Are house prices set to tumble in Oz?

[rockola57]

 

I think it was Liverpool nsw?

I too thought that at first,but the issue became clouded in inuendo i think!:yes:

[pablo]

I too thought that at first,but the issue became clouded in inuendo i think!:yes:

No mate,the hse that was posted was in deysbrook,i clicked on the link,it was one of those roads near Lpools melwood training ground

[Guest siamsusie]

 

It's about what you want to achieve, as much as anything. I'm not actually that interested in financial return - I'm more bothered about having a stable home life and a place that feels like 'home'. If I can achieve that for myself, it's all I need!

 

Exactly right Littlesarah:notworthy:

[Addy]

For anyone interested, the latest auction results (11/12/10) in some states;

 

Melbourne - 53%

http://www.homepriceguide.com.au/saturday_auction_results/Melbourne.pdf

 

Sydney - 50%

http://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf

 

Brisbane - 7%

http://www.homepriceguide.com.au/saturday_auction_results/Brisbane.pdf

 

Adelaide - 33%

http://www.homepriceguide.com.au/saturday_auction_results/Adelaide.pdf

[Joebloggs]

 

There are 621 ghost estates across the Irish Republic now, a legacy of those hopeful years. One in five Irish homes is unoccupied.

If the country immediately used them to house every person on the social housing list, there would still be hundreds of thousands left over.

The obvious question of who people imagined would live in all these new-builds makes Irish people wince now.

But hindsight is a wonderful thing. Only a few years ago, developers feeding money into local government coffers were getting free rein to build row upon row of five-bedroom detached houses on the green outskirts of towns nobody had even thought of commuting from before.

'Raised eyebrows'

Banks were throwing money at members of the public who saw these houses either as an escape to a better lifestyle or an investment route to riches.

 

Builders from eastern Europe were working overtime to create homes, the value of which was sometimes three times what it is now. As the slump set in, the immigrant workers went back home, the banks ceased lending on the scale that had fuelled the frenzy and the market disappeared.

 

 

Property supply had become completely divorced from property demand.

County Leitrim alone would have needed about 590 new houses between 2006 and 2009 to accommodate its population growth. It got 2,945.

The resulting mess is currently being addressed by a nationwide audit of empty and unfinished housing.

It has raised eyebrows that precise numbers are not already clear, even to the local councils who gave planning permission for the homes in the first place.

'Everyone was buzzing'

Ciaran Cuffe is the Green Party minister of state in charge of the audit.

"It's one heck of a challenge", he says, "because we have the legacy of many years of poor planning, and an economy that was overheated, paid far too much attention to construction and was more interested in the quantity than the quality of homes".

He says the state's perceived wealth was part of the problem.

"I think there was a view that demand would continue indefinitely at a time when we had very high levels of immigration.

"People thought the housing was needed not only for the people of Ireland but also for others that had come here, and that this golden goose would continue to lay golden eggs for ever."

 

Nobody expects the majority of the Republic's surplus new housing simply to be ploughed down by the bulldozers now.

But Mr Cuffe admits some of the recent headlines in the Irish press on the subject are not completely wide of the mark.

"I certainly think demolition could be part of the solution in cases where we have housing estates that are unoccupied, that are miles away from where people want to live and that were badly built in the first place."

And indeed, many of the Irish ghost estates are in the unlikeliest, most isolated places.

It is strange, looking down vast rows of immaculate new-builds, taking in their optimistically-planted front gardens and peering through curtain-less windows into unwanted granite-topped fitted kitchens, to comprehend the fact that they might never be occupied.

Mr McWilliams says the whole of the Irish Republic is having to come to terms with what he compares to a collective addiction.

"Everyone took the property drug at the same time", he says, "everyone was up at the same time, everyone was buzzing.

"Now we are all in the middle of this huge comedown. And people are looking around and saying - 'what happened? Was that us?' And then we look at our bank statements and we realise - 'yes, it was'".

 

 

 

 

 

BBC News - Ghost estates testify to Irish boom and bust

[Addy]

I have been busy and haven't been online much for the past few months. So I would be interested to hear what people think now?

