House prices

Blowin's picture
Blowin started the topic in Friday, 9 Dec 2016 at 10:27am

House prices - going to go up , down or sideways ?

Opinions and anecdotal stories if you could.

Cheers

garyg1412's picture
garyg1412's picture
garyg1412 Friday, 2 Dec 2022 at 8:37am

All this talk about buying, selling, renting and investing. How about building from scratch. This is what you will get for a measly $20 million in Tassie currently.

https://www.lanegroup.net.au/projects/tinderbox-residence

donweather's picture
donweather's picture
donweather Friday, 2 Dec 2022 at 12:16pm
garyg1412 wrote:

All this talk about buying, selling, renting and investing. How about building from scratch. This is what you will get for a measly $20 million in Tassie currently.

https://www.lanegroup.net.au/projects/tinderbox-residence

That’s a very impressive house. Pool would want to be heated given it’s half indoors but.

tubeshooter's picture
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tubeshooter Thursday, 8 Dec 2022 at 4:29am

Just editing my post after seeing VJ's " honest gov" vid and I was about to repost it. It's bang on the money.
Anyway, back to work.

velocityjohnno's picture
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velocityjohnno Friday, 9 Dec 2022 at 4:04pm

In the States, Airbnbust begun it has.

flollo's picture
flollo's picture
flollo Friday, 9 Dec 2022 at 5:47pm

Market correcting itself. Leave it alone, the same should be done with many market interventions.

BTW Young Turks is another crappy, sensationalist, biased media source.

velocityjohnno's picture
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velocityjohnno Friday, 9 Dec 2022 at 8:03pm

They absolutely are terrible. Go find their reaction to Trump being elected for some fun and games :)

However, their report shows the influence of Airbnb in the states as similar to that in Australia, and the reporting of that is significant, as it shows what has happened to that aspect of the bubble as interest rates have begun to rise off abnormal lows.

bonza's picture
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bonza Friday, 9 Dec 2022 at 10:43pm
flollo wrote:

Market correcting itself. Leave it alone, the same should be done with many market interventions..

Bullshit. Anyone who thinks there isn’t a case for market intervention in the property market is clueless or benefiting.

That whole let the market sort it out shtick is exactly that. A con.

andy-mac's picture
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andy-mac Monday, 12 Dec 2022 at 8:31am

https://www.abc.net.au/news/2022-12-12/apra-mortgage-serviceability-inte...

"Then-recently re-elected treasurer Josh Frydenberg publicly met with then-APRA chair Wayne Byres within days of the government's 2019 re-election, and just a day after, the regulator announced its plans to ditch that cap.

Despite the timing of the meeting, there is speculation in some quarters of the financial sector that APRA removed the floor at the then-treasurer's behest.

Even if he didn't urge APRA to remove the floor, Mr Frydenberg praised the regulator's move as a "positive development that will continue to spur lending growth across the economy"

Geez the previous govt left a mess.....

velocityjohnno's picture
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velocityjohnno Monday, 12 Dec 2022 at 12:36pm

Talk about throwing diesel on a roaring fire!

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velocityjohnno Monday, 12 Dec 2022 at 12:53pm

"When interest rates had not risen in about a decade, having a buffer might have seemed like a waste of time.

However, the lower rates got below historical norms, the bigger that buffer should have become to protect against a reversion to mean (average), something that happens quite a lot in economies and on financial markets.

Instead, by removing the floor, the regulator effectively did the exact opposite, taking the same gamble as the RBA governor that interest rates would stay abnormally low for quite some time."

Yeah, whoops.

velocityjohnno's picture
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velocityjohnno Tuesday, 13 Dec 2022 at 12:38pm

"The Bank for International Settlements (BIS) has published global household debt statistics for the June quarter of 2022. This shows that Australia’s total household debt is the second highest in the world when measured against gross domestic product (GDP)."

https://www.macrobusiness.com.au/2022/12/soaring-interest-rates-have-mor...

I think we can get to #1. Who's with me? It might be harder now, but one final almighty tap of the credit card, and we can beat Switzerland and be on top of the world.

Craig's picture
Craig's picture
Craig Tuesday, 13 Dec 2022 at 1:03pm

:o

Nick Bone's picture
Nick Bone's picture
Nick Bone Tuesday, 13 Dec 2022 at 1:47pm

From VJ’s article above -

“Nearly one-in-four mortgages (by value) will switch in 2023 from ultra-low fixed rates originated at around 2% to rates that are more than double these levels.

Accordingly, the share of household income used to service principal and interest debt repayments will soar next year to its highest level in history.”

My fixed on 2.05% ends in 2024. Does that mean my repayments will double?

