It's tempting to draw a comparison with the American and UK (or even the NZ) market but the situation is a bit more complex here. For example, NZ's net migration is in decline whilst we continue to grow. Or aside commodities, Australia can benefit from increasing food prices (just look at the price of dairy products) that could result from the global recession. But the strongest indication of a market trend is always the levels of supply/demand and this is telling me that any bargains should be picked up this year
Have read somewhere that when russia gets its shit together they are going to bid for business in china. They have a big mining sector and are looking at undercutting australia for chinese business!!!
I even know some of those russian people who now in talks with Chinese customers. Those are in coal industry, some private mines in russia scheduled to be reopen in 12 months from today.
Yes the world is a changing place … in times of uncertainty it always pays to go back to the basics …
I attended a seminar in Cronulla Sydney for a new network group that is setting up Network Clubs around Australia and involving the local communities to attend. One point was made that we lose of sight of the big picture and need to focus on happiueness first when investing … very interesting …
We need to build smarter housing and not huge 6 bedroom with big pools and huge mortgages …
Just a thought … D
Very interesting read in the Tele on Saturday … 12,562 normal people declare bankruptcy in the last 12 months in NSW alone … financial education needed here …
D
Its a bit late for the bankrupts but they should borrow some books from the library for the next time.
Its a bit late for the bankrupts but they should borrow some books from the library for the next time.
I wonder if we already hit the 'flat" or still have a way to go till we hit the bottom…
Any thouths?wealth4life.com wrote:Very interesting read in the Tele on Saturday … 12,562 normal people declare bankruptcy in the last 12 months in NSW alone … financial education needed here …D
the number itself doesnt say much….what is it normally? how does that compare with other states/other countries? is this a marked increase? 6.7 million people live in NSW (not all bankruptcy capable of course) , so if 0.2% of them make bad choices or are just unfortunate so what?…..sounds like a low "failure"rate to me. Some of these arent bad news by the way. We knew people through our kids school who went bankrupt to avoid debt….still had kids in private school, still drove BMWs and lorded it over us lesser bill paying beings.
With the recent decline in oil price and some recovery on stock market as well as indication of easing inflationary pressure in AU I wonder if this will l be enough to stabilize the current situation and bottom out…..
On the other hand RE has a way to go until prices will become more or less realistic, 3-4 times wage rule…Hi simple
commentators are starting to see more +ve (less -ve?) signs ….or saying that perhaps we have been overdoing the gloom and doom. This thread started mid 2006 and has been feeding the gloom since then.
re the 3-4 times wage rule, its quite possible to by a modest home for 3-4 times a reasonable non minimum wage. The other side of that is that we can try and improve ourselves so that equation is better for us. So far over 30 years over ownership in 2 states, I have never lived in a house that cost more than three times my income. Houses have gone up and my income has gone up. Waiting for the market to come back to meet my salary has never entered my mind until I started reading these forums.The U.S. currently has a 15% foreclosure rate compared to Australias 1%. The only worse to come is going to be for those who aren't currently actively building their portfolio as we speak. You don't see Woolworths frantically selling and reducing debt. Their obviously building in rural mining towns…My opinion only.
Ummmmmmmmmmmmmmmmmmmmmm .. actually, yes, I do see Woolworths closing out the independants they knocked over in the last couple of years … in the wee patch in my State at least, and yup, they have sold the premises
the 3 to 4 times wages rule … mmmmm .. was that before or after the shift from margins to total wage? … or before or after the Structural Efficiency Principal took hold? … before or after the JPEG deal? .. or the Accord? .. or WPA impacts (and normalisation)? … or was it when we measured AWE? .. or AAWE? … or WPI?
was it before salary sacrifice moved into the award system, or before. Is sal sac even considered in the returns to higher earners – does it skew stuff .. I have no idea …
maybe t'was before GST? .. or after? … or the changes to the CPI basket? ..or before? and WHICH change might it have been?!
mebbe the folk that compare the current with the rest of the world .. mmmm .. all them other countires with a regulated award system? .. the US? .. no- cant be, they have a $6Bill industry devoted to union busting … mmmm .. perhaps holland, or mebbe another scandinavian country .. but no, they have a system almost as different as the canadians … who knows the impacts …
do we measure these things (such as we can) against a cave? .. a gress hut? … a simple weatherboard in the 'burbs'? .. or a package with land, house, appliances, landscaping, alarm systems and security patrols, networked for the nougties and beyond, complete with driveway (or crossover depending on where ya is), floor coverings, window treatments, motgage insurance and a lovely water feature?
No disrespect to any intended – its just that we so often get caught up in that we see as the 'rules' or 'lore' (and no, its not a spelling mistake) … just 10 years ago if a child had a question, they asked a parent or a teacher … today google picks up some 35Mill hits a day .. who did folk ask before?
