How was your day?

[notpom]

When I woke up this morning having somebody's boot in my mouth I knew that something went wrong in the Galaxy.

 

When I realised that this boot was bitten through and there was somebody's blood inside it - I understood that my evening sermon about fighting sin, vice and evil is inevitable. Something is out of balance in the Universe.

 

One leap to the computer - reading news - and here you are. Why media bothers to print lies when half of the people know what really goes on and another half does not give a damn?

 

http://www.smh.com.au/business/comment-and-analysis/housing-bubble-yields-billions-in-profits-20150622-ghujfw.html

 

Housing bubble yields billions in profits

 

http://www.news.com.au/finance/real-estate/economists-claim-australia-in-midst-of-largest-housing-bubble-on-record/story-fncq3era-1227410053643

 

Housing market ‘bloodbath’ is looming

 

 

I love reading this kind of nonsense. It gives me a feeling of intellectual superiority. Since 2003 the crowds of prophets worshiping the false God of "Housing bubble burst" aka "property crash" are dancing their shaman dances, beating the drums made of skinned "negative gearing" and casting dark spells.

 

Google "Steve Keen" "Edward Karan". One went to Mt Kosciusco on foot from Sydney (was a mistake that he did not have do it naked). The other one has disappeared. Both predicted "property crash in 2008".

 

When religion is involved, logic is totally redundant. This sect does not want to understand a simple things - like that something that is not in oversupply can not go down in price. Or that AU banks never did "substandard lending". Or that when US and UK (Spain, Greece) were building like mad, our intelligent Reserve Bank strangled all non-mining economy with the highest in the world interest rates.

 

I do get that there are "plenty of losers around" and "misery needs company". Anywhere, in any capital city of Australia in a radius of 200m you can find the worshiper of "housing bubble". Just simply a whinger incapable using a calculator. Struggling to "save a deposit".

At the same time unable to calculate how many "deposits" they get up in smoke and flush down the toilet. $15 for lunch? What about getting up 15 min earlier and making sandwiches at home? $5 for a coffee? What about $10 a kilo for coffee beans and 5 mins to grind and make your own? Barista makes better coffee? Do you need a PhD to make a good coffee? $20 for pizza delivered? Sorry to disappoint you, but I will make a pizza from scratch faster than you get your delivered one. $3 worth of ingredients. Can't do without sipping beer every second? What about brewing your own? Smoking? How about growing your own tobacco instead of paying $15 a pack?

 

Did you notice I do not even suggest changing any habits. Please keep all your terrible vices, only make them more affordable. Just sacrifice the time that you currently use to enlarge your bum sitting on a couch yapping about nothing.

 

This is all about average bloke or sheila. But what possesses people (supposedly with some education) to write the rubbish?

For quiet a long time I was deluded by the thought that they just read too much of "Mein Kampf". But this morning penny finally dropped.

When I was reaching for the pieces of rubber and leather from between my teeth, I finally realised -

They are not readers, they are writers. They most certainly added a chapter each to "Mein Kampf" before indulging into writing about property.

 

That perhaps would be enough rattling about the pleasant things, because the distance from "intellectual superiority" to the "world dominance" is surprisingly short. Before you blink, crowds pull you from your wormhole and carry you to the throne on their shoulders.

 

Luckily, there were some unpleasantries in the media lately reminding me of a grim reality - namely that there are people far more intelligent than myself.

Like this one:

 

http://news.domain.com.au/domain/real-estate-news/house-prices-around-the-world-sydney-and-melbourne-up-but-hong-kong-ranked-no1-20150617-ghp79j.html

 

Tells that we are not that expensive by any measure. And the ratio of rent to price is 40% under long term average, i.e. Australia is REALLY UNDERPRICED. Long way to go even to the smallest of the bubbles.

 

Or this one:

 

http://news.domain.com.au/domain/real-estate-news/new-research-shows-sydney-property-more-affordable-than-26-years-ago-20150617-ghoxqb.html

 

26 years ago people did not know that property was absolutely unaffordable, they were buying when they could whinge (like today's losers).

 

Or this one:

 

http://news.domain.com.au/domain/real-estate-news/new-research-shows-sydney-property-more-affordable-than-26-years-ago-20150617-ghoxqb.html

 

Mining boom over, mines are closing, "long dollar" chasers coming back from mining villages back to capital cities. Need somewhere to live.

 

Everybody knows how much I like talking about myself. But this time evemn I got bored. So - finally - some good news for everyone.

Not exactly. Those who still have not bought a home - it is terrible news.

