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House prices and the media....

House prices and the media....

Old Jul 13th 2008, 11:11 am
  #61  
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Default Re: House prices and the media....

Originally Posted by rabsody View Post
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!
Stupidity itself. Reminds me of a similar one written by a Brit journo about Australia quite recently that did the rounds. Although this one did eventually get down to the negatives.
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Old Jul 13th 2008, 11:29 am
  #62  
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Default Re: House prices and the media....

Originally Posted by rabsody View Post
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!
Noel W was the clever guru telling us that "the magic train' would make everybody a millionaire.Mid 80,s probably.

All you had to do was save something like $2.86 a day for 10 yrs.This would compound over the 40 yrs he stated ,and we would all be millionaires.He said that he used a 14% interest rate,this was low,as at the time you could get a rate of around 16%.

Who would have even dreamed interest rates could rise and fall over a 40 yr period,didn't seem very obvious to him.

I have a very extensive financial library dating back decades,I like reading it just to see the crap they were coming out with to predict the future,they still come out with crap today ,and they will continue to come out with crap in the future.

An author called xxx(don't want to put his name up) writes a book called Top Stocks.When rebalancing portfolios and diversification became fashionable around the mid 90,s he reviewed his picks from 10 yrs before.Some had gone bust,some made very little money and Westfield had turned 10K into around 250K.

As the experts all repeat the same things in general ,the portfolio needed rebalancing ,so obviously you had to sell Westfield and buy other companies to keep your portfolio balanced.

I liked Buffetts take on it at the time,"so you shoot the horse that wins the race and feed it to the losers".
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Old Jul 13th 2008, 4:44 pm
  #63  
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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?
case in point:

"I can buy a 2,500 sq.ft. home in a million dollar neighborhood in Cape Coral, Florida for $170,000. Prop taxes are $3,000, wind insurance is $3,000, flood insurance is $1,900, the pool and yard service is $2,100, the management fee is 10%, and I'd be lucky to rent it for $1,100 a month. Throw in vacancy factors and repairs, and I'd lose money if I got the house for free.
Lenders down there are blowing houses out, but it's still the renter, not the buyer, who makes out. The renter doesn't care if the GSEs are nationalized. He ain't buying, anyway."

once this reality starts popping up is game over. you might hold on for a year if 'experts' keep telling you next year the bubble continues but when you might have this overhead for 5 years and sell at the same price, ppl walked in droves.
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Old Jul 15th 2008, 3:36 am
  #64  
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Default Re: House prices and the media....

Originally Posted by mbike View Post
Tracked the article down here:



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
Here is the Residex article the Sky news piece was referring to. Should make the transition from the UK to Australia a bit less expensive for those lucky enough to sell their homes.

Property nearing once-in-100-year slump

By Fiona Gilles
July 13, 2008 09:20am
Half of all houses lost value last month
Last time that happened was before the Depression
Property: news and tips to beat the slump

PLUMMETING property values have prompted warnings Australia is heading for a one-in-a-100-year real estate slump.

New figures from property analyst Residex showed house and unit prices in nearly every city and country centre fell last month. The last time all states fell at the same time was just before the Great Depression.

More than 50 per cent of all homes across the nation lost value in June. The slump is affecting the top end of the market as well as the lower end.

Residex chief executive John Edwards is warning of tough times ahead. "It looks like we're moving into a one-in-100-year event," Mr Edwards said.

"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 declined for a fourth consecutive month and demand for loans fell 23 per cent 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 three months to the end of June.

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 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.
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Old Jul 15th 2008, 4:29 am
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Default Re: House prices and the media....

Originally Posted by geordie downunder View Post
I have a very extensive financial library dating back decades,I like reading it just to see the crap they were coming out with to predict the future,they still come out with crap today ,and they will continue to come out with crap in the future.
It seems to me the value of keeping stuff like that can be high, or very educational and teach the lessons of history. The cost of things 10/20/30 years ago and salaries can make for interesting reading.

It's funny when you read a book published in say 1980 which says something like, ''the recent fashion is to etc" and you laugh because that lasted all of another year or two or was infact dead by publication.
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Old Jul 15th 2008, 4:49 am
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Default Re: House prices and the media....

But what about those poor buggers(me included) who are currently trying to sell a house here in Aus as they have to move. Do we just accept a low offer as a lower one and then another lower one may follow that?
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Old Jul 15th 2008, 5:00 am
  #67  
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Default Re: House prices and the media....

Originally Posted by BadgeIsBack View Post
It seems to me the value of keeping stuff like that can be high, or very educational and teach the lessons of history. The cost of things 10/20/30 years ago and salaries can make for interesting reading.

