Australian Politics Forum - Poor real estate agents doing it tough !!

Sir lastnail

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Poor real estate agents doing it tough !!
Nov 19^th, 2010 at 10:34am

Don't you just feel sorry for real estate agents doing it tough because the banks have scared off the punters who no longer want to participate in this debt fueled property bubble

LOL

Don't you just feel sorry that they are finding it hard to scalp their commissions from people who have to borrow the lot from a bank and no longer want to

LOL

And the lying real estate agents kept telling us that there was a shortage of property !! Doesn't seem like it now Wink

Where have all the buyers gone...far far away....

LOL

http://www.heraldsun.com.au/news/victoria/banks-gatecrash-spring-property-season...

Quote:

Banks gatecrash spring property season with interest rate rises

IT'S not just the Christmas spirit that greedy bank bosses have ruined - Melbourne's property market is also suffering from super-sized interest rate rises.

The weekend auction clearance rate limped to 61 per cent as rain and more home loan pain thinned crowds and cautious buyers refused to pay inflated prices.

The sluggish results followed NAB and Westpac joining the Commonwealth and ANZ's giant rate hikes above the Reserve Bank's Melbourne Cup move.

Real Estate Institute of Victoria spokesman Robert Larocca said the banks had gatecrashed the normally buoyant spring season.

"Their action has reduced confidence with home buyers and created uncertainty at the busiest time of year," Mr Larocca said.

The Commonwealth lifted standard variable rates by 0.45 percentage points, the NAB (0.43), ANZ (0.39), and Westpac (0.35) compared with the RBA's 0.25 per cent rise, adding $70-$90 a month to a typical $300,000 loan.

Mr Larocca said confused buyers and vendors no longer knew when rates would rise and by how much, as banks increasingly moved out of step with Reserve Bank changes.

The Greens will try to force the banks to limit rate hikes to official adjustments for two years under proposed legislation to be introduced into Parliament this week.

Greens Leader Bob Brown said he hoped to get Opposition support from Joe Hockey.

Mr Hockey said he was "not about any controls" on the banks themselves and would instead introduce legislation this week to stop banks telegraphing rate shifts to rivals through the media.

Auction clearances were marginally up compared with 59 per cent the weekend earlier. Most of the 328 properties that passed in did so on vendor bids.

The results follow four months of clearances around 68 per cent.

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« Last Edit: Nov 19^th, 2010 at 10:39am by Sir lastnail »

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culldav

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Re: Poor real estate agents doing it tough !!
Reply #1 - Nov 19^th, 2010 at 11:04am

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more. By the time you pay back the interest the total amount for the property would be around $750,000 over 30 years. Plus on average $1500 per year for rates = $45,000 over 30 years, and $700 per year = $22,500 over 30 years for home insurance. Grant total of $817,500.

Now compare renting a property for an average price of say $300 per week.

$300 x 52 weeks = $15,600 per year. $15,600 x 30 years = $468,000.

$817,500 - $468,000 = a savings of $349,500 over 30 years.

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Equitist

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Re: Poor real estate agents doing it tough !!
Reply #2 - Nov 19^th, 2010 at 11:07am

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more. By the time you pay back the interest the total amount for the property would be around $750,000 over 30 years. Plus on average $1500 per year for rates = $45,000 over 30 years, and $700 per year = $22,500 over 30 years for home insurance. Grant total of $817,500.

Now compare renting a property for an average price of say $300 per week.

$300 x 52 weeks = $15,600 per year. $15,600 x 30 years = $468,000.

$817,500 - $468,000 = a savings of $349,500 over 30 years.

I see what you are getting at, but: is your $300pw a realistic 'average' rental figure in the first instance - and surely you are erroneous in making no allowances for inflation in the cost of renting!?

For an indication of future rises in rental costs, what was the comparable going nominal rental rate 30 years ago?

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Lamenting the shift in the Australian psyche, away from the egalitarian ideal of the fair-go - and the rise of short-sighted pollies, who worship the 'Growth Fairy' and seek to divide and conquer!

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Ex Dame Pansi

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Re: Poor real estate agents doing it tough !!
Reply #3 - Nov 19^th, 2010 at 11:18am

More like super-sized asking prices. The poor real estate agents, I'm crying tears of joy Grin

Karma's grand.

Stand by for the REI to announce that there's plenty of growth left yet because the boat people will all be wanting to get in on the market, or rising interest rates are good for the housing market.

Stand by for a stimulus bail out by the government too.

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andrei said: Great isn't it? Seeing boatloads of what is nothing more than human garbage turn up.....