 

http://www.news.com.au/finance/real-estate/adelaide-property-price-growth-outperforms-all-other-capital-cities/story-fndba8zb-1227398321225

 

Adelaide property price growth outperforms all other capital cities

Not exactly. While it is certainly correct statistically, just ask me one question:

"Where would you feel more safe - next to RP Data interpreting statistics or next to the monkey playing with the live hand grenade?"

 

Answer - monkey with the hand grenade is much safer. If pin is pulled you still have 3 seconds to hide.

1.7% "decline" for Sydney and Melbourne? Yeah, my rectum. Auction clearance rates steady above 80% - means about 30% yearly capital growth. What has happened - "poorer buyers" started to flood the market. Most of the sales now happening not close to the City, but on outskirts - hence the "decline".

 

Good news (not for all) for Adelaide. Buyers (investors) moving to cheaper areas with better rental returns (of which Adelaide is a champion).

 

And the summary. If you see (read) someone pronouncing words "property bubble" - take shelter, spread the hand with crucifix at front of you, sprinkle them with holy water. Otherwise you might be destined for the grim life without holidays, depression, credit card debt and boring corporate parties. Remember - government wants you to die at work.

 

Oh, yes. Again about me - getting old and forgetful. Please do not indulge into the sin of pride (pleasing people you do not like)

 

http://www.news.com.au/finance/real-estate/melbourne-mansion-owners-accused-of-putting-on-facade-for-neighbours/story-fncq3era-1227410351336

 

Melbourne mansion owners accused of putting on facade for neighbours

Again and again - if you do not combine other sins with adultery - something is wrong with you. May be you are a weak person -involved in yielding yourself to the temptation to deny yourself a pleasure.

 

Edited June 23, 2015 by notpom

[jo_marnes]

Whaaaat is this even about?

[notpom]

Whaaaat is this even about?

evening sermon about fighting sin, vice and evil

 

In computer terms - if you do not want to buy a home - you are suffering from GPF.

 

Or COM object in your brain thrown the exception "Catastrophic failure".

Edited June 23, 2015 by notpom

[Tamara (Homes Down Under)]

There's a lot of comment right now about an overheated property market (especially Melbourne and Sydney) and a bubble correction that's imminent.

 

OMG, that's a lot of words!

Will it happen, won't it happen? So many factors. China. Greece. Russia...so many unknowns outside our sphere.

 

There are pockets within Adelaide that are experiencing large gains but generally our prices aren't in a bubble. A correction would deflate our prices though.

If you have a home and aren't planning to move...no effect. If you are an investor...enjoy the uncertainty of a possible cycle.

[notpom]

There's a lot of comment right now about an overheated property market (especially Melbourne and Sydney) and a bubble correction that's imminent.

 

OMG, that's a lot of words!

Will it happen, won't it happen? So many factors. China. Greece. Russia...so many unknowns outside our sphere.

 

There are pockets within Adelaide that are experiencing large gains but generally our prices aren't in a bubble. A correction would deflate our prices though.

If you have a home and aren't planning to move...no effect. If you are an investor...enjoy the uncertainty of a possible cycle.

 

Hi Tamara,

Heeey how foggy everything is!!!

 

Lets deal with your fears first. I said it many times, I will say it again. When all the world was vigorously overbuilding, Australia was in deep hibernation. Around 2008 so many builders went to the wall... Why would be that? Because building was too profitable?

 

There were two reasons to that. First, low property prices did not provide necessary profitability to stay afloat. Second, in times of mining boom Libs failed to introduce mining tax to cool the sector down, so it gave scope to RBA to kill the rest of the economy by artificially high interest rates.

 

Result - property shortage in all capital cities. Plus in Sydney - just simple blatant absence of the vacant land. (Strictly speaking - Sydney MUST grow in price.)

 

Even if somehow (through the black magic - as there is no other ways at the moment that are not supernatural) they manage to stop the boom - then under the conditions of property shortage what you get as an investor - increase in the rents.

 

You are going to win in any case.

 

Couple of words about the media. About 12 months before September 2008 every newspaper published at least 2 articles a day about interest rates reaching "two digits". It means that at least 10 times a day I was writing comments "No. Interest rates belong to 0%. All non-mining economy is in dire state.". Media beats the drums of "Property bubble" religion since 2003. We have mother of all property booms unfolding just before our eyes. Media is there not to deliver you the truth.

 

Besides that, the property market is now the only engine of economic growth. Thankfully we are not (yet) delivering bricks, roof tiles, pine from China. So if the media wish of property crash will be fulfilled, then there would be recession, then there ought to be economic stimulus, then there ought to be an inflation. And what good inflation does - it pays your mortgage off faster than you can. You win again.

