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House prices and the media....

House prices and the media....

Old Jul 11th 2008, 6:26 am
  #16  
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Default Re: House prices and the media....

Originally Posted by Centurion View Post
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.
Well said. This is exactly what I think.
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Old Jul 11th 2008, 6:27 am
  #17  
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Default Re: House prices and the media....

Originally Posted by Amazulu View Post
Well said. This is exactly what I think.
And I second it.
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Old Jul 11th 2008, 7:06 am
  #18  
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Default Re: House prices and the media....

Must have been a slow day in sydney pretty sure it was the SMH that had petrol at $8 a litre and australia in recession.

Not sure about all this negativity in the markets, economic cycles come and go, always have always will. The the bargain hunters come in and off we go again.
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Old Jul 11th 2008, 7:14 am
  #19  
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Default Re: House prices and the media....

Originally Posted by jad n rich View Post
Must have been a slow day in sydney pretty sure it was the SMH that had petrol at $8 a litre and australia in recession.

Yup. Nothing very interesting going on here. It's not like the state government is about to implode or anything serious.

Oh... hang on...


S
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Old Jul 11th 2008, 8:19 am
  #20  
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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.
Simple - different styles of journalism. UK papers are world famous for being over the top with their style for the most part.

I could of course say that maybe there is a higher VI (vested interest) with the WA papers then in UK. i.e. things are going through the floor but the EA's/banks/Construction unions etc etc ask for it to be played down a tad for the moment so they can salvage what they can before it really gets bad. Play it up and kiss good bye to advertising. Also WA media would be aware of the issues in the early 90's when that boom ended and the whole sh*tstorm. I could say that but I would be mad
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Old Jul 11th 2008, 8:59 am
  #21  
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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 agree with most of the other points but would add one more. Australians are more naturally risk takers and more-readily accept gains and losses in the short-term.

Historically, that is probably in the genes as all first generation Aussies took a risk to get here then often struggled to survive. In the present, our Super is at the whim of the markets and not defined-benefit, in WA our economy is prone to exaggerated boom and bust and farmers are used to drought etc.
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Old Jul 11th 2008, 9:46 am
  #22  
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Default Re: House prices and the media....

Originally Posted by Centurion View Post
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.
Although recorded data on price falls of 6% per half year or 6% per full year is slightly different to the predictions of an "expert".
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Old Jul 11th 2008, 9:51 am
  #23  
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Default Re: House prices and the media....

Originally Posted by seang View Post
... things are going through the floor but the EA's/banks/Construction unions etc etc ask for it to be played down a tad for the moment so they can salvage what they can before it really gets bad. Play it up and kiss good bye to advertising. ....
I was just wondering, with real estate ads in newspapers, is it not the case that the papers stand to gain more advertising revenues when the market is slow and houses are not selling, as the ads stay in for longer? The real estate section of the newspaper tends to be much thicker in a slow market, right?

Or do they charge a one-off advertising fee for a fixed period, or until the house is sold, which would mean they benefit from higher turnover rather than column inches? (Sorry, slow day at work...)
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Old Jul 11th 2008, 10:54 am
  #24  
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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.

Hi, the house prices here in the UK have dropped more than 6% in the last year. Houses just aren't selling here, there are houses on the market that were on last May when we got back from Oz. The main difference with the media I think is that here they over exaggerate everything that goes on and in Perth they just don't mention it and hope nobody notices. That's why everyone that moves there thinks it is Utopia and that there's no drugs, no crime, etc etc.

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Old Jul 11th 2008, 2:24 pm
  #25  
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Default Re: House prices and the media....

Originally Posted by Exile View Post
I was just wondering, with real estate ads in newspapers, is it not the case that the papers stand to gain more advertising revenues when the market is slow and houses are not selling, as the ads stay in for longer? The real estate section of the newspaper tends to be much thicker in a slow market, right?

Or do they charge a one-off advertising fee for a fixed period, or until the house is sold, which would mean they benefit from higher turnover rather than column inches? (Sorry, slow day at work...)
Brisbane Courier Mail charges $1200 a week (once a week on Saturday in the RE section) for a tiny pictorial ad!

But a 3 week stint is a bargain at $3000!
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Old Jul 11th 2008, 2:35 pm
  #26  
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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.
If it helps, Here is the story from WA Business News (you have to subscribe)

For anyone following the supply/demand debate about Aussie housing, Drutit's comments about oversupply are scary for Perth.

For my money, the MSM here are too concerned about RE-related revenues to say anything anywhere near as bearish as the UK papers. Anyone who doubts this should consider the significant trouble the West Australian has gone to to ensure that people pick up both parts of Saturday's West (advertising, rebadging, put all the interesting supplements in part 2 etc).

Cheers

Mbike

Latest News

Perth houses prices drop $30,000 - 11 Jul, 06:45am

The median house price in Perth has fallen $30,000 down to around $446,000 in the past six months and the rental vacancy has returned to normal for the first time in several years, according to the data released today by the Real Estate Institute of WA.

