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Australian Housing Crash, Has the bubble burst?
early birds
post Posted: Apr 30 2019, 01:36 PM
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In Reply To: triage's post @ Apr 30 2019, 12:45 PM

From memory the construction sector employs about 9% of Australian workers s
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yeah triage. you are right about that, and also Mick is right about infrastructure will try to hold sliding down housing market for aussie economy.

here is the thing i try to point out.
if our property market really have a nasty down turn like what Mag siad{ i really agree with him/her],, then it will spreading to other sectors likes of retailers eg...
also, Chinese Govt. is trying really hard to contain the money flow to other countries-----THEY TRY TO PLUG ALL THE LOO POLES AS THEY CAN. so there will be far less money from China to our housing market form now on.
a couple have salary about 130k/a owns 7 properties { all leveraged} dream of getting rich ---------not sure how they gonna deal with current situation . if they don't sell most of them now to take loss then banks will force them to do if housing market keeps down term at current pace. that will spill the disaster

a lot of Chinese still believe "getting rich by buying properties} i guess soon they will learn the lesson for their life ----IN A HARD WAY.


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mullokintyre
post Posted: Apr 30 2019, 12:59 PM
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In Reply To: triage's post @ Apr 30 2019, 12:45 PM

There are plenty of construction workers employed in areas other than housing.

One of my sons was telling me that he is inundated with engineering work because so many tradies are only taking short term jobs cos they all want to get on the Tunnel Project in Melbourne.
Its a union dominated site where the money is good, the hours are good (especially if the union says down tools because its too hot, too cold or too wet) and its going to last a long time.

Mick



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triage
post Posted: Apr 30 2019, 12:45 PM
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In Reply To: early birds's post @ Apr 30 2019, 12:23 PM

This is not a river in Eygpt ... I read some analyst saying that a contracting housing market will not impact employment in the sector because Australia has a long term shortage of construction workers. But if a quarter of new home buyers are not going ahead with building surely that means that the demand of work building new homes will be cut by about the same proportion. I suppose not all alotment sales were going to new home buyers as apparently amongst the uber crowd people were leveraging up to the max to sit on numerous blocks in the expectation that prices would keep spiralling upwards.

From memory the construction sector employs about 9% of Australian workers so ...
(great link eb, thanks muchly).




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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

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Mags
post Posted: Apr 30 2019, 12:38 PM
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In Reply To: early birds's post @ Apr 30 2019, 12:23 PM

But there's a hidden ugliness not addressed in that article.
The two previous lot default peaks occurred under rising interest rate conditions: The first in 2008/09 preGFC when our mining boom was humming, and the second time in 2012 when interest rates were trying to revert to 'normal'... Since then rates have only fallen or remained steady.
We have falling house prices (fasted on record) yet:No interest rate rises.Stable/low unemploymentGood terms of trade
....yet the housing market is falling apart.
Why? Easy, the credit growth, it's the weakest on record. Check our currency supply, it stopped growing in 2017... Right when the housing boom peaked... Co-incident?? Of course not. It's also when the slide in the dollar got it's grove on.. Co-incident? Of course not.
In 2017 the australian view of property shifted seismically. The 'need' to take out monster debts to pay for home become a bad idea for the masses. Once the Chinese money stopped flowing, the whole market tanked. And it's not going to turn around anytime soon.
That housing is tanking so hard, without any negetive news to trigger it, is the telling sign. This is the 'new' normal. People are not expecting to make 10% per year on their properties anymore.
The real 'crash' is going to occur when our interest rate rises. I know the MSM are talking rate cuts, maybe 1 or 2, but our dollar is going to get punished, meaning we will be importing inflation. If they try QE, our dollar is going to get punished.
The only tool they have to prop our dollar is raising rates.... At some stage this is going to NEED to occur.
Wait for the MSM to start talking of our falling dollar, which will then move to talk that the RBA held the rates too low, for too long, which the public will buy/believe.
There's hell to be unleashed at some point: But I've been sprouting that for years now........



