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Beware Mining Town Bulls - Perth and Darwin Housing Bubbles Ready To Burst!; Entire generation of speculators needs to be wiped out and made an example of
Topic Started: 30 Jul 2014, 04:19 PM (14,984 Views)
sandgroper
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This downturn in property will be Australia wide and there is nothing governments can do to stop it (not that they won’t try).

But WA and the NT will be particularly hard hit.

This is what we are seeing now in Darwin.

This weekend we were out on the harbour and from the water I could easily see at least 6 cranes on the city skyline. Ironically we didn’t have a skyline 7 years ago.

With Inpex and the truly insane rents ($900 for a 2 bed apartment, $12-1500 for a 3 bed) all the builders and speculators went nuts. Construction is every where but now its starting to slow down. The agents are casually knocking $100,000 off house prices and they are still not moving.

Tomorrow one of the agency’s is having a massive auction and 50 houses are going under the hammer. It will be interesting to see the sell verses passed in rate. I expect the amount of property on the market to dramatically increase in the next few days.

There are going to be a lot of people financially hurt by this but this city needs to rebalance. We can’t get staff because they cant afford to live here on the wages business owners can afford to pay them.

Darwin is currently as expensive as Sydney but does not have the land constraints or long term high income expectations.

Renting is not dead money, its keeping a roof over your head.

Over spending in a falling market and going under water with a mortgage... thats dead money.

I’ve got a list of the mega auction properties, I’ll do an autopsy on the numbers of sold vs unsold next week when the passed in properties have been put back on the web with a sale price. It will be a sign as to the true state of the local market.

In Gladstone my brother was working a few years back and we were considering buying an IP (I was a bit younger, a bit more naive and a bit less wise). Lucky for us, we walked away from it, mainly because the developer tried to push the price up by 10% between what we were initially quoted and what they wanted once the titles came through.

No matter how much evidence and graphs I try to show, people are still willing and ready to jump into investment property. The big savvy thing now is sub-dividing, cause trust me it works... the store clerk told me. This entire generation of speculators needs to be wiped out and made an example of. The best way is with a fast crash.
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newjez
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would like to see the arguement that justifies the Perth premium over Adelaide and Brisbane, without the mining boom. From both sides.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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MMM
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newjez
30 Jul 2014, 06:18 PM
would like to see the arguement that justifies the Perth premium over Adelaide and Brisbane, without the mining boom. From both sides.
OK newy, I'll go first.

Without the mining boom there is no justification for rents to be anymore. So the median rent should be closer to $350, not the current of around $450. But if you consider all the overbuilding that has gone on since the boom began , as it winds down prices should become cheaper than adelaide or brisbane.

So I guess that means it wont be much longer before the median rent is closer to $300 than the current level around $450.
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skamy
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sandgroper
30 Jul 2014, 04:19 PM
This downturn in property will be Australia wide and there is nothing governments can do to stop it (not that they won’t try).

But WA and the NT will be particularly hard hit.

This is what we are seeing now in Darwin.

This weekend we were out on the harbour and from the water I could easily see at least 6 cranes on the city skyline. Ironically we didn’t have a skyline 7 years ago.

With Inpex and the truly insane rents ($900 for a 2 bed apartment, $12-1500 for a 3 bed) all the builders and speculators went nuts. Construction is every where but now its starting to slow down. The agents are casually knocking $100,000 off house prices and they are still not moving.

Tomorrow one of the agency’s is having a massive auction and 50 houses are going under the hammer. It will be interesting to see the sell verses passed in rate. I expect the amount of property on the market to dramatically increase in the next few days.

There are going to be a lot of people financially hurt by this but this city needs to rebalance. We can’t get staff because they cant afford to live here on the wages business owners can afford to pay them.

Darwin is currently as expensive as Sydney but does not have the land constraints or long term high income expectations.

Renting is not dead money, its keeping a roof over your head.

Over spending in a falling market and going under water with a mortgage... thats dead money.

I’ve got a list of the mega auction properties, I’ll do an autopsy on the numbers of sold vs unsold next week when the passed in properties have been put back on the web with a sale price. It will be a sign as to the true state of the local market.

