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

freeride76's picture
freeride76's picture
freeride76 Sunday, 1 May 2022 at 12:44pm

that bit sounded suss.

old-dog's picture
old-dog's picture
old-dog Sunday, 1 May 2022 at 1:51pm

When little Johnny Howard became PM a nice home on the mid coast cost us 58k,
( the neighbors thought we were crazy for paying that much), eleven years and much back slapping and bragging later that same joint was worth 350k. So it took 200 years to get to 58k and then ten more of a Liberal govt. to be seven times its value. This was something John Howard was very proud as it made all his rich mates a lot richer. When Labors Mark Latham ran for PM on a promise to ditch negative gearing he was absolutely belted and lost. Now we are getting cashed up east coast investors snapping up everything sight unseen from Streaky Bay to Victor Harbor. They sell their inherited dump for a few million then come over here and buy several nice houses and retire. Fuck off.

DudeSweetDudeSweet's picture
DudeSweetDudeSweet's picture
DudeSweetDudeSweet Sunday, 1 May 2022 at 4:34pm
Blowin wrote:

Oh, it’s turning alright.

The fever is gone. Joints are still moving but not at the blistering rate and the days of just whacking a bigger number on a joint you just bought are over. Top end prices around here aren’t shifting.

It’ll take a bit of cultural adjustment to alter the course of two decades of froth and bubble, but they’s a comin’.

August last year was the top.

Interest rate rises will end the party as surely as the crowd discovering the new keg is full of frothy warm urine.

Scummo is jetting in highly skilled food delivery technicians as quickly as he possibly can but he’s pushing shit uphill with a sharp stick

The above was a response to a query from Freeride whether I thought house prices were about to go down.

Here’s the current quarterly house price movements nationwide. Averages are buoyed upwards by regions and weighed down hard by downward trend in the Sydney / Melbourne market leaders.

Iceberg dead ahead Captain!

Optimist's picture
Optimist's picture
Optimist Sunday, 1 May 2022 at 4:44pm

Their maths doesn’t really add up to me, but I think Labor’s 30-40% housing ownership plan is a good idea…at least people will get into a home of their own… it seems like there will be limited places…anything’s better than what we have now though for the battlers….evidently you can buy their percentage out at anytime on current market value…if it’s true...thumbs up from me.

DudeSweetDudeSweet's picture
DudeSweetDudeSweet's picture
DudeSweetDudeSweet Sunday, 1 May 2022 at 4:54pm

The quote above was from January this year.

Distracted's picture
Distracted's picture
Distracted Sunday, 1 May 2022 at 5:35pm

Curious to see how much down turn will eventuate in current high demand areas such as the NSW North Coast.
Prices being quoted last week still seem to be going up.

bonza's picture
bonza's picture
bonza Sunday, 1 May 2022 at 6:07pm

I see no icebergs. Except maybe for a small cohort of GJ Gardeners on the shit end of shitsurbia.

Any of those quarterly losses in the domain market irrelevant when viewed in the annual rise context especially for houses.

And the domain article states it.

“ What we’ll enter into now is a fairly flat sort of market for the next couple of years that looks more like the 2018/2019 marke”

Because 2018/19 was so affordable. Eye roll.

And

“ “If you really think the market is going to drop those huge amounts, it won’t. People just don’t sell and you get a Mexican stand-off.”

That’s my view. I’m at still no crash whatsoever. Not unless the parties act on policy and they won’t. Cowards.

freeride76's picture
freeride76's picture
freeride76 Sunday, 1 May 2022 at 6:35pm
Distracted wrote:

Curious to see how much down turn will eventuate in current high demand areas such as the NSW North Coast.
Prices being quoted last week still seem to be going up.

Yep, still selling for eye rolling prices as of this weekend.

No slowdown here.

My prediction is a flattening in the growth curve, but no correction.

As said, there is so much fat on the bone, it would take a huge correction to even get into correction territory.

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Sunday, 1 May 2022 at 7:38pm

Yep that was just falling growth rates. Ie rate of change of price/derivative
High plateau remains, if we're predicting I'm going to throw a matchstick in and predict 10% falls in Syd/Melb as they lead the cycle, other cities have yet to have had their run. (AUD has retraced from 0.79 to 0.71 so almost that since 2020) Regional Vic hard to say, as so many buyers are relocating, could be immune. Driving around noticed a couple more properties listed on the glamour streets, still selling. Talking with young one that 800K block with views could represent value into the future, am I going mad?