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early birds
post Posted: Apr 30 2019, 12:23 PM
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In Reply To: early birds's post @ Mar 8 2019, 08:58 AM

Walking away: Greenfield lot defaults hit 27 per cent in Melbourne

One in four new home buyers in Sydney and Melbourne is defaulting on their housing lot purchases due mainly to financing and valuation shortfalls, forcing developers to resell these lots in a market where monthly sales rates have hit seven-year lows, new figures show.
Victoria, the country's biggest greenfield land market, is at the epicentre of the surge in defaults, with its cancellation rate hitting 27 per cent in the first quarter of the year, up from a 12 per cent default rate in the December 2018 quarter and just a 2 per cent fallover rate a year prior, according to land consultancy Research4.

Alongside the surge in defaults, Research4 figures show that Melbourne lot sales tumbled to just 539 a month in the first quarter of the year, down from 2200 at the peak of the market in mid-2017.
Research4 director Colin Keane said a cancellation rate above 15 per cent was a "strong red flag" regarding the mindset of "home builders and households".

"The spike is being driven by the fact that people are not prepared to wait the average 15 months from contract signing to settlement, that contracts signed in mid-2018 are all overvalued by $35,000 to $45,000 and that it's hard getting a loan approved at an agreed value and on time," Mr Keane said.

He said some Melbourne buyers were walking away and forfeiting their deposits on lots purchased between March 2018 and March 2019 because they were better off resigning at a lower price supported by the current high-valued incentives that have swept through the market.

In NSW, the default rate more than doubled to 26 per cent in the March quarter, while in South East Queensland almost one in five lots sales are being cancelled with both markets experiencing much lower sales volumes.

The Research4 figures follow February warnings by developer Nigel Satterley that the Melbourne lot default rate was 20-25 per cent "at a minimum" and forecast a rapid fall in prices that is now occurring.

Mr Satterley, a Rich Lister whose Satterley Property Group accounts for about one in 10 lot sales in Melbourne, said speculators, including his Melbourne Uber taxi drivers who were pooling credit cards to buy lots, had fuelled the rampant price growth and surge in lot sales that occurred in 2017 and early 2018.

"We believe that over the next 30 months 5000 growth-area lots (about 165 lots a month) will return to the market, either by defaults or speculators having to resell their blocks immediately," Mr Satterley said in December.

The Research4 figures – based solely on cancelled lots being re-advertised by the respective project – show 201 Melbourne lots were cancelled per month in the first three months of the year, up from 127 per month in the December quarter.

Had Research4 included more than 1000 Melbourne lots listed privately on the Gumtree Index for nomination sale, the default rate would have been even higher.

"This scenario is Melbourne-centric and will play out right through this year and into 2021," he said.

Amid the weakening land market, incentives and resales have become two big features of the changing landscape.

In March, The Australian Financial Review reported Research4 figures showing the average incentive being offered in Melbourne was $12,800 with some as high as $45,000.

Some, like major developer Frasers, have invited buyers to negotiate prices on unsold projects, while in December Stockland, the country's biggest land developer, sold its prized The Grove Estate in Tarneit to Frasers for $202 million amid pressure to reduce its exposure to the Melbourne market.

Project marketer RPM Real Estate Group reported in February that more than a third of all Melbourne housing lots advertised online were resales by buyers who can't get financing or speculators trying to flip sites prior to settlement.

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looks really bleeding, but we still haven't see housing price crash down yet. when it dose it will be really ugly i guess.


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blacksheep
post Posted: Mar 12 2019, 01:53 PM
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How To Capitalize On Australia's Big Housing Bubble
QUOTE
Our Financials & Housing analyst Josh Steiner fielded a pair of subscriber questions on a recent episode of The Macro Show on how best to take advantage of the Australian housing bubble.

“It’s pretty obvious the Australian dollar is a short,” Steiner explains.

“Ultimately, Australia is going to have to print a lot of money in order to get out from under this problem that is coming down the pike.”