Craig's picture
Craig's picture
Craig Tuesday, 13 Dec 2022 at 1:56pm

Umm, you kinda should be all over that Bone.

flollo's picture
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flollo Tuesday, 13 Dec 2022 at 2:40pm
Nick Bone wrote:

My fixed on 2.05% ends in 2024. Does that mean my repayments will double?

Yep, maybe more. You should really look into the details and do some calculations.

Nick Bone's picture
Nick Bone's picture
Nick Bone Tuesday, 13 Dec 2022 at 2:55pm

My twos time stables? It seems bleeding obvious but I honestly have no idea where if double means just that or some subsidy-esque might come into play.

A double in repayments is pretty gnarly. Surely that would equal something times unseen before? Little guy loses and the big dogs clean up again I spose.

flollo's picture
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flollo Tuesday, 13 Dec 2022 at 2:53pm

Maybe not as dramatic:

$500,000 @ 2.05% = $1,861 per month (P+I)

$500,000 @ 5.50% = $2,839 per month (P +I)

Depends on the size, terms...

donweather's picture
donweather's picture
donweather Tuesday, 13 Dec 2022 at 3:04pm
Nick Bone wrote:

My twos time stables? It seems bleeding obvious but I honestly have no idea where if double means just that or some subsidy-esque might come into play.

A double in repayments is pretty gnarly. Surely that would equal something times unseen before? Little guy loses and the big dogs clean up again I spose.

Little guy loses and big guy cleans up? Ummmm the little guy (2.05% til 2024) is winning whilst the big guy (your bank) is losing until 2024.

thermalben's picture
thermalben's picture
thermalben Tuesday, 13 Dec 2022 at 3:46pm

I'm on a variable interest rate, so whilst eight consecutive monthly mortgage increases in the $150 range haven't been great, it's a lot better than a $1,200 kick in the balls.

Nick Bone's picture
Nick Bone's picture
Nick Bone Tuesday, 13 Dec 2022 at 3:58pm
flollo wrote:

Maybe not as dramatic:

$500,000 @ 2.05% = $1,861 per month (P+I)

$500,000 @ 5.50% = $2,839 per month (P +I)

Depends on the size, terms...

Exactly, as I said, I've got no idea but that double isn't double.

Nick Bone's picture
Nick Bone's picture
Nick Bone Tuesday, 13 Dec 2022 at 3:57pm

Don, I meant more that people who are already in and very finically set up will be able to clean up and get another invest property while the people who scraped in get shafted. I'm sorry to hear the banks didn't post massive profits in the couple of years, but hey, I think they'll manage.

Anyways, I'm out of my depth here. Just saying it sounds pretty fucked ahead for a lot of people. Thankfully we had a good opportunity to get in in our crazy market area but that mean I feel for a fuck load of people who weren't so lucky.

goofyfoot's picture
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goofyfoot Tuesday, 13 Dec 2022 at 4:49pm
donweather wrote:
Nick Bone wrote:

My twos time stables? It seems bleeding obvious but I honestly have no idea where if double means just that or some subsidy-esque might come into play.

A double in repayments is pretty gnarly. Surely that would equal something times unseen before? Little guy loses and the big dogs clean up again I spose.

Little guy loses and big guy cleans up? Ummmm the little guy (2.05% til 2024) is winning whilst the big guy (your bank) is losing until 2024.

Banks don’t lose

Nick Bone's picture
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Nick Bone Tuesday, 13 Dec 2022 at 5:10pm

Yeah. Just had a quick look. My bank posted a $7,119,000,000 net profit 21-22 Financial Year. I really fucking feel for them.

velocityjohnno's picture
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velocityjohnno Tuesday, 13 Dec 2022 at 5:41pm

Here's Will Emerson from a bank pointing out they don't lose, and also giving a handy budgeting lesson:

donweather's picture
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donweather Wednesday, 14 Dec 2022 at 2:18pm
Nick Bone wrote:

Thankfully we had a good opportunity to get in in our crazy market area but that mean I feel for a fuck load of people who weren't so lucky.

Their time will come soon enough. Question is will anyone have the balls to jump into a falling market? But you know what they say. Buy when everyone is selling and sell when everyone is buying.

donweather's picture
donweather's picture
donweather Wednesday, 14 Dec 2022 at 2:18pm
goofyfoot wrote:

Banks don’t lose

They're currently losing to those on low fixed rates.

goofyfoot's picture
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goofyfoot Wednesday, 14 Dec 2022 at 3:58pm

“ Given Commonwealth Bank's $9.6 billion full-year profit reported in August, the total full-year profit for the big four banks in 2022 could hit $28.4 billion, assuming expectations are met over the coming fortnight. That would be 6 per cent higher than the $26.8 billion the big four banks reported for 2021.”

