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Australian house prices will be flat as a pancake for the next decade; Resources boom is over, international economy can't get its act together and investors will soon start to lose interest
Topic Started: 25 Oct 2014, 10:44 AM (4,103 Views)
Wrong
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szokolay
27 Oct 2014, 08:53 PM
You are pretty much alone in that opinion now. Is your property bought via interest only loans?
Hmmmm, sorry but I think its you how is in the minority in your views there. The vast bulk of the Aussie population still believe house (and land) prices will keep rising into the future. Maybe it's different in your social circle, I don't know, or maybe you've been spending too much time on bear websites and MSM comments sections, and so gotten yourself a skewed view of what the majority opinion really is out there. The bear minority is a vocal one, but the majority (and by that I mean massive majority) of folk out there in the real world are too busy working, paying the mortgage and buying houses to bother wasting time commenting on housing bear websites or sensationalist MSM articles about bubbles and suchlike. Life goes on and the housing market goes on no matter how vocal the minority bears are, or how vigorously they comment on blogs and news sites. Volume of comments on the internet doesn't reflect the majority of the wider population, it only reflects those minority of people who feel strongly enough to bother posting comments. Land prices will keep rising into the future as long as the population grows, there'll be dips along the way but the overall trend will continue to be up.
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Wrong
27 Oct 2014, 09:40 PM
Land prices will keep rising into the future as long as the population grows
No. Prices will keep rising provided release continues to be restricted relative to demand.

There's a lot of talk about supply response, but does anyone really believe that if the entire country was rezoned residential tomorrow that we wouldn't see a genuine response in supply?

Developer contributions, taxes and fees all play a role but make no mistake, the zoning is the bottleneck ultimately.
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Admin
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4 Major Housing Market Trends Until 2020
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Glenn Stevens
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We're keeping a close watch on the level of risk in the housing market. I think the key thing to keep your eye on is the leverage. If we were to witness an asset bubble in some asset class and it isn’t with borrowed money, I’d be a lot less worried. For example, if there’s a boom and bust in rare coins or art or something — or even minor segments of property where you haven’t got the banking system geared into it — I’m not sure that’s kind of a macroeconomic policy concern. But where you’ve got an asset class with a lot of leverage building up behind it and risks to the lenders, as well as the borrowers, that’s really the issue. So that’s why I say I think it’s important to note that to date we haven’t seen a big rise in leverage in the housing market so far. We might see a housing bubble yet and if we do that will be something to be quite concerned about and, as I say, we need to think about the investor part in Sydney where there is a fair bit of borrowing starting to take place there now so care needs to be taken. But for the system as a whole, I don’t think, on what we’ve seen to date, that there has been a case for us to get on the soap box about leverage. It might come and that’s why we have to watch it.
Edited by Glenn Stevens, 28 Oct 2014, 11:06 AM.
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Blondie girl
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Ooohh yeah
The goodie RBA will rescue housing ... :lol

What's the crunch?

.no serious investor would committ $$ without expectations of a likely return.
.no financial lenders will LOAN out $ without an expectation that it will be returned with interest.

I do believe that the housing market relevts generally ACTUAL household fiancial confidence, which is then influenced by global events.

Another good economic indicator?
Why
It's the RBA Index of Commodity Prices..
Meow.
Edited by Blondie girl, 28 Oct 2014, 01:43 PM.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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Thatguy
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Why is the government subsiding investor risk via negative gearing if they don't want asset inflation? This is especially wasteful when most of the risk subsidisation is for existing properties changing hands, rather than having an upside by creating more supply.

Monetary policy is working against subsidised risk, and at great tax payer expense.
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Gossamer
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44th most prolific poster on APF

Flat prices or rising at CPI would be the best news.
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

APF idiot list
Nelson
Black Panther
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Gossamer
28 Oct 2014, 08:28 PM
Flat prices or rising at CPI would be the best news.
I agree, and fwiw rising prices would actually benefit me.
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b_b
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Thatguy
28 Oct 2014, 02:57 PM
Why is the government subsiding investor risk via negative gearing if they don't want asset inflation? This is especially wasteful when most of the risk subsidisation is for existing properties changing hands, rather than having an upside by creating more supply.

Monetary policy is working against subsidised risk, and at great tax payer expense.
But we are creating new supply. In fact, dwelling approvals are near all time record highs.

Cutting interest rates is the same as offering a simultaneous tax cut to those who borrow, and a tax rise for those with a deposit. Any policy change to NG will simply encourage more IR cuts. eliminating NG will hurt savers.
Edited by b_b, 28 Oct 2014, 10:56 PM.
(S – I) + (T - G) + (M - X) = 0
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Emmanuel
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b_b
28 Oct 2014, 10:45 PM
But we are creating new supply. In fact, dwelling approvals are near all time record highs.

Cutting interest rates is the same as offering a simultaneous tax cut to those who borrow, and a tax rise for those with a deposit. Any policy change to NG will simply encourage more IR cuts. eliminating NG will hurt savers.
It is really that simple. Eliminating negative gearing will require interest rate cuts. Savers are losers. If more people would stop and think what BB is saying, things would get so much better.
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