Interesting article Last Nail .. don't think the property crash is going to happen though <--- sorry but that's how I see it.

Naturally .. we will see adjustments here and there but it will always be "Bricks And Mortar".

My advice?? Buy up GOOD sized and positioned land value properties which can be subdivided at a future date and capitalised.


My family and clan have been doing ^^^ since they arrived here (as migrants in the early 60's). They've done very well.

Regards

Lisa

Chris Joye comments in his release of the recent RP Data-Rismark index that the news of a 0.7% fall in one month will be “manna from heaven for the housing market bears”. Far be it from me to disappoint him, so thanks for the manna. But what adds spice to the manna is the way that Chris has attempted to rationalize the outcome:

    It’s sobering to remember here that we have had 17 consecutive monthly increases in Australian capital city home values. If the sharemarket rose for 17 months straight and then tapered, people would not think twice about. It might be wise to apply the same logic to our housing market.

That comment evinced the following comment on Chris Zdatappone’s report in the Fairfax Press from the reader “Dave”:

    If the share market had risen for 17 consecutive months, people would be screaming BUBBLE. Somehow this logic seems to defy Chris Joye … Oh dear.

Oh dear indeed. In a speculative market like the stock market, much of the buying is driven by the belief that prices will continue to rise; as soon as that belief evaporates, buyers become sellers and the price doesn’t “taper”, but plunge. A certain Irving Fisher once commented that “stock prices have reached a permanently high plateau”, only to see them (and his reputation and wealth) evaporate in the ensuing 3 years.

So the hope for Chris Joye is not that house prices will behave like stock market prices, but precisely the opposite. Bears like myself argue that the housing market has indeed become just like the stock market—a place where leveraged speculation in the belief that house prices always rise does far more to explain house price movements than any appeals to “fundamentals”—and this is the main reason that house prices have risen so much in the last two decades.

There is however one important way in which house prices do differ from shares: the first sign of trouble is not a sudden drop in prices, but a fall in the number of sales and an increase in the length of time it takes for properties to sell. That sign was evident in the data from the last year or so, which is why I argued that a fall in house prices was imminent in a previous article on Business Spectator. Now that the data are unequivocal, the following processes are likely.

Firstly, with an increased stock of unsold houses on the market, buyers are likely to take yet more time to make a decision—which will add further to the backlog. If prices are falling, why hurry? The urgency will leave the buy side.

Secondly, so-called investors—whom I prefer to call speculators, since 90% of them have bought existing properties rather than built new ones—will start to consider whether they should swap from the buy side to the sell side. After all, no-one in their right mind buys an investment property in Australia for the rental returns: it’s capital gains or nothing DownUnder. Do you capitalize on gains to date, or hang on hoping that the upward trend will re-assert itself once more?

Given the skewing of our market away from owner-occupiers and towards speculators in the last two decades, this second effect could cause a sudden increase in the number of properties on the market—at just the same time that buyers have become more relaxed about closing a sale. It’s this sort of process in an asset market that is why asset prices don’t “taper”—or “plateau”, to use a word from an earlier time.

I expect these two processes to lead to an accelerating rate of decline in house prices now, as they did in the USA when “Flip That House” ceased being a winning trade.

The banks could freeze their assets overnight, your money will be stuck there and you won't get access to it. I had an idea that this could happen pre 2007, so I took my money out and now have a small 'running' account that we are forced to have because of government power over us. We should be able to deal in cash if we so desire, unfortunately that is an option that is not available to us.

The scenario that Steve Keen showed on the slides is one that was discussed regularly over the years on Yahoo, to the dismay of the property spruikers.

Have you noticed the real estate vampires in the last week or so, the excuses for the drop in house prices are amazing. From seasonably adjusted prices to the upcoming election ha ha. Of course they will come out with the tired old line about housing shortage and immigration.

It has never been about a shortage of housing, there are plenty of houses, just not enough people who are able or willing to pay the over-inflated prices.

Anyway, bring on the crash!!!!!!

Bring back the great Aussie dream of home ownership for raising a family, and not for investment purposes.

It looks like those who want to make a quick buck will have to buy shares for the foreseeable future.

Hey Last Nail .. thought you'd have a come back for me lol

Ok let me have a read. 

Hope you're having a good day there.

BRB ...

I hear what he's saying .. I just don't agree with it.

The advice I've given in my earlier posts still stands Last Nail.

IF you wish to come out on top .. buy LAND NOW (and hurry up coz there isn't much/any left). NB By land of course I mean land value properties ie properties which are well sized in strategic well positioned locations with shitful existing homes on it. We all know that vacant land is now a thing of the past!

GOOD DIRT is the new GOLD .. and it is almost scarce!!!

There will come a time when future generations will thank their parents and grandparents for buying up this type of land .. because IT WILL be subdivided/capitalised FOR the benefit of such children/grandchildren.

Oh I should probably reiterate .. I am talking SYDNEY whenever I talk property.

I obviously agree with your 1st sentence. You need to jump into the market at the right time. That's just common sense and (usually) goes without saying.

As regards land .. of course there's vacant land .. but where is it??Basically it's outside Sydney/west of Sydney etc and land there is cheap/useless/waste of time and money.

REAL land as I said .. exists (in scarce quantities though) and consists of well sized and well positioned plots with existing old homes.

These properties WILL RUN OUT/HAVE ALMOST RUN OUT ... and should be bought up now with a long term investment strategy in mind.

Our children and grandchildren will thank us one day for having had the insight to buy this type of LAND because it will provide them with the necessary support base upon which they will be able to build good quality owner occupied townhouses/duplexes in good areas. These arrrangments do work and help keep families together and financially on course.

So many (European Aussie) real estate agents and property valuers are doing this as I type .. they know wtf they're doing

Don't want to listen? Fine by me .. some people need to learn the hard way!

I love how Tony Burke criticised Australias obsession with property prices today!

Beware of false profits, lol!

Is Australia really the clever country? Can the Libs survive the 21st century?