Browse Forums Real Estate 1 Oct 19, 2008 8:28 pm Watching 60 minutes tonight they did a story on the crisis and had Steve Keen who said we'll be in for a 10 depression. Frightening stuff!!. He also believes that property will drop 40%. I still think that pricing here is about 20% too high but 40% would be a mighty drop and 10 years is just unthinkable.
What's your thoughts on Keen's estimates? Gloom and Doom 3Oct 19, 2008 9:07 pm He is not the only one playing a gloom and doom song. He is almost Marc Faber's local franchise. Has he said which property's price is going to drop by 40%, the Sydney Harbour mansions, or Perth mining boom suburban houses?
Economies go through cycles and prices do go up and down but a drop of that magnitude in housing across the whole country? Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ Doom and Gloom 5Oct 19, 2008 10:11 pm Well yes, you don't have to be genius to figure out what goes up must come down in an economic downturn. But to come up with a 40% figure, I don't think he has a magic calculator that tells him that.
I heard some people saying "home prices are going to crash so I am just going to rent". That makes as much sense as saying "I'm not going to buy petrol this week because price of petrol is going to crash 40% next week" " I'm just going to hold it out without petrol until prices crash, until they crash I am just going to take a taxi everywhere". Hmm.. Since 2004 (accepted as the peak of real estate prices in suburban Sydney) property in eastern suburbs was hot while home owners in the western and south western mortgage belts suffered under dropping prices. We didn't have a boom in these outer suburbs since 2004 as far I can say. But WA definitely did. Re: property pricing during economic crisis 7Oct 20, 2008 5:22 pm d@n Your analogy between property and petrol buying is stupid. That's a very juvenile remark. Are you at kindergarten buddy? Only at kindy you get away with that sort of remark. Wow this topic is intense Re: property pricing during economic crisis 8Nov 02, 2008 12:37 pm He is right though. The analogy makes no sense. If it is forseable that prices will fall (i would say inevitable) it makes perfect sense to defer buying. Especially when renting would for most people be cheaper than the cost of borrowing for a property. Re: property pricing during economic crisis 9Feb 06, 2009 7:34 pm i have stop listening to half of this stuff as I donot think anyone has any idea,But I can tell all the talk of dresspion etc it not helping by 11 year who saw all about it last night on tt and he would not sleep as he thought we were going to lose our job and house, All this negative talk is having a negative effect on many people as they said we could talk ourselves into it,Not to say it is not important has it is very important but my thread is this if it is going to happen there is not much we can do about it finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: property pricing during economic crisis 10Feb 07, 2009 2:16 pm Hi yvette,
The problem is that people make sweeping statements such as 40% drop in all capital cities , pretending that we have one large mass market rather than micro segments divided along price and geographical factors. I agree with the following comments from January and I made similar comments back in October at this forum. At the moment if the experience of my first home buyers customers are a good indication, there is a mini boom going on in the sub $400,000 range in West Sydney as well as South West Sydney. This price bracket is the number one target for first home buyers and the First Home Owners Grant Boost is the key trigger. Quote: Australian Property Monitors economist Liam O'Hara says "Sydney will have nominal price falls of 10 per cent but it will depend on where you live because some suburbs will have price increases - mostly those that are the cheapest relative to other stock." Mr O'Hara says outer suburbs in the west and south-west - where prices are less than $360,000 - are poised for strong growth, especially property close to trains, schools and shops. He says property in the city's west and south-west is 25 per cent cheaper than it was four years ago."Those areas are now as affordable as they were back in 1998," he says. Re: property pricing during economic crisis 11Feb 07, 2009 7:52 pm were I live there is a increase in new home approval throught council and homes are still selling stronger here as we have some major instructure that has started here a jail about 40kms outside town as people are buying that will be working there and there major upgrade new showground,aquatic centre, new police station,fire ambulane, ses etc.so we have seen no drop in prices here at all. we have just had adil open here too. finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: property pricing during economic crisis 12Feb 08, 2009 3:14 am thlo The problem is that people make sweeping statements such as 40% drop in all capital cities , pretending that we have one large mass market rather than micro segments divided along price and geographical factors. What is worse is that they don't understand the levels of unemployment needed for a 40% drop in house prices across the board... can you imagine 3/4 people out of work (e.g. some WA mining towns)? It would be total chaos. Those hoping that those prices drop like that won't have the funds available to borrow when they do, because no bank is going to lend to you as they won't believe you will have a job to pay it back! Re: property pricing during economic crisis 14Feb 08, 2009 11:16 am I think the unemployment rate would need to be higher than that. Does anyone have some hard data on the 90's recession?. From memory, official rates rose to 11% (it felt higher though) and median prices went down by 20% approx. Correct me if i'm wrong. Re: property pricing during economic crisis 16Feb 09, 2009 12:01 pm ed. I think that he meant to say he didn't think highly of my thought process. Re: property pricing during economic crisis 17Feb 16, 2009 12:38 pm 40% sounds interesting..... but I'm assuming that'll mainly be for the higher-end of the current market?
