Oh dear... socialists think that can manipulate the market

[Leftwinger]

Been having a bit of a look at simple, small beach houses and cottages in the beach town I mentioned. Pre-GFC, you couldn't get a 1960's 2 room fibro shack for under about half-a-mil and that was the floor, they went up into the millions from there. There are still plenty of luxury houses - and I do mean luxurious - there asking $1 - $2 million or more. But the price of many regular houses and cottages is starting to look slightly more realistic, with plenty under $300 000 and some as low as $200 000. I still think it's a fair way off rock bottom yet though, even if prices fall more slowly from here. There are a lot of things marked "price by negotiation" and even "developer liquidating". Guess the market must think it's suddenly gone from shit-hot location to just shit.

I have watched the place go from sleepy hollow to mini-property boom - and now it looks like property bust (I drive past a luxury unit complex each time I go there that has looked the same since 2008 - half finished, with exposed reinforcing rods corroding in the salt air). Blocks with houses, cottages and sheds just sprouted all over the place like mushrooms. I don't think the majority of these people were in it for the lifestyle - they did it because they thought they would now be millionaire propery developers. The ones who got out just before the GFC hit no doubt are. But a lot of them are bunnies who played pass the ever more expensive parcel and wound up holding a bag of shit. Many are no doubt negatively geared and are losing money on something they can't even sell to cover their debt.

Like all bubbles, the ever-rising prices were underpinned by nothing more substantial than the collective belief that prices would simply continue rising.

I like the look of some of what I've seen but I still think it's too exxy.


Patience.

[lisa jones]

I can't really comment Mr Leftwinger because I need to personally know and understand the position of the region you're talking about.

If you're talking Sydney .. I'm there.

[Leftwinger]

Lisa, the town is called Agnes Water. It's a small beach town at the site of James Cook's first landfall in what became Queensland (hence the tiny hamlet just around the corner is called 1770 - it consists of a high headland overlooking the sea and is still millionaires row).

The good thing about talking to conveyancers is that they see what properties are actually changing hands for, as opposed to what they might be advertised for.

If you're talking Sydney .. I'm there.

So you haven't seen any of this?

SYDNEY'S great property divide is being turned on its head, with the wealthy Eastern Suburbs suffering a shock 15 per cent slump in property prices, while values in the city's west continue to soar.
Property monitors and analysts are stunned by the sharp reversal in fortunes in traditional real estate hot spots, claiming the nine-month plunge has wiped billions from the collective wealth of the city's richest homeowners.

And it could be just the start.

Property analyst Jason Anderson, of MacroPlan Australia, believes the Eastern Suburbs could face a further 5 per cent decline in values in the next quarter alone if sentiment failed to turn around and first-home buyers continue to sit on the sidelines.

Such an additional fall would take the market correction to beyond 20 per cent from the inflated peaks reached last year, erasing the majority of gains the Eastern Suburbs recorded in the mini property boom post the Global Financial Crisis.

http://www.dailytelegraph.com.au/news/s ... 6044682715
I have seen property data records (I have no link, I will have to chase the people I was corresponding with) suggesting significant falls in the inner rings of Sydney.

Perhaps it's all statistical? ie A small number of high priced properties being sold for significantly less which are serving to pull down averages? The rises in the west are also interesting though it could be a reflection of the same thing in reverse. There isn't much point speculating on it. Possibly something similar is occurring in Adelaide.....

IT’S A buyer’s market in the leafy eastern suburbs, with house prices dropping substantially, new Real Estate Institute of SA figures show.

The March quarterly figures show Unley Park prices fell by 49 per cent, with the median price dipping from $3 million, to $1.5 million, based on five sales over the same period this year.

Vella Real Estate director Anthony Vella agreed it was a buyers’ market.

“Buyers have the luxury of taking their time as there’s so much choice,” Mr Vella said.

Harris Real Estate managing director Phil Harris said that there were significantly more properties on the market this year.

“There are currently 2500 houses on the market in the Adelaide metropolitan area, compared with 1500 at the same time last year,” Mr Harris said.

“Vendors need to set realistic goals if they want to sell their property.”

Falls were recorded across the east, with Pasadena house prices falling by 28 per cent from $511,875 to $368,000 based on five sales.

Toop and Toop general manager Mandy Wurth said the fall was expected following inflated prices over the past two years.

“The previous stimulated market pushed house prices up so we’re currently seeing a return to normal,” Ms Wurth said.