 

The stats are out for the last quarter and house prices are down 1.6% I think. (I will dig up the article I read with the stats so that is from memory) Which isn't huge, but it's not good either if you annualise that.

 

How are people feeling about the market now?

[nevsm]

I have been busy and haven't been online much for the past few months. So I would be interested to hear what people think now?

 

The stats are out for the last quarter and house prices are down 1.6% I think. (I will dig up the article I read with the stats so that is from memory) Which isn't huge, but it's not good either if you annualise that.

 

How are people feeling about the market now?

 

there is a shortage of housing here - there may be large falls in value in top end apartments and prestige houses but I would be surprised if there are large falls in average houses. Be very careful with statistics a fall in a high value house can skew results. there has been large increases in Melbourne houses and rumors of falls in the area maybe someone living there will post something.

[Guest cricketbackinengland]

This might interest some on the debate of house prices. It's an Australian investor produced subscription read.

 

Money Morning Australia

[Guest guest30038]

This might interest some on the debate of house prices. It's an Australian investor produced subscription read.

 

Money Morning Australia

 

By a company commited to selling stocks and shares. :rolleyes:

[Addy]

Here is the article I read which was in the main stream press;

 

'Worst ever' property dive after disasters | News.com.au

 

It shows fall across certain capital cities.

 

I thought the myth of the property shortage had been busted? Again I will look for a mainstream article I read on that.

 

From personal experience, I have noticed that not one house in our area has sold since Xmas. Prices range from $500K to $800k which is mid market in Adelaide. However it is a small sample of 8 houses.

 

I imagine every city and every area within those cities is different. I have noticed as we were thinking of buying so are looking at what is for sale.

 

I also have friends in Adelaide who have been trying to sell for over 6 months and others in QLD who took a while to sell and had to discount. Again anecdotal evidence.

 

I won't be buying for a while as it doesn't look good to me at the moment. I reckon everyone is holding off waiting to see if interest rates will be raised again.

 

Forgot to add, this was in this mornings press;

 

http://www.news.com.au/money/auction-rates-fudged-by-failed-campaigns/story-e6frfmci-1226016477643

[Guest siamsusie]

Thanks for that Addy, it makes for interesting reading and has been on the cards for a long time.

 

We still have the high prices in the mining towns, which has amounted to silly money, which is probably why FIFO is so prevalent

[Guest peacock]

There has been a huge correction in the stockmarket, property prices are on the downward cycle in Uk/US so I see no reason that there is not some sort of follow on here with property prices

[spottydog]

Sydney's inner west is still booming and the lower north shore is still struggling, I think that's a lot to do with the change in lifestyles of the current generation of parents and means that you will see some areas drop in prices while others boom.

 

I've noted attitudes seem to be changing and women want a career rather than being a full time mum and people now want somewhere to walk to of an evening and weekend and want to socialise with friends and neighbours rather than previously wanting the big house and driving everywhere. Our inner west parks are full at weekends with kids playing on the swings while their parents sit around with a coffee and chat, no longer is it required for you to entertain the kids at home or for those that have kids and those that don't to socialise separately.

[Guest cricketbackinengland]

Here is the article I read which was in the main stream press;

 

'Worst ever' property dive after disasters | News.com.au

 

It shows fall across certain capital cities.

 

I thought the myth of the property shortage had been busted? Again I will look for a mainstream article I read on that.

 

From personal experience, I have noticed that not one house in our area has sold since Xmas. Prices range from $500K to $800k which is mid market in Adelaide. However it is a small sample of 8 houses.

 

I imagine every city and every area within those cities is different. I have noticed as we were thinking of buying so are looking at what is for sale.

 

I also have friends in Adelaide who have been trying to sell for over 6 months and others in QLD who took a while to sell and had to discount. Again anecdotal evidence.

 

I won't be buying for a while as it doesn't look good to me at the moment. I reckon everyone is holding off waiting to see if interest rates will be raised again.

 

Forgot to add, this was in this mornings press;

 

Auction rates fudged by failed campaigns | News.com.au

 

 

My son's a real estate on the Gold Coast. He bought into Kevin's Rudd ludicrous FTB package in the 2009 while interest rates were low. Since he bought, rates have gone up 8 times while his house has dropped in value.

