All Topics / General Property / No Housing Bubble in Australia…is there?

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  • Profile photo of fWordfWord
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    Wynyard wrote:
    "prices in Singapore are highway robbery"

    Why are we in this position?

    Indeed, that is all news to me, thank you for lifting the wool from my eyes. In someways I'm glad to know we're not alone, it strengthens my feeling that we are all screwed – and that perhaps there could still be a revolution (several, a la Egypt). Maybe there is a latent communist in me yet.

    It all has to do with supply and demand. Singapore is very high density for such a small place. With lots of people looking for a place to live, prices naturally go up. The ones who cannot take the 'pressure' in such a crucible invariably leave and look for better quality of life elsewhere. And this at least, is what I (and possibly many others) find in Australia. Better quality of life.

    The people who leave Singapore are sometimes called 'quitters'. That's derogatory. In my opinion, it is the smarter people who decide what they want in life and do something about it, rather than staying put, being miserable and burning pitifully in the said crucible.

    Hence, we 'quitters' shall be joyous, while the 'sitters' will continue to 'work with the system' and degenerate into a woeful existence, unhappy with their life but too afraid to do anything about it.

    Profile photo of god_of_moneygod_of_money
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    fWord

    We (JV with my auntie) bought 1+1 (70m2) apartment near somerset for A$850k few years ago… now it is worth nearly 1.2million+….
    so Aussie property is still cheap…

    Profile photo of fWordfWord
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    god_of_money wrote:

    fWord

    We (JV with my auntie) bought 1+1 (70m2) apartment near somerset for A$850k few years ago… now it is worth nearly 1.2million+….
    so Aussie property is still cheap…

    Somerset is probably close to what we'd call 'inner-city' in Singapore. Nevertheless, for $1.2mil, I'd rather be buying a nice house on a block of land over here. That's not to say I can afford a $1.2mil house of course…I'm a very small player here.

    Profile photo of MRWMRW
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    may as well keep this discussion going.

    http://seekingalpha.com/article/246486-australia-the-last-epic-bubble-formulating-a-coherent-investment-strategy

    I have no idea who this guy is, whether what he says is valid or not. Interesting read though.
    Who knows!


    Mark

    Profile photo of fWordfWord
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    MRW wrote:
    may as well keep this discussion going.

    http://seekingalpha.com/article/246486-australia-the-last-epic-bubble-formulating-a-coherent-investment-strategy

    I have no idea who this guy is, whether what he says is valid or not. Interesting read though.
    Who knows!


    Mark

    Interesting read, and judging by the comments, there's a lot of people out there waiting for the Australian property market to fail. It very well may, or it may not. One thing is for sure: the ones waiting for the crash have virtually nothing to lose and potentially a lot to gain if the bubble bursts. All they need to do is sit around and talk. It doesn't take guts (nor the smarts) to do that. Talk is nothing without action.

    Those with money in the market are the ones who stand the chance of losing a lot. That said, I am betting my future and my entire portfolio that there is no bubble to burst. Sure, prices could fall but that doesn't fuss me. And I'm not anticipating price falls of 30, 40 or 50% either. I'll rather take my chances at a better financial future (at the risk of losing everything) rather than wait around, do nothing, and be screwed anyway, wallowing in self-pity and poverty in my golden years as inflation causes the death of a thousand cuts.

    Profile photo of nicolas_bnicolas_b
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    Here is another article from Seeking Alpha.

    http://seekingalpha.com/article/227083-the-great-australian-housing-bubble

    Most of the people I know have been off-loading their property portfolios. (All based in Sydney).

    You never want to put all your eggs in one basket, especially if the egg is leveraged.  

    What worries me about Australian property,

    1: Australia's dependence on overseas funding,

    2: Baby boomers retiring, my Mum is retired, she has sold all her unencumbered investment properties.
    Why did she sell up? "I do not need the hassle of dealing with real-estate agents, property managers etc… I want to enjoy my retirement".  With an estimated 4.5 million baby boomers approaching retirement age what will they do? In my experience retirees that have money are generally risk averse.

    3: Generation Y embracing the Aussie Property dream. The Australian property market needs FHBs to continue buying properties. This has significantly dropped off. They need to be willing to take on ever increasing amounts of debt.

    4: Australia dose not have a transparent credit market (securitization – RMBS and covered bonds) with primary and secondary markets. We need this to mitigate the future funding risks that expose Australian mortgage holders to the whims of international investors. We need interest rates to be pegged as a margin over an identifiable base eg, bank bills
       
    5: Our dependence on China. Our terms of trade are commodity based, China catches a cold I fear we will be hospitalized with pneumonia.

    6: Food, energy and commodity based inflation,  which is seeing the everyday cost of living increasing dramatically.

    7: Australia's private sector debt. (Private debt to GDP). Australian's are amongst the most heavily indebted people on the planet.

