Browse Forums Real Estate 1 Jul 21, 2011 12:24 am I've been reading a lot in the papers about the possibility of a major house price crash, and there was a guy on the news a couple of weeks ago, Steve King I think, saying prices could fall anything up to forty percent, which is a bit scary. What do people think? I know auction clearance rates are very low and that's not a good sign, but on the other hand it looks like interest rates won't rise any more, which is a good sign. So many different factors to consider. What do others think.... are house prices set for a big fall?? Cheers, BB. Re: Australian House Prices - Are they going to crash? 2Jul 21, 2011 7:53 am It depends on what part of the country you are talking about. Australia is not just one big housing market. There are many different markets throughout the country. A market like inner metro Sydney is unlikely to crash dramatically since there are so many cashed up first home buyers just waiting in the sidelines ready to pounce. Even in the USA with the tremendous crash,pockets within the country weathered the storm quite well and prices did not go down. Real estate is very cyclical. Prices go down. Prices go up. Prices stay the same. If you average it over many decades real estate tends to go up by about 7-9% a year (depending on the area)- same as the stock market. I lived in California during the 90's and housing prices stayed the same for 9 years. It could happen like that in Australia now. Re: Australian House Prices - Are they going to crash? 3Jul 21, 2011 8:43 am Bullion Baron there was a guy on the news a couple of weeks ago, Steve King I think, saying prices could fall anything up to forty percent, which is a bit scary. BB. Isn't this a very old news? way before GFC! Re: Australian House Prices - Are they going to crash? 4Jul 21, 2011 9:31 am devank Bullion Baron there was a guy on the news a couple of weeks ago, Steve King I think, saying prices could fall anything up to forty percent, which is a bit scary. BB. Isn't this a very old news? way before GFC! I believe he said it then too, but he believes now the govt stimulus and low rates postponed it, kicked the can down the road as it were, and now the crash is coming bigger and badder than before! Re: Australian House Prices - Are they going to crash? 5Jul 21, 2011 11:15 am We have close to full employment, one of the strongest economies in the world, historically low interest rates, growing demand/population (immigration) and good housing stock. We also have good infrastructure, an economic giant wanting to buy as much as we can produce, huge resources in our ground and a skilled workforce. On the flip side we have a Labour government, incoming Carbon tax and high house prices. We also have the USA in recession - looks like the debt ceiling issue will be resolved - expect a major rebound, the PIIGS in Europe looking continually shaky with Greece almost certain to technically default. The negatives have given people the sense of insecurity but it is largely unfounded. In time people will get tired of living in fear and start to realise that we are actually in good times - VERY good times!! We should be partying with joy. Given all this, I believe that we will see small single digit corrections or even steady prices as people panic but eventually we will see prices start rising again, slowly at first but with occasional spurts as good news rolls in. I do not believe that we will see 40% corrections happening and if we do, I'll be buying up as fast as I can. I am sure I won't be alone. Re: Australian House Prices - Are they going to crash? 6Jul 21, 2011 11:43 am I highly doubt it, we bought a few IPs in Sydney East and there has been no faltering, don't you remember 2008 GFC everyone was scared and worried prices were going down then? I just feel fortunate to have pounced when people were scared. Also have you tried getting loans recently? They aren't giving money away that easily, they are protecting themselves. If they were giving out 100& loans to everyone you might worry. I just laugh at the people who sell their house now because they believe property WILL fall by 40%...ok its not really funny for them....but seriously!! *Bought the Block of Land with a Delapitated Weatherboard Shack in July 2010 *No Straight answer from Council until June 2011 *Sign Tender with Lily Homes July 2011 *Demolish End of July 2011 Re: Australian House Prices - Are they going to crash? 7Jul 21, 2011 12:59 pm To speak politely of the man, Steve Keen is a [edited]. He is probably the most prominent doom-and-gloomer in Australia. As for the reality, there will be a slow period for a little while now. But in saying that, there will always be areas with a higher demand that will continue to rise contrary to the trend. there are also other areas that may have been overprice that are now going through a correction period. While there is a still a high demand for housing, there will always be growth, even if we have to wait a few years to see it. there are less buyers in the market at the moment due to rising rates and a bit of fear in spending, but give it a little while, particularly if rates fall again and things will be brighter. Land at Chermside At tender stage Re: Australian House Prices - Are they going to crash? 