has seen the average national capital house price rise 15 per cent since its post-GFC trough at the end of 2011.

 

This in turn has seen the Reserve Bank's measure of household debt to income remain locked around 150 per cent - roughly the same as it was before the financial crisis hit.""

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  • 1 year later...

Sydney house prices have reached the third phase in the bubble.

Even Bloombergs are commenting on it. Get ready for the big fall!!

 

Sydney home prices soared 44 percent in the three years ended September, enticing speculators whoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ve been partly inspired by home renovation shows on how to spruce up and sell homes for quick profits. The frenzy surrounding SydneyÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s property boom, reminiscent of the exuberance in U.S. real estate before the 2008 financial crisis, has prompted regulators and Goldman Sachs Group Inc. to warn the market is overheated, while Bank of America Merrill Lynch and fund-manager AMP Capital expect prices to fall.

Since September 2013, more than 1,500 houses and 800 apartments have been resold in less than a year in Sydney, for about 20 percent more on average, according to online property listing firm Domain Group. That compares with about about 530 houses and almost 400 apartments in the previous two years.

bloombergs house frenzy

Mick

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Yeah Mick but this bubble has remained unpopped for so long now that anyone who has not been sitting at the betting table holding a property or two to gamble with has lost out. And I suspect that the authorities have so wilfully allowed and even encouraged real estate to become such a monster that they will face the moral hazard that they cannot stand by if the market looks to correct itself. Even they are disinclined to intervene so many people have their life savings at risk in real estate that the authorities will have no choice but to bail out real estate holders.

 

The only way I see prices and debt levels getting back to respectable proportions is for the authorities to totally lose control of the situation, and that is pretty much the Armageddon scenario imo (no one should hope for that to happen).

 

The Four Corners show last night was all about how the Chinese are pouring billions into Aussie real estate. Reminds me a bit of the how the Japanese bought up everything on the Gold Coast when they were going gangbusters. Maybe the Chinese withdrawing from our markets might be the trigger for a major resetting (???) but honestly mate I've been wrong about this for so many years now I really am over it.

 

 

 

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