Really Don?

Nick Bone's picture
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Nick Bone Wednesday, 14 Dec 2022 at 6:01pm

Imagine winning

velocityjohnno's picture
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velocityjohnno Wednesday, 14 Dec 2022 at 6:07pm
goofyfoot's picture
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goofyfoot Wednesday, 14 Dec 2022 at 7:45pm

I wish I understood all that vj but it may as well be written in Chinese to me

A quadrillion sounds like a fair bit though

donweather's picture
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donweather Saturday, 24 Dec 2022 at 11:40am
udo wrote:

https://m.realestate.com.au/property-house-qld-balgal+beach-141093832

wonder how the shed will go in a cyclone.

Patrick's picture
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Patrick Saturday, 24 Dec 2022 at 12:51pm

Easy to read article that seems to cover all bases (inflation, rates, migration, supply, demand, etc) It's long and thorough but easy to digest.
Nutshell ~ no housing bust and there aint even a bubble.

"Latest property price forecasts for 2023 revealed. What’s ahead in our housing markets in the next year or two?"
https://propertyupdate.com.au/australian-property-market-predictions/

Patrick's picture
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Patrick Saturday, 24 Dec 2022 at 12:53pm

"They have obviously been listening to those perma-bears who keep telling anyone who's prepared to listen that the property markets are going to crash, but they've made the same predictions year after year and have been wrong in the past and will be wrong again this time.
You've probably also read those forecasts - you know...that property values will fall 10 to 15%.

"In fact... Property Prices Will Fall 30% was a recent headline in the Australian Financial Review by a respected columnist, and here he was not talking about a specific segment of the market, but about "the Australian property market”.

"Fact is.... a fall of this magnitude has never happened before.

"Not during the recession of the 1990s, not during the global financial crisis and not during the period of a credit squeeze in 2017-18.

"The worst slump in the overall Australian property market was after the credit squeeze on 2016-17 and when there were concerns around proposed changes to negative gearing before the 2019 election.

"And at that time the peak to trough drop between December 2017 and June 2019 was 9.9%.

"And considering the current state of the economy, our financial health and property markets there's no credible reason to suggest a fall of this magnitude should happen now."

velocityjohnno's picture
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velocityjohnno Wednesday, 28 Dec 2022 at 12:46am

https://www.dailytelegraph.com.au/business/economy/how-many-slabs-of-vb-...

lol, very good article, made me laugh and gets the point across

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velocityjohnno Wednesday, 28 Dec 2022 at 7:44pm

A damning view into Australia's rental market:

https://www.japantimes.co.jp/news/2022/12/23/asia-pacific/australia-hous...

"Rental supply is at the lowest in two decades, pitting renters against record numbers of people who can no longer afford to buy after a surge in house prices. “We have seen increasingly at the lower end of the market, people on lower incomes, the supply of rental stock available to them is reducing quite significantly, so this could have spillover effects on homelessness,” said Cameron Kusher, Director of Economic Research at Data firm PropTrack.

Homelessness ‘tsunami’
Rising migration levels after borders reopened this year have added to demand, with competition for properties resulting in rental bidding wars. "

velocityjohnno's picture
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velocityjohnno Wednesday, 28 Dec 2022 at 7:46pm

IMF has a say:

https://www.smh.com.au/politics/federal/australia-s-misaligned-housing-m...

"In a report on housing stability and affordability, the International Monetary Fund said Australia’s property and rental markets are some of the most “misaligned” in the developed world."

donweather's picture
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donweather Thursday, 29 Dec 2022 at 8:39am
Patrick wrote:

Easy to read article that seems to cover all bases (inflation, rates, migration, supply, demand, etc) It's long and thorough but easy to digest.
Nutshell ~ no housing bust and there aint even a bubble.

"Latest property price forecasts for 2023 revealed. What’s ahead in our housing markets in the next year or two?"
https://propertyupdate.com.au/australian-property-market-predictions/

He’s fatalling missing one massive criteria in his assessment. He’s looking at Australia in isolation and missing what will happen in the world economy which will affect buyer and seller sentiment significantly in Australia.

velocityjohnno's picture
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velocityjohnno Wednesday, 4 Jan 2023 at 6:57pm

Canada bans foreign investors from buying some forms of property

https://www.dailymail.co.uk/news/article-11592499/Canada-bans-foreign-in...

freeride76's picture
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freeride76 Wednesday, 4 Jan 2023 at 7:41pm

Didn't New Zealand do that?

indo-dreaming's picture
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indo-dreaming Wednesday, 4 Jan 2023 at 7:58pm

"Red Hot Chili Peppers star Michael ‘Flea’ Balzary selling $3m home at Moruya on NSW South Coast"

https://www.realestate.com.au/news/red-hot-chili-peppers-star-michael-fl...

