Home prices to explode ?
 

Whaddya make of this one ?

http://www.news.com.au/business/mone...013951,00.html

"A growing housing shortage is setting the scene for the mother of all housing booms,"

"Demand has accelerated and rising immigration, both permanent and temporary, shows no sign of abating. Meanwhile, rising interest rates continue to stymie any building recovery.

"Underlying housing demand is already outstripping new supply, and the gap is set to widen sharply, driving pent-up housing demand to record levels."

Re: Home prices to explode ?
 

http://www.news.com.au/business/mone...013951,00.html

And from same site its completely the opposite.

Inner Melbourne the clearance rates have dropped down to 20% to 30% - this being where at thet auction the property is passed in mainly with a vendor bid. A deal is then hatched before the end of the weekend - the reported clearance rates of 60% to 70% include these final negoiated deals.

My opinion is there is no shortgages, in terms of people not having choices where to have a roof over themselves

Its people living in a want it now, want it bigger and better, closer to work, closer to the beach, with all new fixtures and fittings.

Re: Home prices to explode ?
 

Not sure how that will happen when the mortgage industry is in recession. ie the amount of money available for property is dropping right now.

Right now for every housing is crashing story there is another housing is going to boom story. Evidence on the ground around here is a steady long term let down except in Western Sydney where it already has crashed.

Re: Home prices to explode ?
 

In Sydney it is people wanting a reasonable commute by public transport. Not unreasonable. The clearance rate is a strong indicator of the market and a rate under 50% is regarded as a buyers market.

Re: Home prices to explode ?
 

Yes there may be loads of immigrants arriving and they all want a place to live which means that there is a housing shortage, but you can only buy a house that you can afford. Surely affordability is also related to wages and how much money the immigrants are bringing with them, not just how many immigrants are arriving.

Re: Home prices to explode ?
 

The amount of $$ banks are willing to lend here really has nothing to do with affordability. Case in point: when we first arrived we had small deposit, only 1 of us working earning $40k, offered $400k by bank to buy/build a house. Repayments would have been more than 50% of our income, but they thought we were a good risk.

Re: Home prices to explode ?
 

yes, that was then, this is now. in the meantime (last 2-3 months) everything frozen because collateral is going down and lenders can't 'roll' the loans anymore.

newspapers/RE 'institutes' get their ad dollars from RE agents, so is normal to sing as they're told to by their customers.

Re: Home prices to explode ?
 

Ignore it.

It's a very typical comment by a bank or a real estate company talking the market up as always. All they dream about is a never-ending housing boom with money pouring in from juicy commissions and huge debts.

In WA there's Rob Druit from REIWA - every time he opens his mouth the words "housing boom" fall out!

If people start believing the hype then it becomes a self-fulfilling prophesy with a mad rush to buy into the market.

Re: Home prices to explode ?
 

Both points are valid, the shortage will stop prices falling, but the lack of ban loans will stop them going up much more.

Re: Home prices to explode ?
 

Typical of a statement by a bank .
A crock of S---t There all thieves still trying to drum up rubbish
for there own gain ,thay must think people are stupid and dont
have a clue . :mad:

Re: Home prices to explode ?
 

Sensationalist stuff designed to sell newspapers- much like the stories about values falling 30%. Every time you turn around there's a contradictory article about the very same topic!!

Re: Home prices to explode ?
 

The housing market in the USA crashed.

The housing market here in the UK is falling.

Both of these factors are linked to a global credit crunch so why would Australia escape?

Also - there will be lot les British immigrants arriving in Australia due to them not being able to sell their houses here in the U.K :D

Re: Home prices to explode ?
 

Do people really belive this Bulls--t just look in your local paper, The mandurah mail in wa must have 100 pages of house's that are NOTselling been like this for over 12 months and getting worse every day.

Re: Home prices to explode ?
 

In fairness generalisations, I feel, in Aus arent possible. One state maybe up and another down. All the evidence though is Sydney is suffering and its spreading from the west inwords (as I think IvanM said). There is less money being released by the banks so any drops so far still leave a lot of properties tantalisingly out of reach due to lower mortgages been given.

I am reading nothing but doom and gloom regarding the UK market and the poster child of the property boom, Ireland, are seemingly now officially in recession.

As always cash is king. In this case anyone who sold UK home 3 yrs ago and have since rented in Aus should have a very nice deposit to put towards buying and the banks love it when their exposure (the banks) is limited by a higher than normal deposit on a property being put down.

I look with interest to see what happens when the hedge funds start to have zillions knocked of their investments (probably already happening) but I remember reading alot of UK pensions invested afair amount of the 25% allowable in to hedge funds. Could be huge probs ahead if this is the case.(note: seemingly the reason they invested in to hedge funds was that pensions were underperforming with their usual investments and the hedge fund boom gave an oppertunity to big up the pensions). Perhaps Aus supers invested in them as well ......

