Australia housing bubble

[Syndrome]

Originally Posted by mike_nofx

Not sure what you’re trying to prove. But since people don’t generally buy a house today to sell next month, or even 6 months later, look over a minimum of say 3-5 years for more real life house price data. 5-10 years is even better as it would represent the average home ownership period.

I am not trying to prove anything. Your response to my original question was dismissive so I responded in kind.

So I repeat the question I asked of XB GS 351 Coupe: "How much has it's value increased in the last six months?"

[FairmontGS]

Originally Posted by Syndrome

I am not trying to prove anything. Your response to my original question was dismissive so I responded in kind.

So I repeat the question I asked of XB GS 351 Coupe: "How much has it's value increased in the last six months?"

I'll answer for you - My niece and her partner bought a 1 YO house out at Officer this month for 10% less than the vendor was asking 7 months ago.

[Syndrome]

Originally Posted by FairmontGS

I'll answer for you - My niece and her partner bought a 1 YO house out at Officer this month for 10% less than the vendor was asking 7 months ago.

My brother purchased an apartment in East Perth, about ten minutes walk from the WACA. Purchase was in 2014 at the peak of the market. Now apartments in the same complex are selling for 20% to 25% less than what he paid for his identical place. Ouch.

[FairmontGS]

Originally Posted by Syndrome

My brother purchased an apartment in East Perth, about ten minutes walk from the WACA. Purchase was in 2014 at the peak of the market. Now apartments in the same complex are selling for 20% to 25% less than what he paid for his identical place. Ouch.

For sure. As an investor, if you have the money then it's a good time to be scooping up property. It's also a good time for the first home owners. Everyone is winning ATM.

[Syndrome]

Originally Posted by FairmontGS

Everyone is winning ATM.

So you call a 20 to 25% loss winning?

[GasoLane]

Originally Posted by Syndrome

So you call a 20 to 25% loss winning?

2014 was when WA's mining boom was falling over wasn't it?

[Syndrome]

Originally Posted by GasOLane

2014 was when WA's mining boom was falling over wasn't it?

Just about to.

[FairmontGS]

Originally Posted by Syndrome

So you call a 20 to 25% loss winning?

For sure - if you don't have to sell it's irrelevant.

[prydey]

When referring to the housing market, buying and selling doesn't really matter. It's just an observation of the marketplace in general, and currently its on a bit of a downward trend.

History says it generally will stabilise and climb again, but history is just that.... History. It's not a guarantee of what will happen. Just because a massive house price crash hasn't happened, doesn't mean it can't or won't.

[GT0132]

Originally Posted by prydey

When referring to the housing market, buying and selling doesn't really matter. It's just an observation of the marketplace in general, and currently its on a bit of a downward trend.

History says it generally will stabilise and climb again, but history is just that.... History. It's not a guarantee of what will happen. Just because a massive house price crash hasn't happened, doesn't mean it can't or won't.

Same with movements in interest rates. Everyone says they will never hit the highs of 18% again like they did in 1990 but they've done it once so it can't be ruled out. One thing's for sure they will get to around 10-12% again and that’s where we will see real problems for many home owners with huge debt and earning average incomes

[superyob]

Might be to much for SJWs but here is another perspective.
https://www.xyz.net.au/house-prices-going-fall-75/

[prydey]

Originally Posted by GT0132

Everyone says they will never hit the highs of 18% again like they did in 1990

the thing is, they don't need to, and with the current economy and house prices, they won't. it would cripple the economy overnight.

18% interest was on house prices around $70k give or take. compare that with 4% on 400k, and it is substantially more interest being paid. Factor in that for the east coast, $400k is the cheap end, and you can clearly see why interest rates don't need to hit the high's of yesteryear to rape the population.

this argument always dwells on only 1 aspect of the time (high interest rate period). it doesn't factor in the house prices or the wages as a percentage of the house prices, or the cost of living.

I would argue that for some people its every bit as hard today as it was for those facing high interest rates in the 80's.

[asagaai]

Originally Posted by prydey

this argument always dwells on only 1 aspect of the time (high interest rate period). it doesn't factor in the house prices or the wages as a percentage of the house prices, or the cost of living.

You also missed another elephant in the room- lack of permanent positions and the casualisation of the workforce with non stability of income....

[Bossxr8]

Originally Posted by superyob

Might be to much for SJWs but here is another perspective.
https://www.xyz.net.au/house-prices-going-fall-75/

75%

[GT0132]

Originally Posted by prydey

the thing is, they don't need to, and with the current economy and house prices, they won't. it would cripple the economy overnight.

18% interest was on house prices around $70k give or take. compare that with 4% on 400k, and it is substantially more interest being paid. Factor in that for the east coast, $400k is the cheap end, and you can clearly see why interest rates don't need to hit the high's of yesteryear to rape the population.

this argument always dwells on only 1 aspect of the time (high interest rate period). it doesn't factor in the house prices or the wages as a percentage of the house prices, or the cost of living.

