House Price Serious Warning
Dec 1st 2003, 9:25 am
#31
Joined: Aug 2003
Posts: 11,149
Anyone remember late eighties early nineties? Property price drops and negative equity were the order of the day.
Problem with most people here is they are not bothered about long term UK trend but what cash they will have to bring to Oz. Short term the property market may well slow due to rising interest rates. UK current government defecit is getting worse so taxes may well have to rise and probably in the form of council taxes because income tax is a politcal no no.
The HK boom and bust was classic sheep behaviour by investors and the market is totally different to the UK. It will be interesting to see how much housing is created by Prescott changing planning laws and encouraging building in the overcrowded SE market.
Problem with most people here is they are not bothered about long term UK trend but what cash they will have to bring to Oz. Short term the property market may well slow due to rising interest rates. UK current government defecit is getting worse so taxes may well have to rise and probably in the form of council taxes because income tax is a politcal no no.
The HK boom and bust was classic sheep behaviour by investors and the market is totally different to the UK. It will be interesting to see how much housing is created by Prescott changing planning laws and encouraging building in the overcrowded SE market.
Dec 1st 2003, 4:22 pm
#36
Forum Regular
Joined: Apr 2003
Location: Singapore
Posts: 216
Re: For PaddyThePilot
Originally posted by Megalania
Cautious optimism in property market (HK)
Cautious optimism in property market (HK)
Thanks for that.......interesting reading!
The property market is only just, I mean just, begining to think about turning around.......it took 6 years to stop falling!
You can now buy a decent flat here now for a reasonable price, 60% below the peak prices of 1997, so many people are now looking into this.
My orginal point was to highlight just how the property market (or any market really) is subject to sentiment, here in HK sentiment went out of the window and prices just collapsed........could it happn in the UK?
Probably not to the same extent as here, but I think to buy a property in the UK today would take a very brave person indeed!
Chees
Dec 1st 2003, 7:40 pm
#37
Forum Regular
Joined: Aug 2003
Location: surrey
Posts: 84
Watch out buying property in Australia
http://www.theage.com.au/articles/20...?from=storyrhs
various other proeprty news
'MORTGAGE STRESS' ON RISE
http://finance.news.com.au/common/st...55E462,00.html
MORE than one in 10 Australian homebuyers are already experiencing "mortgage stress".
And that number will rise if the Reserve Bank board lifts rates again on Wednesday following its monthly meeting in Sydney tomorrow.
…
Nationally, housing affordability for first home buyers has fallen to record level lows for the three months to September, according to a Housing Industry Association and Commonwealth Bank report last week.
First home buyers are leaving the cities for the regions in search of a more affordable home. …
PROPERTY BEATS SHARES
By Matthew Horan
http://finance.news.com.au/common/st...55E462,00.html
SYDNEY property has provided almost twice as good a return as share investments over the past 20 years, a report has found. … The study, by property monitor Residex, also shows share investments had more than three times the risk of property.
ABC ONLINE
RATE RISE NOT NEEDED TO COOL HOUSING MARKET: REAL ESTATE INSTITUTE
Reporter: Mark Tamhane
http://www.abc.net.au/am/content/2003/s1000557.htm
DAVID HARDAKER: As home owners hold their breath to see if the Reserve Bank will move this week to raise interest rates again, there's more evidence of a slowdown in the nation's property market.
…
MARK TAMHANE: So for people looking for a home, is this really the sea change, are we now looking at a buyer's market?
ENZO RAIMONDO: Yes, I think the market has changed, it's not what it was 12 months ago, where you put something on the market and people would flock and buy it no matter where it was and no matter how much it cost. I think people are a lot more conscious about pricing, they've seen an interest rate rise recently, there's talk of another one, there's speculation about a housing bubble, all those sorts of comments come into play. …
THE DAILY HERALD
MORTGAGE MANIA
By S.A. Mawhorr Daily Herald Business Writer
http://www.dailyherald.com/business/...intid=37954283
Sales of existing homes across the nation for 2003 are on track to hit an all-time high for the third year in a row while starts on construction of new houses recently hit an 18-year high.
It's a housing boom fueled by historically low interest rates and a growing population. Experts believe sales will continue to be strong.
"We've reached a new plateau in housing," said Walt Molony, spokesman for the National Association of Realtors.
…
"The fundamentals will drive the market for the next decade," Molony said.