[notpom]

Unexpected (from mining boss)

 

http://www.smh.com.au/business/mining-and-resources/rio-tintos-mike-fitzpatrick-on-the-rba-bhp-and-managing-a-mining-boom-20150623-ghuzxj

 

"I just think they [the RBA] have always been behind the curve, and they are still behind the curve."

 

The boom created the two-speed economy in Australia, where resources companies thrived while other sectors struggled under an abnormally strong currency.

While some blamed the miners for the strong currency, Mr Fitzpatrick believed the Reserve Bank "left interest rates too high for far too long".

[h=2]'Destructive effect'[/h]"The rest of the world were basically running an interest rate war and we weren't, and I think that has had a really destructive effect on Australian industry and I don't think that can be put down to miners. I think there has been some institutional failings that have probably been more responsible."

[yoda22]

You are approximately half as smart as you think you are with regard to all of this.

But granted very entertaining (thank you). Predicting house prices will always eventually climb is a no brainer.

 

But thinking housing in Melbourne and Sydney in the short to medium term is not about to take a bath is like me telling you I am right now scratching my eye with my elbow.

 

FYI I would never look housing websites, finance ministers, bankers or people like you who have no doubt a healthy 'portfolio' for information anymore than I would listen to doom merchants.

Hopefully you will not be too exposed I really mean that. However the 'The lady doth protest too much, methinks' tone of your piece tends to make be believe you are somewhat leveraged. No doubt you will deny this.

 

btw I love the rentier class in case you think I have something against you(them). Its thanks to such fine people we have such calm seas economically, loads of jobs for everyone and such a fine meritocracy with no social problems whatsoever. In fact I long for for Grand estates and serfdom I am a huge Downton Abbey fan and believe the cream always rises to the top. Good for you sir. Keep increasing that portfolio you are making the world a better place.

Edited June 24, 2015 by yoda22

[Keith & Linda]

You are approximately half as smart as you think you are with regard to all of this.

But granted very entertaining (thank you). Predicting house prices will always eventually climb is a no brainer.

 

But thinking housing in Melbourne and Sydney in the short to medium term is not about to take a bath is like me telling you I am right now scratching my eye with my elbow.

 

FYI I would never look housing websites, finance ministers, bankers or people like you who have no doubt a healthy 'portfolio' for information anymore than I would listen to doom merchants.

Hopefully you will not be too exposed I really mean that. However the 'The lady doth protest too much, methinks' tone of your piece tends to make be believe you are somewhat leveraged. No doubt you will deny this.

 

btw I love the rentier class in case you think I have something against you(them). Its thanks to such fine people we have such calm seas economically, loads of jobs for everyone and such a fine meritocracy with no social problems whatsoever. In fact I long for for Grand estates and serfdom I am a huge Downton Abbey fan and believe the cream always rises to the top. Good for you sir. Keep increasing that portfolio you are making the world a better place.

 

You've got a glass eye!

[yoda22]

You've got a glass eye!

 

Not really just a brain in my head Linda & Keith. With a dislike for people who think houses are investments and not places to live.

Take a look at Germany's economy and their housing. Germans are pretty smart people with regard to housing.

 

Why did Joe Hockey just sell his farm for 1.5 million ? His wife being an investment banker and knowing up from down, that is why. They will know more than you or I will ever have the privilege to know.

 

I am not lazy and I do not pretend to know it all. But I can say with half a brain in my head the housing in Sydney and Melbourne is a bubble. Put that in your pipe and smoke it. I love your comment is liked by a financial advisor .

Edited June 24, 2015 by yoda22

[Keith & Linda]

Not really just a brain in my head Linda & Keith. With a dislike for people who think houses are investments and not places to live.

Take a look at Germany's economy and their housing. Germans are pretty smart people with regard to housing.

 

Why did Joe Hockey just sell his farm for 1.5 million ? His wife being an investment banker and knowing up from down, that is why. They will know more than you or I will ever have the privilege to know.

 

I am not lazy and I do not pretend to know it all. But I can say with half a brain in my head the housing in Sydney and Melbourne is a bubble. Put that in your pipe and smoke it. I love your comment is liked by a financial advisor .

 

Notpom sends my glass eye to sleep sometimes, and there are a few donkey hind legs laying around too! but he does in general keep us amused with his/her take on the world of finance though doesn't he/she?

[yoda22]

Notpom sends my glass eye to sleep sometimes, and there are a few donkey hind legs laying around too! but he does in general keep us amused with his/her take on the world of finance though doesn't he/she?