AndyM's picture
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AndyM Wednesday, 4 Jan 2023 at 8:00pm

Not sure that would ever happen in Australia.
I expect the vested interests will continue to control the narrative and call any change "racist".
Meanwhile, the well-meaning but misguided will nod and go along with it.

AndyM's picture
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AndyM Thursday, 5 Jan 2023 at 10:02am

Thought this article from the SMH about projected population increase was interesting and telling.
First thing that struck me was the language used.
Population increase was seen as "rebounding" from a "slump".
Population has been "stagnant" which has been a "handbrake on growth".
Everything in the article screams that population growth is not only desirable but essential.
Which, in a roundabout way, brings me closer to the point of this thread.
Sure, we're seeing a post-Covid housing price correction but with an extra million more people in NSW alone in the next ten years, what does this mean for house prices (not to mention rental prices) in the longer term?
And still no sign whatsoever of a broader conversation about population growth and its implications socially and environmentally.

https://www.smh.com.au/politics/nsw/sydney-s-population-forecast-to-hit-...

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batfink Saturday, 7 Jan 2023 at 8:07am

You’re dead right there Andy. The way they use language gives the game away. They are either deluded or conflicted, or so completely sold on outdated ideas they can’t see that their logic chip is broken.

Imagine if they (correctly) said “Population has finally stopped growing at unsustainable levels, but there are signs that this might not continue. Rampant growth in population imperils the ‘best for 50 years unemployment rate’, and government policy remains staggeringly obtuse to the benefits of reduced immigration rates. Lazy business lobby groups and the real estate industry continue to call for population growth with no answer to the question of ‘where are they going to live?’

SMH and other news media outlets are hopelessly conflicted with real estate side hustles such as ‘Domain’.

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velocityjohnno Saturday, 7 Jan 2023 at 9:54pm

Bingo Andy, you are spot on. Any savings we make on CO2 reduction will be negated (and then some!) before all the effort and engineering to achieve it is expended. Add to the amount of new coal fired power stations going up all over the world, and put a fork in her, she's done.

velocityjohnno's picture
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velocityjohnno Saturday, 7 Jan 2023 at 9:56pm

Suburbs and towns where homeowners have won the property lottery:

https://www.realestate.com.au/news/suburbs-and-towns-where-homeowners-ha...

donweather's picture
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donweather Saturday, 7 Jan 2023 at 10:58pm
velocityjohnno wrote:

Suburbs and towns where homeowners have won the property lottery:

https://www.realestate.com.au/news/suburbs-and-towns-where-homeowners-ha...

Kingscliff and Casuarina growth are a joke. Although they’re far more attractive (given proximity to Gold Coast airport) than Minyama on the SC which has absolutely sweet Fck all to offer.

Gonna be a lot of people in a world of hurt in 12 months time.

donweather's picture
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donweather Monday, 9 Jan 2023 at 6:18pm

Biggest drop on record!!!

And more of the same to come.

https://thenewdaily.com.au/finance/2023/01/09/property-downturn-biggest-...

velocityjohnno's picture
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velocityjohnno Monday, 9 Jan 2023 at 7:12pm

I found an excellent explanation for why Canada banned foreigners owning property, why housing in Western cities has gone mental and priced out the locals, why immigration has been turbo charged, and why this system might not work into the future:

Part 1: the problem of demographics:

Part 2: the example of Canada:

He explains things very clearly. The bit about the parking of the money and then moving on while pricing out locals was the penny-drop moment for me; it seems an unintended consequence of a policy designed to kick the can and not face demographic decline, to the detriment of people already here.

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dandandan Monday, 9 Jan 2023 at 7:49pm

Regulating foreign investment and AirBnB are no brainers that could have immediate impacts on availability, but don't necessarily change the structure of the housing problem we've been dealt up by successive governments. I would welcome both of course, and in some places regulating AirBnB would bring hundreds of homes back into the long term rental market if coupled with strong vacancy taxes.

The biggest problem we're facing is one of supply, and supply will always be constrained if the purpose of the housing is not primarily to give people homes, but is financialised as an asset. If this was not the economy we lived in, investment in public and social housing would be much easier to achieve, and investors seeking quick profits would think twice about buying existing residential properties that could otherwise go to first home buyers, and put their money elsewhere. As long as governments continue to structure the economy around assets (in Australia this is mostly housing), and implement policies to ensure asset owners never lose (CGT discounts, negative gearing, weak renter protections) then it will keep going regardless of whether it's foreign investors or middle-class "mum and dad" investors from Australia.

A good article out today:

https://theconversation.com/how-housing-made-rich-australians-50-richer-...