Guest Bullion Baron Posted June 1, 2011 Share Posted June 1, 2011 Okay, so it's clear now to anyone with half a brain out there that house prices in Australia are collapsing fast, with the data released yesterday highlighting massive falls in Perth and Brisbane especially but all around the country too! Sometimes it’s hard to believe this ponzi kept going for as long as it did. It should have popped last time but a round of unprecedented stimulus forced a last gasp of air into the bubble. All they did was kick the can down the road and now the collapse will be even worse. Posters have been predicting this outcome for some time, and now the scale of this coming collapse will surprise the majority of commentators, in the same way the GFC surprised most economists I'm a potential FHB (First Home Buyer) as are several family members and we can't help thinking this will be a scary thought for our politicians, and now that this (inevitable IMHO) crash is underway they'll be utterly desperate to avoid a UK or US style economic collapse led by the bursting of the housing bubble. What's worse, is that GDP has gone negative and we're only one quarter away from a technical recession. Get that, halfway to recession folks! This aint good news! (for housing bulls ha ha) :biggrin: I kind of suspect our government will panic and pressure the Reserve Bank to slash interest rates, and at the same time they'll unlease another barrage of stimulus spending, especially more grants and handouts to the bloated and inefficient housing sector. What does everyone else think? Will Labor make the same schoolboy errors all over again and pump up the housing bubble with more stimulus, or will they sit back let it all collapse this time and bring the country down with it? Awareness of the housing bubble is really seeping into the brains of the masses in Australia. The biggest driver of house prices is sentiment, when consumers are confident they’ll bid up prices to crazy levels irrespective of fundamentals, but now the tides turning, panic is setting in and they’ll all run for the exits at the same time, especially the speculators holding multiple investment properties. Even Kochie is in on the game, saying prices are crashing on morning television! Thoughts? BB. Quote Link to comment Share on other sites More sharing options...
janine the party queen Posted June 1, 2011 Share Posted June 1, 2011 I have been keeping a close eye on the housing situation myself.Trying to decide to buy or not. From what I am seeing in my area,house prices are on there way down. There are 2 houses on my street that have been up for sale since January,both have now dropped their asking price by $60,000 !!!!!!.It seems to be the same story in most suburbs here in Palmerston. On the news this morning they were talking about how Australia is becoming a nation of renters and that only 1 in 4 people will own their own home ,and have enough super by the time they retire. Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted June 1, 2011 Share Posted June 1, 2011 I hope there is a huge crash, for my own personal reasons, our house in the uk is down about 20% or £45,000 and it would be nice if Australia has a mini melt down, so that we can afford that house we saw when we visited there, sorry if its happening to my friends on PIO but those of us who are trying to emigrate, we are due a bit of good news. Quote Link to comment Share on other sites More sharing options...
Guest Gibbo Posted June 1, 2011 Share Posted June 1, 2011 I hope there is a huge crash, for my own personal reasons, our house in the uk is down about 20% or £45,000 and it would be nice if Australia has a mini melt down, so that we can afford that house we saw when we visited there, sorry if its happening to my friends on PIO but those of us who are trying to emigrate, we are due a bit of good news. what part of it is good news ? Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted June 1, 2011 Share Posted June 1, 2011 what part of it is good news ? PIO is a site predominently for people looking at emigrating to Australia and hoping to buy a home over there, a crash in prices would help the majority of PIO members. Quote Link to comment Share on other sites More sharing options...
Guest Gibbo Posted June 1, 2011 Share Posted June 1, 2011 do you not think that a house price crash will lead to a lot of unemployment in the construction sector and therefore the retail sector will be affected also. This will totally scupper a lot of peoples plans to emigrate as the competition for jobs will increase. I have to disagree with you - I think it is very bad news for a lot of people. Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted June 1, 2011 Share Posted June 1, 2011 do you not think that a house price crash will lead to a lot of unemployment in the construction sector and therefore the retail sector will be affected also. This will totally scupper a lot of peoples plans to emigrate as the competition for jobs will increase.I have to disagree with you - I think it is very bad news for a lot of people. I don't disagree with you, but we have had this here in the uk for the last 3 years and those of us trying to get over to Australia have seen our money dwindle and i don't want anyone to suffer, but what will happen, will happen, for my own personal circumstances it will be good, for others not so. Quote Link to comment Share on other sites More sharing options...
Guest The Ropey HOFF Posted June 1, 2011 Share Posted June 1, 2011 On the flip side of this, there are people on here who are coming back to the uk and they are very voiciferous over the high dollar due to Australia fairing alot better than the uk financially, they go on about how much money they will make, thanks mainly to Australias booming economy and no one says your being selfish for saying that, it is how it is, we can't change things, if Australias economy and house prices crash, its just a cycle of boom and bust, the uk has had 18 recessions in its history and the experts say this one is taking longer than most of the others to come out of. It would be nice if everyone had jobs and nice houses and didn't suffer from the global financial disasters, but unfortunately reality isn't like that. Quote Link to comment Share on other sites More sharing options...
