BOOMING house prices could trigger a mortgage crisis in Australia, a property researcher says.   :(

The nation could face a sub-prime crisis like the one in the US that sparked the global financial crisis, said Brian Haratsis, chief economist at Macro Plan Australia.

He warned that without government intervention on house prices battlers at the bottom end of the market would be worst affected.   :(

He is also predicting at least two rate rises this year, pushing home loan interest rates as high as eight per cent for some punters and freezing the market.

"Australia is going to be extremely exposed between 2012-15 because people won't be able to afford to buy a house," he said.   :(

"A lot of people could wind up with negative equity and we could have a sub-prime issue on our hands."


He warns that all parts of the property market could feel the effects if another "Black Swan Event" like a market crash in China occurs.

Mr Haratsis has been monitoring the industry for 30 years and believes house prices are inflated by about 20 per cent at the moment.   :(

He will be speaking at the first ever Australian Mortgage Conference in Sydney today, which will discuss this and other issues facing the lending market in the coming decade.

That is Capitalism for you, when people may have to sell under stress, then the vultures will buy very cheap.
Yet there are still people under the misapprehension that house prices always go up; yet on the Gold Coast there is a five year supply of units and the number on the market is almost four times the normal.

Damn .. I would have loved to have been at that conference today.

Brian Haratsis does know what he's talking about. He is a professional speaker with a hell of a lot of relevant experience.

Having said that .. I'm not sure if he has all the answers though (hence why I would have loved to have been at that conference today .. coz I would have thrown a few tricky questions at him lol).

Hmm might see if I can find out where he's talking next.

1) He warned that without government intervention on house prices battlers at the bottom end of the market would be worst affected.  

2) He is also predicting at least two rate rises this year, pushing home loan interest rates as high as eight per cent for some punters and freezing the market.

3) "Australia is going to be extremely exposed between 2012-15 because people won't be able to afford to buy a house," he said.  

4) "A lot of people could wind up with negative equity and we could have a sub-prime issue on our hands."


- From the OP

Re 1) What sort of govt intervention is he referring to? I'm sure he isn't referring to an increase in the 1st home owners grant (given that's been tried before and it failed miserably).

Re 2) I doubt this will "freeze" the market ... it will slow it down though.

Re 3) I agree. Why? People are already paying ridiculous amounts of $$$ for an average sized home in an average suburb here in Sydney. $1 mill doesn't get you much anymore .. and couples are working hard to pay off mortgages around $1 mill. That's a BIG ask IMO.

Re 4) Yes I agree IFF (if and only if) there is a dramatic correction in the property market. I don't think it's going to happen esp if interest rates are going to go up to 8 % as he's predicted. I think we'll see a correction but nothing too dramatic. Even then .. those who are NOT over committed and have bought POSITION .. will be able to ride the correction wave. Those who haven't .. will experience a submarine mortgage situation .. and learn from it. That's always been the case though .. nothing new there.

Lisa Jones wrote on Mar 10^th, 2011 at 6:02pm:

1) He warned that without government intervention on house prices battlers at the bottom end of the market would be worst affected.   2) He is also predicting at least two rate rises this year, pushing home loan interest rates as high as eight per cent for some punters and freezing the market. 3) "Australia is going to be extremely exposed between 2012-15 because people won't be able to afford to buy a house," he said.   4) "A lot of people could wind up with negative equity and we could have a sub-prime issue on our hands." - From the OP Re 1) What sort of govt intervention is he referring to? I'm sure he isn't referring to an increase in the 1st home owners grant (given that's been tried before and it failed miserably). Re 2) I doubt this will "freeze" the market ... it will slow it down though. Re 3) I agree. Why? People are already paying ridiculous amounts of $$$ for an average sized home in an average suburb here in Sydney. $1 mill doesn't get you much anymore .. and couples are working hard to pay off mortgages around $1 mill. That's a BIG ask IMO. Re 4) Yes I agree IFF (if and only if) there is a dramatic correction in the property market. I don't think it's going to happen esp if interest rates are going to go up to 8 % as he's predicted. I think we'll see a correction but nothing too dramatic. Even then .. those who are NOT over committed and have bought POSITION .. will be able to ride the correction wave. Those who haven't .. will experience a submarine mortgage situation .. and learn from it. That's always been the case though .. nothing new there.

