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House prices and the media....

House prices and the media....

Old Jul 12th 2008, 4:17 am
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Default Re: House prices and the media....

Originally Posted by mbike View Post
I'm not certain where you'd find that info, maybe on Somersoft? You're right about loss aversion among sellers. It can lead to stagnant markets - an RE agents worst nightmare (as they depend on volumes). Maybe this is why Rob Druitt is now asking sellers to adjust their expectations, rather than suggesting buyers get more imaginative with funding options?
exactly. any RE body/institute/organization/media whatev that is being funded by members' contributions will pull it on the buy side all the way until the activity grounds to halt and then switch to sell side, lest the contributors starve. happens everywhere. in the US the mantra was ''they're not making anymore land''. so you can't go wrong. are you kidding me? continental USA can accommodate maybe 2 europes and 2 australias population wise without changing current config even.
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Old Jul 12th 2008, 4:32 am
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Default Re: House prices and the media....

Originally Posted by lastere View Post
exactly. any RE body/institute/organization/media whatev that is being funded by members' contributions will pull it on the buy side all the way until the activity grounds to halt and then switch to sell side, lest the contributors starve. happens everywhere. in the US the mantra was ''they're not making anymore land''. so you can't go wrong. are you kidding me? continental USA can accommodate maybe 2 europes and 2 australias population wise without changing current config even.
On the issue of RE agents and their desire for sales, I am still amazed by the apparent disconnect (unless it's just me) between advertised house prices and what what they believe to be affordability.

Just been out to my mailbox and picked up the Real Estate free sheet. There's a house in Wariwck for sale at $470000. Next to the photo is the heading - "1st time buyers dream".

Can somebody please tell me if $470K - i.e. 230K GBP would be a first timer buyers house price in the UK?

Are my finances so out of line with the rest of the population of the developed world?
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Old Jul 12th 2008, 7:15 am
  #48  
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
It's interesting that the Bayview lots mentioned in the paragraph became the "right price" (i.e. the "different level") after a 35% contraction.
Maybe they were just 35% overpriced to start with. I remember at the beginning of the year, someone called Ed or Edward Karan posted all the time on news.com.au. He was constantly talking about a Q1 "tipping point" and house price drop of 40% in the two years after that. He was slagged off quite a lot by the pro-RE posters and yet events seem to be proving him right, at least for now.
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Old Jul 12th 2008, 7:20 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
On the issue of RE agents and their desire for sales, I am still amazed by the apparent disconnect (unless it's just me) between advertised house prices and what what they believe to be affordability.

Just been out to my mailbox and picked up the Real Estate free sheet. There's a house in Wariwck for sale at $470000. Next to the photo is the heading - "1st time buyers dream".

Can somebody please tell me if $470K - i.e. 230K GBP would be a first timer buyers house price in the UK?

Are my finances so out of line with the rest of the population of the developed world?
A typical first time buyer in Perth over the last couple of years would be a uk or european who had arrived with anywhere between 60 and 200 ukp equity in their back pocket after selling up in the more advanced stage of the housing boom in the UK or europe. This distorted the FHB market somewhat. Most native aussie FHB have only been able to make the leap with help from paper rich BB parents who have released a little equity to help out the little ones. Rents rising over the last 18 months have tended to rule out saving for a larger deposit so the remainder of potential FHBs have effectively been sidelined.
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Old Jul 12th 2008, 1:41 pm
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Default Re: House prices and the media....

Originally Posted by mbike View Post
Most native aussie FHB have only been able to make the leap with help from paper rich BB parents who have released a little equity to help out the little ones. Rents rising over the last 18 months have tended to rule out saving for a larger deposit so the remainder of potential FHBs have effectively been sidelined.
Sounds very familiar. This has been going on for something like 8 years now in UK, US, Aussie, stacks of other contries etc....
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Old Jul 12th 2008, 1:50 pm
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Default Re: House prices and the media....

Originally Posted by BadgeIsBack View Post
Sounds very familiar. This has been going on for something like 8 years now in UK, US, Aussie, stacks of other contries etc....
I can remember back in 93 scraping together a 2.5k ukp mortgage deposit, getting my boss to add next years pay rise onto my 14k salary and then accepting the worst (best for the salesman) mortgage offer from Abbey National (a low-cost, with-profits endowment + LMI) in order to just about afford a 1 bedroom flat in a shabby area of North London. 10 years later, when I sold it, I would have needed to earn 70k to to the same thing again for the same property. There aren't too many FHBs with that kind of money. It's one of the downsides of a housing bubble/boom.

Last edited by mbike; Jul 12th 2008 at 1:55 pm.
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Old Jul 12th 2008, 1:55 pm
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Default Re: House prices and the media....

The West is on a bit of a D&G roll. Here's today's bit of bad news - with the hint of a silver lining in 3 months time (a bit optimistic imo)


Land sales tipped to dive more than 40pc
12th July 2008, 9:15 WST

Land sales in WA have been tipped to slump more than 40 per cent this financial year and tradesmen are no longer getting the big bonuses of the housing boom as fresh signs emerge of a decline in the property market.

