well,… you are using aussie dollar to purchase something in the third world countries… bad comparison…
(i.e. you earn aussie dollar and live in other countries..??? does NOT make sense)the best comparison… of course..house to income ratio.. has been well published and accepted (see media comments about housing affordability).. they compare using income.. not income generating from oversease.. i hope this will clear some confusion..
Something that no-one has considered in the equation – risk, ie security of tenure. Australia has one of the highest/most secure forms of tenure which is guaranteed by the Crown (under the Real Property Act in each state).
Can that be said of any of the other countries?
In other news, clearance rates in Melbourne seems to have dipped below 80% for the last two weeks. Not that it's necessarily indicative of what's going to happen in the market. But prolonged periods at low to mid 70's would turn the tide in favour of buyers (finally), and vendors can cease to command what looks like ridiculous (historically) prices.
Just this past week a house on my street was put up for sale…old and needs a lot of updating, yet the quoted range is far in excess of that of my own home about 6 months ago. Such price increases are fantastic for those who own a place, and even better for those who have a couple of properties.
I still consider 70% clearance rate = high.
The bottom line is vendoer might NOT want to sell it (unless a good price).
The stock market is going nowhere.
Can't see the reason why people would like to sell the property at the discount price.
Remember.. the interest rate is still LOW (below average)It would be CRAZY for RBA to increase the IR in the future as PIIGS issue coming through.
People will flock into safe haven invesment again…..god_of_money wrote:People will flock into safe haven invesment again…..This is precisely the reason cited for the AU$ hitting the pits of late, and no end in sight, it seems.
I have to resurrect this post again…
>3 years since it was posted, the median price of sydney property has reached all time high….with the auction clearance rate is/was sitting on 75-80%
The prediction from property experts through many articles/comments published in APM/Residex/Domain/smh/Keen = FAILED!!!
So glad I bought one in Sydney in 2010
I have to agree.
I don't think people fully appreciate five things.
Firstly, the settlement pattern of the world is what it is because there is natural advantage at those locations.
Two, human built infrastructure is consequentially now also loaded into those areas.
Third, Australia looks big on the map but so does the Sahara Desert. Major parts of Australia would require huge investment to build conditions similar to what the areas we can live in provide.
Fourth, world population is growing at a rate so much faster than it did in the past, and so whatever you thought was normal 30 years ago you need to reject and reassess.
Fifth, there is no political agenda to stand between that world dynamic and Australia.
The fundamental demand for land in Australia is going no where other than up.
Feel old when these posts from years ago come up
Steve Keen – Wrong. Analysts – Wrong. Kochie – Always Wrong. A bunch of scaremongers from USA – Wrong.
GOM – Right. Everyone who still bought property in the last 3 years – Probably right.
The two issues we may now have in Oz is the banking system, and demographics.
The banks wish to see the status quo continue and keep property at the same prices by offering limited lending. If you are going to stay in the same house for 30 years and the same job 30 years then Mr Bank Manager wants to know you! Construction finance….. that's whole other basket of fish.
It'll also be interesting as Gen Y and the next gens start to come into the banking scene what will happen. They'll be used to change and flexibility, will the current housing system (difficult to easily trade/move/sell property) be something that gets a revamp in the next few years.
Oh and the Grey Tsunami – I'm voting this myth busted.
Those are my things to watch for the next 3 years!
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeSo true , it comes down to supply and demand , oh and a bit of waiting , or some cosmetic work to enhance the end price ! They ain't making anymore land – it's already there , just use it to maximise the best result .
On the flip side, look at Japan. Many more people than us, very little land and there property prices have been stagnant forever.
Of course their economy is a different kettle of fish to ours and probably accounts for the poor growth, however it does show that it's not just down to supply and demand.
There is no demand at all in Japan…. most of their population is suitable for nursing home allocation vs. high growth rate of population in big cities in Australia. Japan is habitably bigger than Australia due to excellent in transportation (i.e. Cityrail/country link vs. Shinkansen) and very low inflation rate or -ve inflation rate.
DWolfe wrote:Those are my things to watch for the next 3 years!
There's only one thing to watch over the next few years and that's China (where Aus is concerned anyway). China's banking system has had two near death experiences over the last 6 months and remains firmly stuck in the credit creation cycle. It has no choice but to exit this cycle (basically taper like the FED) or it will simply blow up. Tapering requires crushing growth of 7.5% down to around 3% for them to transition from an investment lead economy to a more consumption based economy. That means shifting the wealth creation machinery towards building wealth within the general populace (so they can consume)and away from the elites. A complex and politically difficult task.
Whatever the outcome it is all negative for the Australian economy. Throw in Japans crazy Uncle Abe and Sth Koreas difficulties and you have some serious head winds for AU. Given that Abbot and Co are somewhat like Bill and Ben the flower pot men I can't get excited about Australia's chances over the next 3 – 5.
Plan accordingly.
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