    8: We need to change the Australian mortgage system, currently the major 4 Australian banks can charge the borrower any interest rate they want at any time plus increase fees and charges at any time.
    The Australian banks can call for repayment of a mortgage any time but especially under situations where collateral values have decreased.
    The Australian banks have to stop using whatever equity a borrower has in their house as a tool to prop up their capital bases, This is all at the risk of the Aussie encumbered home owner, investor. 

    Here are just some of my thoughts, I am no expert, and I have absolutely  no idea what is going to happen, however i fear the property game is in overtime.  

    Profile photo of luke86luke86
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    fWord wrote:
    MRW wrote:
    may as well keep this discussion going.

    http://seekingalpha.com/article/246486-australia-the-last-epic-bubble-formulating-a-coherent-investment-strategy

    I have no idea who this guy is, whether what he says is valid or not. Interesting read though.
    Who knows!


    Mark

    Interesting read, and judging by the comments, there's a lot of people out there waiting for the Australian property market to fail. It very well may, or it may not. One thing is for sure: the ones waiting for the crash have virtually nothing to lose and potentially a lot to gain if the bubble bursts. All they need to do is sit around and talk. It doesn't take guts (nor the smarts) to do that. Talk is nothing without action.

    Those with money in the market are the ones who stand the chance of losing a lot. That said, I am betting my future and my entire portfolio that there is no bubble to burst. Sure, prices could fall but that doesn't fuss me. And I'm not anticipating price falls of 30, 40 or 50% either. I'll rather take my chances at a better financial future (at the risk of losing everything) rather than wait around, do nothing, and be screwed anyway, wallowing in self-pity and poverty in my golden years as inflation causes the death of a thousand cuts.

    Well said

    Profile photo of luke86luke86
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    fWord wrote:

    Sure, prices could fall but that doesn't fuss me. And I'm not anticipating price falls of 30, 40 or 50% either. I'll rather take my chances at a better financial future (at the risk of losing everything) rather than wait around, do nothing, and be screwed anyway, wallowing in self-pity and poverty in my golden years as inflation causes the death of a thousand cuts.

    Well said fWord!!!

    Profile photo of nicolas_bnicolas_b
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    @nicolas_b
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    Wynyard wrote:
    "prices in Singapore are highway robbery"

    Why are we in this position?

    Indeed, that is all news to me, thank you for lifting the wool from my eyes. In someways I'm glad to know we're not alone, it strengthens my feeling that we are all screwed – and that perhaps there could still be a revolution (several, a la Egypt). Maybe there is a latent communist in me yet.

    I doubt there will be a revolution in Singapore, considering 85% of Singaporeans live in public housing.

    I should probably inform you that the majority of the residential housing developments in Singapore are publicly governed and developed and about 85% of Singaporeans live in such houses. Public housing in Singapore is currently managed by the Housing and Development Board (HBD). http://www.hdb.gov.sg/

    More than 80% of Singapore's population live in HDB flats, with 95% of them owning their HDB flat. The remainder are rental flats reserved for those who are unable to afford to purchase the cheapest forms of public housing despite financial support.

    Pricing of public housing flats are meant to be affordable, and are typically substantially cheaper than privately-built developments. For example, an HDB 4-room flat depending on age, environment and surrounding amenities can have a sale value of between S$200,000 to above S$300,000 and an HUDC Executive maisonette above S$500,000.

    However, in contrast a privately developed condominium type housing can cost as much as S$1,000,000 and above.

    http://en.wikipedia.org/wiki/Public_housing_in_Singapore

    Profile photo of nicolas_bnicolas_b
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    @nicolas_b
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    nicolas_b wrote:
    Here is another article from Seeking Alpha.

    http://seekingalpha.com/article/227083-the-great-australian-housing-bubble

    Most of the people I know have been off-loading their property portfolios. (All based in Sydney).

    You never want to put all your eggs in one basket, especially if the egg is leveraged.  

    What worries me about Australian property,

    1: Australia's dependence on overseas funding,

    2: Baby boomers retiring, my Mum is retired, she has sold all her unencumbered investment properties.
    Why did she sell up? "I do not need the hassle of dealing with real-estate agents, property managers etc… I want to enjoy my retirement".  With an estimated 4.5 million baby boomers approaching retirement age what will they do? In my experience retirees that have money are generally risk averse.

    3: Generation Y embracing the Aussie Property dream. The Australian property market needs FHBs to continue buying properties. This has significantly dropped off. They need to be willing to take on ever increasing amounts of debt.

    4: Australia dose not have a transparent credit market (securitization – RMBS and covered bonds) with primary and secondary markets. We need this to mitigate the future funding risks that expose Australian mortgage holders to the whims of international investors. We need interest rates to be pegged as a margin over an identifiable base eg, bank bills
       
    5: Our dependence on China. Our terms of trade are commodity based, China catches a cold I fear we will be hospitalized with pneumonia.

    6: Food, energy and commodity based inflation,  which is seeing the everyday cost of living increasing dramatically.

    7: Australia's private sector debt. (Private debt to GDP). Australian's are amongst the most heavily indebted people on the planet.