Definitely better to rent and watch to see how things go. It's not just about banks and borrowing now, the climate is having it's affect on people choosing where to buy a home. The recent global weather patterns have given climate scientists and environmentalists a much louder voice. All those houses built on flood plains are going to be very difficult to sell. Not just over there but here in England too.

For the last 2 years, we've had weeks of snow and ice in the run up to Christmas. We're in retail so trading figures weren't just affected by the economy, they were crippled because of the weather.

 

We're looking to buy now but our criteria is much different to how it used to be. For a start, I'm not buying a house out in a rural area again. I need to be able to get to my business premises.

 

Currently, it's predicted that house prices are going to drop by possibly 20% within the next 2 years so probably better to rent for now. We've worked out that we can save 1,000 pounds a month by renting which we wouldn't do if we bought. Houses are not going up by 12,000 a year so at the moment, renting for us anyway, is not dead money.

[Addy]

Thanks cricketback. I have heard that things are very tough in QLD due to the floods and the high dollar discouraging tourists.

 

Prior to emigration we lived through the GFC in the UK and I completely agree that you should wait to buy. The financial world is still in turmoil.

 

I have this in mind here in Australia too. Kevin Rudd bought his way out of the GFC but the coffers are empty. That can't be done again. I don't think a crash here is inevitable but I can see many reasons why it could happen.

 

Like you we have our own business and are used to looking at our lives wholistically and right now , the risk of buying is too high for us as we could very well have to move in a year or two and we can't risk not being able to sell or to be in negative equity. If this was a house for life it would be a whole different story.

 

Good luck in the UK. I have the feeling it will be a rough ride for a couple of years but things will improve. :wubclub:

[Guest cricketbackinengland]

Thanks cricketback. I have heard that things are very tough in QLD due to the floods and the high dollar discouraging tourists.

 

Prior to emigration we lived through the GFC in the UK and I completely agree that you should wait to buy. The financial world is still in turmoil.

 

I have this in mind here in Australia too. Kevin Rudd bought his way out of the GFC but the coffers are empty. That can't be done again. I don't think a crash here is inevitable but I can see many reasons why it could happen.

 

Like you we have our own business and are used to looking at our lives wholistically and right now , the risk of buying is too high for us as we could very well have to move in a year or two and we can't risk not being able to sell or to be in negative equity. If this was a house for life it would be a whole different story.

 

Good luck in the UK. I have the feeling it will be a rough ride for a couple of years but things will improve. :wubclub:

 

 

Thanks Addy. You too.

 

It's a big dose of reality here in the UK which I think is very healthy. I think it's also global and that no one is getting off the hook. We've got plenty of friends in business Oz (QLD) and they say things are very difficult. Obviously a lot of problems caused by the floods, we really feel for our Aussie friends at the moment.

No one is any doubt how serious things are here but I think we're turning a corner on some levels. Car manufacturers said yesterday that sales were steady, John Lewis showed a profit, we're up on last years figures but when we came back from Oz, I leased a very small business premises (low overheads) and haven't borrowed so the money that's coming in is staying in, not going out on huge bills. Been here before in these times with business and property :wink: Your money could be in a far worse place than sat idling in the bank right now. At least you can get to it if you need it in a hurry. I'm glad we're through this March quarter anyway. My view is that 2011 is the bottom, next year we'll start coming back up.

[Guest burgledad]

We have been watching this post on PiO because we will be moving from Manchester to Perth quite soon. A bubble has been created in Aus and the gearing for mortgages is unsustainable; anything more than 5 x salary is overheated. A slight loss of confidence (such as that we are witnessing) will result in easing of prices and stagnation. This will happen in Aus.

The things that actually burst the property bubble are rising unemployment or to a lesser extent rising interest rates. I have spent a lot of time in Florida and have kept a very close eye on the bursting of the US housing bubble, and what a spectacular collapse it has been. Check the number of forclosures on this site. Property is worthless.

 

Orange County Property Appraiser

 

Compared to this disaster, Aus has nothing to worry about.