It's funny when you read a book published in say 1980 which says something like, ''the recent fashion is to etc" and you laugh because that lasted all of another year or two or was infact dead by publication.
The one that always gets me is the Blue Peter Time Capsule for the year 2000, perhaps because I was a child when it was buried in 1971 and then a grown-up when it was dug-up. I remember when it was put-in thinking how exciting it would be for the future generations to find it and then it was just like, "oh".
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Old Jul 15th 2008, 5:11 am
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Default Re: House prices and the media....

Originally Posted by peanut21 View Post
But what about those poor buggers(me included) who are currently trying to sell a house here in Aus as they have to move. Do we just accept a low offer as a lower one and then another lower one may follow that?
Take a lower offer, but make sure you pressure the vendor in your next house to take a similar haircut when yo buy. It's all relative and eventually everyone saves on the cost of housing (unless you are one of those people who took out huge mortgages, in which case you may just have to accept the inevitable)

Incidently if you are trading up, falling prices can benefit you greatly as the sums of money involved are proportionately much larger so the "savings" become greater. I know of one couple who couldn't sell their house in Perth at $1.25mill, so took a 250k haircut. 250k is a lot of money that a purchaser would have to find (and probably would have last year courtesy of the credit crazy banks and NBLs). They only paid 400k for the house so they are still up on the deal, but it is amazing to see how paper values have diverged from real value
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Old Jul 15th 2008, 9:03 am
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Default Re: House prices and the media....

Originally Posted by peanut21 View Post
But what about those poor buggers(me included) who are currently trying to sell a house here in Aus as they have to move. Do we just accept a low offer as a lower one and then another lower one may follow that?
It's not so much about 'lower offers', but about taking a longterm view. I am trying to sell my house in the UK and have had ongoing discussions on another website, the consensus is basically:
1. If you hold on to it for 12-18 months what are people going to offer you then?
2. By having your money tied up in the property what other investment opportunities are passing you by?
3. Loss or gain of money since you bought it is absolutely irrelevant to what the house is worth on the open market- the value of the house is its value to someone who will buy it, not it's value to you as the vendor. If nobody in the world will buy it for $x then it is not worth $x- that's all there is to it.

Anyway, done some hard thinking and decided against the estate agent's advice of a 10K drop, I have dropped the price by 17.5K GBP yesterday (house only 210K GBP to start with)
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Old Jul 15th 2008, 10:44 am
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Default Re: House prices and the media....

Originally Posted by mbike View Post
The one that always gets me is the Blue Peter Time Capsule for the year 2000, perhaps because I was a child when it was buried in 1971 and then a grown-up when it was dug-up. I remember when it was put-in thinking how exciting it would be for the future generations to find it and then it was just like, "oh".
Back in 1980, I thought we would be flying around on monorails and living under a dome.... in 2000.
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Old Jul 15th 2008, 10:49 am
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Default Re: House prices and the media....

Originally Posted by BadgeIsBack View Post
Back in 1980, I thought we would be flying around on monorails and living under a dome.... in 2000.
and wearing head to toe silver
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Old Jul 15th 2008, 10:55 am
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Default Re: House prices and the media....

Originally Posted by rabsody View Post
and wearing head to toe silver
That's the go. We did a project at school inthe 70s about the year 2000 and people really thought we would have progressed to that. ''Progressed''?

About the only advance in 2000 was admittedly quite cool looking cars, (much nicer looking than 80s/early 90s cars), websites and er....er and retro 1970s furniture/clothing.

Also recall being told in 70s/80s that you would be able to order stuff online and ''check'' information on what looked like glorified Teletex. Remember that!!Internet actually made it happen.
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Old Jul 15th 2008, 11:29 am
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Default Re: House prices and the media....

Originally Posted by BadgeIsBack View Post
That's the go. We did a project at school inthe 70s about the year 2000 and people really thought we would have progressed to that. ''Progressed''?

About the only advance in 2000 was admittedly quite cool looking cars, (much nicer looking than 80s/early 90s cars), websites and er....er and retro 1970s furniture/clothing.

Also recall being told in 70s/80s that you would be able to order stuff online and ''check'' information on what looked like glorified Teletex. Remember that!!Internet actually made it happen.
Cor you're showing your age now Badge. I was born in the 70s so couldn't possibly know what you are talking about
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Old Jul 15th 2008, 9:09 pm
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Default Re: House prices and the media....

Originally Posted by mbike View Post
Here is the Residex article the Sky news piece was referring to. Should make the transition from the UK to Australia a bit less expensive for those lucky enough to sell their homes.
And then you have this article...
http://www.guardian.co.uk/business/feedarticle/7649891
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Old Jul 15th 2008, 10:37 pm
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Default Re: House prices and the media....

Originally Posted by DownUnderPaddy View Post


Good old Westpac salt of the earth never made a quick buck
in there lives ,all for the people
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