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Sunday, 1 May 2022 at 7:37pm

"And the recent monthly data suggests we are still not at the worst point of the crisis. We were thinking at least regional Australia may have started to have some relief as people return back to the cities. But that has not happened as yet."

https://www.abc.net.au/news/2022-04-12/brt-house-prices-fall-rent-crisis...

TwsitedDrifter's picture
TwsitedDrifter's picture
TwsitedDrifter Sunday, 1 May 2022 at 8:40pm

I haven't read the whole thread as it's too long but is this caused by greedy real estate agents?

AndyM's picture
AndyM's picture
AndyM Sunday, 1 May 2022 at 8:44pm

Am I reading that right?
Rental vacancy rate in Hobart is 0.3%??
Fuck me.

DudeSweetDudeSweet's picture
DudeSweetDudeSweet's picture
DudeSweetDudeSweet Sunday, 1 May 2022 at 8:50pm
AndyM wrote:

Am I reading that right?
Rental vacancy rate in Hobart is 0.3%??
Fuck me.

Sure sounds like you’ll have to fuck someone to get a rental in Tassie.

tubeshooter's picture
tubeshooter's picture
tubeshooter Sunday, 1 May 2022 at 9:14pm

I'd just like to thank the landlords out there that aren't squeezing their tenants for all it's worth. I'm lucky enough to have one of them so far (touch wood) and I know a few friends who also seem to have fair landlords.
Sadly though , It's not the case for the majority around here ,,but many are paying the big increases because there is nowhere else to go .

donweather's picture
donweather's picture
donweather Sunday, 1 May 2022 at 9:37pm
velocityjohnno wrote:

"And the recent monthly data suggests we are still not at the worst point of the crisis. We were thinking at least regional Australia may have started to have some relief as people return back to the cities. But that has not happened as yet."

https://www.abc.net.au/news/2022-04-12/brt-house-prices-fall-rent-crisis...

The Melbourne suburb with the biggest drop in value was Cremorne, down 6.4 per cent. In Sydney the steepest decline was 5 per cent in Beaconsfield.

These figures above are for the quarter!! And interest rates haven’t even risen yet.

Writing is on the wall folks. It’s a coming!!

Distracted's picture
Distracted's picture
Distracted Sunday, 1 May 2022 at 9:43pm

Can someone explain how there can be no rentals when there was no immigration last year and the tradies have never been busier building entire new suburbs while at the same time there are still massive unit complexes going up in the cities?
Is it too many people owning multiple houses?

campbell's picture
campbell's picture
campbell Sunday, 1 May 2022 at 10:04pm

Air bnb and Holiday rentals would explain the lack of permanent rentals available in the south west

tubeshooter's picture
tubeshooter's picture
tubeshooter Sunday, 1 May 2022 at 10:13pm
campbell wrote:

Air bnb and Holiday rentals would explain the lack of permanent rentals available in the south west

Same here ,but there has also been a substantial amount of investment rental properties that went under the hammer in the last 2 years ,and were sold to people who wanted to move in themselves.

flollo's picture
flollo's picture
flollo Monday, 2 May 2022 at 9:43am
udo wrote:

https://www.abc.net.au/news/2022-05-02/borrowers-home-loans-mortgage-str...

And in an ironic turn of events, it will probably hurt people who the government is trying to help the most - first home buyers over the last 2 years or so. In addition, election pitches look like adding even more fuel to the fire with further subsidies into an inflated market. As a basic rule of thumb, when the market booms you should tax it, not subside it (relevant to any industries). Remove taxes and subsidise when it's doing poorly and not moving. It appears that Australian politicians simply don't know how to stay dynamic and turn things on and off as required. When a rule is implemented, it is set in stone forever.

On another note, I've done a bit of research on the ideas I shared a few pages back. Here is an article that talks about something similar (although it runs into an issue as Singapore is used as an example. Nothing against Singapore but they're all comfortable living in small units, a compromise many Australians would never consider).

https://www.abc.net.au/news/2022-02-06/could-australia-learn-from-singap...

stunet's picture
stunet's picture
stunet Monday, 2 May 2022 at 9:48am
flollo wrote:

As a basic rule of thumb, when the market booms you should tax it, not subside it (relevant to any industries). Remove taxes and subsidise when it's doing poorly and not moving. It appears that Australian politicians simply don't know how to stay dynamic and turn things on and off as required. When a rule is implemented, it is set in stone forever.