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bwood1946

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Re: Poor real estate agents doing it tough !!
Reply #4 - Nov 19^th, 2010 at 11:21am

Equitist wrote on Nov 19^th, 2010 at 11:07am:

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more. By the time you pay back the interest the total amount for the property would be around $750,000 over 30 years. Plus on average $1500 per year for rates = $45,000 over 30 years, and $700 per year = $22,500 over 30 years for home insurance. Grant total of $817,500.

Now compare renting a property for an average price of say $300 per week.

$300 x 52 weeks = $15,600 per year. $15,600 x 30 years = $468,000.

$817,500 - $468,000 = a savings of $349,500 over 30 years.

I see what you are getting at, but: is your $300pw a realistic 'average' rental figure in the first instance - and surely you are erroneous in making no allowances for inflation in the cost of renting!?

For an indication of future rises in rental costs, what was the comparable going nominal rental rate 30 years ago?

$35.00 A WEEK

Grin

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Sir lastnail

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Re: Poor real estate agents doing it tough !!
Reply #5 - Nov 19^th, 2010 at 11:38am

Ex Dame Pansi wrote on Nov 19^th, 2010 at 11:18am:

More like super-sized asking prices. The poor real estate agents, I'm crying tears of joy Grin

Karma's grand.

Stand by for the REI to announce that there's plenty of growth left yet because the boat people will all be wanting to get in on the market, or rising interest rates are good for the housing market.

Stand by for a stimulus bail out by the government too.

There is such a shortage of property that is why the auction clearance rate has dropped substantially Wink

LOL Those desperate migrants prefer to live on the street Wink

LOL

Quote:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

Joseph Goebbels

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Equitist

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Re: Poor real estate agents doing it tough !!
Reply #6 - Nov 19^th, 2010 at 11:46am

bwood1946 wrote on Nov 19^th, 2010 at 11:21am:

Equitist wrote on Nov 19^th, 2010 at 11:07am:

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more. By the time you pay back the interest the total amount for the property would be around $750,000 over 30 years. Plus on average $1500 per year for rates = $45,000 over 30 years, and $700 per year = $22,500 over 30 years for home insurance. Grant total of $817,500.

Now compare renting a property for an average price of say $300 per week.

$300 x 52 weeks = $15,600 per year. $15,600 x 30 years = $468,000.

$817,500 - $468,000 = a savings of $349,500 over 30 years.

I see what you are getting at, but: is your $300pw a realistic 'average' rental figure in the first instance - and surely you are erroneous in making no allowances for inflation in the cost of renting!?

For an indication of future rises in rental costs, what was the comparable going nominal rental rate 30 years ago?

$35.00 A WEEK

Grin

OK, for argument's sake, then...

If we assume that these two nominal figures are close to representative of past trends in rental costs and speculate that they are indicative of future changes, then we might need to factor in an increase in the vicinity of another 857% over the next 30 years...

So, weekly rental paid for a comparable 3 bedroom 1 bathroom home might be around $2,500 in 2040 - or $130,000 pa...

Even at a 500% increase on $300 pw, the comparable rental figures in 2040 would be $1,500 pw or $78,000 pa...

Now, I'm not suggesting that any of the above figures are remotely accurate - rather that some of the assumptions made earlier are inherently erroneous...

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Lamenting the shift in the Australian psyche, away from the egalitarian ideal of the fair-go - and the rise of short-sighted pollies, who worship the 'Growth Fairy' and seek to divide and conquer!

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culldav Gold Member Offline Australian Politics Posts: 2020	Re: Poor real estate agents doing it tough !! Reply #7 - Nov 19^th, 2010 at 2:39pm Your argument flawed!
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Amadd Gold Member Offline Mo Posts: 6217	Re: Poor real estate agents doing it tough !! Reply #8 - Nov 19^th, 2010 at 4:28pm culldav, if you put some graphite on your abacus it makes the beads slide more easily. You're not factoring in the obvious that rental and property prices will rise markedly over a 30yr period.
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laborfornever

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Re: Poor real estate agents doing it tough !!
Reply #9 - Nov 19^th, 2010 at 5:22pm

My GFs sister and hubby refused to buy a place here on The Gold Coast in 2001, they could have bought a house and land package at varsity lakes for 220K 4 bed house dub garage pool landscaped etc.

They were renting at $180 a week, now they are still in the same property when they could have built a new house, but are renting a 1970s stock standard 3 bed single garage old everything carpets bathroom kitchen laundry etc.

The houses in varsity Lakes now sell for 500K+ if they had borrowed 200K back then the monthly repayments would have been about $1400ish a month at year for 25 years,in 20 years they would have still been paying $1400 a month if not all ready repaid.

Today they are paying $450 a week in rent on that same dump, every year its gone up 15-25 a week.