The spruikers will jump at anything to put a floor under house prices. What annoys me is how they want to do it under the guise of helping out the battlers which is a total lie :( They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker everytime. If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place ;) That's how you help out the battlers ;)

Quote:

They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker everytime.

Unfortunately their right in this instance.
As I showed in the other thread the top end of the market has not suffered as the middle bottom end, yes prices have been relatively stable and not climbing but they aren't going backwards.
The lower end of the market is where its going to bite, those that have bought in the last 5 years outside a captial city will see their investment go backwards as the correction comes in.
Then again I'm ones of those vultures just waiting :)

Dsmithy70 wrote on Mar 10^th, 2011 at 7:24pm:

Quote: They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker everytime. Unfortunately their right in this instance. As I showed in the other thread the top end of the market has not suffered as the middle bottom end, yes prices have been relatively stable and not climbing but they aren't going backwards. The lower end of the market is where its going to bite, those that have bought in the last 5 years outside a captial city will see their investment go backwards as the correction comes in. Then again I'm ones of those vultures just waiting :)

Smithy perhaps I've misunderstood this, and certainly not review your posts in the other thread, but, locally at least, the top end of the market has been hit the hardest, with little or no change in the bottom end, and nothing to be overly concerned about in the middle.

Not that it matters anyway if you aren't forced to sell.

If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place. That's how you help out the battlers

- Last Nail

NO NO NO!

If they let it CRASH .. it is the battler who will suffer most (NB battler = those with little equity and who have bought in at the lower end of the market.)

Everyone will hurt .. but the BATTLER will hurt the most.

In fact .. they will be the 1st to go through mortgagee sale pain. It's happened before Last Nail.

Lisa Jones wrote on Mar 10^th, 2011 at 6:02pm:

1) He warned that without government intervention on house prices battlers at the bottom end of the market would be worst affected.   2) He is also predicting at least two rate rises this year, pushing home loan interest rates as high as eight per cent for some punters and freezing the market. 3) "Australia is going to be extremely exposed between 2012-15 because people won't be able to afford to buy a house," he said.   4) "A lot of people could wind up with negative equity and we could have a sub-prime issue on our hands." - From the OP Re 1) What sort of govt intervention is he referring to? I'm sure he isn't referring to an increase in the 1st home owners grant (given that's been tried before and it failed miserably). Re 2) I doubt this will "freeze" the market ... it will slow it down though. Re 3) I agree. Why? People are already paying ridiculous amounts of $$$ for an average sized home in an average suburb here in Sydney. $1 mill doesn't get you much anymore .. and couples are working hard to pay off mortgages around $1 mill. That's a BIG ask IMO. Re 4) Yes I agree IFF (if and only if) there is a dramatic correction in the property market. I don't think it's going to happen esp if interest rates are going to go up to 8 % as he's predicted. I think we'll see a correction but nothing too dramatic. Even then .. those who are NOT over committed and have bought POSITION .. will be able to ride the correction wave. Those who haven't .. will experience a submarine mortgage situation .. and learn from it. That's always been the case though .. nothing new there.

No one is forced into a million dollar property or mortgage; if you're battling to meet a million dollar mortgage sell and downgrade or wear it, it's their choice.  A lot of people spend a lot of money they don't have trying to buy things they don't need to impress people they don't even know or like.

Dsmithy70 wrote on Mar 10^th, 2011 at 7:24pm:

Quote: They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker everytime. Unfortunately their right in this instance. As I showed in the other thread the top end of the market has not suffered as the middle bottom end, yes prices have been relatively stable and not climbing but they aren't going backwards. The lower end of the market is where its going to bite, those that have bought in the last 5 years outside a captial city will see their investment go backwards as the correction comes in. Then again I'm ones of those vultures just waiting :)

that's right house prices only go up or plateau but they never go down !! Yeh right ;)

Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now?

Lisa Jones wrote on Mar 10^th, 2011 at 8:10pm:

If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place. That's how you help out the battlers - Last Nail NO NO NO! If they let it CRASH .. it is the battler who will suffer most (NB battler = those with little equity and who have bought in at the lower end of the market.) Everyone will hurt .. but the BATTLER will hurt the most. In fact .. they will be the 1st to go through mortgagee sale pain. It's happened before Last Nail.

i don't think so Lisa. It's the people at the top end of town who have over committed and bitten off more they can chew will suffer the most.

and why not use tax payers money to put a floor under the share market to stop it from collapsing ?? Plenty of mums and dads investors involved in that not to mention super funds etc. Ever heard of a first share buyers grant ?? :) LOL It's totally absurd to keep using tax payers money to distort the free market system !!