[Addy]

I found this online today. It pretty much says the things which were half formed in my mind;

 

Were We Wrong About the Bubble Down Under? | Economy | theTrumpet.com by the Philadelphia Church of God

 

Scary stuff

[Guest burgledad]

I found this online today. It pretty much says the things which were half formed in my mind;

 

Were We Wrong About the Bubble Down Under? | Economy | theTrumpet.com by the Philadelphia Church of God

 

Scary stuff

There is usually some substance to what they say, but the Philadelphia Church of God is a "cult" type church with its own "the end is nigh" agenda. Still, some good points made.

[Paul1Perth]

There is usually some substance to what they say, but the Philadelphia Church of God is a "cult" type church with its own "the end is nigh" agenda. Still, some good points made.

 

Yep! Where were these guys before the housing market collapsed in the US. It's easy to be right after something has happened and even easier to look at somewhere that looks the same, make up a few names and scenarios and be critical.

 

Common sense told everyone that once the government grant disappeared houses would have to drop by the same amount (or even more) than the government grant had been. Otherwise how do new buyers get a start.

 

Looks like easy journalism too me.

[Paul1Perth]

We have been watching this post on PiO because we will be moving from Manchester to Perth quite soon. A bubble has been created in Aus and the gearing for mortgages is unsustainable; anything more than 5 x salary is overheated. A slight loss of confidence (such as that we are witnessing) will result in easing of prices and stagnation. This will happen in Aus.

The things that actually burst the property bubble are rising unemployment or to a lesser extent rising interest rates. I have spent a lot of time in Florida and have kept a very close eye on the bursting of the US housing bubble, and what a spectacular collapse it has been. Check the number of forclosures on this site. Property is worthless.

 

Orange County Property Appraiser

 

Compared to this disaster, Aus has nothing to worry about.

 

Aren't the rules different in America though. I believe you can just walk away from your debt and the government can't chase you up for it or come after you for your other assets. Not 100% sure on the rules but I've heard other people talk about it.

[Guest burgledad]

Aren't the rules different in America though. I believe you can just walk away from your debt and the government can't chase you up for it or come after you for your other assets. Not 100% sure on the rules but I've heard other people talk about it.

More or less correct.

I spent quite a lot of time in the US over the past two years and did some research into buying because house prices looked so attractive.

 

You can simply hand in your house keys to the bank and walk away. Also, any debt linked to the house such as a second mortgage or a loan that uses it for collateral stays with the house and becomes the responsibility of any new owner. Further, bankrupcy laws are less punitive so many people opt to declare and walk away. There are therefore many bank owned homes in the US and quite a proportion come with hidden debt. Sources tell me that the US market hasn't yet bottomed out and another 20% reduction in values might still happen. It is therefore very difficult to draw similar conclusions for Aus or UK housings markets.

 

The other complication is that the US banks and their exposure to debt is structured differently. The US banks are currently sharing the pain whereas in Europe and Aus the banks are yet to really feel the sting.

[Life on easy street]

Yep! Where were these guys before the housing market collapsed in the US. It's easy to be right after something has happened and even easier to look at somewhere that looks the same, make up a few names and scenarios and be critical.

 

Common sense told everyone that once the government grant disappeared houses would have to drop by the same amount (or even more) than the government grant had been. Otherwise how do new buyers get a start.

 

Looks like easy journalism too me.

 

There were over one dozen economist who predicted the mess well before it happened in the U.S and Eroupe.

 

The problem is these articles are usually only a small paragraph in the financial sections of quality newspapers which unless you have a lot of time on your hands you will never notice them.

It was chance that I read reports of warnings to Gordon brown from the I.M.F, Economists etc.

In 2003!, 2004

[Addy]

This was in today's main stream press.

 

Property sales reach 10-year low - ABC News (Australian Broadcasting Corporation)

 

I can't see any reason they would fudge the figures. I agree the other article I found was a bit left of centre.

 

Having lived through the GFC in the UK and the housing crash in 2008, I can see scary similarities here. That doesn't mean the same thing will happen but it is worrying.

[Guest carlj3108]

Hi,

 

slightly moving away from the initial thread, but we're looking to move to Perth later this year, and as mentioned housing is very costly now. I was reading that not many banks/lenders offer anything more than 90% mortgages now, but there is an insurance you can take out which can assist and push it further towards the 100% mark.

Does anyone have any knowledge of this?

Carl