 

Thanks for the term glass eye - new one on me. But a nice expression

 

I can be overly negative and I am working on it as well as my apathy. Better nutrition and a good nights sleep is the key to my recovery of my auto immune disease. Genuinely.

 

I really don't know that much economics hedge funds, bond holders, negative gearing, interest rates, central banks, negative swaps it is all beyond me really. In fact compound interest still eludes me to this day. But I read a few headlines and well I think I know everything.

 

On a positive note I do not believe there is a bubble in Adelaide. Long term the outlook is good for this beautiful land. Also buying a house I believe is a great thing for some people.

[notpom]

Thanks for the term glass eye - new one on me. But a nice expression

 

 

I really don't know that much economics hedge funds, bond holders, negative gearing, interest rates, central banks, negative swaps it is all beyond me really. In fact compound interest still eludes me to this day. But I read a few headlines and well I think I know everything.

 

 

This is a key phrase. "I do not know much, I do not read (I do not want to know)" but I always decide who is half smart (i.e. stupid translated to plain English.)

 

You are the kind of person who thinks airplanes can not fly because they are heavier than air. Contrary to your beliefs, Adelaide one of a few Australian capitals where prices actually DO go down (Unlike MEL and SYD).

 

The only positive side I can see for you - that you can be actually appointed as a personal breast feeder of Tony Abbott and John Hockey. You have got all the merits to be close to the Government.

[Tamara (Homes Down Under)]

This is a key phrase. "I do not know much, I do not read (I do not want to know)" but I always decide who is half smart (i.e. stupid translated to plain English.)

 

You are the kind of person who thinks airplanes can not fly because they are heavier than air. Contrary to your beliefs, Adelaide one of a few Australian capitals where prices actually DO go down (Unlike MEL and SYD).

 

The only positive side I can see for you - that you can be actually appointed as a personal breast feeder of Tony Abbott and John Hockey. You have got all the merits to be close to the Government.

 

OMG you have me in stitches again!

Honestly, you did used to write satirical scripts for a living? If not you should do it...earn a little extra on the side to add to the property portfolio...you are so funny!

[notpom]

OMG you have me in stitches again!

Honestly, you did used to write satirical scripts for a living? If not you should do it...earn a little extra on the side to add to the property portfolio...you are so funny!

 

Thanks Tamara.

 

You are almost spot on. Almost. I will try to explain.

 

I bet you can imagine a modern university. 90% of all students in uni are very intelligent.They know why they are there for. To acquire skills to get a successful career - somewhere in the office. Unis usually do not teach the tradesmen - because tradesmen need different set. You know - the main one. When asked "How much?" - make the face reflecting all the centuries of Jewish nation sorrows, plus at least two genocides of other nations. So the client feels ashamed that they did not give their wallet, clothes and whatever else they have.

 

Uni students are not taught that. About a month into studies (do they want it or not) they run a checklist in their heads , named "The skills to run successful office career". Works like that:

 

- Be positive (i.e. having no compassion to the problems of others combined with altruistic love to yourself) - check

- Sound like you are about to die when you are calling in sick - check

- Look busy all the time (run along the office with concerned face from time to time, swear and bang your keyboard randomly,etc) -check

- When any manager gets to the kitchen for a cuppa, arrive before competition and start the conversation (have a list of your achievements ready, do not forget the flattery ) - check

- Maintain intelligent face at the meetings - check

- Have a list of propositions and plans. The best source - Little Red Book - quotations of comrade Mao. Just replace "Communist Party of China" with "company" and "people of China" with "team". - Check

 

And so on and so forth. You know better. In other words, after 3-4 weeks in Uni 90% of students feel they are ready for a successful office career. For some obscure reason, some naughty people have introduced the whole silly ritual of going to lectures and seminars, sitting tests and exams. Really a hurdle between smart student and a successful career.

 

And just imagine - you have got to wake up early in the morning to go to your lecture. You do not know what you do not know. You have got everything to make big money. But they (stupid people) for some stupid reason do not give you that stupid piece of paper called "diploma". Most of these stupid people are dodgy. They hide in the Education Ministries and Uni offices. But there are the silliest ones - and you are going to see one of them.

 

Here he is - at front of whiteboard, writing some absurd things about integral calculus, biometry, yapping about linear algebra and other boring stuff you will never need. He is called a "lecturer".

 

Thats where I come. I was lecturing in uni for almost 20 years. Lecturers are generally divided in two classes. First class - "smart lecturers". They just read some stuff from the papers. Main thing - to stay emotionally detached.

 

Second class is called "other lecturers". They have many absolutely redundant features like "dignity" (????), "pride for the achievements" (???????????). In other words, they are actually trying to give students "knowledge"(?????????????).

