jensteve

Well what do you thnk guys, do you think a property crash is on the way?

I am in Perth where housing has gone pretty bonkers and can remember this happening in the UK, and then interest rates went up, lots of people in negative equity and lots of repoccessions.

Dunno just about to put my house on the market and hoping for a miracle and it sells fairly quickly, although we are building the next one so don't mind if it takes a while so we arn't left living in a shed!

The market so says a real estate pal has slowed right down, the first time buyers although better off can't buy at the prices houses are, its pretty manic. A friend in work has just bought her first house and has a mortgage of 400k!!!

Jenny

gajjitt

I have to say that if we had our time again and we were just about the emigrate to Oz, I think we'd give Perth a wide-berth.

Last years incredible growth has slowed to a trickle, even gone backwards at the start of this year, median prices went down about $20k. Allegedly they're back on the rise everso slightly. But who knows, there are still plenty of jobs around, and resource jobs are paying a mint. It looks like interest rates might be on hold for a while (easily until next year according to The West ).

The problem in the UK and Aus back in 1991 was the interest rates shooting up to 16-17% ouch, and pushing people into negative equity, and mass repossessions. They seem to have interest rates and inflation a lot more under control now. Interest rates have gone up 3 times last year, and people still keep coming back for more, inflation keeps bouncing back. People seem to still have a lot of disposable income. Seems people haven't overstretched themselves, even with the humble rate rises.

And state government are about to raise the threshold for stamp duty to kick in at $500k. Where we live in Kinross I'm seeing houses sell in a couple of months. 2 years ago in Kinross prices were $300-375 and houses selling in a few days, now you are lucky to see anything much less than $480k. And people are still buying them. This might breath a short spell of life into the market.

If all those investors put their houses on the market in a bid to cash in and move East then we could be in for trouble. Which would squeeze the rental market yet more.

Another reason prices, especially lots, remain high is the demand outstripping supply. So this could help prolong the market for a while.

My feeling is that it might trundle along at around -5% to 8% growth, for awhile, some areas depreciating in value (a correction). Others growing slightly, but averaging at 2 or 3%. If the boom continues that is.

If the boom stops or slows considerably, then I reckon there could be some real tears!! People abandoming Perth in droves.

Who knows.....

Paul