Or until another Tony Abbott comes along and weaponises the word 'tax'.

jwithay's picture
jwithay's picture
jwithay Monday, 2 May 2022 at 10:22am

Spot on Stu...

Peta Credlin: "It wasn’t a carbon tax, as you know. It was many other things in nomenclature terms but we made it a carbon tax. We made it a fight about the hip pocket and not about the environment ..... that was brutal retail politics and it took Abbott about six months to cut through and, when he cut through, Gillard was gone".

bonza's picture
bonza's picture
bonza Monday, 2 May 2022 at 1:16pm

"In truth, we can’t really hope to make a dent in the housing affordability crisis without hard policy choices such as reforming tax concessions that have pushed up house prices. Labor put forward such measures in 2019. It isn’t this time."

https://theconversation.com/for-first-homebuyers-its-labors-help-to-buy-...

pathetic

AndyM's picture
AndyM's picture
AndyM Monday, 2 May 2022 at 2:01pm

Band-Aid solutions.

Gutless bullshit.

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Monday, 2 May 2022 at 2:25pm

this one's a bit apocalyptic

https://www.abc.net.au/news/2022-05-02/borrowers-home-loans-mortgage-str...

looks like APRA are chosen scapegoat, not bad to be picked even before tomorrows interest rate meeting!

And they will finally look at lending standards, liar loans etc only in hindsight (41 to 55%!!!!), just like every other financial hiccup - the naked are revealed only when the tide turns and goes out. The shame is that study of history (bubbles beforehand) could have made sure it didn't happen in the first place.

flollo's picture
flollo's picture
flollo Monday, 2 May 2022 at 2:43pm
velocityjohnno wrote:

this one's a bit apocalyptic

https://www.abc.net.au/news/2022-05-02/borrowers-home-loans-mortgage-str...

looks like APRA are chosen scapegoat, not bad to be picked even before tomorrows interest rate meeting!

And they will finally look at lending standards, liar loans etc only in hindsight (41 to 55%!!!!), just like every other financial hiccup - the naked are revealed only when the tide turns and goes out. The shame is that study of history (bubbles beforehand) could have made sure it didn't happen in the first place.

The highlight for me:

'APRA data shows that of 1 million new home loans written over the past two years, about 280,000 Australians have borrowed six or more times their income and/or have loan-to-value ratios of more than 90 per cent.'

I don't know what to say anymore. Also, politicians are very keen to keep the fire burning through policies that hardly require any deposit in an inflated market. Hasn't anyone looked at the GFC in the US? Everyone was buying but when problems started they would just return the keys and piss off.

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Monday, 2 May 2022 at 2:44pm

"I was just so swept up in being approved, that I was like, 'this is a dream come true. Just roll with it and keep going and think about the consequences later'. "

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Monday, 2 May 2022 at 2:46pm

My fav from the GFC was the NINJA loan

No Income No Job or Assets

Moral Hazard. Seems we've got a bit here too

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Monday, 2 May 2022 at 2:56pm
flollo wrote:

Hasn't anyone looked at the GFC in the US? Everyone was buying but when problems started they would just return the keys and piss off.

Correct me if wrong anyone, but I think in US at that time is was non-recourse loans wheras Australia is recourse?
Edit: corrected, non recourse and recourse swapped - I think
https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse...

So that explains a bit of the 'jingle mail'?

flollo's picture
flollo's picture
flollo Monday, 2 May 2022 at 2:55pm

Dear lord, NINJA, haha. I forgot about that. Thank you for reminding me.

If houses were shares even a small 5-ish % drop would trigger thousands of margin calls, resulting in a wave of crap liquidity, probably triggering a recession before you wake up in the morning.

velocityjohnno's picture
velocityjohnno's picture
velocityjohnno Monday, 2 May 2022 at 3:00pm

2 things have blown me away in this election campaign, the 2% deposit bit, and the TV ads from one party claiming they can keep home loan rates under 3%. If finance is sourced offshore, surely this is impossible?

