Guest The Pom Queen Posted May 19, 2012 Share Posted May 19, 2012 What a difference a year makes. At least if you've ignored all the hype. It was about this time in 2011 when the word went out we were in the midst of a rare phenomenon — a buyer's market. Clearance rates were on the slide. Supply was way up. Most importantly, prices were down in many parts of the country. This was the time to buy, it was said. Don't wait — these favourable conditions wouldn't last long — because the market had hit bottom. There was plenty of scepticism, to say the least. The claims smacked of self-interested optimism at best; an increasingly desperate spruiking at worst. This is where the market stood in April 2011, according to RP Data-Rismark's index of dwelling values (houses & units): Year to April 2011 Sydney 1.2% Melbourne -0.4% Brisbane -6.8% Adelaide -2.1% Perth -7.1% Darwin -7.0% Canberra 0.7% Hobart NA National -1.5% These falls had barely begun to take the edge off the massive price growth experienced in the previous two years. While there were undoubtedly some good individual buys to be had, a buyer's market it was clearly not ... yet. Fast-forward 12 months and the picture is a hell of a lot different. Rather than bottoming out in mid-2011, across-the-board declines followed throughout the capital cities. The slide proved to be pretty steep in Hobart, Melbourne and Brisbane. Year to April 2012 Sydney -2.6% Melbourne -7.0% Brisbane -6.4% Adelaide -4.2% Perth -2.8% Darwin -1.1% Canberra -0.7% Hobart -8.5% National -4.5% Plenty of pundits and industry people will disregard or dismiss this whole exercise by attacking the use of metropolitan median figures. They are too imprecise; they don't tell the story about what's happening in pockets of the market or particular price bands. Fair enough, up to a point. Nobody buys a house based on the Melbourne metro median, but nor do they base a purchase decision on the suburb or council median either. Individual purchases are exactly that. Nevertheless, these figures do point to a trend that certainly runs counter to the buyer's market mantra we heard last year. And for the average punter, someone who doesn't need to buy a home but can move into the market at a time and place of their own choosing, the figures are quite stark. In many parts of the country, the decision to wait just one year could have theoretically saved them a bundle: Change in $ for a $500,000 home over year to April 2012 Sydney -$13,000 Melbourne -$35,000 Brisbane -$32,000 Adelaide -$21,000 Perth -$14,000 Darwin -$5,500 Canberra -$3,500 Hobart -$42,500 National -$22,500 And this only accounts for price movements in the last year, not from the market's peak. Quote Link to comment Share on other sites More sharing options...
Peach Posted May 19, 2012 Share Posted May 19, 2012 (edited) In many parts of the country, the decision to wait just one year could have theoretically saved them a bundle: Change in $ for a $500,000 home over year to April 2012 Sydney -$13,000 Melbourne -$35,000 Brisbane -$32,000 Adelaide -$21,000 Perth -$14,000 Darwin -$5,500 Canberra -$3,500 Hobart -$42,500 National -$22,500 And this only accounts for price movements in the last year, not from the market's peak. Only if they didn't have to spend money on rent in the same year.. Saving $13,000 in Sydney by waiting longer buy a house, only to have to spend $26k on rent aint much of a saving. Edited May 19, 2012 by guest32487 Quote Link to comment Share on other sites More sharing options...
NickyNook Posted May 19, 2012 Share Posted May 19, 2012 What a difference a year makes. At least if you've ignored all the hype................. ................ And this only accounts for price movements in the last year, not from the market's peak. Just curious - but are you Chris Vedelago? The author of this article? Quote Link to comment Share on other sites More sharing options...
Joebloggs Posted May 19, 2012 Share Posted May 19, 2012 Only if they didn't have to spend money on rent in the same year.. Saving $13,000 in Sydney by waiting longer buy a house, only to have to spend $26k on rent aint much of a saving. Over the same period rents increased Canberra +6.4% Perth +5.3% Sydney +4.2% Melbourne -1.5% Hobart -3% Adelaide +1.5% Quote Link to comment Share on other sites More sharing options...
Danny&Em Posted May 19, 2012 Share Posted May 19, 2012 Thanks for this info,,, regardless of who wrote it... If it wasn't posted I would never have seen it. One of the 'what if etc' questions is what, when should we buy,,, and working out which crystal ball to gaze at. If the prices are dropping then it gives us more to buy etc.... Hopefully?.??.... Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted May 19, 2012 Share Posted May 19, 2012 I have noticed that house prices have decreased in Perth, these figures bear that out, 10% down, on a $500k property = $50k, which is definitely good news for us, all i need now is for the dollar to go up to $2 to £1 would see us get over there, buy the house of our dreams and be mortgage free, i can see it might be all coming together. Quote Link to comment Share on other sites More sharing options...