 

There is a whole science on how to give that "knowledge". In a nutshell, everything revolves around the scientific fact that people forget around 20% of the things they are told. In other words, you have to give 120% of "knowledge" so students get 100% of what they need.

 

Here starts a little complication. Unfortunately "education" is a two way process. In other words, if one side gives even 200% of "knowledge", but the other side does not listen, the result is - 0% of "knowledge" transmitted. Try to teach a telegraph pole to make an omelette for example.

 

So at the end of the day all comes down to make telegraph poles (students who do not know what they do not know) to listen. What tele... (sorry) people would generally listen to with the desire? Not many things. Humor, tales about fights, sex, excrement, tortures and executions.

Still better if it is humor about fights, sex, excrement, tortures and executions. Here is the art of lecturing - quickly pack "knowledge" in between things that stand up comics do.

 

So you are almost spot on. Which reminded me of an old joke.

 

Teacher calls the father and complaints: "When asked what is his father's profession, your son told us 'My dad plays piano in the brothel'. "

Father answers: "How do you think I can explain to 7 year old that I am System Administrator of the data warehouse running under Unix?"

[yoda22]

I can't let go the fact you think property prices are not heading south in the two big cities Melbourne and Sydney !!

I have had my slide rule and compass out all night tonight. 2+2 still equals 4 right ? As I speak there is a hedge fund manager not caring.

(Again it is my issue being a financial dullard or loser. I honestly do have problems with basic arithmetic).

 

Your writin (yes writin) is very entertaining and mostly I agree with your latter sentiments. Although the air that you breath sounds rather rarefied.

If we could all live up to such lofty standards the world indeed be a better place, one would agree.

 

However (no fingers pointed) anytime I feel I am being hit over the head by a persons educational prowess I often wonder if they understand the meaning of education.

Education is a great gift if one has been given it (or earned it as you say), it is not a badge or a stick. Preaching I believe should be left to more qualified types such as bible bashers, life coaches and parents.

 

Brown nosing and a shiny suit though as you have said gets you a lot further nowadays. Tis a shame, but whata ya goin to do ?

 

What all this has to with Adelaide, who knows !! so .... Go the Crows tomorrow afternoon.

Edited June 26, 2015 by yoda22

[notpom]

http://www.news.com.au/finance/real-estate/home-ownership-inquiry-treasury-insist-housing-as-afforable-as-ever/story-fncq3era-1227417163980

 

there was a perception that housing affordability had become worse in recent years but the figures showed it had remained fairly stable across Australia.

 

 

Australian Bureau of Statistics assistant statistician David Zago agreed housing costs as a percentage of income over time had pretty much balanced out.

“There is some ups and downs but in 2012 it was the same as 1995 in terms of a proportion of household income,’’ he said.

[yoda22]

That is not a fact I can't argue - however when a housing bubble ponzi goes bang a lot of said income is property based.

So unemployment will deffinately increase, Mr.David Zago 95-15 data means nothing then. 1995 is an interesting year to choose

because it is a year when arguably the last big recession experienced in Australia was ending although not over was at the tail end.

 

Ian Macfarlane, Governor of the Reserve Bank from 1996 to 2006, has said that the financial excesses of the 1980s were of such a scale that they made the 1990s recession "inevitable", describing Australia's economy at the end of the 1980s as overstretched and vulnerable to contractionary shock. The pressure of high interest rates on businesses - many of which were "borrowed up to the hilt" - became relentless.

 

Currently the interest rates are not something that has people lowering the lifeboats. However once this thing goes bang the government will promise to be more responsible in the future and make sure housing never overheats again. Interests rates will have to go up. Until the next time they want votes that is.

 

Notpom you are right ! property will always go up. But for the next 1-5 years in Sydney and Melbourne it will lose 20% 30% ? value. Unemployment will go up double digits ? certainly here in South Australia it will. But Adelaide has no housing bubble just a very weak economy currently with declining manufacturing and opportunities.

 

Adelaide will be back, Australia will be back just in for choppy waters. 10 years ? hopefully 5 with as little social unrest as possible.

 

You can send me to Coventry now.

Edited June 27, 2015 by yoda22

[yoda22]

Lets hope that 3 bedroom house in Sydney will do better than Chinese equities.

 

And people wonder why the Australian property market has been flooded with Chinese investors for the last couple years ? Below is your answer folks.

London and Sydney have been used as giant car parking spaces for Chinese investors and money. One way or another property prices and wages

being in line ? Notpom Keep dreaming.