SMH
PONZI STAMP ON PROPERTY PIPEDREAMS
By Alan Kohler
http://www.smh.com.au/articles/2003/...825993334.html
…
Henry Kaye's variation works like this. He will agree with a developer to provide buyers for units at a certain price - say $300,000 each. Rent on a unit worth that much would normally be around $250 a week, but Kaye provides a rental guarantee at $350 a week for five years, which supports a genuine sworn valuation at $440,000.
He then appears at a seminar (from which he can make $10 to $20 million just from the attendances) offering to sell new units to his fortunate attendees at a 10 per cent discount to the sworn valuation - ie, $400,000.
Gross profit per unit is thus $100,000. The rental guarantee costs him $25,000 ($350 a week minus $250 over five years), so net profit is $75,000 per unit. It's a classic Ponzi scheme: the profits fund the rental guarantees on which those profits are based.
Meanwhile, the seminars essentially teach ordinary people how to play property like a futures market, except with much greater leverage - and risk. …
RBA WALKS A FINE LINE BETWEEN BIG DEBT AND A PROPERTY CRASH
http://www.smh.com.au/articles/2003/...825993100.html
When the Reserve Bank board meets next week its members will no doubt congratulate themselves on early signs that last month's decision to raise rates for the first time in nearly 18 months appears to be having the desired effect.
The board will also, no doubt, debate the merits of giving the over-inflated housing market and debt-addicted households another dose of the same. While the likelihood is that it will raise rates another 25 basis points, the immediate impact of the last rise means that it isn't a foregone conclusion.
Auction clearance rates have slumped, prices are sliding in Sydney and Melbourne, and the seedy empire that spruiker Henry Kaye built on the naivety and greed of battlers has collapsed.
For those who maintained the extraordinary increase in property prices and activity could be rationalised by the fundamentals, the hissing you can hear isn't just the angry chorus of Kaye's creditors - the bubble has developed a leak.
…
MARKET COOL-OFF HAMMERS AUCTIONS
By Lisa Pryor, Property Reporter
http://www.smh.com.au/articles/2003/...127270301.html
Up to 30 per cent of Sydney properties listed for auction at the weekend did not go under the hammer. Nearly one in five listed for auction were withdrawn and more than one in 10 were sold before auction.
The trend, which has steadily increased over the spring auction season, occurred throughout Sydney in suburbs including Alexandria, Woolooware, Roseville Chase and Bankstown.
However, Ashfield had a 100 per cent auction clearance rate with all five properties selling at or before auction, including $1.075 million paid for a 110-year-old home offered for the first time in 53 years.
The large number of pre-auction sales was due to a cooling market and new auction laws requiring bidders to register, said buyers' agent Dennis Kalofonos. …
THE WEST AUSTRALIAN
STATE'S HOUSING BOOM IS OVER
By Anne Buggins and Dawn Gibson
http://www.thewest.com.au/20031129/n...sto116390.html
WA'S runaway housing boom - which had seen property values soar more than 40 per cent in three years - was over, leading industry members warned yesterday.
They said this month's 0.25 percentage point interest rate rise, the first for 17 months, had made already nervous home buyers even more pessimistic about entering the over-heated market.
But they said there was no sign the market was about to crash and another interest rate rise would not spell disaster for the building industry or cause prices to tumble.
Property developer Nigel Satterley said a slowdown in both the new and established home markets had been apparent for some time. ….
THE NEW ZEALAND HERALD
HOUSING BOOM PRODUCES BIGGEST PRICE RISE IN 15 YEARS
http://www.nzherald.co.nz/storydispl...ection=general
A 17 per cent rise in house prices in the September year was the biggest increase in 15 years, Quotable Value New Zealand said today.
Seven cities saw average house prices increase over 20 per cent in the year, led by Nelson with a massive 39 per cent hike.
There is little evidence of the boom slowing despite the private agency saying such increases are unsustainable. …
STUFF
HOUSING GROWTH LIKELY TO CONTINUE
People are rushing into residential property because the capital gain is "fantastic", according to Massey University Property Professor Bob Hargreaves – but some may be jumping on an "irrational" bandwagon.
http://www.stuff.co.nz/stuff/0,2106,2743742a13,00.html
Latest Quotable Value New Zealand figures show a 17 per cent rise in house prices in the year to September – the biggest jump in 15 years.
Property prices tend to go in cycles, but Prof Hargreaves said real estate tended to "overshoot" more than business booms and busts.
"You get this irrational stuff that happens when everyone is jumping on the bandwagon, or bailing out," he said.