In 15 years time they'll still be renting but probably paying $800 a week.

In 15 years they'll be 40, they could have been home owners, however they'll be renting and continue to rent till they are dead, so from age 40 to 80 they could have paid NO mortgage, but will now have to pay atleast 40K a year (minimun) for those last 40 years of their life, thats 1.6 million dollars in rent when they could have paid nothing if they bought????

You do the maths, buying a house is far better than renting.

Yes renting over the inital loan term may see you slightly infront, but then factor in the rest of your life renting when you could be sitting at home paying nothing, that is when you become streets ahead.

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The_Barnacle

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Re: Poor real estate agents doing it tough !!
Reply #10 - Nov 19^th, 2010 at 5:57pm

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more.

Property is worth whatever a buyer is willing to pay.

In Victoria the population is increasing faster than they can build houses so property prices are going to keep going up. The last few weeks has seen a hiccup due to the media and political hand wringing over Bank interest rates. But with interest rates still at historically low levels and housing still in demand you can expect to see prices continue to rise.

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Ex Dame Pansi

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Re: Poor real estate agents doing it tough !!
Reply #11 - Nov 19^th, 2010 at 6:03pm

The_Barnacle wrote on Nov 19^th, 2010 at 5:57pm:

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more.

Property is worth whatever a buyer is willing to pay.

In Victoria the population is increasing faster than they can build houses so property prices are going to keep going up. The last few weeks has seen a hiccup due to the media and political hand wringing over Bank interest rates. But with interest rates still at historically low levels and housing still in demand you can expect to see prices continue to rise.

That would be due to the exponential growth fairy. One must wonder when the boom will bust, as they inevitably do.

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"When the power of love overcomes the love of power, the world will know peace." Hendrix
andrei said: Great isn't it? Seeing boatloads of what is nothing more than human garbage turn up.....

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perceptions_now

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Re: Poor real estate agents doing it tough !!
Reply #12 - Nov 19^th, 2010 at 6:14pm

Ex Dame Pansi wrote on Nov 19^th, 2010 at 6:03pm:

The_Barnacle wrote on Nov 19^th, 2010 at 5:57pm:

culldav wrote on Nov 19^th, 2010 at 11:04am:

This situation is going to get worse. The majority of people with IQ’s about 60 are now starting to realise that a run-down 1970’s 3 bedroom 1 bathroom house is not worth $300,000 or more.

Property is worth whatever a buyer is willing to pay.

In Victoria the population is increasing faster than they can build houses so property prices are going to keep going up. The last few weeks has seen a hiccup due to the media and political hand wringing over Bank interest rates. But with interest rates still at historically low levels and housing still in demand you can expect to see prices continue to rise.

That would be due to the exponential growth fairy. One must wonder when the boom will bust, as they inevitably do.

Not much longer, I suspect!

See the post on The Great Australian Housing Bubble, posted at 12.38 today at -
http://www.ozpolitic.com/forum/YaBB.pl?num=1277536490/195#195

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Carl D

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Re: Poor real estate agents doing it tough !!
Reply #13 - Nov 19^th, 2010 at 6:19pm

I think used car salesmen have more integrity than most real estate agents. At least car salesmen are controlled to a certain extent by government regulation.

As I've said before - the housing industry (especially estate agents) should have been heavily regulated years ago. Then, we might not be in the situation today where people can not/will not pay the ridiculous prices being asked for just to have a roof over one's head. And, that also includes rentals.

Houses are supposed to be places to live in, a haven for families. Not a 'for profit' investment.

Any financial system which relies heavily on people paying absurd prices for a necessity of life (a place to live) deserves to come crashing down. And, the sooner the better.

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« Last Edit: Nov 19^th, 2010 at 6:57pm by N/A »

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Amadd

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Re: Poor real estate agents doing it tough !!
Reply #14 - Nov 20^th, 2010 at 7:09am

I agree Carl D. But it's a fact of life that property will be used for profit, and they ain't making any more of it.

Sure the bubble will probably burst, or at least stagnate or deflate a little. But what's gonna happen when it does?

There will still be a demand for housing even if not many people can afford to buy.
Landlords will still be able to demand a premium 'relative' price, because people need somewhere to live.
If you don't play the game, you're eventually going to be held to ransom.

The argument between the financial aspects of renting or buying is a no brainer. You're always going to be better off buying than renting in the long term as long as the system holds up.
If that becomes no longer the case, then the money that you've saved by renting won't be much use to you because the entire system will have crumbled and you will be paying through the nose for everything and will still be without a place to live.

The system would need to collapse into an abyss of anarchy before you could say to somebody that your piece of land is worthless to me.

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