8Jul 22, 2011 4:41 pm zozo To speak politely of the man, Steve Keen is a [edited]. He is probably the most prominent doom-and-gloomer in Australia. Well his timing was off that's for sure, but a lot of what he says rings true to me. There's a profile of the man here - Steve Keen, with links to some of his work and predictions. He may have been wrong about 2008, but look what's happening now, things are looking worse in many cities. Maybe the can was just kicked down the road by all the govt stimulus? zozo As for the reality, there will be a slow period for a little while now. But in saying that, there will always be areas with a higher demand that will continue to rise contrary to the trend. there are also other areas that may have been overprice that are now going through a correction period. While there is a still a high demand for housing, there will always be growth, even if we have to wait a few years to see it. there are less buyers in the market at the moment due to rising rates and a bit of fear in spending, but give it a little while, particularly if rates fall again and things will be brighter. Maybe, maybe not. I guess it will vary from city to city. Things look really bad in Melbourne to be honest, with auction clearance rates diving and rental vacancy rates at their highest level for 6 years (see here - http://news.domain.com.au/domain/real-e ... 1hoxy.html ). That can't be good for prices? Re: Australian House Prices - Are they going to crash? 9Jul 22, 2011 9:51 pm I doubt that there’ll be a price crash. I think the papers like to say there will be as it sells more papers. People like Steve King who predict huge price falls only do this because if they do happen to get it right, they can make loads of money. They look like they know what’s going on. People will pay to listen to their advice. That’s why they come out again and again with these outlandish theories. Nobody really knows what’s going to happen with the market. Auction clearance rates are low but that doesn’t mean there’s not demand out there. A lot of people are just waiting to see what will happen with the market so they’re exacerbating the issue by either not putting their properties on the market or delaying their property purchase. The good thing to remember is that we all need a roof over our head. A large percentage of households are owner occupied. It’s not like with shares, the price can crash because the investors can quickly offload their shares. People can’t offload their property because they still need a roof over their head. For them, it’s not an investment. Hence, it doesn’t matter if the price of their property has gone down as they aren’t selling it anyway. If unemployment were high, then people could be forced to sell their homes. The market could get flooded with lots of properties. But it’s not high so I just don’t seeing it crashing anytime soon. Re: Australian House Prices - Are they going to crash? 10Jul 22, 2011 10:25 pm Over the past 10 years I've heard so many so called experts make these predictions and every time they get proven totally wrong. If you were in a position to invest and listened to these people imagine what you would have missed out on. Historically prices have doubled around every 7-10 years since the 1950's. The worst periods have seen maybe 7-10 years of stagnent prices but prices have never gone down dramatically. Going by history there is no reason why they would now either. Like others mentioned there are too many people wanting to enter the market for prices to crash. Places like Melbourne and Sydney have a huge demand for property in close proximately to the city and that pressure is not going to go away. Areas that do not have a scarcity value like outer suburbs and regional areas might see bigger price falls such as what is happening in Perth and in Queensland where in some areas there is an over supply of apartments. Even Melbourne is likely to have an over supply of apartments in the CBD over the next few years but you can guarrantee suburbs that people want to live in like StKilda, Malvern, South Yarra etc aren't going to suddenly become unwanted. People keep comparing what is happening overseas to Australia and it's a totally different situation. Where is the massive unemployment and economic break down like what is happening in the US to drive down these prices? It's not happening and you can try to scare people as much as you like but after a while is starts to sound more like sour grapes or ill feeling towards people who have been successfull out of what some perceive to be other peoples misery. People tend to move like a heard in the property market so when the market is bad everyone sits back and does nothing or sells their properties. When the market starts to improve and interest rates are more favourable people all buy at the same time and prices increase. The time when investors make their move is actually the opposite of this - right now is when they would be looking for investment bargains and feeding off the negativity of the market. Once it starts to improve it's too late because everything is going up in price. Of course these people only buy in areas where there is allways demand and not so called up and coming areas where there is no history of strong price growth. It takes a strong belief in the market to do this but if I were to say in 7 years prices will be much higher than they are today and some expert says they will crash who is likely to be correct? The annoying thing is these people have nothing to loose by saying this - if they turn out to be wrong they have lost nothing. Unlike anyone who actually listened to them and planned their finances to suit. Re: Australian House Prices - Are they going to crash? 11Jul 22, 2011 10:35 pm History is littered with bankrupts who said "it is different this time" whether in respect of US economy, dot com boom etc Pretty much every other housing bubble has collapsed. Australia has the higher price/income ratios in the world for house prices. Is it different this time? I doubt it. Re: Australian House Prices - Are they going to crash? 