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October 15, 2011 - 10:49 am

Why doesn't she sell for 50k less than the other houses in the street? That way it should move quickly.

My 2 cents, it will be an easier sell now than this time next year.

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October 12, 2011 - 9:43 am

Scott No Mates wrote:

not in the least. Everyone assesses their own risk & exposures. The ones who bear the risk are the investors & the bank. Neither control the market.

So if a whole bunch of wannabe PIs get in on the action – that's not going to effect the demand side of the equation, the consequent rises in equity and lowerring of bank lvrs?

Don't get me wrong here, I'm not saying that PIs who are in it for the long haul and smart about their lvr can't make a good thing out of their investments. What I am saying is that a market where everyone and their dog wants to own a second house and is given the oppurtunity to do so must effect the game for those long term PIs.

For instance, take NG. The rise in the amount of NG property in Australia has been pretty impressive over recent years (I'll probably use it as a way to lessen my ever increasing tax and pay off my holiday/retirement home whilst I rent close to work) and this has an effect on how much government attention NG gets. The more tax payers that claim it, the more of a target it is likely to become. Ultimately, I'd like to think this doesn't effect all the really smart LLs who should be positively geared anyway.

Also, though I agree investors bear the risk, I'm not sure how much banks have. It's the age of bailouts, don't forget. If our property market tanks, I bet the country is given no choice but to rescue the big 4. Commonwealth bank may become more commonwealth again:)

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October 12, 2011 - 7:23 am

Sparkys wrote:

My question is who owns the home that the third little pig lived in? A smart investor, that's who.

That seems like more of an answer than a question:)

My question is to the post above this. If a lot of inexperienced PIs are playing with the market, wouldn't that make the whole market risky, even for the experienced PIs?

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October 10, 2011 - 6:17 am

simple wrote:

I value those who been around for some time

<br /:)” title=”>:)” class=”bbcode_smiley” /> I've been around for ages.

Actually, I started reading and posting here before I found any bear sites.

I still think the same basic logic applies though. It looked like the Aussie housing market was going to correct in 2008 (more than the 5-10% average it suffered) until Rudd's housing/construction/retail stimulus package came into play. Now, it looks like it is going to correct again if another stimulus package doesn't come into play.

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October 2, 2011 - 6:28 am

It's not quite time to resurface it yet.

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October 1, 2011 - 3:31 am

JackFlash wrote:

ummester wrote:

Difference as I see it is that American confidence in the housing sector is shot. It isn't shot here yet.

Yes it is. It's in the declining house prices, the doubling of properties for sale and the low turnover. Anyone with half a clue knows that this is something different…. you can almost feel it. Jack

Of course it's something different – it's the downside of a second peak. In shares that always signifies time to get out. Housing is less liquid than shares though. It's still time to get out but the effects are going to take a while to play out.

Further, unlike the first slide in 2007/2008, I agree with you that sentiment is a lot worse now. It could be the big slide down but it also could not.

All I am saying is that no-one should count their chickens before they hatch. I've been watching, researching and saving for the time to buy a house in Australia for my family since 2007 and I know it isn't that time yet. I'm sure we will know by the middle of next year exactly how things are going to play out.

Bears are not too different to bulls in the end, you know? We come from opposite ends of the economic spectrum on a given asset class but each always tries to positively re-enforce their own POV and prophesise boom or bust before it occurs. Human nature I guess. I'm with your POV – I hope you are right but I think I have grown to be a bit less anxious with my predictions.

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September 28, 2011 - 8:03 am

JackFlash wrote:

The FEDs with their massive QE programs and near zero interest rates haven't made any difference to the US property markets. Our problem is that we are maxed out on credit. Australian private debt stands at around $1.2 trillion. 60% of that is supposedly residential property debt which is funded by short term international funding. One of the big criticisms in the US is banks using short term borrowings to fund long term mortgages. Stopping the market from softening is not desirable anyway. That's how markets should work. Jack

Difference as I see it is that American confidence in the housing sector is shot. It isn't shot here yet. Just look at half the posts on this forum.

Don't get me wrong, I'm not disagreeing with your sentiment. I just think that there is still some confidence left with Aussie house vendors and investors. A cash injection now could hieghten that confidence for a time and scare some sideline buyers into acting. It will not solve the problem long term.

No cash injection and by the middle of next year I'd wager there will be no confidence in our housing market at all. BBs will be selling en' masse to try and get some retirement money. This will make rent very tight in some areas (not all) and the banks will require sunbstantial deposits to offset future falls. Likely the RBA will cut rates and the banks may meet them half way. Shouldn't stop property from sliding though. I think time is fast running out for a cash injection to have any effect on confidence.

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September 17, 2011 - 9:27 am

Scott No Mates wrote:

Lots of 'not much' adds up to quite a bit also may have a lower risk profile which suits piggy 1.

Yea, that makes sense – play it safer.
I guess that is why many PIs try to lvr more bottom end property. 2 slum apartments vs a 4 beddy in the burbs for rent.
Land banking seems safer still, for the first little piggy though.

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September 15, 2011 - 6:55 am

I don't get it?

In the end, a house, like any thing, is worth what you can sell it for.

If the 3rd little pig stays at home, who do the first little pigs sell to?

Agree that most want it all and now – that's what got the second little pig in trouble. But, if niether the 2nd or 3rd little pig can afford or want the 1st little pigs house then that house isn't worth much.

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September 12, 2011 - 2:31 am

Andysydney wrote:

There should be a rush of buyers to "get in" before the new cut backs apply, forcing prices in the first home bracket to jump.

And then?