Data released today by the Real Estate Institute of Western Australia show that the Perth median
house price has dropped a further $14,000 since March, while the rental vacancy rate has returned
to normal for the first time in several years.

REIWA's preliminary results for the June quarter show a 3 per cent fall in median price, pulling the
metropolitan median down from $460,000 in March to around $446,000.

This follows the median price having peaked at the end of last year at $475,000.
REIWA President Rob Druitt said the post-boom market was still correcting but had now been hit by
the weaker consumer confidence in the overall economy, interest rate uncertainty and petrol
prices.

"Perth has experienced an overall slump of almost $30,000 in the median price since the beginning
of this year, and the June quarter shows that this slump is found right across the metropolitan area
and also that the regions have gone backwards a little too," Mr Druitt said.
REIWA data for June show that Mandurah dropped by 7 per cent, Greater Bunbury by 7 per cent,
Geraldton-Greenough by 9 per cent and Kalgoorlie by around 5 per cent.

Mr Druitt said the large number of properties for sale punctured the myth of a housing shortage.
"In WA we have a situation of oversupply - not a problem with undersupply, and this is due to the
strength of building activity between 2001 and 2007," he said.

There were 17,200 properties on the market in June (down 2 per cent on March), including 2,450
blocks of land.

Mr Druitt said the once tight vacancy rate for tenants had now returned to normal, with REIWA
recording a comfortable 3 per cent vacancy rate, illustrating many new properties had flooded into
the rental system as investor/owners now found it a difficult time to sell.
"For the first time in several years tenants should now find it much easier to find a suitable home.

There is much more stock available and much more competition amongst owners to secure good
tenants.

"However, rents did increase a little in the June quarter, lifting by $10 per week for houses to a
median of $350 per week, while units rose by $10 per week to a median of $320 per week," Mr
Druitt said.

"Given the large number of properties now being passed over into the rental system, it is
reasonable to expect that rental price growth will ease in the latter part of the year.

"Landlords need to be mindful of the changing conditions and not to price themselves out of the
market," Mr Druitt said.

The oversupply of housing is not restricted to the Perth market with both Mandurah and Bunbury
recording high stocks of listings along with healthy vacancy rates which have contributed to no
movement in rents in these regions during June.
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Old Jul 11th 2008, 2:51 pm
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Default Re: House prices and the media....

Originally Posted by Amazulu View Post
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.
The key may well be how much "sooner or later". Cheap credit, which has fueled the property boom here, came mainly from securitisation issuance (50% domestic, 50% overseas) and this market (worth $47 billion last year) has been completely seized up since last October. Wholesale funding is still costing the banks more and crushing margins. Whilst national savings rates (deposits) are at historical lows. Non-bank lenders have been squeezed out of the market almost entirely and the big four are becoming much more selective about who they lend to (whilst retain extra capital to cover potential losses in speculative commercial property ventures they rushed into financing in the good times). At the same time, almost 30% of loans written in WA over the last couple of years were lo/no-doc with LVR>80% and these are the ones that are most vulnerable to a turn around or stagnation in price rises. Without significant capital gains and/or and increase in rental yields they will no longer be an attractive investment and will be unloaded sharpish before -ve equity rears its head.
Don't want to sound too negative but there is a perfect storm brewing and blithe optimism and a she'll be right attitude could cost people a lot of money in the next few months.

mbike
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Old Jul 11th 2008, 2:58 pm
  #28  
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Default Re: House prices and the media....

Originally Posted by mbike View Post
Don't want to sound too negative but there is a perfect storm brewing and blithe optimism and a she'll be right attitude could cost people a lot of money in the next few months.

mbike
Maybe. Who knows?
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Old Jul 11th 2008, 3:03 pm
  #29  
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Default Re: House prices and the media....

Originally Posted by mbike View Post
If it helps, Here is the story from WA Business News (you have to subscribe)

For anyone following the supply/demand debate about Aussie housing, Drutit's comments about oversupply are scary for Perth.

For my money, the MSM here are too concerned about RE-related revenues to say anything anywhere near as bearish as the UK papers. Anyone who doubts this should consider the significant trouble the West Australian has gone to to ensure that people pick up both parts of Saturday's West (advertising, rebadging, put all the interesting supplements in part 2 etc).

Cheers

Mbike
Wow - interesting article - thanks. Certainly more dire than the The West portrayed.
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Old Jul 11th 2008, 3:25 pm
  #30  
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Wow - interesting article - thanks. Certainly more dire than the The West portrayed.
"Dire" is a strong word. Rob Druitt of REIWA has certainly become more circumspect in his pronouncements of late. I think there is a growing realisation in the RE industry that they need to adjust their modus operandi to a slowing and/or reversing market. Whilst most of his advertorials in the West RE section used to be about not missing the boat, he now warns sellers against the dangers of loss aversion/cognitive dissonance. How many people will actually listen to what is basically sound advice will dictate which way the Perth market goes from here.
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