Smart money moved before this happened.

http://www.smh.com.au/business/markets/china-stocks-plunge-most-since-1996-as-bubble-warnings-increase-20150627-ghz67z.html

Which caused this to happen.

http://www.smh.com.au/business/property/chinas-60-billion-australian-property-splurge-20150507-ggwgz7.html

http://www.breakingviews.com/how-china-is-stoking-london%E2%80%99s-housing-bubble/21141108.article

I wonder what will happen next ?

Edited June 27, 2015 by yoda22

[SpongeBob]

My day was lovely thank you, although wet and cold on the East coast just how I like it. So what are everyone's plans for the weekend?

[Tamara (Homes Down Under)]

My day was lovely thank you, although wet and cold on the East coast just how I like it. So what are everyone's plans for the weekend?

 

 

Just chilling in wintery Adelaide.

[Rabeah]

Not really just a brain in my head Linda & Keith. With a dislike for people who think houses are investments and not places to live.

Take a look at Germany's economy and their housing. Germans are pretty smart people with regard to housing.

 

Germans smart people in regards to economy and housing??? Did I miss something? I am German and nobody I know can easily afford housing there!!! We would like to be smart but banks don't borrow you money for a mortgage like banks do here in Australia simply down to the fact that if you don't have a full-time contract you won't even get a loan for a car.

Nowadays young Germans mostly work in temporary employment and will never afford to live in a own place. Germany now has one of the lowest wages/salaries in the entire European Union. That's the reason why hubby and me came over here! Here the banks offered us money for a mortgage to pay off our house, our 'own' country betrayed us simply to the fact that hubby had a fixed-term contract.

Germany has a property rate of nearly 40 % at the moment (many owned by international syndicates) whereas Australia has one above 70 %. In my opinion that fact speaks for itself!

Last but not least many properties in Germany are owned by foreign investors, many from the US, Greece, China...Nothing with Germans are clever, not for the own people!

Edited June 28, 2015 by NicF
Fixed quote

[yoda22]

I take your point. I am not German so you have a much better idea of how things are than I do.

I am sorry to hear young Germans are now also suffering under 0 hour / temp contracts. It is a terrible practice. Governments need to stop this. I think having a home is great and everyone should have the chance if they work hard. I am against investment buying and selling.

 

In think in times past Germans built their economy on manufacturing things not buying and selling houses to each other. I was of the opinion Germans found it more acceptable to rent than British ? In any case at least the government there has not encouraged this type of economy. Perhaps they should prevent foreign buyers / investors. I can see that you find things better here and I can not argue with you.

 

my initial argument was I believe there is a housing bubble in Sydney and Melbourne. Not Adelaide where if you have a good secure job it is not a bad place to buy.

 

http://youtu.be/SWbn2FfTEvY

 

This is why I love Germany

 

Edited June 28, 2015 by yoda22

[Rabeah]

Yes, you're right yoda22 there is a housing bubble in Sydney and Melbourne, these places have gone mad. I couldn't sleep with a million mortgage to serve for a very average and modest house.

 

Sorry for drift off the main topic but I felt the need to clarify and demystify the 'smart' German way, actually we are very good in marketing ourselves.

 

We also have high stamp duty that's something Australia learnt from the Germans ;-) Luckily Australia hasn't got the strict banking criteria like Germany as otherwise Aussies would also have a higher percentage of renters. No, renting is not a particularly accepted form of living in Germany, actually my 40 % people with properties regard renters as losers 'lame ducks' though everybody knows how hard it is to obtain a loan and social envy you won't find in any of these nice youtube videos as well

[notpom]

Yes, you're right yoda22 there is a housing bubble in Sydney and Melbourne,

 

In inflamed imagination of Gen Y illiterate media jornos - yes, there is a "bubble".

 

In reality - Australia has 150 years history of property market records. Average yearly capital growth - 8%.

 

Not much by the world standards. If 8% a year a "bubble", what about share market - with average 11% pa?

Do you hear much of "sharemarket bubble"?

Average property cycle - 10 years. Normally it is 5 years boom, 5 years flat market.

 

Last two property cycles were interfered with by Reserve Bank. 1987 they inflated rates to 18%, which killed the economy. In 1995 boom has started and it lasted till 2003 - 8 years. Property was just catching up.

 

In 2008 Reserve (on the back of the mining boom) jacked up rates even more (8.5% - which is equivalent to around 25% in 1987 terms).

 

They killed the all non-mining economy again. This boom is not going to last less than 10 years. Simply because Sydney has run out of available land, there is a huge property shortage and no matter what - we are going to see interest rates with 0 at front very soon.