Lisa Jones wrote on Mar 10^th, 2011 at 8:16pm:

Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now?

that's because it is way over priced and due for a major correction ;)

Lisa Jones wrote on Mar 10^th, 2011 at 8:10pm:

If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place. That's how you help out the battlers - Last Nail NO NO NO! If they let it CRASH .. it is the battler who will suffer most (NB battler = those with little equity and who have bought in at the lower end of the market.) Everyone will hurt .. but the BATTLER will hurt the most. In fact .. they will be the 1st to go through mortgagee sale pain. It's happened before Last Nail.

toenail doesnt care about battlers or anyone actually. he wants house prices to crash for reasons that only his therapist would understand. house price crashes would devastate the economy as so much is underpinned on it. A 10% correction would be no big deal and somethign that has happened many times in the past. evena  20% correction wuld worry very few because assumming you can afford your mortgage, the actual value of your house is pretty irrelveant. and if you sell then the house you move to has also been reduced by 20%. The only people who would really lose are those who are forced to sell who will lose 20% of their value and possibly end up with negative equity.

Personally, I expect no more than a 10% correction on average and many places to have far less (or zero) and a few - like western sydney - to have more.

Lisa Jones wrote on Mar 10^th, 2011 at 8:16pm:

Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now?

Did you miss mine?  If you can't afford it you can't afford it.  Sell it and move.

Sir lastnail wrote on Mar 10^th, 2011 at 8:14pm:

Dsmithy70 wrote on Mar 10th, 2011 at 7:24pm: Quote: They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker every time. Unfortunately their right in this instance. As I showed in the other thread the top end of the market has not suffered as the middle bottom end, yes prices have been relatively stable and not climbing but they aren't going backwards. The lower end of the market is where its going to bite, those that have bought in the last 5 years outside a capital city will see their investment go backwards as the correction comes in. Then again I'm ones of those vultures just waiting :) that's right house prices only go up or plateau but they never go down !! Yeh right ;)

Last Nail .. I do think Dsmithy is correct in this instance. When talking about the domestic real estate market .. we need to be specific about which areas we're talking about. Why? Because different areas behave differently even under the same economic conditions. (Hence why I keep crying out buy POSITION!)

Those geographic areas outside capital/major cities are particularly vulnerable and sensitive to ANY pressure and those in the lower end of the market ... who are in these vulnerable areas WILL SUFFER the most.

If the domestic real estate market experiences a correction/adjustment of ANY magnitude  .. these areas will be hit hardest .. and those who have mortgaged themselves to the max ..within these areas will find themselves in a submarine mortgage situation virtually overnight.

In effect .. they will go bankrupt/lose everything .. and fast.

longweekend58 wrote on Mar 10^th, 2011 at 8:20pm:

Lisa Jones wrote on Mar 10th, 2011 at 8:10pm: If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place. That's how you help out the battlers - Last Nail NO NO NO! If they let it CRASH .. it is the battler who will suffer most (NB battler = those with little equity and who have bought in at the lower end of the market.) Everyone will hurt .. but the BATTLER will hurt the most. In fact .. they will be the 1st to go through mortgagee sale pain. It's happened before Last Nail. toenail doesnt care about battlers or anyone actually. he wants house prices to crash for reasons that only his therapist would understand. house price crashes would devastate the economy as so much is underpinned on it. A 10% correction would be no big deal and somethign that has happened many times in the past. evena  20% correction wuld worry very few because assumming you can afford your mortgage, the actual value of your house is pretty irrelveant. and if you sell then the house you move to has also been reduced by 20%. The only people who would really lose are those who are forced to sell who will lose 20% of their value and possibly end up with negative equity. Personally, I expect no more than a 10% correction on average and many places to have far less (or zero) and a few - like western sydney - to have more.

Whats wrong with a major housing price correction and reducing the house-price-to-income-ratios to a more sustainable level ?? Surely you wouldn't want joe battler to be ripped off when he buys a house or maybe you do, just like you want joe battler to be ripped off when he fills up his clunker at the fool bowser !!