Yeah the share margin agreements, agree. It would probably be up to each trader/investor how much if any of the margin they used. Like companies, can decide to gear aggressively, or conservatively or anywhere in between.

batfink's picture
batfink's picture
batfink Monday, 2 May 2022 at 5:57pm

I readily recall when the regulators started to do their job, a bit, and pulled up the banks on excessive loans. House prices stopped going up and some even went down a tiny bit. The real estate industry went off its nana. Reading that story it sounds about right, late 2018 to early 2019.

You would seriously wonder if the whole of our economy is geared towards making for an easy life for real estate agents.

RBA, ASIC and APRA have mostly been redundant. RBA came out to say that house prices weren’t their problem. We weren’t great before but we’ve had two decades of insanity on house prices.

monkeyboy's picture
monkeyboy's picture
monkeyboy Tuesday, 3 May 2022 at 1:26pm

US centric but a really good write up; especially the demographics bit - some of this will apply here, I'm just not up on Aussie demographics though. The references to Interest rates in the 80s is a good one. and house prices in the 70s (high inflation)

https://adventuresincapitalism.com/2022/05/02/in-defense-of-housing/

Worth subscribing (its free).

kaiser's picture
kaiser's picture
kaiser Tuesday, 3 May 2022 at 2:41pm

Cash rate increased by .25%

Seatbelts!

monkeyboy's picture
monkeyboy's picture
monkeyboy Tuesday, 3 May 2022 at 2:46pm
kaiser wrote:

Cash rate increased by .25%

Seatbelts!

to...........0.35% OMG !!!!

Lets see what the banks do....0.25 or 0.35 ?

flollo's picture
flollo's picture
flollo Tuesday, 3 May 2022 at 2:56pm

Relax, as per the expectation.

monkeyboy's picture
monkeyboy's picture
monkeyboy Tuesday, 3 May 2022 at 3:43pm

"it's just the gully"

DudeSweetDudeSweet's picture
DudeSweetDudeSweet's picture
DudeSweetDudeSweet Tuesday, 3 May 2022 at 4:00pm

Fake news.

Can’t possibly be true because the RBA said they wouldn’t raise until late 2024.

indo-dreaming's picture
indo-dreaming's picture
indo-dreaming Tuesday, 3 May 2022 at 7:48pm

AndyM's picture
AndyM's picture
AndyM Tuesday, 3 May 2022 at 8:04pm

“ growth slows to a 12-month low”

Non-story.

simba's picture
simba's picture
simba Tuesday, 3 May 2022 at 8:25pm

freeride76's picture
freeride76's picture
freeride76 Wednesday, 4 May 2022 at 6:17am

Here is the statement in it's entirety directly from RBA website if anyone is interested.

https://www.rba.gov.au/media-releases/2022/mr-22-12.html

monkeyboy's picture
monkeyboy's picture
monkeyboy Wednesday, 4 May 2022 at 7:49am

US sneezes, the rest of the world catches a cold.

https://wolfstreet.com/

donweather's picture
donweather's picture
donweather Wednesday, 4 May 2022 at 8:03am
flollo wrote:

Dear lord, NINJA, haha. I forgot about that. Thank you for reminding me.

If houses were shares even a small 5-ish % drop would trigger thousands of margin calls, resulting in a wave of crap liquidity, probably triggering a recession before you wake up in the morning.

Bingo!!

Stok's picture
Stok's picture
Stok Wednesday, 4 May 2022 at 10:48am
AndyM wrote:

“ growth slows to a 12-month low”

Non-story.

Yep, coming into winter is typically a low point anyway.

DudeSweetDudeSweet's picture
DudeSweetDudeSweet's picture
DudeSweetDudeSweet Thursday, 5 May 2022 at 5:37am

RBA saying a 2.5% cash rate is probable. I’m sure it’ll be fine! People will just cut back on smashed avo toast and sail through it.

donweather's picture
donweather's picture
donweather Thursday, 5 May 2022 at 8:20am
DudeSweetDudeSweet wrote:

RBA saying a 2.5% cash rate is probable. I’m sure it’ll be fine! People will just cut back on smashed avo toast and sail through it.

I can tell you that in Sydney there’s a Fcking lot of people with mortgages way above the median price shown above. Was talking to a guy in Syd yesterday who said his sister just bought a house 50km out of Syd for $2.4m!!! Mortgage is $2m!!! Do the math on their repayment increase!!!