In Gladstone my brother was working a few years back and we were considering buying an IP (I was a bit younger, a bit more naive and a bit less wise). Lucky for us, we walked away from it, mainly because the developer tried to push the price up by 10% between what we were initially quoted and what they wanted once the titles came through.

No matter how much evidence and graphs I try to show, people are still willing and ready to jump into investment property. The big savvy thing now is sub-dividing, cause trust me it works... the store clerk told me. This entire generation of speculators needs to be wiped out and made an example of. The best way is with a fast crash.
Quote:
 
This entire generation of speculators needs to be wiped out and made an example of. The best way is with a fast crash.


Dark fantasies you got going there.

If there is a crash it is poor FHBs that will be wiped out, they are always the worst effected in a crash. The rich speculators will be snapping up their homes at bargain basement prices. Are you one of those vultures hoping for hard times to hit other people so that you can grasp their homes from them ? Are you naive or are you deliberately misleading youngsters?


It is amazing how many youngsters have bought the doom and gloom lemon that would hurt them more than anyone, it it had ever come to pass.

Luckily, the downturn has been and gone, you might get some regional slow downs but all the big markets are well into recovery.

Your doom and gloom is past its sell by date fortunately.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Massive
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skamy
31 Jul 2014, 12:58 AM



Dark fantasies you got going there.

If there is a crash it is poor FHBs that will be wiped out, they are always the worst effected in a crash. The rich speculators will be snapping up their homes at bargain basement prices. Are you one of those vultures hoping for hard times to hit other people so that you can grasp their homes from them ? Are you naive or are you deliberately misleading youngsters?


It is amazing how many youngsters have bought the doom and gloom lemon that would hurt them more than anyone, it it had ever come to pass.

Luckily, the downturn has been and gone, you might get some regional slow downs but all the big markets are well into recovery.

Your doom and gloom is past its sell by date fortunately.
have you ever been through a slowdown in perth skamy ? downturn is not over... it hadnt really started had it? there's still been demand for housing sales, but if a genuine downturn comes, that demand will wane..

perth has slow, drawn out affairs where the city basically stagnates (prices, salaries, etc) while the rest of australia leaves it behind until it catches up in the next boom .. happens every cycle... its a boom/bust town. more and more young people will start seeking better opportunities / salaries offered in sydney and melbourne as those cities really start to leave perth in their wake...

there will be those who buy up property getting ready for the next upturn but it will likely be at their leisure as property for sale just sits there idly for longer periods of time with the same asking price.. others who want to buy may simply not have the opportunity as work is slow, and cost of living rises reducing disposable income...

Edited by Massive, 31 Jul 2014, 01:24 AM.
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MMM
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skamy
31 Jul 2014, 12:58 AM



Dark fantasies you got going there.

If there is a crash it is poor FHBs that will be wiped out, they are always the worst effected in a crash. The rich speculators will be snapping up their homes at bargain basement prices. Are you one of those vultures hoping for hard times to hit other people so that you can grasp their homes from them ? Are you naive or are you deliberately misleading youngsters?


It is amazing how many youngsters have bought the doom and gloom lemon that would hurt them more than anyone, it it had ever come to pass.

Luckily, the downturn has been and gone, you might get some regional slow downs but all the big markets are well into recovery.

Your doom and gloom is past its sell by date fortunately.
The downturn here is just beginning skamy and well and truly going on everywhere else in the world clearly shown with rates at zero for six years.

But seeing as you just leveraged up on more Perth property, we face this clear absconding of all reality. And it is you that wishes to push others down the path of ruins by being so out of touch with reality.

Your Irish right, just like shadow. You would think you clowns might have half a clue, but no, none whatsoever.
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Veritas
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skamy
31 Jul 2014, 12:58 AM



Dark fantasies you got going there.

If there is a crash it is poor FHBs that will be wiped out, they are always the worst effected in a crash. The rich speculators will be snapping up their homes at bargain basement prices. Are you one of those vultures hoping for hard times to hit other people so that you can grasp their homes from them ? Are you naive or are you deliberately misleading youngsters?


It is amazing how many youngsters have bought the doom and gloom lemon that would hurt them more than anyone, it it had ever come to pass.