Asked if that was happening now, Prof Hargreaves said: "I think it probably is, though anyone in property will probably shoot me". Capital gains could never continue indefinitely, he added.
…
For investors, yields on residential property were now "abysmal", with gross rental returns of about 4 per cent in parts of central Wellington, with 5 per cent or more in the suburbs. …
http://www.theage.com.au/articles/20...?from=storyrhs
various other proeprty news
'MORTGAGE STRESS' ON RISE
http://finance.news.com.au/common/st...55E462,00.html
MORE than one in 10 Australian homebuyers are already experiencing "mortgage stress".
And that number will rise if the Reserve Bank board lifts rates again on Wednesday following its monthly meeting in Sydney tomorrow.
…
Nationally, housing affordability for first home buyers has fallen to record level lows for the three months to September, according to a Housing Industry Association and Commonwealth Bank report last week.
First home buyers are leaving the cities for the regions in search of a more affordable home. …
PROPERTY BEATS SHARES
By Matthew Horan
http://finance.news.com.au/common/st...55E462,00.html
SYDNEY property has provided almost twice as good a return as share investments over the past 20 years, a report has found. … The study, by property monitor Residex, also shows share investments had more than three times the risk of property.
ABC ONLINE
RATE RISE NOT NEEDED TO COOL HOUSING MARKET: REAL ESTATE INSTITUTE
Reporter: Mark Tamhane
http://www.abc.net.au/am/content/2003/s1000557.htm
DAVID HARDAKER: As home owners hold their breath to see if the Reserve Bank will move this week to raise interest rates again, there's more evidence of a slowdown in the nation's property market.
…
MARK TAMHANE: So for people looking for a home, is this really the sea change, are we now looking at a buyer's market?
ENZO RAIMONDO: Yes, I think the market has changed, it's not what it was 12 months ago, where you put something on the market and people would flock and buy it no matter where it was and no matter how much it cost. I think people are a lot more conscious about pricing, they've seen an interest rate rise recently, there's talk of another one, there's speculation about a housing bubble, all those sorts of comments come into play. …
THE DAILY HERALD
MORTGAGE MANIA
By S.A. Mawhorr Daily Herald Business Writer
http://www.dailyherald.com/business/...intid=37954283
Sales of existing homes across the nation for 2003 are on track to hit an all-time high for the third year in a row while starts on construction of new houses recently hit an 18-year high.
It's a housing boom fueled by historically low interest rates and a growing population. Experts believe sales will continue to be strong.
"We've reached a new plateau in housing," said Walt Molony, spokesman for the National Association of Realtors.
…
"The fundamentals will drive the market for the next decade," Molony said.
SMH
PONZI STAMP ON PROPERTY PIPEDREAMS
By Alan Kohler
http://www.smh.com.au/articles/2003/...825993334.html
…
Henry Kaye's variation works like this. He will agree with a developer to provide buyers for units at a certain price - say $300,000 each. Rent on a unit worth that much would normally be around $250 a week, but Kaye provides a rental guarantee at $350 a week for five years, which supports a genuine sworn valuation at $440,000.
He then appears at a seminar (from which he can make $10 to $20 million just from the attendances) offering to sell new units to his fortunate attendees at a 10 per cent discount to the sworn valuation - ie, $400,000.
Gross profit per unit is thus $100,000. The rental guarantee costs him $25,000 ($350 a week minus $250 over five years), so net profit is $75,000 per unit. It's a classic Ponzi scheme: the profits fund the rental guarantees on which those profits are based.
Meanwhile, the seminars essentially teach ordinary people how to play property like a futures market, except with much greater leverage - and risk. …
RBA WALKS A FINE LINE BETWEEN BIG DEBT AND A PROPERTY CRASH
http://www.smh.com.au/articles/2003/...825993100.html
When the Reserve Bank board meets next week its members will no doubt congratulate themselves on early signs that last month's decision to raise rates for the first time in nearly 18 months appears to be having the desired effect.
The board will also, no doubt, debate the merits of giving the over-inflated housing market and debt-addicted households another dose of the same. While the likelihood is that it will raise rates another 25 basis points, the immediate impact of the last rise means that it isn't a foregone conclusion.
Auction clearance rates have slumped, prices are sliding in Sydney and Melbourne, and the seedy empire that spruiker Henry Kaye built on the naivety and greed of battlers has collapsed.
For those who maintained the extraordinary increase in property prices and activity could be rationalised by the fundamentals, the hissing you can hear isn't just the angry chorus of Kaye's creditors - the bubble has developed a leak.
