Australian housing bubble thread

Discussion in 'Economics' started by m22au, May 21, 2010.

  1. I am from sydney. property research i do is to manage my small property portfolio. Trying to figure out what is really happening on the ground and decide if and at what price sydney property is a value.
    #61     Nov 30, 2010
  2. shortterm property trading easy :

    "Lorne's median house price decreased 31.3 per cent to $687,500, down from $1 million in the previous quarter. But that was off the back of a 52.7 per cent increase in the March quarter.


    at 7% cost for round trip, it a piece of cake. Make money faster than in FX 500x geared account !

    I hope these data are based on average sale value and have nothing to do with appreciation. Real appreciation is when same property is sold twice and deducted costs&labour for all improvements in that time period.

    Example I have in my research:

    unit sold '96 at 420k, sold again in 2010 for 750k. Improvements estimated to 50k. So appreciation is 750 -50 - 420 = 280.

    14 years holding period, annualized return 3.7%. With net yields at around 4% on average, this is total 7.7%. With mortgage rates at around 7-8% p/a, one has to struggle to see the profit if money borrowed. Sure, banks are laughing pocketing 2% margin pa. More than investor for 0 risk.
    #62     Dec 1, 2010
  3. m22au


    #63     Jan 2, 2011
  4. m22au


    #64     Jan 10, 2011
  5. "Playable Actions

    The day of reckoning has finally arrived for Australia. A day of reckoning awaits Canada, China, and the UK as well. It's too late now to do much of anything except

    Exit the Australian stock market
    Get out of the Australian dollar
    Pick up some popcorn
    Stay on the sidelines and watch the collapse unfold"

    #65     Jan 10, 2011
  6. increase in prices in 2009 did not bring increased consumer spending as in previous swings, and therefore did not generate new jobs and increased profits and therefore new entrants in AU that keep pressure on prices/rents will not get jobs and this negates this perpetual process. People increasingly losing faith. Se soros model of bubbles.

    Property lobby can organize another bridging property stimulus if they can show that there is a good chance in pick up in spending.

    My guess is spending will not improve. Still another stimulus (if there is one) good time to exit.

    Wait and see.
    #66     Jan 10, 2011
  7. Divine intervention to cause a housing crash?

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    #67     Jan 12, 2011
  8. m22au


    Some good articles from Adam Schwab at Crikey:

    For example:

    "Signs of the bursting housing bubble are emerging"

    also a link to property price data:

    and this article compares the Ireland situation to that of Australia:

    "Australia, Ireland parallels: watch out, there’s something in the Eire"
    #68     Jan 23, 2011
  9. For Sydney and Melbourne...

    Lots of outsurcing firms temp staff keep renting pressure up. However, once jobs moved to India, renters will go and money these contractors made will go to indian real estate around outsurcing centres which are 1/10 of AU prices.

    People that have property as their super and no cash are gambling with smelly bad odds on theis side.
    #69     Jan 26, 2011
  10. as usual you guys making this way too complicated.

    aussie's property prices went up because chinese are buying it up. As the chinese government continue to impose price control on their domestic real estate market cooling investment, massive money flows to australia since it's a beautiful and stable western country nextdoor to china. The policy changes in 2009 that made foreign investment much more friendly in australia only added fuel to the fire. That combined with the desire for the rich chinese to diversify and have some money/asset overseas, created this boom market.

    As to whether or not it's a bubble, who knows. But chinese are buying up all the luxury units in australia, and this is not likely to stop anytime soon.
    #70     Jan 26, 2011