I would argue that for some people its every bit as hard today as it was for those facing high interest rates in the 80's.

True right now there's no need for an increase. However all it could take is a major inflation hit and rates start going up. It could even be out of our control - i.e a trade war between China and the US and the imposition of tarrifs will put prices of raw materials up which will be passed on to consumers, then wage pressures, then interest rates.

If rates got to only 10%, on a loan of $400k borrowers would need to find another $24,000 of after tax income (assuming its not an investment property) to pay the mortgage. Many would find that a struggle

[Syndrome]

Originally Posted by FairmontGS

For sure - if you don't have to sell it's irrelevant.

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

[.:4:.]

Originally Posted by Syndrome

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

Markets go up and down, if its a short term thing then yeah, you may get screwed. But there is such thing as refinancing a loan like i did to stop the rediculous interest. In the long term things will go up. But thats if you do your reaserch. If you buy in a boom town then the boom goes away, well thats a lost bet. But if its a place you want to or intend to live in for years and years then its more of an annoyance. So its the finance im getting at here not the property value, because regardless of the property value, you still have to pay what you bought it for. Even with the slump at the moment if i sell my place the mortgage would be covered, and there would be another few hundred grand on top. Thats not a profit though. I need a house to live in so with the market growth in the past few years i might end up with a deposit and stamp duty paid, but the rest goes into getting house with the loan on top and its not going to be that much better then where im at now. If anything at all.

[asagaai]

Originally Posted by Bossxr8

75%

If it drops 75% there will be no new building could not build new for the price of old house with 75%drop in price. What a further depressionary impact that would be on the economy no further construction.

[MITCHAY]

Originally Posted by Syndrome

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

Only if you can't make the repayments.

As for 75%. If **** gets that bad we are all ****ed anyway

[FairmontGS]

Originally Posted by Syndrome

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

It's not a losing position either unless you have to sell. Most Australians aren't house traders so it really shouldn't be an issue?

[mr smith]

Originally Posted by Syndrome

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

Correct, too far of a drop and the bank will want some cash to get the LVR value into comfortable position and unless you have some cash at the ready (remember you wont be able to borrow against your home for this) the bank will foreclose.
Only way is if you owe nothing or very little..

Big property portfolio with lots of debt that's been interest only = up the creek.

[hayseed]

Originally Posted by Syndrome

But if you are locked into a mortgage and the value of the house drops below what you owe then that is NOT a winning position.

One of My Brothers Bought a Town house in Dublin Ireland in 2007 for 385,000 Euros..

in 2009 It's market value was assessed at 160,000 Euros...( 59% drop in value)

They're both back here working to keep the payments Up..

Even Today Its market value is only about 200-220,000 Euros.
It's going to be Years before the Loan Payout figure & Its market Value Meet.

[Syndrome]

Originally Posted by hayseed

One of My Brothers Bought a Town house in Dublin Ireland in 2007 for 385,000 Euros..

in 2009 It's market value was assessed at 160,000 Euros...( 59% drop in value)

They're both back here working to keep the payments Up..

Even Today Its market value is only about 200-220,000 Euros.
It's going to be Years before the Loan Payout figure & Its market Value Meet.

[Peter B - CV8]

"Did you hear the joke about the Irish property investor ??"

[Bossxr8]

Originally Posted by hayseed

One of My Brothers Bought a Town house in Dublin Ireland in 2007 for 385,000 Euros..

in 2009 It's market value was assessed at 160,000 Euros...( 59% drop in value)

They're both back here working to keep the payments Up..

Even Today Its market value is only about 200-220,000 Euros.
It's going to be Years before the Loan Payout figure & Its market Value Meet.

If I remember correctly Ireland got absolutely smashed during the GFC. Barely caused a ripple here.

[hayseed]

Originally Posted by Bossxr8

If I remember correctly Ireland got absolutely smashed during the GFC. Barely caused a ripple here.

Correct.. & the Aussie Gooberment doesn't have big Budget Surplus to help us ride it out this Time..
I reckon We're in for a Hard Landing, next Time..

[BENT_8]

Originally Posted by hayseed

Correct.. & the Aussie Gooberment doesn't have big Budget Surplus to help us ride it out this Time..

Oh, bugger, we're due for a new flat screen TV too..

[Syndrome]

Originally Posted by hayseed

Correct.. & the Aussie Gooberment doesn't have big Budget Surplus to help us ride it out this Time..
I reckon We're in for a Hard Landing, next Time..

Or they pour in so much borrowed money that the next three generations will have to repay.

[DoreSlamR]

It’s ok, WA will prop up the rest of the country....again

[vztrt]

Originally Posted by DoreSlamR

It’s ok, WA will prop up the rest of the country....again

Going to ask for more gst money?