Luckily, the downturn has been and gone, you might get some regional slow downs but all the big markets are well into recovery.

Your doom and gloom is past its sell by date fortunately.
Skamy,

Take note that the East Coast Bulls never touch the WA threads.

That should tell you something.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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skamy
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Massive
31 Jul 2014, 01:12 AM
have you ever been through a slowdown in perth skamy ? downturn is not over... it hadnt really started had it? there's still been demand for housing sales, but if a genuine downturn comes, that demand will wane..

perth has slow, drawn out affairs where the city basically stagnates (prices, salaries, etc) while the rest of australia leaves it behind until it catches up in the next boom .. happens every cycle... its a boom/bust town. more and more young people will start seeking better opportunities / salaries offered in sydney and melbourne as those cities really start to leave perth in their wake...

there will be those who buy up property getting ready for the next upturn but it will likely be at their leisure as property for sale just sits there idly for longer periods of time with the same asking price.. others who want to buy may simply not have the opportunity as work is slow, and cost of living rises reducing disposable income...
Posted Image

Sorry Massive but I do not see these so called booms and busts I see steady price growth that you would expect from a growing city. Only 4 years showed an annual price drop since 1974. If you want read this http://6pointfinance.net/HousePrices.pdf then look at the recent ABS stats since 2003 and you will see that Perth is just emerging from the biggest downturn in the data which goes back to 1970. I will put a table of data with annual % change together for you that will make it easy to see this if you are interested in this data.

Most of the previous times when Perth has corrected is after huge annual increases lasting 10 years or more - not after several years stagnation and falling prices.

Veritas
31 Jul 2014, 02:08 AM
Skamy,

Take note that the East Coast Bulls never touch the WA threads.

That should tell you something.
Ok I have taken note now what?

I don't get involved in Melbourne threads - that city appears to have a property market that defies my understanding. Do you think that will make Melbourne crash?
Edited by skamy, 31 Jul 2014, 03:00 AM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Lef-tee
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Quote:
 
Luckily, the downturn has been and gone, you might get some regional slow downs but all the big markets are well into recovery.


Been and gone? I would have said it's just barely begun - but I'm talking about the mining investment boom, not sure if you're alluding to the same thing.

Interesting chart there - it demonstrates how most of the price growth has occurred during this historically unprecedented mining boom. When the boom actually has reached the bottom of the bust cycle it will be interesting to re-visit.

Sandgroper, I wouldn't hold my breath for a price crash though - remember that property speculation is supported by government policy and is veiwed as crucial to economic growth, even if it is not said in so many words. Even if coming generations are locked out of home ownership, everything possible will still be done to ensure that prices keep rising. Interest rates may be very low but we can still take them a bit lower yet and that's just for starters.

Here in Gladstone, the boom has passed it's peak (though things are still going) and rents have plunged sharply. Which is good, young people not on $150 000 might reasonably be able to afford to leave home. But selling prices have only come down a little, despite poor demand and plentiful supply. Movements in the price of housing are no longer connected to the fundamental purpose of housing, that's history.
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peter fraser
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Lef-tee
31 Jul 2014, 06:46 AM
Sandgroper, I wouldn't hold my breath for a price crash though - remember that property speculation is supported by government policy and is veiwed as crucial to economic growth, even if it is not said in so many words. Even if coming generations are locked out of home ownership, everything possible will still be done to ensure that prices keep rising. Interest rates may be very low but we can still take them a bit lower yet and that's just for starters.

Here in Gladstone, the boom has passed it's peak (though things are still going) and rents have plunged sharply. Which is good, young people not on $150 000 might reasonably be able to afford to leave home. But selling prices have only come down a little, despite poor demand and plentiful supply. Movements in the price of housing are no longer connected to the fundamental purpose of housing, that's history.
Yep the silly high rents will fall but house prices are sticky. There will be some good buys for those brave enough to buy in this market, and that's usually cashed up investors. FTB's certainly don't buy in down markets, and that's why they are down markets.

On the median house price index for Gladstone, Perth and Darwin this will be but a small blip.
Any expressed market opinion is my own and is not to be taken as financial advice
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