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Australian Housing Crash


Jimmy123

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In reply to: watchmaker on Sunday 15/06/08 09:27pm

Some good points their watchmaker.

 

Is the shortage really as bad as talked about?

 

I know an investor who has bought about 15 units since 2003. I don't know for sure, but if he works out that he is not going to get the capital gains over the next few years I am pretty sure he would sell of a few of these units.

 

I am sure there must be plenty of high rollers out there with multiple properties??? They have never really needed to worry about rental yields because they have always been getting over 10%+ capital growth every year. The chances of there been any capital growth over the next few years would be under 5% I would have thought. Surely this will make the multi-dwelling holders focus more on the poor rental yields and sell out some of their exposure???? If this is the case this would also go a long way towards solving the supply problems over the short term.

 

Don't get me wrong I think prices will be a lot higher by 2020-2030, however at some stage before then there just has to be a massive pullback/crash/correction, and for mine everything is starting to line up.

 

If now is the time, unemployement will have to get a lot higher, so I will be watching those figures very closely over coming months. Also think commods will prob need to come off to get the full blown housing crash/correction, but maybe their will be enough other negatives to do the job.

 

The great man Warren doesn't get many economic forecasts wrong, and I think just reading one paragraph of his views is enough to make you realise most of the risks talked about in this thread are genuine.

 

 

 

I think their is a lot of dis-information out their regarding housing prices. A lot of media and general public have a bias towards housing prices continuing to rise and I just wonder if some of the negative forecasts are not getting the air-time.

 

 

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QUOTE (flower @ Sunday 15/06/08 01:38pm)

Hey there Flower. I am also in WA near Perth. We are already seeing the price of petrol affecting real estate here.

 

The past few years, country property 30-45 minutes from the CBD had absolutely skyrocketed. You used to be able to get an average house on a 5 acre block for about $500,000. Late last year they went as high as $2million and were selling as fast as they hit the market. This year the market for these properties has completely died. Houses sitting for 5-6-8months, for sale signs everywhere. A friend of mine has dropped her price $300,000 already, and I reckon she'll have to go another $300k in order to get it sold.

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Last year there was quite a bit of rezoning of these near-country properties, and developers were buying up whole neighborhoods. Many people borrowed on their equity to purchase a new country property a bit further out (1 hour from town), but held out on the sale of their current residence, hoping to get the highest price from the developers. Then the interest rate rises hit, petrol went thru the roof, and the new developement came to a screeching halt in these areas. Project have been postponed 18 months -5 years, and the developers stopped buying. So now the homeowner who thought he was clever is stuck with two mortgages, and no buyers in site.

 

On the other hand, properties near the train line to Perth are holding their value reasonably well. Yes, they are taking longer to sell, and have dropped off somewhat; but the semi-country properties are the hardest hit.

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Hey, great posts, I totally agree we are on the verge of a dramatic shift in the way we live in and around cities. We had rose coloured glasses on 20 years ago and nearly built on acreage, it would have meant 50,000km per year commuting just to and from work.

 

Sure acreage offers wonderful peaceful lifestyle with space enough to build your dreams away from noise and people. but today it comes at a growing cost, unfortunately. I still agree acreage living is the way to go if you have the money to commute..

 

Most of us dont have the spare cash to pump into fuel anymore..

 

Heres my logic that was used when we decided where to live in Brisbane...

 

Is it near the CBD.

 

Is it near public transport., shops, etc.

 

Is it near the bay for cooling fresh-air breezes.

 

Is it east of freeways so we wont be gridlocked with traffic.

 

Is it close to a freeway if we need to use it.

 

Is it easilly accessable to the hairport.

 

When we retire can we live without a car and still get around.

 

Will our property keep growing in value as the city develops and can never be built out or a tunnel be built underneath or a telecom tower nearby.

 

Will we be able to put granny flats in for our kids. then retire in them ourselves and pass our house onto our kids.

 

Will we have enough space for vegies, chooks, etc.