Norwood, however, bucked the trend, increasing its median house price by almost 10 per cent, from $720,000 to $791,000.

http://eastern-courier-messenger.wherei ... y-in-east/
In the main however, real estate around Australia is in trouble for the simple reason that it is far too expensive for the average person to reasonabley afford ownership. Any belief that national median prices will rise to $1 million by 2020 is naive. Despite a significant rise in the real inflation-adjusted value of our household income, my wife and I would struggle to afford to buy the same little shoebox again today. This had become the case well before anyone had mentioned the word "LNG" here. So two full time jobs - one underpinned by a university degree - are no longer enough to reasonabley afford a fairly humble house that is currently valued at around the Australian Finaciers Group average price. We would afford it per se, but life would be very much tighter.

[Leftwinger]

More stagnation in Melbourne....

Hume house price dive
HUNDREDS of houses are sitting on the market around Hume as home buyers save their cash for good value buys.

Real Estate Institute of Victoria figures show that in the past year the clearance rate for Broadmeadows has dropped more than a quarter to 58.3 per cent.

It joins median house price drops across the board and few house sales.

The only suburb in Hume to sell more than 30 homes in the January-March quarter was Craigieburn.

Raine and Horne Gladstone Park principal Ray Biner said there were a lot of properties on the market but no one was buying.

“It is very, very clear to see that since probably July the local markets around Gladstone Park, Tullamarine, Westmeadows and Greenvale have certainly started to stabilise and plateau off,” he said.

You have to love real estate agent speak - all news is good news. Even when the news is bad, it is spun as good. But this is perfectly understandable since buyer sentiment is absolutely critical to this industry. This throws some suspicion on auction clearance rate figures. They are collected by the industry itself and reporting is voluntary. There is significant motivation for individual agents to simply not report a bad result.

[lisa jones]

I'm not familiar with the Melbourne domestic real estate market but ahh the Eastern suburbs of Sydney .. yes!

I actually lived in Rose Bay/Double Bay for a few yrs back in my early 20's (as my ex husband was from the area) .. and no I personally would never buy anything there. In fact .. back in the early 1990's I made a conscious decision NOT to buy into the area because I could see it was overcrowded even then as well as overpriced. I just couldn't see the value for my dollar in terms of lifestyle.

[lisa jones]

Allow me to elaborate further .. I could not justify spending $700 000 on a 2 bedroom home with no garage or car space on a narrow and short block of land on the low side of a narrow car crowded street with large trees spanning both sides of it so that the street was left in perpetual shade.

The year??? 1992 (Yes .. almost 20 yrs ago!)

[Leftwinger]

So it always was a more upmarket area then, as the previous articles suggest?

It has to have been (note I did not say "luxury") for something to have been valued at $700 000 in 1992 when the Sydney median six years later in 1999 was significantly less than half that figure ($295 000 - still very expensive for it's day though on a national average basis). Let's not get our wires crossed - when you say "Sydney", you're obviously referring to very specific parts of the great sprawling metropolis that I call Sydney. This is why it's official median is lower than the figures you talk about.



The information in the chart is accurate for all columns except the last, which is a projection. Property investment champion Micheal Yardney actually appears to believe that within nine years, the median price right round Australia will be solidly exceeding a million dollars. I am wondering how on Earth he honestly expects most people to find the money each month to repay such sums. The broader property industry is stalling now because prices are bumping the limit of realistic affordability.
http://www.smartcompany.com.au/property ... ecade.html

[lisa jones]

Mr Leftwinger .. you're looking at and relying on misleading figures there.

The area covered in that table ie Sydney .. covers a lot of "outer bogan" (<-- for want of a better term) areas and these areas tend to distort the real figures.

When we talk real estate .. ie REAL real estate .. the type that's not gonna get you caught up in some risky submarine mortgage situation in the future .. we HAVE to exclude the "bogan" regions from the equation BEFORE we begin any worthwhile analysis.

Otherwise we're just wasting our time .. and money.

[lisa jones]

Property investment champion Micheal Yardney actually appears to believe that within nine years, the median price right round Australia will be solidly exceeding a million dollars. I am wondering how on Earth he honestly expects most people to find the money each month to repay such sums.

- Leftwinger

I am wondering how the hell a so called property investment champion is able to make such a ridiculous blanket statement covering ALL of Australia.

Median prices should be analysied on a regional basis. Even then .. you need to look at each region more closely to see which pockets = bogan so as to exclude these areas as well.

I always concentrate on those areas where my after tax dollar is gonna be worth the 30 yr mortgage noose I'm offering my neck to.

In the final analysis .. it is all about risk management. Buying real estate to live in or rent out .. is and will always be an impt business venture. As such, you need to LOOK before you leap and THINK before you sign any contracts.

Oh and million dollar mortgages are nothing new here in Sydney right now. Most of my friends and rels (including myself) have one.

[Jovial Monk]

But someone on even $150K per annum would find it hard to pay such a mortgage unless he is renting the place out.