Lisa Jones wrote on Mar 10^th, 2011 at 8:23pm:

Sir lastnail wrote on Mar 10th, 2011 at 8:14pm: Dsmithy70 wrote on Mar 10th, 2011 at 7:24pm: Quote: They peddle the battler doing it tough line to the government and the government falls for it hook line and sinker everytime. Unfortunately their right in this instance. As I showed in the other thread the top end of the market has not suffered as the middle bottom end, yes prices have been relatively stable and not climbing but they aren't going backwards. The lower end of the market is where its going to bite, those that have bought in the last 5 years outside a captial city will see their investment go backwards as the correction comes in. Then again I'm ones of those vultures just waiting :) that's right house prices only go up or plateau but they never go down !! Yeh right ;) Last Nail .. I do think Dsmithy is correct in this instance. When talking about the domestic real estate market .. we need to be specific about which areas we're talking about. Why? Because regions behave differently even under the same economic conditions. (Hence why I keep crying out buy POSITION!) Those geographic areas outside capital/major cities are vulnerable to ANY pressure and those in the lower end of the market ... who are in these vulnerable areas WILL SUFFER the most. If domestic real estate experiences a correction/adjustment of any magnitude  .. these areas will be hit hardest .. and those who have mortgaged themselves to the max .. will find themselves in a submarine mortgage situation. In effect .. they will go bankrupt/they will lose everything.

Yes but why do you expect something or someone to bail you out when there is a downturn whilst enjoying good capital growth when times are good ??

It sounds like you want an investment vehicle which makes lots of money for you where there is no risk !! I'm sorry but leveraging other peoples money to generate big returns equates to taking big risks !!

It is you people who want to treat property as a commodity rather than a necessity and so you need to accept the downside risk associated with trading in commodities !!

Whats wrong with a major housing price correction and reducing the house-price-to-income-ratios to a more sustainable level ??

Surely you wouldn't want joe battler to be ripped off when he buys a house or maybe you do ..

- Last Nail

I know I should not answer for Long Weekend and I know that you directed the question at him .. but you've raised an interesting point so I hope you won't mind me answering.

The thing is .. it's not going to happen. Adjustments/corrections occur every so often (and that's normal). Those most vulnerable within this context will sink (and that's normal too).

I think we've already covered who those are .. and unfortunately it will be the battlers who have next to no equity in their homes and who have bought into affordable housing eg those cheaply constructed project homes on small blocks of land out in the middle of nowhere. In short .. those in the lower end of the market.

You're basically stating that an event tantamount to THE DEPRESSION is going to hit. It isn't. And no one with long term real estate specialist knowledge/experience is going to agree with you, Last Nail.

As I stated above ..

When talking about the domestic real estate market .. we need to be specific about which areas we're talking about. Why? Because different areas behave differently even under the same economic conditions. (Hence why I keep crying out buy POSITION!)

Those geographic areas outside capital/major cities are particularly vulnerable and sensitive to ANY pressure and those in the lower end of the market ... who are in these vulnerable areas WILL SUFFER the most.

If the domestic real estate market experiences a correction/adjustment of ANY magnitude  .. these areas will be hit hardest .. and those who have mortgaged themselves to the max ..within these areas will find themselves in a submarine mortgage situation virtually overnight.

In effect .. they will go bankrupt/lose everything .. and fast.

Last Nail .. the above has happened before. Precedence provides predictive ability.

Yes but why do you expect something or someone to bail you out when there is a downturn whilst enjoying good capital growth when times are good ??

It sounds like you want an investment vehicle which makes lots of money for you where there is no risk !! I'm sorry but leveraging other peoples money to generate big returns equates to taking big risks !!

It is you people who want to treat property as a commodity rather than a necessity and so you need to accept the downside risk associated with trading in commodities.

- Last Nail

Last Nail .. who is going to bail who? If you cannot swim the wave of correction/adjustment you will sink. It's that simple!

One thing I find amusing is this: you recurringly keep pointing your finger at home owners.

Let's stop here for a moment and consider just who these people are.

They are Mr and Mrs Joe Average with around a million dollars worth of debt in an average home in an average suburb in Sydney.

You can bet your bottom dollar they're gonna treat their house as a commodity NOT just a necessity. Why? Because they have a home loan noose around their neck for 30 yrs and they want to come out of this 30 yr term as old people who've not lost their money (money both have worked hard for and paid taxes on). Their investment is in fact their family home. Any investment over a period of 30 yrs SHOULD increase in real terms. Right?

