comet555

I just spotted this article, so thought I'd post it. Any thoughts?

http://news.ninemsn.com.au/article.aspx?id=59380

Something to think about anyway.

We're probably looking at selling our house in 2 years time so I keep wondering whether the price is likely to rise or fall. We only bought it last August so the a price fall would actually mean we lose money.

AndyR1976

Very interesting..

I was looking at another forum the other day where there has been a prediction of house rice drop over the next 12 months........

NKSK version 2

This is an average over 5 years? I think that I calculated it at 6% a year from my reading of the speech. Pretty normal growth for an asset?

renth

So who is going to buy these houses that have gone up 40% - the same people who at the moment can't afford to buy a house? Here in Perth prices went up more than that and the result? no none can afford to buy a house.

The only way house prices will go up 40% is if wages go up at least 40% in the same period of time.

Otherwise this article is a total crock of shit.

Nerine

There are two houses near to us that have been on the market since before we got here in late Nov 2007, and I drove past another one last night in Mudgee that came on not long after we arrived. I've seen another house in Worongary sitting on the market for months and is going/has gone to auction in an effort to sell it.

If there was a real shortage of houses these places would have sold by now.

Amazulu

Who knows? Who cares? The market will go where it is going to go. Economics will decide. These kind of articles make me laugh.

Nerine

It's just scaremongering.....or wishful thinking

renth

Wishful thinking by whom?

Why is it when petrol and food prices go up it's bad news but when houses go up it's often presented as good news?

Nerine

Since all three add to the cost of inflation the cheaper the better. I
wonder how many of Frank Gelber's clients have their money in property investments.

Here's an article quoted a few days back predicting a 50% drop in house prices

http://www.somersoft.com/forums/show...376#post391376

comet555

I actually do think the prices might drop over the next year, I'm just curious as to what will happen after that.

I think 40% is probably too optomistic, but I think it has an interesting slant on things. If the current interest rates are causing prices to fall, people to stop buying and builder quit building then what would happen if things started to correct themselves?

I think it's possible that the prices start to go back up a bit and people entering the market again with a shortage of houses. Who knows? It's all speculation anyway.

Either way my ultimate wish is for my house to worth about the same as we paid for it. Even a bit of a loss is not the end of the world.

Amazulu

I love all these 'expert' predictions. Like I said earlier, these kind of articles make me laugh. So I guess they do have a use then!

Wol

Exactly!

The "experts" ignore what is at present the fundamental problem: non-affordability isn't anything to do with supply and demand, it's just that - non-affordability. Unless inflation rockets away houses will remain unaffordable for many.

MartinH

Well I think thats something to do with the fact that petrol and food are consumables and property is an asset.

MartinH

I think there are various arguments around affordability which are generally oversimplified i.e. its easy to look at the average cost of housing and compare that to average wage levels and call it an affordability crisis. Thats not to say that it isn't a problem but more that is doesn't take account of all the factors.

It ignores for example that there is a significant proportion of the population who have minimal or zero mortgages who actually benefit from interest rate rises. It also ignores the dynamics of Austrlaian population growth which has a high proportion of skilled, better off workers.

Of course it isn't as simple as that but what is?

Phoenix

Having been house hunting for the last 6 months here in Perth I would say that house prices have dropped slightly.
I think we've paid 30k less for our house than we would have done last year.