Peach Posted May 19, 2012 Share Posted May 19, 2012 I have noticed that house prices have decreased in Perth, these figures bear that out, 10% down, on a $500k property = $50k, which is definitely good news for us, all i need now is for the dollar to go up to $2 to £1 would see us get over there, buy the house of our dreams and be mortgage free, i can see it might be all coming together. I keep hoping to read that you've booked your flights Quote Link to comment Share on other sites More sharing options...
Guest asaandanirish Posted May 19, 2012 Share Posted May 19, 2012 um....if i compute correctly thats good news for me i think. booking flights next week for the 27th/29th july and wanna buy a house quite quickly once getting there.... bringing over our saving and exchange rate looking ok? thanx :-) Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted May 19, 2012 Share Posted May 19, 2012 I keep hoping to read that you've booked your flights Cheers mate, thats a long way hoff yet, my son has another year of his A levels to do and the jobs we are after don't materialise until the end of 2013. 6 months ago i would have said it was 60/40 against going, but now its at least 60/40 to go. Its things like this with the houses, that makes the chances of going more possible, we are mortgage free here in the UK and the last thing we want is to be saddled with about $200k of debt at my age. Quote Link to comment Share on other sites More sharing options...
Guest JK2510 Posted May 19, 2012 Share Posted May 19, 2012 I don't really understand these figures.....houses in our suburb were under $500k last year and now alot are at least $550-$580k.....something doesn't add up....:err:! Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted May 19, 2012 Share Posted May 19, 2012 I don't really understand these figures.....houses in our suburb were under $500k last year and now alot are at least $550-$580k.....something doesn't add up....:err:! This can happen, the figures will be based on the national state averages, some places go up a bit, like yours, others go down, might even be lower in some areas than the average figures which is even better news. Quote Link to comment Share on other sites More sharing options...
fish.01 Posted May 19, 2012 Share Posted May 19, 2012 What a difference a year makes. At least if you've ignored all the hype. It was about this time in 2011 when the word went out we were in the midst of a rare phenomenon — a buyer's market. .... Seems a bit strawman to me...no wonder this guy is quoted by Steve Keen...last year, apart from the odd real estate ad, most of the hype was to not buy here in Brisbane. Quote Link to comment Share on other sites More sharing options...
Quinkla Posted May 19, 2012 Share Posted May 19, 2012 I don't really understand these figures.....houses in our suburb were under $500k last year and now alot are at least $550-$580k.....something doesn't add up....:err:! That's because the reported percentage fall applies to the average property whereas a $500000 property is at the cheap end - at least in Melbourne. And in Melbourne, there have been massive falls in the top end of the Market whereas the bottom end has pretty much held up and might even be increasing slightly. Quote Link to comment Share on other sites More sharing options...
stevemalbec Posted May 30, 2012 Share Posted May 30, 2012 Only if they didn't have to spend money on rent in the same year.. Saving $13,000 in Sydney by waiting longer buy a house, only to have to spend $26k on rent aint much of a saving. Plus the interest on the deposit you've got in the bank, the savings from not paying building insurance, strata fees, maintenance etc, the difference could be negligible. Quote Link to comment Share on other sites More sharing options...
RockDr Posted May 31, 2012 Share Posted May 31, 2012 Plus the interest on the deposit you've got in the bank, the savings from not paying building insurance, strata fees, maintenance etc, the difference could be negligible. Yeah I did the maths a few weeks back, whether we rent and save and then buy outright, or buy & pay mortgage, financially doesn't make much of a difference over a 5-7 year period. (In fact if housing market stays flat, we're financially marginally better off renting). Quote Link to comment Share on other sites More sharing options...
Guest JK2510 Posted May 31, 2012 Share Posted May 31, 2012 We are alot better off renting....around $250-$350 pw better off. Quote Link to comment Share on other sites More sharing options...
