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Australian Housing Crash, Has the bubble burst?
joules mm1
post Posted: Nov 9 2018, 09:49 AM
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fixed the editorial to being positive-biased rather than emotively-negative-biased (designed to keep your eyes on the media)

"Sydney house buyers are being forced to buy at steeper discounts as properties languish longer in a better-bargains residential market."



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. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price

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nipper
post Posted: Nov 9 2018, 09:17 AM
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In Reply To: early birds's post @ Nov 9 2018, 07:55 AM

Willing buyer, willing seller. That's not discounting, it's price discovery !



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Nov 9 2018, 07:55 AM
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https://www.afr.com/real-estate/sydney-sell...y_Sent=08112018

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Sydney house owners are being forced to sell at steeper discounts as their properties languish longer in a weakening residential market.

Houses in Sydney were discounted by an average 7 per cent in September, according to Domain Group's latest State of the Market report.

That figure is up from the previous month's discount of 6.9 per cent and has been increasing steadily over the past year, with the extent of discounting gaining 37.3 per cent in the past 12 months.

At the same time, the average days that Sydney homes sit unsold on the market is steadily rising. By October it was 71 days, up 57.8 per cent over the past year, according to the Domain report.

"We're seeing heavier discounting. Vendors are accepting a bigger discount than they were the month before and also the year prior as well," said Domain data scientist Nicola Powell.

"It's pretty significant for houses and units. It's something that looks like it's gaining pace. It indicates that homes are being priced to meet the market. Buyers are certainly wanting more than they did a year ago."

Domain is majority owned by Fairfax Media, publisher of The Australian Financial Review.

The discounting figures are calculated on homes sold by private treaty. At the same time, more homes are passing in at auction or being withdrawn. Clearance rates in Sydney fell to 44 per cent in October. A year ago the rate was 58 per cent in Sydney.

"So we're naturally seeing vendors sway to selling by private treaty," Dr Powell said.

"That is a common dynamic in the Sydney market when we start to see a slowdown in price growth."

Price growth, the number of homes that sell by auction as well as clearance rates are all correlated

Median prices for the September quarter are down 6.5 per cent in Sydney on a year ago, according to Domain. The median for a Sydney house is now $1,101, 532. In Melbourne, the September median for houses has fallen 3.2 per cent in the past year to $852,980.

A panel of economists surveyed by The Australian Financial Review this week all expect prices to fall further in 2019, both nationally and in Sydney. AMP's Shane Oliver predicts Sydney prices to fall another 7 per cent in 2019.

The volume of properties sold in September is down by more than 31 per cent year-on-year in both Sydney and Melbourne, on Domain figures.

New listings in all capital cities have increased over the previous month, a seasonal effect due to the spring selling season.

"What we are seeing is a build up of stock, not only over the month but over the year," Dr Powell said.

"What that says is there's fewer buyers in the market, there's fewer transactions taking place. Homes are taking longer to sell.

"In Sydney we are seeing all those market indicators point to further weakening and slowing in the market."

This week, Macquarie Securities economists cut their outlook for Sydney and Melbourne dwelling prices. In June they had predicted a fall of 10 per cent from peak to trough. They now expect prices in Sydney and Melbourne to fall by 15-20 per cent peak to trough.
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looks it's coming....

 
nipper
post Posted: Oct 29 2018, 08:55 AM
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In Reply To: Mags's post @ Oct 29 2018, 08:26 AM

what about "tightly held" , then?



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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Mags
post Posted: Oct 29 2018, 08:26 AM
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In Reply To: early birds's post @ Oct 26 2018, 06:44 AM

Can someone please explain what the hell "pent up demand" is???????????????
Oh these commentators infuriate me:
Of course there's demand: There's demand for Ferrari's too: But unless you can afford it, does it even count???
I'm confused about the market, here in Adelaide the last couple of places we were interested in went for way above what we expected, yet ordinary 3 bedroom, single bath places have definitely been kicked in the teeth.
I suggest this shows a frail/fragmented market. The agents tell me it means those with money are still buying and don't care about price.
I say we're still in a bubble, and the disaster is no where near unfolding fully.



