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House prices and the media....

House prices and the media....

Old Jul 11th 2008, 3:46 am
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Default House prices and the media....

Something which has been mentioned before but was reinforced today.

On the front page of The West Australian today there is a news item stating that the average Perth house price has fallen 6% in 6 months. I can't even find the article on their website.

I don't think that there's any doubt - expressed by the bulls or the bears - that this is a signficant drop in prices.

And yet in the UK, where houses prices have droppped 6.1% over the last 12 months - i.e. at half the rate of WA - the media acts as if it is the end of the world. "Biggest drop in two decades""etc etc

Discuss.
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Old Jul 11th 2008, 3:55 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Something which has been mentioned before but was reinforced today.

On the front page of The West Australian today there is a news item stating that the average Perth house price has fallen 6% in 6 months. I can't even find the article on their website.

I don't think that there's any doubt - expressed by the bulls or the bears - that this is a signficant drop in prices.

And yet in the UK, where houses prices have droppped 6.1% over the last 12 months - i.e. at half the rate of WA - the media acts as if it is the end of the world. "Biggest drop in two decades""etc etc

Discuss.
Ostriches abound here.
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Old Jul 11th 2008, 4:00 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Something which has been mentioned before but was reinforced today.

On the front page of The West Australian today there is a news item stating that the average Perth house price has fallen 6% in 6 months. I can't even find the article on their website.

I don't think that there's any doubt - expressed by the bulls or the bears - that this is a signficant drop in prices.

And yet in the UK, where houses prices have droppped 6.1% over the last 12 months - i.e. at half the rate of WA - the media acts as if it is the end of the world. "Biggest drop in two decades""etc etc

Discuss.
I don't normally get involved in discussions on house prices as I don't really care what happens - the market will do what it has to do, but there has been a lot of bearish news about property recently. Here in WA and the rest of the country. Markets rise and fall - although the general trend is always up. Fact. That's all I need to know.

The West Australian does not tend to put their headline articles on their website - I guess they think it's going to affect their newspaper sales.
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Old Jul 11th 2008, 4:03 am
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Default Re: House prices and the media....

Originally Posted by Amazulu View Post
I don't normally get involved in discussions on house prices as I don't really care what happens - the market will do what it has to do, but there has been a lot of bearish news about property recently. Here in WA and the rest of the country. Markets rise and fall - although the general trend is always up. Fact. That's all I need to know.

The West Australian does not tend to put their headline articles on their website - I guess they think it's going to affect their newspaper sales.
I'm more interested in the different apparoaches of the media to what are big drops in asset values.

Both nations invest heavily - financially and emotionally in houses and yet the UK seems hysterical compared to here.
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Old Jul 11th 2008, 4:10 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
And yet the UK seems hysterical compared to here.
That's it in a nutshell - over-reaction, hype, hyperbole and hysteria. Whether it's stabbing deaths, MRSA or house prices - it's always apocalyptic. About the only thing they can justifiably whinge about is the cost of petrol and teh fact that it always rains on bank holiday weekends ...

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Old Jul 11th 2008, 4:19 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
I'm more interested in the different apparoaches of the media to what are big drops in asset values.

Both nations invest heavily - financially and emotionally in houses and yet the UK seems hysterical compared to here.
I think the situation in WA is quite a bit different from the UK. WA is suffering a hangover from extreme price growth in recent years, and despite its local economy probably has the 'worst' house price statistics right now. I'm not keen on the term worst because I'm not someone who thinks falling house prices are a bad thing - I've no idea why people consider year after year of 20% growth a good thing - don't they care that their kids will never stand a chance of owning a home??

The UK on the other hand is being confronted by the full force of the credit crunch. By all accounts mortgages are nigh on impossible to come by for people without a 25% deposit - effectively a critical rung in the housing ladder has been removed. So the house price falls there are seen as part of a greater crisis.

The majority of Aussies still think they live in splendid isolation, looked after by the resources boom forever more. I don't agree and I think pretty soon the mortgage market will dry up here too, the CBA has raised its rates again today and I think soon the rationing of funds will start.

Then we'll see how much of an effect immigration has on holding up house prices - the US and UK are both countries with large net inward migration and it hasn't stopped the values of homes falling there.
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Old Jul 11th 2008, 4:20 am
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Default Re: House prices and the media....

Originally Posted by Hutch View Post
That's it in a nutshell - over-reaction, hype, hyperbole and hysteria. Whether it's stabbing deaths, MRSA or house prices - it's always apocalyptic. About the only thing they can justifiably whinge about is the cost of petrol and teh fact that it always rains on bank holiday weekends ...

Yep - I wonder whether that's it. When I was in the UK one of the things which really got to me was the negatives in the newspapers. (I reckon that health scares are the UK broadsheets' sex scandals.)