In addition, he adds that there will soon be a “generational opportunity” to buy a very affordable home in a favorable area of Australia as a result.

https://app.hedgeye.com/insights/73774-how-...bble?type=macro



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

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early birds
post Posted: Mar 8 2019, 08:58 AM
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Chinese Buyers Helped Boost Australian Home Prices. Now They're Leaving

https://www.bloomberg.com/asia

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vary good news to my ears. i heard a lot of them can't settle their "off plan" ...hope housing price drop another 20% ---that will sent a lot of them packing. cool.gif



 
triage
post Posted: Feb 13 2019, 10:35 AM
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In Reply To: early birds's post @ Feb 13 2019, 08:12 AM

No EB, you're the little bird of happiness. biggrin.gif I think you are on the money.





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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

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early birds
post Posted: Feb 13 2019, 08:12 AM
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Australian Bureau of Statistics yesterday show that in seasonally adjusted terms lending dropped 4.4% between November and December to $32 billion, the lowest level in three years.

This is driven by a 6.4% drop in mortgages for owner occupiers and a 4.6% drop in lending for investment properties, continuing the weaker trend we have seen for most of the past year.

In the year to December, lending fell 19.8% with lending for owner-occupied homes down 16.2% and 27.8% for lending to investors. Loans for first home buyers were down 12.6% compared to December 2017.

The ABS said this fall was smaller than the 15.5% fall in loans to owner-occupier non-first home buyers.

The RBA is well aware of this weakness in dwelling investment (and falling approvals, down 22% seasonally adjusted in the 12 months to December, thanks to a 38% drop in approvals of apartments and home units and an 11% plus drop in new private dwellings.

In the first Statement on Monetary Policy last Friday the Reserve Bank identified weak dwelling investment as a key weakness for the economy:

“Very weak conditions in the earlier stages of residential development identified in business liaison point to further downside risk to dwelling investment in 2020 and beyond.” In fact, the RBA sees dwelling investment falling 10% or thereabouts over the next two to three years,” The RBA said.

“The slowdown in lending for investor dwellings this month continues the steady decline over the past two years, with the value of new investor loan commitments down around 40 percent from the peak at the start of 2017,” ABS chief economist Bruce Hockman said in a press release yesterday.

“The slowdown in lending for owner occupier dwellings is more recent, with falls concentrated in the last half of 2018.”

“In seasonally adjusted terms, the value of lending for owner occupier dwellings excluding refinancing fell in New South Wales (-6.1 percent), Victoria (-6.6 per cent), Queensland (-9.9 per cent), Western Australia (-6.3 per cent), the Australian Capital Territory (-4.9 per cent), the Northern Territory (-18.3 per cent) and South Australia (-1.0 per cent). Tasmania (4.2 percent) recorded the only rise this month,” the ABS said.

Lending to businesses dropped 9.7% on a seasonally adjusted basis.
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not sharp enough in my mind. the housing price drop 7--10% within a month---that will shake the tree for those { day dreamer to get rich easy and quick by investing in housing}.. devilsmiley.gif
i'm too dark am i??? tongue.gif



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triage
post Posted: Feb 4 2019, 06:50 AM
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The day is starting off appearing to be an absolute horror for the housing sector.

First up, today we get the final report of the Kenneth Hayne banking royal commission. Anything less than an excoriation of the lending mentality of the banks will be a shock and a profound disappointment. Any idea that the banks can go back to their old loose lending ways is or should be a fantasy. What has been going on in the housing market in the last six months will become the new norm.

https://www.reuters.com/article/us-australi...SKCN1PS0M3?il=0

https://www.abc.net.au/news/2019-02-04/bank...making/10771612

Then there's this. A fire has broken out in a high rise apartment block in the Melbourne CBD at about 5:00 this morning. The ABC is reporting that firefighters believe that it is spreading through the combustible cladding on the building. From all reports there are thousands of apartment blocks in Australia where combusible cladding was used in construction. The problem (plus a few others not typical in modern Australian buildings) was highlighted by the Grenfell fire in the UK. Up till now no action has been taken for most Australian buildings but to remedy the problem will cost individual unit owners tens of thousands of dollars. Besides who wants to invest in or live in a fire-trap?

https://www.abc.net.au/news/2019-02-04/spen...bourne/10776018



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: early birds  
 
 


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