 

The answers are all yes.

 

Have lived extremely happily in our old queenslander..slowly renovating as money permits..growing vegies, chooks, palms, herbs...and kids..

 

Hope this helps you..

 

Happy trading.

 

 

 

 

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In reply to: fatty on Monday 16/06/08 08:54am

1 thing you forgot to mention about Brisbane...you need to leave home 1 - 1 1/2 hours earlier than you needed to 10 years ago...the traffic is really bad...the houses are losing there back yards..the suburbs are getting over crowed which is resulting in more crime, everyone is losing green space and there piece of mind...sad for brisbane, for it was once a great place to live..http://www.sharescene.com/html/emoticons/sad.gif brisane is over populated now

 

 

later

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QUOTE
House prices to soar
June 16, 2008 - 11:05AM

House prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates, an economic forecaster says.

The BIS Shrapnel Residential Property Prospects, 2008 to 2011 report also says that banks may offer more attractive lending rates in 2009.

The report said residential property markets would experience marginal price increases in 2008/09 as the population was expected to grow by 1.5 per cent, its highest level since the late 1980s.

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In reply to: Optionsman on Monday 16/06/08 11:40am

Over the longer term I agree with the basis of the BIS Shrapnel Residential Property report.

 

Ie the shortage will mean massive demand will drive prices much higher.

 

However I think the real risk period which could trigger a big sell-off is the next 6-12 months. Even the report admitted there will be little growth whilst economic conditions are as they are now.

 

If we get through this period, and inflation drops of, interest rates lower etc etc, I also agree prices will shoot up, it just depends how long till these economic conditions change.

 

 

 

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In reply to: Optionsman on Monday 16/06/08 11:10am

Be careful who you read info from. What are anz in the business of doing????? Selling mortgages. Of course they aren't going to print negetive news on the housing dilema.

 

There are two ways for this housing to sort itself out:

 

1: The crash we are expecting (I've been waiting for what feels like a life time)

 

2: Inflation continues to ramp up pushing up wages and lowering the gap between salary to house price ratios.

 

I'm not sure why people have such a strong opinion on how fantastic real estate is. Its a high risk, time consuming, low return investment over time. Its so true that no one under 40 has experienced negetive property value growth.

 

As for the shortage, who are they kidding????? Seriously our immigration levels are minimal, and Mr 07 reckons hes going to raise immigration for workers, blah, the unions will slow that idea right down especially with so many job loses occuring.

 

Make no mistake our Australian economy is not bullet proof. Housing is only ever worth what some one (or financed idiot) will pay for it. Individual funds in Australia are fast drying up, everyone knows someone whose "downsizing". Its a nice word for in serious financial trouble. I've got friends who lost the house only 2 weeks ago.

 

Housing is a market, and markets are only fuelled by confidence.

 

I used to think that our housing would gracefully retract, but the last 12 months have seen the speculation and now a pullback.......Is it gonna pop???????? I myself think it will.

 

I have friends who tried to sell their house early last year, they wanted 250k, one open day and some 24 yr old offered 330k!...Oh yes they sold there and then.....They have also sold their other two houses, no they haven't bought any more.

 

I had a friend sell their house only 2 months ago. Units over the road sold for $380k 2 years ago, but they could only get $350 for a 4yr old house with yard and double garage.

 

There is no doubt it has peaked short term. Will it hold???? I can't see it happening.

 

It will be dominos I believe. I know of a fellow with over 130 homes, not bad for a fellow who had very little before finding out how to pull the equity and buy another house, then do the same......It only takes a couple bad months after raising rates and the bank will be knocking on the door.....nasty.

 

The smart money is out of real estate. Sure some developers are holding on to land and properties, but it is prime land....Kinda like a blue chip, sure its value may drop, but its a great investment over time.

 

Mum and Dad houses in the 'burbs are well over valued and I just can't see the number of fools out there to continue putting up these crazy prices.

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