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early birds
post Posted: Oct 26 2018, 06:44 AM
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House prices in Sydney will fall another 3.5 per cent in 2019, bottom out by 2020 and then begin to build momentum in 2021, according to the latest QBE Housing Outlook report.

Melbourne, which has lagged slightly behind the trajectory of Sydney's property market, is set for a sharper drop in house prices next year of 4.2 per cent before growing again in 2020.

The forecast from QBE and BIS Oxford Economics coincides with Domain's September quarter figures that show Melbourne experienced its first annual decline in six years.

Tighter lending restrictions have stung the investor market in the two major markets, causing prices to deteriorate as auction clearance rates plunge to new lows.

However lending to first-home buyers has surged by a whopping 74 per cent in Sydney over the past 12 months and almost 30 per cent nation-wide.

QBE Lenders' Mortgage Insurance CEO Phil White said there had been an influx of first-home buyers, motivated by government schemes, into the market previously dominated by international and domestic investors taking advantage of low interest rates.

"The restrictions banks have been putting in place in response to regulatory pressures have done their job, as well as China putting restrictions on their residents getting money out of the country," Mr White said.

"There is a pent up demand still there and that opportunity for first-home buyers will be there for the next 12 months," he said.

While APRA officially removed its 10 per cent cap on investor growth back in April, Mr White didn't believe the availability of credit would loosen any time soon.

Banks have been reigning in risky lending since the beginning of the royal commission, which put their methods of evaluating loans for would-be buyers in the spotlight.

Despite record low interest rates, Australian homeowners are under considerable financial pressure, with residential lending blowing out to more than 40 per cent of borrowers' disposable incomes - 30 per cent above maximum recommended levels.

According to QBE, Brisbane house prices are expected to rise by 11.3 per cent to reach $615,000 by the middle of 2021, with more growth also on the cards for Canberra (10.4 per cent), Hobart (7.9 per cent), Darwin (6 per cent) and Perth (5 per cent) over the next three years.

Adelaide house prices are forecast to increase 12.4 per cent by 2021, the highest of all the capital cities.
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https://www.afr.com/real-estate/more-falls-...y_Sent=25102018

 


nipper
post Posted: Sep 18 2018, 12:34 PM
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In Reply To: triage's post @ Sep 15 2018, 12:09 AM

Just watched that 60 Minutes piece.

Seems like it's time to cash in my reality cheque.

(PS. It wasn't convincing.... only featured men. How out of touch).



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
triage
post Posted: Sep 15 2018, 12:09 AM
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According to Martin North, 60 Minutes is going to do a very bearish piece on Australian real estate this weekend.

https://www.youtube.com/watch?v=zHNiML-5URg


I confess I have not watched any 60 Minutes program in decades. Too tabloidy. But hey, I need a bit of confirmation bias so will probably tune in.

(hat tip: Gavin at macrobusiness)



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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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joules mm1
post Posted: Sep 3 2018, 05:23 PM
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In Reply To: early birds's post @ Sep 3 2018, 03:59 PM

"...further declines are likely as the peak selling season starts."
so would that happen to coincide with a buying season ?

(sorry, it was just sitting there waiting to be hit!)




--------------------
. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price

Said 'Thanks' for this post: early birds  
 
early birds
post Posted: Sep 3 2018, 03:59 PM
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Australia House Prices Fall for 11th Month as Downturn Deepens

Australian housing prices fell for an 11th straight month in August, and further declines are likely as the peak selling season starts.

National dwelling values dropped 0.3 percent last month, led by declines in Sydney and Melbourne, according to CoreLogic Inc. data released Monday. Prices in Sydney, the epicenter of the recent property boom, have now fallen 5.6 percent from a year earlier.

Australian house prices slumped for an 11th month in August.

Looking forward, there are a few wildcards that could create some headwinds for housing market conditions,” CoreLogic said in the statement.

Westpac Banking Corp.’s move last week to raise home loan rates “is likely to send a chill through the housing market,” CoreLogic said. Tight credit conditions and record household debt could also damp confidence as the peak spring selling season starts.

Read more: Sydney’s mortgage pain signals RBA on hold into next decade

“With so many balls in the air, it’s likely the spring season will be a challenging one for the housing sector,” CoreLogic said.
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RBA hold rate ??? the banks just did something that made RBA less effective ----raised rate without RBA.

 
 


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