As regards risk .. there is no such thing as NO RISK IMO. I believe in identifying and managing risk factors so as to prevent loss.

Lisa Jones wrote on Mar 10^th, 2011 at 9:03pm:

Yes but why do you expect something or someone to bail you out when there is a downturn whilst enjoying good capital growth when times are good ?? It sounds like you want an investment vehicle which makes lots of money for you where there is no risk !! I'm sorry but leveraging other peoples money to generate big returns equates to taking big risks !! It is you people who want to treat property as a commodity rather than a necessity and so you need to accept the downside risk associated with trading in commodities. - Last Nail Last Nail .. who is going to bail who? If you cannot swim the wave of correction/adjustment you will sink. It's that simple! One thing I find amusing is this: you recurringly keep pointing your finger at home owners. Let's stop here for a moment and consider just who these people are. They are Mr and Mrs Joe Average with around a million dollars worth of debt in an average home in an average suburb in Sydney. You can bet your bottom dollar they're gonna treat their house as a commodity NOT just a necessity. Why? Because they have a home loan noose around their neck for 30 yrs and they want to come out of this 30 yr term as old people who've not lost their money (money both have worked hard for and paid taxes on). Their investment is in fact their family home. Any investment over a period of 30 yrs SHOULD increase in real terms. Right? As regards risk .. there is no such thing as NO RISK IMO. I believe in identifying and managing risk factors so as to prevent loss.

Yes but it sounds like the million dollar or even $500,000 home owners who only put down a 10% deposit don't actually understand the risk associated with their purchase. It only takes a 10% reduction in house prices to wipe out their original equity. A 20% reduction in house prices and they have lost their original equity plus they are down by  by an amount equal to their original equity !! This is no different to buying shares on margin. That's a big risk IMHO and they should understand that instead of the spruikers bullshit about how there is no bubble and house prices only go up and never down !!.

Yes but it sounds like the million dollar or even $500,000 home owners who only put down a 10% deposit don't actually understand the risk associated with their purchase. It only takes a 10% reduction in house prices to wipe out their original equity. A 20% reduction in house prices and they have lost their original equity plus they are down by an amount equal to their original equity !! This is no different to buying shares on margin. That's a big risk IMHO and they should understand that instead of the spruikers bullshit about how there is no bubble and house prices only go up and never down !!.

- Last Nail

Exactly .. and well said.

Many people unfortunately do enter the real estate market on the HIGH RISK side (refer to my posts from yesterday re what that actually means). These people are particularly vulnerable to interest rate fluctuations and any other form of adjustments/corrections which DO OCCUR from time to time in the domestic real estate market. And it is these types of people who find themselves in submarine mortgages virtually overnight .. and lose everything they have.

In short .. these people set themselves up for failure. Why? Because they don't know wtf they are doing.

People often burn before they learn .. and that's a sad fact of life.

In nails thread it says we are busting, so are we booming Imcrook, or busting nail?

Verge wrote on Mar 11^th, 2011 at 9:26am:

In nails thread it says we are busting, so are we booming Imcrook, or busting nail?

Excellent pick up Verge!

I'm going to hold back this time .. and see how other people answer this before I come in and tell you what I think.

Verge wrote on Mar 11^th, 2011 at 9:26am:

In nails thread it says we are busting, so are we booming Imcrook, or busting nail?

busts always follow booms but some people believe that the Australian property market is immune to this free market behaviour and property in Australia either goes up or plateaus but never goes down !! ;) LOL

All bubbles burst. They may burst for different reasons but eventually they still burst ;)

What will ulitmately decide a bust is the employment percentage.
If people start losing their jobs & we get over 10% unemployment then there will be a bust.
The house prices fell in the USA either because of the GFC or
they actually caused the GFC.

It seems like the banks are only too ready to lend large sums of money
& the Chinese are still buying up big time.
The Banks will keep the prices up as long as they can find money to lend.

Bobby. wrote on Mar 11^th, 2011 at 11:20am:

What will ulitmately decide a bust is the employment percentage. If people start losing their jobs & we get over 10% unemployment then there will be a bust. The house prices fell in the USA either because of the GFC or they actually caused the GFC. It seems like the banks are only too ready to lend large sums of money & the Chinese are still buying up big time. The Banks will keep the prices up as long as they can find money to lend.