…
MARKET COOL-OFF HAMMERS AUCTIONS
By Lisa Pryor, Property Reporter
http://www.smh.com.au/articles/2003/...127270301.html
Up to 30 per cent of Sydney properties listed for auction at the weekend did not go under the hammer. Nearly one in five listed for auction were withdrawn and more than one in 10 were sold before auction.
The trend, which has steadily increased over the spring auction season, occurred throughout Sydney in suburbs including Alexandria, Woolooware, Roseville Chase and Bankstown.
However, Ashfield had a 100 per cent auction clearance rate with all five properties selling at or before auction, including $1.075 million paid for a 110-year-old home offered for the first time in 53 years.
The large number of pre-auction sales was due to a cooling market and new auction laws requiring bidders to register, said buyers' agent Dennis Kalofonos. …
THE WEST AUSTRALIAN
STATE'S HOUSING BOOM IS OVER
By Anne Buggins and Dawn Gibson
http://www.thewest.com.au/20031129/n...sto116390.html
WA'S runaway housing boom - which had seen property values soar more than 40 per cent in three years - was over, leading industry members warned yesterday.
They said this month's 0.25 percentage point interest rate rise, the first for 17 months, had made already nervous home buyers even more pessimistic about entering the over-heated market.
But they said there was no sign the market was about to crash and another interest rate rise would not spell disaster for the building industry or cause prices to tumble.
Property developer Nigel Satterley said a slowdown in both the new and established home markets had been apparent for some time. ….
THE NEW ZEALAND HERALD
HOUSING BOOM PRODUCES BIGGEST PRICE RISE IN 15 YEARS
http://www.nzherald.co.nz/storydispl...ection=general
A 17 per cent rise in house prices in the September year was the biggest increase in 15 years, Quotable Value New Zealand said today.
Seven cities saw average house prices increase over 20 per cent in the year, led by Nelson with a massive 39 per cent hike.
There is little evidence of the boom slowing despite the private agency saying such increases are unsustainable. …
STUFF
HOUSING GROWTH LIKELY TO CONTINUE
People are rushing into residential property because the capital gain is "fantastic", according to Massey University Property Professor Bob Hargreaves – but some may be jumping on an "irrational" bandwagon.
http://www.stuff.co.nz/stuff/0,2106,2743742a13,00.html
Latest Quotable Value New Zealand figures show a 17 per cent rise in house prices in the year to September – the biggest jump in 15 years.
Property prices tend to go in cycles, but Prof Hargreaves said real estate tended to "overshoot" more than business booms and busts.
"You get this irrational stuff that happens when everyone is jumping on the bandwagon, or bailing out," he said.
Asked if that was happening now, Prof Hargreaves said: "I think it probably is, though anyone in property will probably shoot me". Capital gains could never continue indefinitely, he added.
…
For investors, yields on residential property were now "abysmal", with gross rental returns of about 4 per cent in parts of central Wellington, with 5 per cent or more in the suburbs. …
Last edited by Enzo&Chloe; Dec 1st 2003 at 7:50 pm.
Dec 1st 2003, 8:16 pm
#38
Guest
Posts: n/a
On TV here tonight there was an article saying that people will have to live further out from the cities to be able to afford housing.
I live just 2mins away from the beach, about 30 mins from Brisbane CBD, and my area has for some time been classed as way too far out. Standard 3 bed Houses start at around $250,000 on 700sm blocks.
Currently Ipswich area, maybe about an hour from CBD is still relatively cheap, but if you go further west it gets cheaper and cheaper.
It all depends on what you want eg: 4 bedroom house on 13.5 acres in Toowoomba $ 275,000, but it is 105km from Brisbane.
see it here: www.realestate.com.au
I live just 2mins away from the beach, about 30 mins from Brisbane CBD, and my area has for some time been classed as way too far out. Standard 3 bed Houses start at around $250,000 on 700sm blocks.
Currently Ipswich area, maybe about an hour from CBD is still relatively cheap, but if you go further west it gets cheaper and cheaper.
It all depends on what you want eg: 4 bedroom house on 13.5 acres in Toowoomba $ 275,000, but it is 105km from Brisbane.
see it here: www.realestate.com.au
Dec 1st 2003, 8:29 pm
#39
Guest
Posts: n/a
"The trend, which has steadily increased over the spring auction season, occurred throughout Sydney in suburbs including Alexandria, Woolooware, Roseville Chase and Bankstown. "
Is it worth pointing out that these are the slum areas of town which will be effected first?