Re: Home prices to explode ?
 

Just be careful of borrowing too much on mortgages folks. I live in a large market town in Northern Ireland and so many people have gone bankrupt, or are in the process at the moment. About a quarter of businesses are up for sale or vacated, everyone reckons when house prices were rising and economy in good nick, then banks were firing money at people, now they are forclosing on one default.

Rumour has it that 3 of the 4 main banks are shitting it, as they gave mortgages to anyone and now we are in the negative equity phase, they are squealing!!!!!!!!!

We have friends who are going to go under, simply because the banks let them borrow too much on rental properties, I think a lot of people were too greedy.

Re: Home prices to explode ?
 

But it won't happen in Oz:p


so tells me, a 23 yr old EA



on P plates, living at home:D with mum & dad

Re: Home prices to explode ?
 

So, what do you all advise to do if recently moved to Aus, and sold uk property with equity in bank in UK? Do we wait to see if exchange rate goes up and Aus house prices fall, or buy now and hope that they stay the same or rise, and that the interest rates either stay the same or go down? We really dont know what to do, having spoke to many locals where we are, some say its a buyers market and wont fall anymore, others say wait 12-24months when they really fall, and others say they are not falling, but will start to rise sharply over the next 2 years. We live near Noosa so prices are quite steep, but we are looking at Coolum, which is a lot more reasonable, and they are set to begin an update/refurb of the whole seafront in 2 months time.

Any help, thoughts, suggestions invited. Thanks.

Re: Home prices to explode ?
 

Hi Dorothy,
If it is not a secret, let me know what's the bank's name?!;)

Re: Home prices to explode ?
 

:rofl:

I feel reassured now :lol:

Re: Home prices to explode ?
 

Can't give advice, but we're happy to tell you that the plan is to take out the regular savers account with Halifax .... 12% AER with £5000 in the account by 4 weeks after opening and a regular deposit of, I think, £25 or more per month. Only offered for 12 months but, it's a great offer! I can't even find that on an ISA even on the after tax rate!
We're going to let our money sit it out for a bit.... tbh I don't know what the market is going to do, but I'm guessing that it won't rise more than the interest that I'm going to earn on the money I'm depositing here!
I'm bricking it a bit that the exchange rate will become really favourable for us and then drop before my 12 months are up, more than how much our future home is going to cost us!!!
Everything is, at best an educated risk, at worst a complete and utter unqualified risk, but this is our decision at the moment!

Ali

Re: Home prices to explode ?
 

I think you'r on the ball Ali and good to see Kapri sounding positive.
I'm hoping to move over permanently in Jan 2010 and hopefully by then house prices in Aus will be lower and house prices in the UK will have stabalised. Also, we may be out of a possible depression by then and the £ will be strong again. Perhaps falling house prices in the UK are not too much of a problem if the £ recovers its strength and the $ weakens! My wife wants a newly built 4b house under $400K!! :cool:Any comments?

Re: Home prices to explode ?
 

Most 4 bed 2 bath homes cost (not marketed) around $250K too build base. Add fittings and you are going to struggle regardless of market. Unless you concede location.

I hope for you I am proved wrong:)

Re: Home prices to explode ?
 

and rising all the time apparently.
http://www.news.com.au/business/mone...013951,00.html

"The Master Builders Queensland Cordell Housing Cost Index found a "typical" four-bedroom, 200sq m brick family home in southeast Queensland now costs $271,574 to build, a jump of $11,755 in the past 12 months."

"From November last year until February this year it went up by $2205, mostly due to rises in the price of materials and labour."

"MBQ director of housing Darren Barlow said that in March 2004 the cost of building a new home was only $221,700. "

Re: Home prices to explode ?
 

Property nearing once-in-100-year slump
http://www.news.com.au/story/0,23599,24012370-2,00.html

"The only other times this has ever occurred are before we have moved into severe recessions."

Re: Home prices to explode ?
 

To aliplay,
Check out the small print on that Halifax deal - if it is like the Alliance and Leicester 10% deal (which I would guess it is) the interest is 12% on the 1st deposit for 12 months, same on the 2nd deposit for 11 months etc and when you work out the compound interest the A+L works out at 4.35%, yours will work out around 5% - not the 12% as stated.:sneaky:
Banks, you gotta love 'em!:frown:

Croc:rofl::D:rofl:

Re: Home prices to explode ?
 

When people choose to live beyond their means, then blame the banks for lending too much when it all turns sour, I find it hard to dredge up any sympathy for them.

It's very simple: don't borrow more than you can afford to repay, and make sure your mortgage is low enough to accommodate future rate rises.

If necessary, downsize. That brand new 4x2 with a swimming pool is a privilege, not a right.