Ultimately, this descision will increase supply in a market where supply is already above what is required. What happens to the price of established homes in NSW next year?

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September 7, 2011 - 7:12 am

surely this has to effect the sales potential and ultimately price of established homes.

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September 6, 2011 - 12:56 pm

JackFlash wrote:

ummester wrote:

Seems to me that without a prompt credit injection, at rates borrowers can afford, the market will continue to soften or begin to crash. Question is, where does that credit injection come from?

I tend to agree with most of what you say Unmester, however, credit or should I say easy credit is the primary cause of global woes. The last thing we need is more credit in a credit fuelled crises. The sooner we deleverage and take our medicine the sooner we can get on with rebuilding the new economies. It's not going to be pretty I'm afraid. Jack

Of course we have to take our medicine – why do you think I haven't brought a house yet:)

Just saying that a credit injection is the only thing that will stop the market from continuing to soften ATM – never said it was a good idea.

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September 3, 2011 - 1:10 pm

C2011 wrote:

Interesting… I recently made an offer on a house where the asking price had a + against it. My initial offer was below the asking price. It was rejected, which I can understand, but I thought it was worth a try. I then offered above the asking price. It was also rejected. The agent came back to me with a sale price that was $15k above asking price and said that this was the minimum that the vendor was willing to accept. So why bother advertising at a lower price than what the vendor wants? The funny thing was that the estate agent then changed the advertised asking price to 'offers above' the price that I had offered. I didn't pursue the deal and 3 months later the property is still on the market.

Which raises the question, just because you should never ask for less than you want (which I agree with by the way) should you sell for less then you want? Or, to put it another way, should a want to sell outwiegh a wanted sale price?

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August 31, 2011 - 12:50 pm

Jamie M wrote:

I'm surprised to see that they're reporting on Canberra growing at that rate. From where I stand, the market seems a bit flat – but I wouldn't be surprised if things pick up within the next few months.

Cheers

Jamie

Canberra seems very up and down – I think because it is a small sample.

I think this property observer article is very relevant to Canberra (even though it claims not to be – the amount of building that has happened over the past couple of years here is massive). And, there are still PS wages to rely on.

http://www.propertyobserver.com.au/residential/australia-s-housing-market-is-oversupplied.-yes-oversupplied/2011083051360

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August 31, 2011 - 7:46 am

simple wrote:

Agree with observation.  Market is stugnant but there is no FEAR there. Vendors not willing to sell with discount, buyers not purchasing at full price anymore. So not many transactions are made.
Prices need to start doping or rising to change the situation.  Make your bet

My avatar should give my bet away:)

Even if people want to buy now, credit is harder to obtain. Many may think Brissy is the buy of the century – it only looks that way prior to the last decade and not if you take the lows of 2008 into account.

Is a bubble tripple peak possible? That is what I wonder now. Can house prices in this country possibly be spiked to a new high before it comes down?

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August 31, 2011 - 7:42 am

macrobusiness has some graphs
http://www.macrobusiness.com.au/2011/08/housing-fall-accelerates/

I think Joyce's comments on the RBA's tightening cycle are a little bit irrelevant. If the RBA does lower rates, what guarantee is there that the banks will follow? Credit is becoming harder to obtain for our lenders:

http://www.news.com.au/money/banking/job-losses-start-to-bite-at-investment-banks/story-e6frfmcr-1226126148932

The article also suggests that our banks lending ability is affected by local house prices.

'The big four retail banks are also starting to look to their staffing levels as the housing market softens.'

Seems to me that without a prompt credit injection, at rates borrowers can afford, the market will continue to soften or begin to crash. Question is, where does that credit injection come from?

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August 31, 2011 - 3:16 am

abcd1 wrote:

I agree and am one of those buying in qeensland nows a great time to buy when everyone is scared

Buying when everyone is scared is a good idea. I don't think everyone is scared yet though.

Buyers obviously are, as stock is rising and prices are softeneing.

Vendors aren't really scared yet.

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August 23, 2011 - 12:20 am

I think your observations fword are based on the circle of friends you keep, as hbbehrendorff's may be. I guess ours all are – it is hard to look beyond our immediate sources of influence to try and get an understanding for a majority that those influences may or may not represent.

I do think however, that it doesn't matter what anyone wants, if they can't afford it they can't have it (without credit expansion). Rent has never been based on credit – it is based on what people can afford there and then.

My take on the rental market for the last 5 years or so (trying to be unbiased) is that the bottom is always in hotly contested demand, whereas prices higher than that get much less tenant interest. This suggests to me that a kind of peak rent has been reached – that even those who would normally rent in the middle of the market (myself included) prefer to rent at the bottom and those that rent at the bottom can barely afford the cost.

If I lived in a state close to either my parents or inlaws, I would consider moving in with them – not for comfort but just because it would make economic sense for both of us. If I gave either of them half of what I pay in rent – they would be stoked and I could save at twice the rate but it would be uncomfortable for the time. The discomfort, however, is working towards a long term goal – me buying a house with as much of the money up front as possible.

I agree that few would actively make the same choice but I feel that some now have no choice because of rising costs. And in the news today, 50-100k people are tipped to lose work over the coming year. That is more that will have choice taken away from them. 

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August 22, 2011 - 6:01 am

ksherwell wrote:

Is it a buyers market?

Not yet but it is getting there.

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August 21, 2011 - 2:28 am

simple wrote:

Been negative about real estate does not mean been negative generally. Say returns on physical Silver over last 52 weeks been 90%

I would go as far to say that being negative about RE is being positive about Austrlaia's (long term) economic growth.