ozzieeagle

That will hurt Australias housing industry more than most factors. Depends how deeply Asia falls. I can see Australia and China collaborating very closely, even at the cost of much lower commodity prices to help each other out of this downturn. Seems like it would be the sensible thing to do.

IvanM

That will take a mindset change from Rio and BHP. Both really pissed off the Chinese mills with their attempt to move to spot pricing rather than benchmark contracts. Vale and FMG did well out of it now that spot pricing is below the contract. Rudd is still well regarded in China and is well positioned to do it.

BTW Is demand from Asians for new Australian housing that much?

Mipik

In the area that I live which can be considered "nicer" the house prices have been driven up over last few years by Chinese immigrants from mainland China coming here on business visas. I have seen auctions where they were raising price by 100k per bid.

To be honest for most of them the 500k+ that the houses here cost (quite high for Adelaide) is pocket change.
Even with economic downturn in China this will not change.
But now a lot of them are waiting to buy expecting price drops.

On the other hand there are properties on market now that have been bought by locals about a year ago. This looks like people being forced to sell.

ozzieeagle

It appears to be, no figures to prove or disprove, just observation. One Local Suburb Preston, changed character in less than 5 years. Consequently it seems far more affluent.

When large blocks of apartments are built, it seems that the owners are almost always Chinese.

Tableland

This is a really interesting time right now, and places like Australia, for the reasons you mention, are great places to look at exactly how "global" this problem is. On the one hand we have collapsing internal (domestic) demand because prices are too high and unemployment is going up, and on the other hand we have a lot of, well, you could say FDI for want of a better term, coming into the market from China, which will only stop China is badly hit in the same way many more developed nations have been.

It makes it all very hard to predict.

dpande

At least they had the sense to accept the $800k offer, so many are still in denial and would have turned that down.
This time next year $600k will look like a fantastic offer.

Mipik

Same here.
What I found it is becoming a self propeling circle.

Starts with an nice area with a good state schools, Chinese are settling in, as they do focus on their kids education more than most other groups their kids do well in school, school level goes up, more Chinese move in, house prices around go up, kids do well in school, school level goes up, more Chinese move in, house prices go up....

About a year ago spoke with an RE agent dealing with the area and he said 7 out of 10 houses were being bought by Chinese, the local state high school is now maybe 40% Chinese and gets very good results...

But I must admit that it all slowed now at the moment, houses that would have sold within a week a year or two ago are now for sale for a long time.
Somehow I think that it is not for luck of people with money ready to buy but rather people waiting for prices to fall.

Burbage

Of course the only people in this category are people who do not have to sell a house before they buy one. Which is first home buyers and immigrants. Many immigrants, as we see on this board, have the problem of selling at home before they come anyway.

The problem for the housing market is that with falling prices the only buyers are first home buyers. Investors won't get loans in a falling market, people who already have a house won't be selling and moving...

All this means that the market is essentially controlled by what the first home buyer can afford, and if you remember that only six months ago the government was talking about first home buyers being completely priced out of the market, we can see that house prices have to fall a fair bit before this sector of the market will start buying.

IvanM

Nothing to do with a drop in available finance then?

savanna454

Exactly!

We're in the eastern burbs of Melbourne and had to rent within a few streets of an academically high performing primary school to get the kids in as it was 'capped'

This has been brought about by the phenomena described aided by a particularly dynamic headmistress

Our rent was reflected in the proximity to this school but we're glad now we followed our instincts and paid a little more.

IMO 'Asian' is a more accurate term for 30-40% of the students at this school who emanate from China, Korea, Taiwan, Singapore etc.

Last year properties within the school catchment were flying at up to $100K above guide at auction but this has slowed dramatically and although the turnouts remain good nobody is bidding.

Realistic pricing/negotiation gets some sold after auction but many vendors can't accept that they won't achieve mid 2007 prices and we've seen a few properties stagnate unsold for months.

ozzieeagle

I wonder if this is mainly a Melbourne phenomenon ?

It's definitely happening over here in the Inner North as well. Except we have the BoHo crowd (the Leftie Teachers/Lawyers/Medicos/Journalists) Especially in Fitzroy, Brunswick and Northcote now competing with them. It's an interesting mix.

Mipik

Not really.
It happens that I have lived and worked in China for a while, learned the language and have no problems talking to these people.

As said before the 500k+ house prices here are little more than pocket change for most of them.
I think that buying a property is one of the conditions on their visa.
I know that operating a company with certain turnover is a condition so a lot of them are in wine export business sending wine to China and selling it there way below the cost just to get the turnover (they earn their money in companies they run in China).

Mipik

Correct, add a few Japanese.
All similar cultures with similar attitude to kids schooling.

However the largest growth in recent years was from Mainland China.

Mipik

I live in Eastern suburbs in Adelaide so not a Melbourne only thing.

savanna454

We're not Asian but are happy to go with the Asian ethos towards education and hope it rubs off on ours.

However not all share our views and have heard the odd racist comment about people NOT sending their kids to our primary on the basis of "too many Asians"

Sorry I've just gone off topic.............it was a poll on property prices!