Guest Gibbo Posted June 1, 2011 Share Posted June 1, 2011 The government in Australia for the last couple of years have been kicking the ball up the pitch as far as recession is concerned. They have used hundreds of billions of dollars in stimulus money and recession is now starting.What will they do now to avoid recession ? The ammount of personal debt in Australia will start to catch up with people now. Of course this is only my personal opinion and I am by no means an expert in economics. Quote Link to comment Share on other sites More sharing options...
Graemsay Posted June 1, 2011 Share Posted June 1, 2011 Bullion Baron, you're not a Hobo on a different forum are you? Australian house prices are grossly out of line with incomes in some of the cities, particularly Sydney and Melbourne. As a very rough illustration of this, economists describe having to spend more than 30% of gross (i.e. before tax) income on paying for a house as mortgage stress. The median (average) house in Sydney would need to halve in value just to get back to this level. To afford a typical property you need to be earning twice the median wage, or be in the top 10% of earners. And before anyone says it was always difficult, 25 years ago the ratio was about half. Bubbles tend to deflate slowly. Jeremy Grantham, a fund manager who specialises in spotting and profiting from them, says that they tend to be symmetrical. Given that houses started to rise somewhere ahead of inflation somewhere around 1997, and got out of line with wages a few years later, the market could be painful for some time to come. The US peaked in 2006 and is still falling, for example. The last house price boom ended in 1989 in the UK, and the trough was 1996. That was seven years of falls. After a bubble, prices have a tendency of becoming very, very cheap. If you're willing to hang out until 2015 to 2020 then you could pick up a once-in-a-lifetime bargain. Where the Ropey Hoff is correct is that anyone who doesn't own property is going to benefit massively from price falls, as would those who want to upgrade. The group that's likely to get smashed up will be recent entrants, and (in particular) those of roughly my age (30s) who have upgraded. They'll have paid top dollar for a family house, but won't have a big enough equity buffer to absorb losses. Older owners (say 40s onwards) should have enough equity to shelter then. Gibbo is right, in that any period of falling prices is going to be painful. It'll be another burden on the economy, so you'd be looking at recession, slow growth and unemployment. Look at the UK in the early nineties, or the US and UK now. Quote Link to comment Share on other sites More sharing options...
KIRK AND CO Posted June 2, 2011 Share Posted June 2, 2011 do you not think that a house price crash will lead to a lot of unemployment in the construction sector and therefore the retail sector will be affected also. This will totally scupper a lot of peoples plans to emigrate as the competition for jobs will increase.I have to disagree with you - I think it is very bad news for a lot of people. Good news if you have £4-6 hundred thousand to cart over with you & the exchange rate goes up so fantastic news. Quote Link to comment Share on other sites More sharing options...
Guest Gibbo Posted June 2, 2011 Share Posted June 2, 2011 Good news if you have £4-6 hundred thousand to cart over with you & the exchange rate goes up so fantastic news. good for you mate. so what have you got - 4 or 6 hundred thousand. what about people who go to try and carve a life for themselves with nowhere near this ammount. easy to boast over the net isn't it. Quote Link to comment Share on other sites More sharing options...
KIRK AND CO Posted June 2, 2011 Share Posted June 2, 2011 good for you mate.so what have you got - 4 or 6 hundred thousand. what about people who go to try and carve a life for themselves with nowhere near this ammount. easy to boast over the net isn't it. If you have ???? did I say I had that NO but your right easy to have a go at someone isnt it just like you have but I have no problem with you so hope your plans go well good luck. Quote Link to comment Share on other sites More sharing options...
Petals Posted June 2, 2011 Share Posted June 2, 2011 We have been waiting for a long while for prices to reduce and I expected them to a while back. Everytime they start to reduce they seem to come back again. The reason, immigration, short supply, in some areas supply is dire. I think that areas with a lot of new builds may come under pressure due to competition from builders still building. People still like new builds house and land for the stamp duty savings. Inner city there is still shortage of reasonably priced property and any there is is highly sought after so cannot see that changing. I look at it this way, if I have to sell and I do not get as much money, I will not have to spend as much to get somewhere else. Population will still dictate. The prices got out of kilter when the gst was introduced and I lay the blame on the last government for the price rises, did not handle it well to prevent this. Also the incentives for people to invest in property are not helping the housing become affordable in Aus. Quote Link to comment Share on other sites More sharing options...