    8: We need to change the Australian mortgage system, currently the major 4 Australian banks can charge the borrower any interest rate they want at any time plus increase fees and charges at any time.
    The Australian banks can call for repayment of a mortgage any time but especially under situations where collateral values have decreased.
    The Australian banks have to stop using whatever equity a borrower has in their house as a tool to prop up their capital bases, This is all at the risk of the Aussie encumbered home owner, investor. 

    Here are just some of my thoughts, I am no expert, and I have absolutely  no idea what is going to happen, however i fear the property game is in overtime.  

    Note: Disclaimer, I am 33 years old single male who owns an unencumbered property in Neutral Bay, Sydney.

    Profile photo of michaelandre70michaelandre70
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    Post Count: 34
    fWord wrote:
    MRW wrote:
    may as well keep this discussion going.

    http://seekingalpha.com/article/246486-australia-the-last-epic-bubble-formulating-a-coherent-investment-strategy

    I have no idea who this guy is, whether what he says is valid or not. Interesting read though.
    Who knows!


    Mark

    Interesting read, and judging by the comments, there's a lot of people out there waiting for the Australian property market to fail. It very well may, or it may not. One thing is for sure: the ones waiting for the crash have virtually nothing to lose and potentially a lot to gain if the bubble bursts. All they need to do is sit around and talk. It doesn't take guts (nor the smarts) to do that. Talk is nothing without action.

    Those with money in the market are the ones who stand the chance of losing a lot. That said, I am betting my future and my entire portfolio that there is no bubble to burst. Sure, prices could fall but that doesn't fuss me. And I'm not anticipating price falls of 30, 40 or 50% either. I'll rather take my chances at a better financial future (at the risk of losing everything) rather than wait around, do nothing, and be screwed anyway, wallowing in self-pity and poverty in my golden years as inflation causes the death of a thousand cuts.

    I totally agree with you on the note that many people will gain if the bubble bursts. I have the same feeling that prices won't fall by 30 – 50%. It could be 15 – 25 % at best.
     

    Profile photo of fWordfWord
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    michaelandre70 wrote:

    It could be 15 – 25 % at best.
     

    And 25% would be a good drop, turning a $500K property into a $375K bargain. And I'd like to believe this is possible. If such property is not in mortgage-belt areas and is in well-established suburbs with adequate amenity, those fence-sitters would do very well to buy.

    Profile photo of hschmidhschmid
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    nicolas_b, I remember going to a seminar where the headline presenter was introduced as a guy worth 25 million so I paid close attention.

    A lot of what he said made no sense and I couldn’t believe his position of wealth.

    I then discovered that he inherited 50 million 2 years prior.

    I am sure though that your unencumbered property in Neutral Bay is totally self made.

    At 33 thats a great achievement. Well done

    Profile photo of WynyardWynyard
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    Here is a link to the full ‘Demographia International Housing Affordability Survey: 2011’ for those interested: http://www.demographia.com/dhi.pdf

    Profile photo of aresares
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    @ares
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    DW, I like this: Please don't bother trying to tell us all how unaffordable everything is. The question you should be asking my friend is "what do fear mongerers have to gain" People who spruik the market "what do they have to gain?", people who spook the market, "what do they have to gain?". – Like everything it's a knowledge game – who's zooming who and why! <moderator: delete personal comment>

    Profile photo of DWolfeDWolfe
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    Property development is not 9-5! So I can make time if I am passionate about something :)

    Yep totally slack, I should be a billionaire by now lol.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of aresares
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    @ares
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    A mate of mine already is a billionaire between him and his pops.
    (Comm prop) gets ragged on all the time.

    Peeps forget his pops had difficulties in the 80’s and they learnt from it.
    Remember the 80’s!

    I agree, the answer, or, the ever elusive chalice, whatever, is – you get
    what you put time into. Passion is the key.

    You have obviously learnt your lessons well, or are a well learned scholar (lol)!

    Henry Ford said – “Funny thing is, the harder I work, the luckier I get”

    Carol Shelby said – “It’s not how fast you go, but how you go fast”

    Never tire of hearing these, gives everyone hope I think.

    Better off living on the lighter side of life if you can.

    Do risk analysis but eventually, ONE side has to tip you over and here’s
    the kicker, IMO , the due diligence IS the passion, and so IS the BS
    (lol) that comes along with pulling the trigger.

    Talk about dribble (mine), anyhow as you say (between the lines), forums
    can be an interesting intermission –

    Profile photo of fWordfWord
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    DWolfe wrote:
    Property development is not 9-5! So I can make time if I am passionate about something :)

    Yep totally slack, I should be a billionaire by now lol.

    D

    Yeah, REAL investors don't frequent these forums on a regular basis. ;) Get out there and get cracking!! :D

    Profile photo of DWolfeDWolfe
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    LOL.

    Yeah imagine if I was 'real' investor, I'd have to wear an ugly black suit, work 9-5 in a windowless office and have no personality. ;)

    Gotta love a stereotype.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of David22MayDavid22May
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    Well here we are quite a few months later and here in Sydney in some areas we have seen excellent gains since this last post. 20% in some areas that we have invested in

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