Yes it's not until the banks lend money to punters that they actually create money from thin air through the fractional banking system. Banks need to lend lots of money to suckers. They will make up any lies about the resilience of the property market to keep the gravy train going ;)

Verge wrote on Mar 11^th, 2011 at 9:26am:

In nails thread it says we are busting, so are we booming Imcrook, or busting nail?

We are BOOMING, we will never BUST, it just doesn't happen in Australia.

If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing....

Has there ever been a housing BUST in Australia....................never!

Ex Dame Pansi wrote on Mar 11^th, 2011 at 11:46am:

Verge wrote on Mar 11th, 2011 at 9:26am: In nails thread it says we are busting, so are we booming Imcrook, or busting nail? We are BOOMING, we will never BUST, it just doesn't happen in Australia. If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing.... Has there ever been a housing BUST in Australia....................never!

Yes property booms never bust in Australia because house prices either go up or just plateau ;) LOL

Sir lastnail wrote on Mar 10^th, 2011 at 8:26pm:

longweekend58 wrote on Mar 10th, 2011 at 8:20pm: Lisa Jones wrote on Mar 10th, 2011 at 8:10pm: If they really want to help out the battlers then let it crash so that the price drops and the battlers can afford to buy a place. That's how you help out the battlers - Last Nail NO NO NO! If they let it CRASH .. it is the battler who will suffer most (NB battler = those with little equity and who have bought in at the lower end of the market.) Everyone will hurt .. but the BATTLER will hurt the most. In fact .. they will be the 1st to go through mortgagee sale pain. It's happened before Last Nail. toenail doesnt care about battlers or anyone actually. he wants house prices to crash for reasons that only his therapist would understand. house price crashes would devastate the economy as so much is underpinned on it. A 10% correction would be no big deal and somethign that has happened many times in the past. evena  20% correction wuld worry very few because assumming you can afford your mortgage, the actual value of your house is pretty irrelveant. and if you sell then the house you move to has also been reduced by 20%. The only people who would really lose are those who are forced to sell who will lose 20% of their value and possibly end up with negative equity. Personally, I expect no more than a 10% correction on average and many places to have far less (or zero) and a few - like western sydney - to have more. Whats wrong with a major housing price correction and reducing the house-price-to-income-ratios to a more sustainable level ?? Surely you wouldn't want joe battler to be ripped off when he buys a house or maybe you do, just like you want joe battler to be ripped off when he fills up his clunker at the fool bowser !!

because of what it does to existing owners and the holders of mortgages - none of which are now fully secured. it disrupts everyone in a savegly negative way. there is more to life than people saving up for a home. We need to help them for sure but not at the expense of everyone else in the market. Prices WILL correct but by around 10% maybe 15%. That is more than enough.

Sir lastnail wrote on Mar 11^th, 2011 at 11:50am:

Ex Dame Pansi wrote on Mar 11th, 2011 at 11:46am: Verge wrote on Mar 11th, 2011 at 9:26am: In nails thread it says we are busting, so are we booming Imcrook, or busting nail? We are BOOMING, we will never BUST, it just doesn't happen in Australia. If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing.... Has there ever been a housing BUST in Australia....................never! Yes property booms never bust in Australia because house prices either go up or just plateau ;) LOL

for the answer to that you could simply look at the history of prices in australia where there has never been a bust - just a series of regular corrections just like every other tradable commodity.

Dont you get sick of saying the same thing year after year and not only being wrong but wrong by a huge margin???

longweekend58 wrote on Mar 11^th, 2011 at 1:39pm:

Sir lastnail wrote on Mar 11th, 2011 at 11:50am: Ex Dame Pansi wrote on Mar 11th, 2011 at 11:46am: Verge wrote on Mar 11th, 2011 at 9:26am: In nails thread it says we are busting, so are we booming Imcrook, or busting nail? We are BOOMING, we will never BUST, it just doesn't happen in Australia. If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing.... Has there ever been a housing BUST in Australia....................never! Yes property booms never bust in Australia because house prices either go up or just plateau ;) LOL for the answer to that you could simply look at the history of prices in australia where there has never been a bust - just a series of regular corrections just like every other tradable commodity. Dont you get sick of saying the same thing year after year and not only being wrong but wrong by a huge margin???