12Jul 23, 2011 11:11 pm Here's a property price plunge report on Today Tonight aired Fri 22nd of July 2011 on Channel 7. http://www.youtube.com/watch?v=oE20DWnsEpo Quote: Residex's John's Edwards has been analysing statistics for 25 years, and has never seen market conditions more primed for a crash. RP Data's Tim Lawless says auction clearance rates are at 50 per cent. The weakest markets are absolutely Perth and Brisbane. We are seeing properties take around 60 days to sell in both of those cities. Re: Australian House Prices - Are they going to crash? 13Jul 30, 2011 11:11 pm One thing to consider is that stagnant price growth is actually a loss when you take into consideration inflation. Its at about 2.5% currently so four years of flat growth and your property techinically has lost 10%. The property market requires a soild correction in some parts to stop the chance of a total price crash just like would happen in any market. Re: Australian House Prices - Are they going to crash? 14Jul 31, 2011 2:44 pm Hi, The housing market and prices of homes in many suburbs is not going to drop and I agree with the last post that prices will be stagnant. However is this a very good time to source out a property and buy one if you have a set budget. While I am based in the inner city Melbourne, I have been keeping an eye on property data sites like www.realestateview.com.au/propertydata where average prices on houses in specific area can be checked. Also myrp.com.au will give you an idea of what to pay for houses in different areas. Re: Australian House Prices - Are they going to crash? 16Aug 09, 2011 3:29 pm A number of news articles today about CBA and Westpac cutting interest rates on their fixed interest loans by as much as 0.6%. Also talk of 0.75% cut by the reserve next month with more to come (1.5% apparently). If this plays out the same as last time, house prices could be headed up another 20%. Worth keeping an eye on this I think. A crash is starting to look more and more remote and another run up more and more likely even if everyone is getting tired of ever rising prices. Re: Australian House Prices - Are they going to crash? 17Aug 09, 2011 7:14 pm Your kidding aren't you 3times? Large rate cuts are bad news. It means the economy is receeding and needs stimulating. F all chance of double digit growth with an economy going backwards. Last time house prices dropped/stagnated then rose, take into account those loss years and the 20% doesn't look very impressive. Re: Australian House Prices - Are they going to crash? 18Aug 09, 2011 8:55 pm eyspy You should only be concerned if you are wanting to sell, or NEED to sell, otherwise who cares if if goes down or up, just be happy with a roof over your head. Hooray. Why is it that young-ish couples are so stressed over the short-term value of the properties they are about to buy or build, when they fully intend to stay for 20 years and raise a family there? Geoff - Decophile. Re: Australian House Prices - Are they going to crash? 19Aug 10, 2011 8:33 am [quote="Eager"]"eyspy" wrote: You should only be concerned if you are wanting to sell, or NEED to sell, otherwise who cares if if goes down or up, just be happy with a roof over your head. Hooray. Why is it that young-ish couples are so stressed over the short-term value of the properties they are about to buy or build, when they fully intend to stay for 20 years and raise a family there?[/quote] Probably because they dont plan on being there for 20 years because generally speaking a first home wont be suitable for a family forever for a range of reasons (eg commute time, too small, old, schools). Not to mention being mortaged up the butt to afford it. Prices are vital to these people to allow them to move or upgrade or buy a car etc. Re: Australian House Prices - Are they going to crash? 20Aug 10, 2011 11:12 am This is sort of straying of this topics point a little, but I think todays younger people entering the property market for the first time have much higher expectations than times gone by. I am only 52 and when I first entered the property market I was only 28. I bought a piece of rubbish which we renovated and sold (The worst house in the best possible street I could find). It was all we could afford at the time. I would have loved to have had a big house with Home theatre room, pool, games room, formal dining ETC.... but it was out of the question, I worked on what I could afford if my partner lost her job and we only had one income. I was realistic about interest rate rises (took my first loan out for $75,000 @ 9%, within 18 months the stock market crash seen that figure go to 18% !!) I figured I would renovate the house sell and make some profit, then upgrade to something a little bigger, and continue with that formula to eventually get the type of house I really wanted. It worked, and still works. The trouble I see with todays first home buyers is they want it all and they want it now. I watch the current affairs programs and see the stories of doom and gloom and see young peoples dreams and hopes shattered. Then I look at the homes that the bank is about to take from them and no longer have to wonder why it all went wrong for them. A lot of them (Not all) had BIG houses, BIG T.V's , swimming pools ETC.... They never factored interest rates rises, job loss ETC.... They had to have it all now. People need to go back to basics. Start small, work your way up, pay of the home loan, then upgrade. There's an old saying quite apt in today's society "Learn to walk before you run" Tradie may sit at home but will need to get house plastered as well or will you sit it out? 6 9965 I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. All their existing trades and businesses don't work with… 14 105554 Hi I am wanting some opinions about the build of a steel shed I am going to get one about 4.5 x 2.5 m steel shed and the height will be about 2.3-2.4m high The one I am… 0 14442 |