I wonder if people really are panicking about a 6% drop in the UK.
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Old Jul 11th 2008, 4:24 am
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Default Re: House prices and the media....

Originally Posted by bcworld View Post

Then we'll see how much of an effect immigration has on holding up house prices - the US and UK are both countries with large net inward migration and it hasn't stopped the values of homes falling there.
I've never been taken in by this argument - doesn't matter how many immigramts you have, if they don't have cash for a deposit and high enough earnings to service a mega-mortgage, then it's all irrelevant.
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Old Jul 11th 2008, 4:26 am
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Default Re: House prices and the media....

BTW - another interesting article on rental yelds inside the paper. Perth's yelds are apparently extremely low. A year ago, this was one of the reasons touted for houses prices to increase continually.

I remember reading some bright spark's post on here suggesting that this logic might be false - i.e. that to get a realistic yield in percentage terms, prices might have to come down. Very perceptive.....
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Old Jul 11th 2008, 4:52 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
I've never been taken in by this argument - doesn't matter how many immigramts you have, if they don't have cash for a deposit and high enough earnings to service a mega-mortgage, then it's all irrelevant.

Especially now that house prices in the UK are falling and the exchange rate is very much against would be migrants. People moving here now have to find much more money to have the same buying power they could have had a year ago.

I imagine that many more immigrants will now have to consider borring more than they had anticipated for their Australian dream. Possibly, for the time being anyway, the days of huge immigrant lump sum purchases are over.


S
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Old Jul 11th 2008, 4:54 am
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Default Re: House prices and the media....

Originally Posted by Swerv-o View Post
Especially now that house prices in the UK are falling and the exchange rate is very much against would be migrants. People moving here now have to find much more money to have the same buying power they could have had a year ago.

I imagine that many more immigrants will now have to consider borring more than they had anticipated for their Australian dream. Possibly, for the time being anyway, the days of huge immigrant lump sum purchases are over.


S
I think that you may well be right here. I'm not sure that we would have been as keen to make the move if it was now.
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Old Jul 11th 2008, 6:07 am
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Default Re: House prices and the media....

Originally Posted by bcworld View Post
I think the situation in WA is quite a bit different from the UK. WA is suffering a hangover from extreme price growth in recent years, and despite its local economy probably has the 'worst' house price statistics right now. I'm not keen on the term worst because I'm not someone who thinks falling house prices are a bad thing - I've no idea why people consider year after year of 20% growth a good thing - don't they care that their kids will never stand a chance of owning a home??

The UK on the other hand is being confronted by the full force of the credit crunch. By all accounts mortgages are nigh on impossible to come by for people without a 25% deposit - effectively a critical rung in the housing ladder has been removed. So the house price falls there are seen as part of a greater crisis.

The majority of Aussies still think they live in splendid isolation, looked after by the resources boom forever more. I don't agree and I think pretty soon the mortgage market will dry up here too, the CBA has raised its rates again today and I think soon the rationing of funds will start.

Then we'll see how much of an effect immigration has on holding up house prices - the US and UK are both countries with large net inward migration and it hasn't stopped the values of homes falling there.
Some thoughts:
The credit 'crisis' is a temporary crisis IMO. Sooner or later, the market will sort itself out. Things will return to 'normal'.
There may be a recession in Australia (if there is, it will probably be mild IMO) but there will not be a recession in WA - or Qld for that matter.
The resources boom will not last forever, but it has a few more years still left in it yet.

Last edited by Amazulu; Jul 11th 2008 at 6:25 am.
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Old Jul 11th 2008, 6:20 am
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Default Re: House prices and the media....

Originally Posted by Amazulu View Post
There may be a recession in Australia (if there is, it will probably be mild IMO) bit there will not be a recession in WA - or Qld for that matter.
According to some figures that were in the business news last week, the only state whose services sector is not currently contracting is Vic - if it's true, I've no idea why. The services sector is a big part of the economy, strikes me as odd that cash rich WA would be shrinking too.
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Old Jul 11th 2008, 6:22 am
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Default Re: House prices and the media....

I genuinely think that when its a slow news day, just run a story about house prices going up or down. Doesn't matter which, just print any old crap about it to fill some space. People love to speculate about property prices when we all know its just going up in the long term anyway.
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Old Jul 11th 2008, 6:23 am
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Default Re: House prices and the media....

Originally Posted by bcworld View Post
According to some figures that were in the business news last week, the only state whose services sector is not currently contracting is Vic - if it's true, I've no idea why. The services sector is a big part of the economy, strikes me as odd that cash rich WA would be shrinking too.
Victoria is kept a float with a lot of financial sector stuff. Still a lot of disposable income amongst professionals in Melbourne.
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