well lets see how it goes now without the Government topping it up with tax payers money ;)

Sir lastnail wrote on Mar 11^th, 2011 at 1:56pm:

longweekend58 wrote on Mar 11th, 2011 at 1:39pm: Sir lastnail wrote on Mar 11th, 2011 at 11:50am: Ex Dame Pansi wrote on Mar 11th, 2011 at 11:46am: Verge wrote on Mar 11th, 2011 at 9:26am: In nails thread it says we are busting, so are we booming Imcrook, or busting nail? We are BOOMING, we will never BUST, it just doesn't happen in Australia. If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing.... Has there ever been a housing BUST in Australia....................never! Yes property booms never bust in Australia because house prices either go up or just plateau ;) LOL for the answer to that you could simply look at the history of prices in australia where there has never been a bust - just a series of regular corrections just like every other tradable commodity. Dont you get sick of saying the same thing year after year and not only being wrong but wrong by a huge margin??? well lets see how it goes now without the Government topping it up with tax payers money ;)

the FHOG never propped up existing properties which is the bulk of the market. the effect of the FHOG has been grossly overstated.

hawil wrote on Mar 10^th, 2011 at 5:05pm:

That is Capitalism for you, when people may have to sell under stress, then the vultures will buy very cheap. Yet there are still people under the misapprehension that house prices always go up; yet on the Gold Coast there is a five year supply of units and the number on the market is almost four times the normal.

The longer term trends would always go up!

It simply depends on how long your moving point averages are, I would have thought!

 ::) ::) :-? :D

Ex Dame Pansi wrote on Mar 11^th, 2011 at 11:46am:

Verge wrote on Mar 11th, 2011 at 9:26am: In nails thread it says we are busting, so are we booming Imcrook, or busting nail? We are BOOMING, we will never BUST, it just doesn't happen in Australia. If we don't learn from history, we are doomed to repeat it. Busts and booms go together like a horse and carriage............I could start singing.... Has there ever been a housing BUST in Australia....................never!

Immigration can't keep going! That's a factor that people are getting sick of!!

Of course a bust is possible!!!

Lisa Jones wrote on Mar 10^th, 2011 at 8:16pm:

Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now?

Move to Brisbane.  One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.  Not going to get any sympathy from me on this one.

qikvtec wrote on Mar 11^th, 2011 at 9:50pm:

Lisa Jones wrote on Mar 10th, 2011 at 8:16pm: Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now? Move to Brisbane.  One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.  Not going to get any sympathy from me on this one.

Huh???

Move to where???

>> scratches her head <<

If that is where YOU are from then right now YOU have MY sympathy .. given property values there have dropped significantly on a/c of all the dramas QLD has experienced over the past few months.

One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.

- qikvtec

Huh?

Explain this .. coz right now it sounds insane.

the FHOG never propped up existing properties which is the bulk of the market. the effect of the FHOG has been grossly overstated

- Longweekend

Huh?

Excuse me?

Were you out there actively looking for properties whilst the FHOG fiasco was on? I was.

The fact is .. the domestic real estate market WAS affected .. ADVERSELY affected. How? Homes which fell within the ambit of the FHOG cost price cap became artificially inflated.

What did this therefore mean? It meant ANYONE (ya hear that LONGWEEKEND) ANYONE ie first home owner or not .. who was looking for a property which fell within the FHOG cost price cap had to pay more for the property in question because the asking price of those properties went UP to factor in the FHOG $$.

Bottom line? It did NOTHING to help ANYONE! It was a complete failure. All it did was contribute to the bubble! And any real estate agent will confirm what I've stated.

Lisa Jones wrote on Mar 11^th, 2011 at 10:53pm:

One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it. - qikvtec Huh? Explain this .. coz right now it sounds insane.

I think he means that if you have a million dollar joint on the riverside and you get flooded out then you will have to rebuild it again with your own money because the insurance company won't come to the party :(

Sir lastnail wrote on Mar 11^th, 2011 at 11:52pm:

Lisa Jones wrote on Mar 11th, 2011 at 10:53pm: One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it. - qikvtec Huh? Explain this .. coz right now it sounds insane. I think he means that if you have a million dollar joint on the riverside and you get flooded out then you will have to rebuild it again with your own money because the insurance company won't come to the party :(

Oh. Thanks Last Nail. I've not been home that long .. and I'm Facebooking as well as reading Oz Pol .. so I guess I kinda missed his point.