Guest snowy10 Posted June 2, 2011 Share Posted June 2, 2011 House prices going down can only be a good thing for the majority of people on here wanting to emigrate, and for those people renting in Australia waiting for prices to become more realistic. House prices are not the issue, as previous poster mentioned, if house prices fall "every" house price falls so it is all relative. The most important thing for affordability is interest rates, providing you can still afford to pay your mortgage it does not matter what your house is worth...unless you intend selling and not buying another property. Quote Link to comment Share on other sites More sharing options...
jimithechew Posted June 2, 2011 Share Posted June 2, 2011 When Main street follows 'Wall Street' its time to get out! In the paper the other day it said its been 4 years since we (UK) started the slippery slope, it is impossible to maintain or increase the house prices, and that goes for anywhere. I hope, that the property market does check itself, and the AU$ does fall against the pound. What you have to remember is that unlike the UK, Oz is a different kettle of fish, i.e mining, and untold future growth, I think prop will go down but they wont have a recession like us, Quote Link to comment Share on other sites More sharing options...
fleabo Posted June 2, 2011 Share Posted June 2, 2011 Have you decided yet whether you are buying in Perth or Brisbane? Okay, so it's clear now to anyone with half a brain out there that house prices in Australia are collapsing fast, with the data released yesterday highlighting massive falls in Perth and Brisbane especially but all around the country too! Sometimes it’s hard to believe this ponzi kept going for as long as it did. It should have popped last time but a round of unprecedented stimulus forced a last gasp of air into the bubble. All they did was kick the can down the road and now the collapse will be even worse. Posters have been predicting this outcome for some time, and now the scale of this coming collapse will surprise the majority of commentators, in the same way the GFC surprised most economists I'm a potential FHB (First Home Buyer) as are several family members and we can't help thinking this will be a scary thought for our politicians, and now that this (inevitable IMHO) crash is underway they'll be utterly desperate to avoid a UK or US style economic collapse led by the bursting of the housing bubble. What's worse, is that GDP has gone negative and we're only one quarter away from a technical recession. Get that, halfway to recession folks! This aint good news! (for housing bulls ha ha) :biggrin: I kind of suspect our government will panic and pressure the Reserve Bank to slash interest rates, and at the same time they'll unlease another barrage of stimulus spending, especially more grants and handouts to the bloated and inefficient housing sector. What does everyone else think? Will Labor make the same schoolboy errors all over again and pump up the housing bubble with more stimulus, or will they sit back let it all collapse this time and bring the country down with it? Awareness of the housing bubble is really seeping into the brains of the masses in Australia. The biggest driver of house prices is sentiment, when consumers are confident they’ll bid up prices to crazy levels irrespective of fundamentals, but now the tides turning, panic is setting in and they’ll all run for the exits at the same time, especially the speculators holding multiple investment properties. Even Kochie is in on the game, saying prices are crashing on morning television! Thoughts? BB. Quote Link to comment Share on other sites More sharing options...
Guest Anya Posted June 3, 2011 Share Posted June 3, 2011 Someone asked me when we were doing to buy a house (a small 4 bed house in our suburb costs $2 million++). My reply was - I can't even bring myself to buy Tahitian limes at 60c a piece here (refer to my post in Aus is a rip off thread!) so do you see me buying a house here?? LOL Seriously, house prices are beyond ridiculous in Melbourne as it is elsewhere in Australia. I have much better uses for my money and won't be wasting it on buying some overpriced pile of bricks over land! Quote Link to comment Share on other sites More sharing options...
Parley Posted June 3, 2011 Share Posted June 3, 2011 Its the land that's valuable - not the pile of bricks on it. Quote Link to comment Share on other sites More sharing options...
Guest Anya Posted June 3, 2011 Share Posted June 3, 2011 Its the land that's valuable - not the pile of bricks on it. Oh right, I forgot there could be gold mines down below. So nothing to do with speculation fuelled by a rampant growth in credit I suppose... Quote Link to comment Share on other sites More sharing options...
Parley Posted June 3, 2011 Share Posted June 3, 2011 You must live in the most expensive suburb in Australia. Toorak ? Quote Link to comment Share on other sites More sharing options...
Guest Anya Posted June 3, 2011 Share Posted June 3, 2011 Close Quote Link to comment Share on other sites More sharing options...
Parley Posted June 3, 2011 Share Posted June 3, 2011 Malvern East ? Quote Link to comment Share on other sites More sharing options...
l1sa Posted June 3, 2011 Share Posted June 3, 2011 PIO is a site predominently for people looking at emigrating to Australia. Actually Ropey, I don't mean to be pedantic here but I'm not sure that is actually the case!!:tongue: Just look at the name....Poms IN Oz, not Poms wanting to be in Oz!! hoping to buy a home over there, a crash in prices would help the majority of PIO members. But this bit I agree with!! Would most definately help me!! Well provided massive recession doesn't follow house price crash, cos I'd really quite like a job when I get there!!!:jiggy: xx Quote Link to comment Share on other sites More sharing options...
Guest Anya Posted June 3, 2011 Share Posted June 3, 2011 Malvern East ? Sackville st, kew ;-) Quote Link to comment Share on other sites More sharing options...
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