Is it worth pointing out that these are the slum areas of town which will be effected first?
Dec 1st 2003, 8:41 pm
#40
Joined: Aug 2003
Posts: 11,149
Originally posted by badgersmount
"The trend, which has steadily increased over the spring auction season, occurred throughout Sydney in suburbs including Alexandria, Woolooware, Roseville Chase and Bankstown. "
Is it worth pointing out that these are the slum areas of town which will be effected first?
"The trend, which has steadily increased over the spring auction season, occurred throughout Sydney in suburbs including Alexandria, Woolooware, Roseville Chase and Bankstown. "
Is it worth pointing out that these are the slum areas of town which will be effected first?
Woolooware is also far out but in the Shire (sutherland shire). Shire people are firercly proud of the shire. Along with the North shore it is very Anglo. Woolooware is also near Cronulla where the prices are city prices because of the enourmous surf beach. Northies (the North Cronulla Hotel) is supposed to be the place to be in the area.
Dec 1st 2003, 10:25 pm
#41
Guest
Posts: n/a
Mortgage length
No ones mentioned the possibility of mortgages being increased from 25yrs to say 30 or 35yrs so people have longer to pay. I'm sure some bright spark in govt. has planted this seed of an idea in a ministers ear.
Personally, I think house prices will remain fairly static in the UK for around 5 yrs. Then people will be coming out of their lock in period on their mortgage and will find they'll have to find an extra 5% or so...
Personally, I think house prices will remain fairly static in the UK for around 5 yrs. Then people will be coming out of their lock in period on their mortgage and will find they'll have to find an extra 5% or so...
Dec 2nd 2003, 3:17 am
#42
Purveyor of Beaches
Joined: May 2003
Location: Caloundra Sunshine Coast Yippee
Posts: 374
Re: Mortgage length
Originally posted by Spectre
No ones mentioned the possibility of mortgages being increased from 25yrs to say 30 or 35yrs so people have longer to pay. I'm sure some bright spark in govt. has planted this seed of an idea in a ministers ear.
Personally, I think house prices will remain fairly static in the UK for around 5 yrs. Then people will be coming out of their lock in period on their mortgage and will find they'll have to find an extra 5% or so...
No ones mentioned the possibility of mortgages being increased from 25yrs to say 30 or 35yrs so people have longer to pay. I'm sure some bright spark in govt. has planted this seed of an idea in a ministers ear.
Personally, I think house prices will remain fairly static in the UK for around 5 yrs. Then people will be coming out of their lock in period on their mortgage and will find they'll have to find an extra 5% or so...
Dec 2nd 2003, 7:48 am
#43
BE Enthusiast
Joined: Jun 2003
Location: Melbourne, Victoria
Posts: 524
200,000 financial jobs to go offshore in next 5 years. That will certainly take the steam out of the South-East property market.
http://www.thisislondon.co.uk/news/a...ivaind?source=
Plus IT, call-centers, etc
http://www.thisislondon.co.uk/news/a...ivaind?source=
Plus IT, call-centers, etc
Dec 2nd 2003, 10:32 am
#44
Guest
Posts: n/a
There seems to be a trend, here in OZ, to go for Interest Only mortgages.
It keeps the repayments down !!
The reasoning with a lot of people is:
Buy two houses,
pay interest only,
get rent on one to cover part of costs,
then when house prices have doubled, sell one house to pay of BOTH mortgages.
It keeps the repayments down !!
The reasoning with a lot of people is:
Buy two houses,
pay interest only,
get rent on one to cover part of costs,
then when house prices have doubled, sell one house to pay of BOTH mortgages.
Dec 2nd 2003, 12:47 pm
#45
Lost in BE Cyberspace
Joined: Mar 2003
Posts: 9,397
Originally posted by ABCDiamond
There seems to be a trend, here in OZ, to go for Interest Only mortgages.
It keeps the repayments down !!
The reasoning with a lot of people is:
Buy two houses,
pay interest only,
get rent on one to cover part of costs,
then when house prices have doubled, sell one house to pay of BOTH mortgages.
There seems to be a trend, here in OZ, to go for Interest Only mortgages.
It keeps the repayments down !!
The reasoning with a lot of people is:
Buy two houses,
pay interest only,
get rent on one to cover part of costs,
then when house prices have doubled, sell one house to pay of BOTH mortgages.
Can only work if there are new punters coming in all the time - otherwise, when the music stops there are many tears.