rikyuu Posted May 31, 2012 Share Posted May 31, 2012 (edited) The Australian property market and peoples views of it never cease to amaze me. Absolutely every conceivable thing you can think of is done to talk up the market and everyone believes money can and will be made with a property investment. All news reports and survery etc are done by people with vested interests in increasing property prices - government, builders, investors, property agencies and every bit of information is twisted to make you want to invest. Investing is heavily promoted on TV and radio too. You've got negative gearing and grants from the government. You've got tight lips on anything negative, like there are no official records on reposessions and banks won't advertise a house a reposessed as it gives bad vibes. There must be 2 houses for sale on every street in the area I rent (which is nice, new and convenient), yet housing shortage is always mentioned and agencies specifically only allow viewing on one particularly day, so you end up viewing with 10 other people, creating the illusion of high demand (10 people for 1 house). Every trick in the book is used to keep the prices going up and Aussies fall for it hook line and sinker. The young people I know expect to live with their parents most of their lives, but they all have investment properties. The rent doesn't even cover the interest and they are low paid, but the government gives back much of the losses at tax time. Even the unemployment rate is talked down. To be classed as fully employed, you only need to work for 1 hour in the week the survey is done and that work doesn't have to be paid! Hence unemployment below 5%, making people feel happy and secure and continue investing. The government has many other tricks up it's sleeves to keep prices high. Restrict land release and allow more foreign investment, easy. In theory, the bottom should fall out of the market, but it won't as the Australian government like to intervein in anything that will affect them, the banks or the building industry, so they won't let it collapse........ Edited May 31, 2012 by rikyuu Quote Link to comment Share on other sites More sharing options...
bensym Posted May 31, 2012 Share Posted May 31, 2012 Rikyuu, a somewhat cynical view but I like most of what you say. There is this overwhelming undercurrent of "she'll be right mate" around the Aussie economy and the housing market. You should listen to my father bang on about his three investment properties over there, despite being leveraged up to the hilt. Negative gearing has exacerbated the housing bubble there, and the Australian govt have been the main proponents in getting the Australian housing market to overheat to the stage it is now. Of course they are going to intervene wherever possible to protect themselves politically. All it takes is a shock to the system and the house of cards will come tumbling down. I don't want to buy when I get there due to this threat. I think the tipping point is coming. Quote Link to comment Share on other sites More sharing options...
fish.01 Posted May 31, 2012 Share Posted May 31, 2012 I don't understand these comments...none of it matches my reality...house prices have been falling for well over a year in Brisbane...apart from the odd real estate article spruiking that the bottom has been reached everyone knows the prices have been falling for a long time, most people are not duped, the bubble has been deflating, average mortgage sizes are the same as places like the UK, there doesn't appear to be multiple mass conspiracies in play...just a normal gradual deflation after a boom...while things are stable this should continue...mass instability could change this...all well known things discussed often, hardly a secret to most who care... Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted May 31, 2012 Share Posted May 31, 2012 I have noticed a decrease on the realestate.com.au site, from a year ago, which is good news indeedydoodle, lol. Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted May 31, 2012 Share Posted May 31, 2012 I didn't realise i had posted on here before, lol We want the prices to go ....... LLLLLLLLLL Lower, lol. As long as there isn't mass suicides, because of mass home repossessions, throwing thousands of homeless families out of their homes, to the live on the streets, or in tents, just thought i would post that, just in case someone massively mis-quotes my intentions again. Quote Link to comment Share on other sites More sharing options...
jamjar Posted May 31, 2012 Share Posted May 31, 2012 We are alot better off renting....around $250-$350 pw better off. Does that calculation take into account the full mortgage amount or just the interest element - you need to compare like for like and not include the capital element. Quote Link to comment Share on other sites More sharing options...
RockDr Posted June 1, 2012 Share Posted June 1, 2012 Does that calculation take into account the full mortgage amount or just the interest element - you need to compare like for like and not include the capital element. Actually a full calculation does take the capital into account, along with all the other fees etc payable by owners, and also the amount of interest you could be earning on your savings while renting. Take all of that into account and we're marginally better off renting, despite having a 50% deposit. With a much smaller deposit you'd be significantly better off renting, so JK's quote sounds about right. Quote Link to comment Share on other sites More sharing options...
Guest JK2510 Posted June 1, 2012 Share Posted June 1, 2012 We would have a smaller deposit,this amount is for principal and interest. i don't want to rent for the next 2-3yrs but the sums just don't add up....yes we will have peace of mind but we would struggle financially. That is a lot to lose every week! Quote Link to comment Share on other sites More sharing options...
bensym Posted June 1, 2012 Share Posted June 1, 2012 Actually a full calculation does take the capital into account, along with all the other fees etc payable by owners, and also the amount of interest you could be earning on your savings while renting. Take all of that into account and we're marginally better off renting, despite having a 50% deposit. With a much smaller deposit you'd be significantly better off renting, so JK's quote sounds about right. I think anyone moving to Australia (like myself in three weeks) needs to rent with the Australian housing market and AUD over-inflated to the state they are now. I've always been a big believer in minimizing debt in your life, yet Australia does seem more of a debt "trap" than the UK at the moment. Aussie banks charging exorbitant lending rates and massive multiples-of-salary needed to buy a property do not help. Quote Link to comment Share on other sites More sharing options...
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