The biggest property developer in WA, Satterley Property Group, said yesterday that only 9500 lots would be sold in the State this financial year compared with an average of 16,500 lots a year for the past decade.

Group chief executive Nigel Satterley said the only land being sold was in the range of $160,000 to $225,000.

He predicted that the number of lot sales in some top-selling subdivisions such as Brighton, Ellenbrook and Dalyellup in Bunbury would drop by up to 42 per cent this financial year.

“We’re nearly at the bottom of the cycle, maybe two or three months off the bottom, and market forces have driven the prices down, and the good product is selling at a lesser pace and the poorer product is not selling at all,” he said.

Plunkett Homes group construction manager David Reed said the days of tradesmen such as bricklayers earning big bonuses and getting high rates of pay were over.

He said the company’s current rate of about $1850 per thousand bricks laid was set less than two years ago and would be reviewed soon. “We would be reviewing those to drop them but I must admit I don’t know what we would drop them to,” he said.

Master Builders Association of WA figures showed that the annual rate of new home starts had dropped 20 per cent to about 19,000 compared with two years ago. It said 1937 dwellings were started in May, down from 2800 for the same month in 2006.

MBA WA housing director Gavan Forster said the mid-range of homebuyers was being affected the most. People were adopting a wait-and-see approach when building costs for new homes were continuing to rise.

“The fact that they can’t sell their house or they can’t sell it at the price they thought they were going to get is a bit of a bump in the road for them so that market is a little bit inhibited,” he said.

Mr Forster said permanent tradesmen were not out of work due to the downturn but many of those who had come into the industry when times were good were now leaving.

The Real Estate Institute of WA said on Thursday the median house price in Perth had fallen $30,000 in the first half of this year.

The number of properties listed for sale in WA had risen to 17,200 from a low of about 5000 some 20 months ago, according to REIWA figures.

The average wait for a property to be sold also rose from 71 days in the March quarter this year to 74 days for the June quarter. The average under usual market conditions was 45 days.

REIWA president Rob Druitt said it was a strong signal for sellers to meet the market rather than trying to get prices equivalent to 2006.
DALE MILLER
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Old Jul 12th 2008, 2:23 pm
  #53  
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Default Re: House prices and the media....

Originally Posted by mbike View Post
The West is on a bit of a D&G roll. Here's today's bit of bad news - with the hint of a silver lining in 3 months time (a bit optimistic imo)
Yes - interesting last line from Druitt.

Incidentally I notice on Sky News that house prices in every Australian capital decreased last month - the first time since the Great Depression with typical house prices in Australia set to decrease 8-10 per cent over the next 12 months.
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Old Jul 12th 2008, 3:39 pm
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Yes - interesting last line from Druitt.

Incidentally I notice on Sky News that house prices in every Australian capital decreased last month - the first time since the Great Depression with typical house prices in Australia set to decrease 8-10 per cent over the next 12 months.
Tracked the article down here:

Aus house price fall
Updated: 19:06, Saturday July 12, 2008
A new report shows Australian house prices fell in every capital city last month.

It's the first time it's happened since the Great Depression, and housing experts say we'd better get used to further falls in the market.

To get buyers to part with cash and sign contacts is becoming very hard due to mortgage stress.

It's estimated the typical house around Australia will fall by around 5- 10 per cent over the next 12 months.

The big increase in rental prices are also affecting tenants have already eroded the latest tax cuts. Experts say those people who are selling homes should price them correctly to move it quickly.
Funny how they don't mention the source of the report or comment in any more detail. I would say a simultaneous decline in all markets would be a pretty significant milestone for Australian property
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Old Jul 12th 2008, 8:41 pm
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Yes - interesting last line from Druitt.

Incidentally I notice on Sky News that house prices in every Australian capital decreased last month - the first time since the Great Depression with typical house prices in Australia set to decrease 8-10 per cent over the next 12 months.
A friend here on Sydney's Northern Beaches is a property valuer, does most of his work with St George . He's absolutely convinced there's 15%-20% to come off everything here over the next 18 months to 2 years; as he says he's at the sharp end and can see exactly what's going on. We've even had a couple of repo's up here in an end of the market that you just wouldn't expect to see, i.e. $3m plus...
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Old Jul 13th 2008, 12:48 am
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Default Re: House prices and the media....

http://www.dailyreckoning.com.au/gov...se/2008/07/09/

I wonder how many journos/editors have investment properties and don't want to believe there will be a correction? Most stories here are pro-there is a "strong housing market".
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Old Jul 13th 2008, 2:51 am
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Default Re: House prices and the media....

Originally Posted by temptininnit View Post
http://www.dailyreckoning.com.au/gov...se/2008/07/09/

I wonder how many journos/editors have investment properties and don't want to believe there will be a correction? Most stories here are pro-there is a "strong housing market".
Funny you should say that....
I've just been watching an interview with the head of a big mortgage brokers. He didn't exactly talk the market up but he did say that buyers should purchase now in case they were disappointed by price rises in the next 12 months. He wasn't asked to justify this in the light of recent data or other viewpoints!!
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Old Jul 13th 2008, 3:29 am
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Default Re: House prices and the media....