I'm looking at spending $200k (or less) on a three bedroom house (which is actually doable - just trying to find "the one" at the moment). I'm going to use the FHOG, which of course is quite large up until June 30th. So I have the choice of buying now, or waiting to see if the prices do drop. 40% lower prices later in the year without the extra FHOG (I'd still get 10k) would be far better than the current prices with the extra FHOG (17k) .... but honestly, at the lower end of the market, I doubt prices will drop 40%. What do people think? west sydney home loans 18Feb 17, 2009 2:10 pm webbiegareth 40% sounds interesting..... but I'm assuming that'll mainly be for the higher-end of the current market? I'm looking at spending $200k (or less) on a three bedroom house (which is actually doable - just trying to find "the one" at the moment). I am certain years from now a lot of people will say "I told you so" but whether the guy who made the "40% drop on average in all cities" claim will be one of those people, who knows. At the lower end of the market (sub $400,000), all I can say is that in Sydney, houses are currently being sold within 2 weeks of listing. Re: property pricing during economic crisis 19Feb 17, 2009 2:21 pm I've done some Googling on this subject lately and it appears to me that during the early 90s recession house prices dropped around 3%. They then remained flattish for around 3 years.
Looking forward, I think the process of elimination should be applied here and I reckon it would be safe to say that you could eliminate any chance of prices rising at anywhere near the rate of the last 10 years if at all. Prices should remain flat for a while but there will be the odd bargain picked up from mortgage defaulters and this may bring the median price down a little. Re: property pricing during economic crisis 20Feb 18, 2009 2:09 pm Well said colsy, unless people actually loose jobs and default on payments, I cant see anyone trying to offload their house at a 40% reduction in price. There are enough options available if you are feeling financial pressure, especially with todays rental market being so tight.
I think people would just sit tight during the hard times and not flood the market with houses. As for a 10 year depression... what constitutes as a depression! many financial analysts believe that an unemployment rate of 5% can be healthy for an economy and can stimulate competition in the market place. Have any of you noticed that its easier to negotiate nowadays! I think that if something is going to happen for 10 years, it'll be us getting used to a different way of operating. Just to put this 5% unemployment into perspective, with my basic maths skills (and please correct me if im wrong), 5% of a working year is equal to being unemployed for 13 working days per year, thats not too bad...go on holiday or get some rest...think of it as work life balance. Now stop freaking out and spend some money on some good ol Aussie products i would suggest nothing is unreasonable for PCI. we did all sorts, including checking the hot water, checking all the GPO's had power, testing that the showers were… 9 98695 Just to makea point about this, an approach that some people have found sucessful in negotiating these rises down, Is to provide some workings to the builder, specifying… 4 81734 The only thing to add to these comments is that where possible it's always good to try and work with people than just say "no" because you can. Having someone… 4 17153 |