Are we at the bottom yet?

[csobrien1966]

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[TD]Bottom of the market.....?

 

 

 

 

 

A recent report put together by RP Data has shown that the housing market is possibly beginning to show new signs of life, with data showing housing prices are close to having reached the bottom. The decline in property values has slowed from 0.6 per cent in July to only 0.1 per cent in August according to the RP Data-Riskmark home value index.

 

 

According to Cameron Kusher, RP Data senior analyst, "We're probably nearing the bottom of the market -- but not in every city, Brisbane is close to the bottom and so probably is Adelaide. Perth isn't. Values there fell a further 2 per cent this month."

 

 

The market is already showing benefits from the increasing chance that the Reserve Bank of Australia (RBA) will cut rates at some point during this year. According to Rismark economist, Christopher Joyce, "As the most interest rate sensitive sector of the economy, Australia's housing market will be the main beneficiary of any rate reductions. Almost all Australian mortgage debt is variable rate."

 

 

What is interesting is that a recent independent study has found 16.6 per cent of all new home loans processed during September were on fixed rate loans, compared with 9.4 per cent in August. This is the highest level of fixed-rate home loans since April 2008 where 18.4 per cent of loans were fixed.

 

 

It can be expected that this number will continue to increase with the current uncertainty in the economy and people looking for more security around their investments. According to Gina Maltman, State Manager of Loan Market South Australia and Northern Territory, "September has seen some aggressive competition between lenders, who are cutting their fixed rates. I think a combination of factors including, a lack of confidence in the share market, more attractive financing options and the flattening of the property market has caused us to start seeing an increase in investors and first home buyers into some segments of the market."

 

 

 

 

 

 

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[Guest shella_n]

An interesting read, especially as we r currently debating whether to buy or hold out for a year to see what the Market is gonna do - I wanna buy but hubbie wants to wait. I may use this to convince him - who are RP Data though cause he will question their findings?

 

What is everyone else thinking of doing who are ready to buy - buy or wait?

 

Michelle

[sueoc]

To be honest Chris,i think not.In my opinion house prices are over inflated,given peoples income and the questionable quality and,or condition of many of them.People are not soft when it comes to making one of the biggest decisions of their life,and prices can only go up so much before buyers start to shy away.Recently it got to that point IMO.They,ll probably stay static for a while yet(or drop)i think.

[Anne B]

No, I think there is further to fall.

 

At the end of June Adelaide home values had fallen 3.1% to a median value of $385,000

At the end of July Adelaide home values had fallen 4.5% to a median value of $380,000

At the end of August Adelaide home values had fallen 4.9% to a median value of $370,000

 

There is a huge stock of housing on the market too, 38% more listings than this time last year in SA, and the traditional spring surge in houses for sale hasn't really started yet.

 

When supply exceeds demand the prices fall, simple economics.

 

Obviously government may try and intervene and stimulate the housing market somehow via First Home Buyer grants or stamp duty reforms, or the interest rate may fall (which looks likely). However even if that happens there is still a lot of stock to shift, the world economy is weak and the outlook is gloomy, people are losing their jobs, utility bills keep rising and the average Australian household is already hugely in debt.

 

We are holding back from buying as all indicators are pointing to a further fall. Saying that though, Adelaide does seem to exist in a world of it's own and many people are oblivious to what's going on in the outside world.

 

http://www.macrobusiness.com.au/2011/09/more-dour-news-for-housing/

http://www.macrobusiness.com.au/2011/09/rpdatas-august-data/

http://www.whocrashedtheeconomy.com/blog/?p=1766

[Guest smit]

No, I think there is further to fall.

 

At the end of June Adelaide home values had fallen 3.1% to a median value of $385,000

At the end of July Adelaide home values had fallen 4.5% to a median value of $380,000

At the end of August Adelaide home values had fallen 4.9% to a median value of $370,000

 

Can someone put a calculator to these figures and make sense to them.............cos i cant!!!

[Guest Adelaide_bound]

Can someone put a calculator to these figures and make sense to them.............cos i cant!!!

I think it means the median value firstly dropped by 3.1% to $385,000. Then it fell a further 1.4% to $380,000 and finally a further .4% - the amounts might not make 100% sense if you don't know what the figure was to start with, and therefore how much they have actually dropped by in terms of actual $ not just % points.

 

Basically, it has gone down month on month, and whilst that has slowed a bit now, it might still be going on. (but I'm only a renter and don't understand complicated things like buying houses, so what do I know? lol )

[JimandBarbinAus]

No, I think there is further to fall.

 

At the end of June Adelaide home values had fallen 3.1% to a median value of $385,000

At the end of July Adelaide home values had fallen 4.5% to a median value of $380,000

At the end of August Adelaide home values had fallen 4.9% to a median value of $370,000

 

There is a huge stock of housing on the market too, 38% more listings than this time last year in SA, and the traditional spring surge in houses for sale hasn't really started yet.

 

When supply exceeds demand the prices fall, simple economics.

 

Obviously government may try and intervene and stimulate the housing market somehow via First Home Buyer grants or stamp duty reforms, or the interest rate may fall (which looks likely). However even if that happens there is still a lot of stock to shift, the world economy is weak and the outlook is gloomy, people are losing their jobs, utility bills keep rising and the average Australian household is already hugely in debt.

 

We are holding back from buying as all indicators are pointing to a further fall. Saying that though, Adelaide does seem to exist in a world of it's own and many people are oblivious to what's going on in the outside world.

 

http://www.macrobusiness.com.au/2011/09/more-dour-news-for-housing/

http://www.macrobusiness.com.au/2011/09/rpdatas-august-data/

http://www.whocrashedtheeconomy.com/blog/?p=1766

 

well said anne, sums up nicely, we have been thinkng along the same lines too

[Anne B]

The 3.1%, 4.5% and 4.9% falls are apparently year on year. I just got them from the RPData blurb, must admit I didn't get my calculator out to check how they worked out! Median is just the 'middle' value of a set of values not the average, so I suppose it can't be calculated by taking a percentage off the previous month's figures.

 

The figures come from

http://www.rpdata.com/images/stories/content/pressreleases/rp_data_rismark_home_value_index_jul29_2011.pdf

http://www.rpdata.com/images/stories/content/pressreleases/rpdata_rismark_home_value_index_aug31_2011.pdf

http://www.rpdata.com/research/monthly_indices.html

[Guest shella_n]

We were planning on holding off hoping that they may do something with the stamp duty etc - but then they announced they were phasing out the 1st time builders grant ( or whatever's it's called) and so I thought we'd have no hope at getting an increase in the grant after that. I was looking the other day at what QLD offer as I heard you get larger 1st buyer grants in other states - and yes although it was a higher grant they have just cancelled it too. So im not convinced there will be anything in the way of stamp duty help anytime soon