As most here know (coz I keep saying it every 2nd day) .. I mainly specialise in the Sydney domestic real estate market. It's a large market .. and a robust and lucrative one IMO (compared to other parts of Oz).

Lisa Jones wrote on Mar 11^th, 2011 at 10:52pm:

qikvtec wrote on Mar 11th, 2011 at 9:50pm: Lisa Jones wrote on Mar 10th, 2011 at 8:16pm: Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now? Move to Brisbane.  One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.  Not going to get any sympathy from me on this one. Huh??? Move to where??? >> scratches her head << If that is where YOU are from then right now YOU have MY sympathy .. given property values there have dropped significantly on a/c of all the dramas QLD has experienced over the past few months.

And there lies the problem of why Mr and Mrs Average can't have a house of their own to rare their family.

Lisa Jones wrote on Mar 11^th, 2011 at 10:52pm:

qikvtec wrote on Mar 11th, 2011 at 9:50pm: Lisa Jones wrote on Mar 10th, 2011 at 8:16pm: Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now? Move to Brisbane.  One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.  Not going to get any sympathy from me on this one. Huh??? Move to where??? >> scratches her head << If that is where YOU are from then right now YOU have MY sympathy .. given property values there have dropped significantly on a/c of all the dramas QLD has experienced over the past few months.

Not far from Brisbane but not flood affected.  Property value is fine thanks, maybe down 8% over the last couple of years but being up 400% I'm not too concerned for my property value. ;)

Lisa Jones wrote on Mar 11^th, 2011 at 10:53pm:

One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it. - qikvtec Huh? Explain this .. coz right now it sounds insane.

To even contemplate a million dollar mortgage your income should be at least $500k.  Mr & Mrs Average have no business buying a million property with a significant mortgage, it's financial suicide on an instalment plan.

If $1m property gets you nothing and you can't afford to tear it down and rebuild it forget it; take a reality check and look for a different area that is within your means.

qikvtec wrote on Mar 12^th, 2011 at 6:10pm:

Lisa Jones wrote on Mar 11th, 2011 at 10:52pm: qikvtec wrote on Mar 11th, 2011 at 9:50pm: Lisa Jones wrote on Mar 10th, 2011 at 8:16pm: Qikvtec .. did you miss the point I was making .. about how $1 mill in Sydney gets you nothing much now? Move to Brisbane.  One should not even consider a million dollar property if you couldn't afford to tear it down and spend another million on it.  Not going to get any sympathy from me on this one. Huh??? Move to where??? >> scratches her head << If that is where YOU are from then right now YOU have MY sympathy .. given property values there have dropped significantly on a/c of all the dramas QLD has experienced over the past few months. Not far from Brisbane but not flood affected.  Property value is fine thanks, maybe down 8% over the last couple of years but being up 400% I'm not too concerned for my property value. ;)

Very bravely said.

I'd be in tears (if approx 10% of the value of my property portfolio was wiped out).

It hasn't happened thank God. I'm very fussy about position.

To even contemplate a million dollar mortgage your income should be at least $500k.  Mr & Mrs Average have no business buying a million property with a significant mortgage, it's financial suicide on an instalment plan.

- qikvtec

I'm typically seeing $250K - 300K combined income plus a half decent deposit of around 100K in these scenarios.

And it's for an average home on an average block .. in an average to above average block in Sydney ( no water or district views either ).

I think it's a recipe for disaster esp if and when a baby comes into the picture and life changes for everyone in many ways.

That's my opinion.

Lisa Jones wrote on Mar 13^th, 2011 at 4:38pm:

To even contemplate a million dollar mortgage your income should be at least $500k.  Mr & Mrs Average have no business buying a million property with a significant mortgage, it's financial suicide on an instalment plan. - qikvtec I'm typically seeing $250K - 300K combined income plus a half decent deposit of around 100K in these scenarios. And it's for an average home on an average block .. in an average to above average block in Sydney ( no water or district views either ). I think it's a recipe for disaster esp if and when a baby comes into the picture and life changes for everyone in many ways. That's my opinion.

if it quacks like a bubble and looks like a bubble then it probably is a bubble ;)

Qld know the market is crashing, lets abolish sales tax they said.....poor people that got sucked into the  first home buyers scheme.....come in suckers.