I found this excellent explanation of the European financial situation.
simple wrote:Home prices drop despite rate cut
- From: The Australian
- June 01, 2012
AN aggressive interest rate cut failed to halt a 1.4 per cent plunge in capital city residential values in May, according to researcher RP Data-Rismark.
For the year, residential values dropped 5.3 per cent, with Melbourne contributing the worst performance, given its property prices dropped 2.7 per cent in May. Darwin dwelling values slid 2.4 per cent.
Apartment prices fared better than houses and the premium market suffered more than most.
"Premium dwelling values have fallen by 6.1 per cent over the 12 months ending April 2012 while dwelling values at the affordable end of the spectrum are down by just 1.5 per cent,'' Tim Lawless, senior economist with RP Data, said.
"Unit values across the combined capitals increased in May and they are up 1.3 per cent over the first five months of the year."
Sydney property prices slumped 1.2 per cent in May to record a median dwelling price of $555,000.
Of the capitals, Adelaide was the best performer with a 1.2 per cent increase in prices to a median of $370,000.
The trend in house prices suggested there was more room for the Reserve Bank of Australia to cut interest rates, Mr Lawless said.
these drops in values are hardly anything to worry about short term,,
Try living here in the states and seeing your home drop in Value 50 to 80% like what happned in some areas.
Even the best areas prices dropped 30%..
From what I understand of your country you have supply demand issues that preclude huge market swings…
You could have stagflation or just stagnation,,,, but if you have no land to build on and increasing population values should hold a little and not crash..
Question is what is the income to value ratio…. Are the high Aussie prices from Equity roll ups.. and if equity roll ups stop buying IE one that bought a house 20 years ago for 100 thats worth 500k sells uses there 400k as downpayment to buy 800k.
this is what fueled US, and of course NO money down liar loans. in the mid west and east coast,,, where prices were 150k and under as the average price… so payments are akin to rent.Can Aussie wages support new homeowners buying houses at 500k… ???
JLH
Despite all the noise and the European dramas we seen some pretty solid economic numbers last week with GDP, inflation and employment all tracking well. The RBA say that recent rate cuts were not made to address any local problems and were solely to help us through the international concerns. The banks are still whining about funding costs but how serious is this is it that dire that funds will stop flowing, who knows. Affordability and yields have also improved so not quite sure if there are any areas of concern left, other than the offshore funding costs. Hopefully the PIGS all get baled out and they all get on with it and the next big game changer might be Mitt getting into the Whitehouse.
Personally speaking, unless any of that lot suddenly head south, particularly employment I cant see the trigger for a property bust occurring.
Bardon,
Love your optimism !
Dubstep wrote:Bardon,
Love your optimism !
I may well have a blind spot for something but I do feel good about my lot in life at the moment.
Hi Bardon,
That's a good thing ! Life is too short to not feel good, every day.
We should all make preparations against the economic uncertainty we are in, business administrators are doing big hours at present and the domino effect from each unpaid debt effects the overall economy.
Keep your head above water and ride out the tough times : )
bardon wrote:I may well have a blind spot for something but I do feel good about my lot in life at the moment.You have more than a blind spot Bardon but enjoy it while it lasts anyway. Ignorance may very well be bliss.
The Mickey Mouse games in Europe continue. They’ve kicked the can down the road once again and all the things in the world that keep coming back to screw us haven’t been fixed one jot.
The only positive I take from it is that it gives me a little more time to reinforce the defenses.
I’m reminded of the saying;
“My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel.”
Freckle wrote:bardon wrote:I may well have a blind spot for something but I do feel good about my lot in life at the moment.You have more than a blind spot Bardon but enjoy it while it lasts anyway.
So how long have I got left before this hidden hazard gets me?
I think Freckle comment was a bit too generic, bardon.
The reality is, hazard to some is opportunity to profit for others. So, when one see hazard all around, other can see money to be made all round him. This alone can create difference in opinions whether you see trouble or 'rosy' picture.Mine take is that markets worldwide will go thru second phase of negativity, similar to 2008.
bardon wrote:So how long have I got left before this hidden hazard gets me?Kinda scary really. You think it’s hidden, not obvious etc. Like I said, enjoy it while it lasts Bardon. They say ignorance is bliss. I’ll leave you to continue with a blissful life.
simple wrote:Mine take is that markets worldwide will go thru second phase of negativity, similar to 2008.2008 will seem like a non event compared to the next downturn Simple.
There shall be a global bonfire at which all money on the planet shall be burned. Yee-hah, let's break out the marshmallows and make a good show of it. All houses shall be demolished so we'll need to live in tents which is good as we'll be in the zone for camping after the toasted marshmallows.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM
Coming financial armageddon for some reasons getting extended to physical world assets destruction in the minds of some people. The fact is, that as in every past recession/depression there will be little changed for your average person on the street.
There will be some degree of shortage of money, jobs and prosperity that was in abundance just few years back. Nothing else changes.
Where it will be evident and hard is in finanace sector. Those who had large loans, heavy geared businesses, speculators and such will suffer.
But then again, if you see this coming – prepare and make some significant money out of it. Fortunes to be lost and made in very near futureJust thinking out loud, 30% australians – own there's homes, 30% rent. Both of those classes are unlikely to suffer. They have no debt, little expenses and flexible in options. Remaining 30% have homeloans. Probably 10% are silly, overstreached. This give us aproximate figure of say 3% Australians that doing something wrong and will go down. I do not see this number as much of the issue for society as whole. It will wreck banks balance sheets, GDP and our AAA rating, but that is a little importance to your average person on the street…
nice one Simple
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
As sad as it sounds, I undertook most of my overseas flights, purchased a couple of new ‘used’ cars and saved more during the 2008 recession than any year prior.
Made a little bit of spending money on the stock market too, never seen so much movement in a day before.
You can pick things up very cheap when everyone yells out doom and gloom.
NHG +1
I seen 40ft boat at Noosa Heads (QLD) going for just $250K!!! Those in 2006-2007 was sold for $600K. Jetsky half the price, a Bentley recently been sold at the auction for something like $125K! If you like the toys – go and splash out NOW. Staff goes at fraction of the cost, distressed sellers.If you been reasonable before 2008 – now are the golden times for you!
Freckle wrote:bardon wrote:So how long have I got left before this hidden hazard gets me?Kinda scary really. You think it’s hidden, not obvious etc. Like I said, enjoy it while it lasts Bardon. They say ignorance is bliss. I’ll leave you to continue with a blissful life.
Yes bliss is good. I guess if you don’t put a schedule on the bust then there is every possibility that you will be right some time way out there in the future. Its a bit like the broken clock being right twice a day.
Yeah, the world is coming to an end too.
But it's not gonna be 2012! That's my prophecy! LOL
Simple most people use this recession as a excuse not I do nothing simple
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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