 

Prices are in the process of getting to the mark they should have been 5 years ago. Then they will go another 5 years to get to the peak, where they will rest for 5 years.

 

It does not matter how do you sleep with a million mortgage. I have got dozens of times more - and I sleep very well. First - because debt is not my problem. It is problem of "savers" - silly lazy people who keep money in the bank and bank lens them to me and I rent out to "savers". I am fleecing them twice.

Second - mortgage is the best debt you can ever have. You invest in the growing asset. If you do not want to "invest" and just need a "place" - there are plenty of places in this country where "place" costs less than a $1 per hectare.

 

If you want to join the club of capital city dwellers - then obey the rules of the club. First rule is that all homes here are "assets" first, and "love nest" may be a bonus for that.

[Tamara (Homes Down Under)]

So you would disagree with this?

 

BIS Shrapnel report reveals property prices to fall

 

• NATHAN MAWBY NETWORK REAL ESTATE
  
• NEWS CORP AUSTRALIA NETWORK
  
• JUNE 29, 2015 12:30AM
  

 

 

 

 

 

Syd, Melb property prices to fall

 

 

 

 

 

 

Australian property could be in for a rough few years.

 

[*=left]Syd, Melb property prices to fall
[*=left]Australian property could be in for a ro...

 

 

 

AUSTRALIAN home buyers, your time is coming.

It just might not be for another year or two.Or at least three if you’re looking to buy in Brisbane.But the surging prices of Sydney and Melbourne have been tipped to come to an end across the coming three years by respected market research group BIS Shrapnel.In the Residential Property Prospects 2015-2018 report released by the group today prices have been tipped to take a hit in Melbourne and Sydney, two of the nation’s strongest property markets, within that period.

Report author and BIS Shrapnek senior manager Angie Zigomanis said it would take a little while for the markets to change gear, however.“Beyond the next 12 months there may be more of an opportunity for buyers to come back in for housing and in some areas of the unit market I suspect buyers have already got the upper hand,” Mr Zigomanis said.“It will be more of the same for the next 12 months, but things start to slow beyond that.“It’s a regular function of the market, it’s economics 101. Market booms, people jump in and start building and market gets oversupplied and corrects.”

Just one city will avoid the crash in property prices.

 

 

And with the exception of Brisbane, buyers are also likely to be in the better position around the rest of the nation’s capitals.Apartments are likely to be worst hit with those currently buying into off-the-plan developments in hot spots like Melbourne potentially facing a double-blow as they pay at the peak of the market today with the likelihood of getting the keys to the property after the market softens.“The risk with units is that you have investors buying today in this market, but they will come online in a few years once the building is completed and they may be having to discount rents to find tenants,” Mr Zigomanis said.The report points to overseas migration having tumbled from 237,500 in the financial year of 2012-2013 to just 184,000 across 2014, at a time when new dwelling construction is expected to hit a record level of 210,000 new commencements.There are another 200,000 developments expected to start in the 2015-2016 financial year.“In general there’s an under supply at the moment and that’s something that has to be eaten away at first,” Mr Zigomanis said.“But the 210,000 are just being started and so two or three years away, and that’s where we see a reduction in prices coming through.”Mr Zigomanis said it was the beginning of the end for those looking for “big gains in property” and that the “boom mantra of the last few years will be going away”.“We expect prices will be pretty soft or fall in some cities,” he said.Real Estate Buyers Agents Association of Australia president Jacque Parker said she would not be surprised to see home values in Melbourne and Sydney contract in the coming years, and noted any slowing of those markets would be welcome news to those looking to buy.“Sydney and Melbourne sellers have had the upper hand in the last 2.5 years,” Ms Parker said.“It is good for buyers in that they aren’t going to be chasing a rising market and there may be more time for thinking through a purchase of a property.”She added that at any time when a market might be on the cusp of a change of direction that it was important to do your homework as a homebuyer.However, the Real Estate Institute of Australia argued there were no economic factors facing Australia that were likely to change the status quo.REIA president Neville Sanders said outside of Melbourne and Sydney the nation’s property markets were fairly stable. Something he anticipated to continue.“There aren’t any major factors likely to push that up or down,” Mr Sanders said.“The feedback I am getting from each of the states and territories in the main is they are expecting stability.“The worst property cycles have had high interest rates and high unemployment, and those drivers ... aren’t there.”Here’s what BIS Shrapnel are expecting for your corner of the country.

SYDNEY

Sydney’s property market could be in for a contraction in the next three years.