10 years ago folk lived in a world their parents could only dream of … 20 years earlier, the same, 30 years the same …
I imagine, if the internet existed in the 60s, we'd have heard and read all the same commentary with the credit crunch then … or maybe later in the 70s, the bulls and bull of the eighties, in the nineties – jeepers – we'd be jumpin off the buildings we invested in
…well he we are in the nougties (LOL)
Is it all new? … YES – and probably not … Is it all real? … YES – and probably not … does it really matter? .. to the folk in 30 years reflecting on the credit crunch of the noughties … YES – and probably not
Wont quote the source (or validate the quote for that matter) … after some 98 years, folk still argue
… but I've always thought it useful to recall .."It aint what ya know that gets you into trouble; its what ya know for sure, that just aint so" (there be many derivations) …
The variables is our instant world are astonishing … folks can be wrong (or right) with more absolute conviction, than any other time in our history (discounting crusades, witch burning and so on) …. t'is simply sometimes, in our search for an edge (and we ALL do it folks
) .. methinks we confuse the variables (and a few of em are above) with the fundamentals.Fundamentals remain sound … the be no greater 'lore' than the need of folks for a home – and or somewhere to live.
We saw the same sort of peaks in all commodities and consumables … and when these things reach critical mass .. a cheaper way of producing them is found .. fortunately, unlike PCs, phones, televisions, clothes, even kids ….. it is still too expensive (though who knows for how long) to produce land
I (and for all I know, I could just be a fruitbat in these things) only see a lot of variables movin about the place .. yes, we monitor em, but the fundamentals remain unchanged.
jthomo wrote:The U.S. currently has a 15% foreclosure rate compared to Australias 1%. The only worse to come is going to be for those who aren't currently actively building their portfolio as we speak. You don't see Woolworths frantically selling and reducing debt. Their obviously building in rural mining towns…My opinion only.Homo : it is 1.15% , not 15%. And a few months back US had 'only' 0.95% foreclosure rate.
compared to 1% in Australia today.See any trends ?
RobL wrote:I (and for all I know, I could just be a fruitbat in these things) only see a lot of variables movin about the place .. yes, we monitor em, but the fundamentals remain unchanged.Somehow I get the feeling that you're dutch Rob ? Anyway, what about the fundamentals of credit since the 70's ?
Hasn't that changed ? Didn't 'the world' create money out of thin air from the 70's onwards ? They created this 'wealth' which had to be paid back somewhere in the future. A concept known as a debt. The USA mainly have been getting themselves into debts bigger than they can possibly pay back. They pay back by printing more money. The result is that the taxpayer now has to pay for all the debt that has been created in the 70's and onwards. Some people got filthy rich by exploiting this ( either driving commodities up / house prices up ) and NOW the taxpayer is paying for those filthy rich people with printing presses.Please explain to me why you think that this didn't change any fundamentals ?
How do you explain an average joe in Australia with an average job getting 1.000.000 AUD$ in property based on non-existant 'equity' and then calling himself bankrupt because he couldn't pay back his loans ? I don't recall this being possible in the 1970's, let alone before that time.Please explain to me how the fundamentals of 10-year mortgages ( normal in 1920 – 1970 ) were replaced by 40-year, 50-year and in some extreme cases 100-year mortgages ?
You say the fundamentals didn't change : I completely disagree. Everything changed. People have found a way to steal money from the future generations and have done so greedily and hastily. Now is payback time, and guess who is to pay it all back ? The future generation ( also known as 'the tax payer' )
I'd be interested to hear your view on these matters.
Scamp do not agree with all you say, but have seen more than one economist talking of the western "supply and demand – with minimal government intervention " model has been broken. Under that model, the recent boom, bust, boom cycle seen in the states since 1991, should not be happening.
There are many players, that have worked out how to make staggering money through these cycles (not talking property investors) and the government has lost control of the economy.
Yep things change.
Scamp ..
am sorry mate, am not Dutch ..
and you go on doin ya thing – ya evidently enjoy it .. good for you
Unfortunately, I deal with journos (many good folk among em), who do what you do here .. pick out the only word or a single passage that allows a 'hook' to peddle a message .. again good for you
.. and you're very good at it … we see it on all the sites .. well done So I tell ya what … I and other will continue havin the Fun … and you can have the rest
Enjoy.
Hey Guys, this thread started by D on June 5, 2006.
Anyone want to summarize?
1. Early indication of problems in RE in June, 2006
2. First major signs of instability in December??? 2007
3. Today indications of RE loosing value (only small %), September 2008Seem like as time passes it just becomes worse. Given trend we have and based on past experience it seem like next 12 months situation to cause further reduction of RE value. I some how do not think we "have reached permanently flat plateau"
simple wrote:I some how do not think we "have reached permanently flat plateau"Not by half.
Thing is, we could have plateued so much softer around 2005 if Howard didn't double the FHBG and give the capital gains tax concessions. Now the landing will be harder and, in some cases, sink lower than needed for equilibrium because a minor bubble was grown into a big one just to make the economy look good and the rich feel richer.
ummester wrote:simple wrote:I some how do not think we "have reached permanently flat plateau"Not by half.
Thing is, we could have plateued so much softer around 2005 if Howard didn't double the FHBG and give the capital gains tax concessions. Now the landing will be harder and, in some cases, sink lower than needed for equilibrium because a minor bubble was grown into a big one just to make the economy look good and the rich feel richer.
If this is true does that mean Sydney and NSW are ripe for investment since they have had little to no growth since 2005 for the majority of property. effectively missing the extended portion of the bubble.
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