But then this was quite interesting:

Property values plummet across Australia
July 13, 2008 - 8:09AM


Plummeting property values have prompted warnings Australia is heading for a one in a 100 year slump.

New figures from property analyst Residex showed house and unit prices in nearly every city and rural centre fell in June, News Ltd reports.

The last time all states fell at the same time was just before the Great Depression. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards has warned of tough times ahead.

"It looks like we're moving into a one-in-100-year event," Mr Edwards is quoted as saying.

"It points to a situation where unless the government and Reserve Bank take action Australia could move into a recession.

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

The Residex statistics come at the end of a gloomy week for the Australian economy.

Official figures released last week showed housing construction fell for a fourth consecutive month and demand for loans declined by a quarter in the four months to the end of May.

Higher petrol prices and interest rates, and the share market slump also saw consumer confidence drop 51 per cent to its lowest level since 1992, when the economy was recovering from recession.

Mr Edwards said housing markets in different states usually rose and fell at different times.

"To see an adjustment going on a wholesale basis across the whole of the nation is incredibly unusual," he said.

"Never in my lifetime have I seen so many converging negative events." Residex reports the current median house value in Sydney is $573,000, down 1.05 per cent in June compared with 1.81 per cent for the three months to the end of June.

The falls are happening all over Sydney. While property values in Sydney's battler suburbs in the west and southwest have been dropping for some time, homeowners in well-off areas are now being hit.

Among the 20 worst-performing suburbs for houses are the wealthy northern enclaves of Whale Beach, Clontarf, Palm Beach, Elanora Heights, Clareville and Mona Vale.

While Plumpton, near Mount Druitt, was the worst-performing suburb, with negative capital growth of 5.74 per cent in the three months to June and 1.96 per cent in June, Whale Beach came in as the third-worst performer, with negative growth of 3.73 per cent and 1.14 per cent, respectively.

Maria Cassarino, from Richardson and Wrench Seaforth, which covers the Clontarf area, reported fewer people had attended open houses in recent months.

"This time last year we were getting 30 people though a property and now we are getting five," she said.

While Seaforth usually had low turnover, Ms Cassarino said the types of properties that had sold after four to six weeks were taking much longer.

John Gavagna, principal of Residential Real Estate at Mona Vale, said there had been a slowdown in sales of properties over $1 million, as buyers were more cautious.

RP Data's director of property research Tim Lawless said what happened in the coming months would depend on inflation.

He showed some optimism, although he said values would probably fall further in Sydney this year.

"Coming into 2009, it's likely - and it depends on what happens with interest rates - we will start to see some value improvements return to the market, albeit relatively small," he said.

It's the same story for units, with Casula the worst-performing suburb with negative growth of 1.8 per cent in the three months to June, and 0.55 per cent in June.

Suburbs such as Milsons Point, Double Bay and Greenwich are also among the poor performers.

And Sydney rents rose 15.29 per cent in the year to June, the biggest jump in the country. The average Sydney rent is $490 a week, a jump of $65 from last year.
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Old Jul 13th 2008, 9:07 am
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Default Re: House prices and the media....

Originally Posted by NKSK version 2 View Post
Funny you should say that....
I've just been watching an interview with the head of a big mortgage brokers. He didn't exactly talk the market up but he did say that buyers should purchase now in case they were disappointed by price rises in the next 12 months. He wasn't asked to justify this in the light of recent data or other viewpoints!!
I find it sickening the amount of rubbish put out by the media pumping up the market when they know full well it's on a down turn.
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Old Jul 13th 2008, 9:17 am
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Default Re: House prices and the media....

To illustrate my point above, this is an article (and my comments) I posted less than a year ago from an article in The Sunday Mail by their finance "expert", Noel Whittaker.

Brainwashing alert!
"I HAVE just returned from a factfinding trip to Britain. Let me assure you, from a financial point of view at least, that this [Australia] is the lucky country."
Quelle surprise.

A main course in a restaurant may be 30 pounds in Britain and $30 in Australia, so the cost of living is more than double ours."

A marvellous foolproof method of working out the cost of living in other countries by anyone's standards!

"Average house price is a 152,000 pounds ... and to make matters worse, the Bank of England lifted interest rates to 5.75 per cent earlier this month, putting further pressure on homeowners' budgets"

So in other words the average house price in UK is the same as in Aus! And yet the interest rate is about 2% lower to boot.

"you have to understand that prices there have the same nominal value as in Australia"
Hmm, so I'm thinking that brocolli must be going for around 7quid a kilo in Tescos these days.
This kind of propaganda is rife in Aus and the people aren't worldly enough to realise it. I actually had people quoting this article at me IRL as a measure of how much better life was in Aus - I rest my case!
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