 

 

Sydney price growth is tipped to slow over the next 12 months as affordability is pushed to the limit.A lack of supply and investor demand are being tipped to carry the city to 7 per cent growth across the next financial year.“The supply side of the equation will still have an impact in Sydney, though the increase in construction is starting to see some of these pressures alleviated,” Mr Zigomanis said.That alleviation is expected to lead to a fall in values of 4 per cent across the following two financial years, ending in June 2018. For the full three years, growth will top out at 2 per cent.But once adjusted for inflation the BIS Shrapnel report argues it will see a 6 per cent decline in real terms.

MELBOURNE

Melbourne’s city apartment scene could be at the centre of falling median prices in the near future. Picture: Mark Stewart

 

 

Strong migration, including unprecedented levels of migration from other states, has helped underpin strong growth in prices in Melbourne in recent years.“The interesting thing coming out of Melbourne is that Victoria is actually the strongest of all the states for in flowing state migration,” Mr Zigomanis said.That will help over the next three years, but among houses is only tipped to account for 4 per cent growth from June 2015 to June 2018. A 5 per cent rise over the coming 12 months will be followed by contractions in both of the following two years.In real terms, the tip is a 4 per cent fall anticipated over the period.Which is better than what is on the cards for units, where a 12 per cent slide in the median price in real terms is anticipated.FURTHER READING: Negative gearing crackdown looms for foreign investors

BRISBANE

Brisbane is set to remain the last market standing for property price growth in the coming three years.

 

 

“In real terms, Brisbane prices are still below where they were five years ago, so we still think that market is pretty affordable at the moment,” Mr Zigomanis said.That comparable affordability is expected to put it at the top of the nations property ladder over the next three years with house prices there tipped to lift 13 per cent across the period.The Gold Coast and Sunshine Coast have a similar forecast, 13 per cent and 12 per cent respectively. Meanwhile Townsville is on track for a 3 per cent lift across the coming three years and Cairns for an 11 per cent lift.

ADELAIDE

Adelaide has a mixed future. Picture by Matt Turner.

 

 

A lift in new home construction off the back of first homebuyer incentives is thought to have pushed supply too high in Adelaide.“This rise in construction is coinciding with slowing underlying demand as net overseas migration inflows ease,” Mr Zigomanis said.“With the state continuing to face headwinds in a number of industry sectors, there will be little to place upward pressure on prices apart from low interest rates.”In real terms Adelaide is tipped to see both houses and units median prices drop 7 per cent across the next three years, on the BIS Shrapnel forecast.

PERTH

Perth is likely to have a sluggish few years as changes work through the resource-sector.

 

 

A parring back of mining and resource sector activity and investment are anticipated to lead the way for a similar reduction in home values around Perth.The city has already seen median house prices decline in the past 12 months, and is likely to see the trend continue.In inflation-adjusted terms a decline of 10 per cent is tipped across the coming three years.But the end of that period is tipped to be when the market balances out.

HOBART

Hobart may benefit from interstate interest. Photo: Linda Larsen

 

 

The Tasmanian capital is another market expected to suffer from an oversupply of property thanks in part to first homebuyer grants for new homes.However, there may be a positive light on the horizon.“Given the recent and prospective growth in Sydney and Melbourne, there is potential upside to underlying demand if the state experiences a net interstate migration inflow, similar to the early 200s when interstate arrivals — largely ‘tree change’ migrants from the mainland — increasingly took advantage of price gains to sell their main homes to downshift to Tasmania,” Mr Zigomanis said.Over the coming three years a 4 per cent anticipated growth is likely to be realised as a decline to the same figure in real terms. Unit medians are expected to fall 10 per cent in real terms.

CANBERRA

High wages across the city of Canberra are expected to help mitigate a rising number of new properties in its property market.

 

 

An expected long-term oversupply puts Canberra in a position where a relatively flat market is anticipated. Though a 5 per cent decline in values is considered likely once corrected for inflation.“Canberra has the highest incomes of the capital cities and affordability is not as strained as in other cities, which should therefore also prevent any major price declines,” Mr Zigomanis said.Units are not expected to be insulated by this, however, with a real terms reduction of 10 per cent on the cards, according to BIS Shrapnel.

DARWIN

Darwin could have a rough few years ahead for home prices.

 

 

Investment in the resource sector is believed to have peaked in the NT, according to the report.At the same time, new dwelling numbers have also risen, following a rise in population driven by the resources economy.As investment into the large Icthys project comes to an end median house prices are tipped to suffer.“The median house price (is) forecast to decline by a total of 2 per cent in the three years to June 2018, which will result in a real house price decline of 10 per cent over the period,” Mr Zigomanis said.Units are faced with a 12 per cent decline in real terms.