Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 2
  • 15
Perth $30K FHB promotion; Why so desperate?
Topic Started: 19 Aug 2015, 12:54 AM (9,006 Views)
newjez
Member Avatar


Jimbo
19 Aug 2015, 04:09 AM
So simple, a five year old could understand it.

Less land sold = fewer people looking to build houses.

Builders offer incentives to try and grab some of a falling market share.

Buyers go for the ones offering the best incentives (lowest overall cost for the same thing).

Builders try to recoup lost margin by making cost savings such as reducing wages and staffing levels. They shop around more aggressively for materials and contracted out services.

Their suppliers offer incentives and to maintain margin, they reduce costs by reducing wages and staffing levels.

Those who don't win the contracts to build the houses or supply the builders? They reduce their losses by reducing wages and staffing levels. Some will just shut up shop.

In summary, if your land sales drop 50% so does everything else associated with land sales.

Simple.
Where oh where does Matty get the idea that falling demand equals higher prices? I'd say he's a salesman rather than a business man.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


newjez
19 Aug 2015, 06:21 AM
Where oh where does Matty get the idea that falling demand equals higher prices? I'd say he's a salesman rather than a business man.
I don't think he said that. I think he was trying to say that when you give something away (like a free fence or carpets), you reduce your margin but keep the price the same.

What he didn't say was what happens to the 50% of current builders who don't manage to tempt a buyer with a trinket or two?

What happens to them? And their employees? And the money they would have spent in the shops if they weren't on the dole?

What happens?

Simple.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


Jimbo
19 Aug 2015, 07:27 AM
I don't think he said that. I think he was trying to say that when you give something away (like a free fence or carpets), you reduce your margin but keep the price the same.

What he didn't say was what happens to the 50% of current builders who don't manage to tempt a buyer with a trinket or two?

What happens to them? And their employees? And the money they would have spent in the shops if they weren't on the dole?

What happens?

Simple.
building a house in Perth about now would be a good option while builders are struggling to get work, and sub contractors will work for low wages, if a bespoke home is what you desire. Prices may get a little cheaper but probably not much.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
The Whole Truth
Member Avatar


Certainly in a year or so cheaper renovations will be on the cards Peter. Work like painting that has little material inputs fell by half the cost in Brisbane 5 or 6 years ago and is probably still at those levels. That's not across the board, you have to get a few quotes because there are many who will still try and gouge out the boom rates. Often these are tradies who developed a high flier lifestyle ( lots of debt ) and need to over charge to pay their fat home equity and new ute loans back.

The same is true of rental prices in a collapse like we're seeing in perth. Established landlords with paid out properties can be flexable and drop rents to follow the market down. Nuvo landlords on IO loans are screwed though and need the old higher rents to hold the property. Many landlords will be forced out of the game in the years ahead, often taking their lumps in the form of hefty losses that get transferred back to their PPOR on the cross collaterized loans. I know a few in brisbane who have suffered this, unit holders for the most part. Units are shit investment all round IMO.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
Profile "REPLY WITH QUOTE" Go to top
 
Matthew
Default APF Avatar


The Whole Truth
19 Aug 2015, 01:58 AM
Sorry to dissapoint you mattie. But you put your big FAT foot in your mouth again.




You can't refute anything I write can you? All you can do is plagerize shit out of wikipedia and rant across the forum insulting people.
You need therapy mate, that or stronger medication :lol
Eveyone who can read a paper is aware Perth had a record in building starts last year. One swallow does not make a summer though.
My only hope for my three boys is that they turn out nothing at all like Chris.
Profile "REPLY WITH QUOTE" Go to top
 
Chris
Default APF Avatar


Matthew
19 Aug 2015, 10:36 AM
Eveyone who can read a paper is aware Perth had a record in building starts last year. One swallow does not make a summer though.
Not true at all Matthew, starts were at record high during 2013 into 2014, a period where sentiment was still unexplainable high

http://m.perthnow.com.au/realestate/news/residential-building-starts-in-wa-at-record-highs-according-to-abs-data/story-fnhlgriw-1227091731413

The climate now is catastrophic in comparison

https://sourceable.net/residential-construction-in-perth-hits-a-brick-wall/

For you to pretend, or worse, believe that housing in Perth is not in dire straights you are embarrassing yourself. The writing is on the wall, Perth is in crisis and it has the very real prospect of collapsing in spectacular fashion, it may not but unfortunately it has the potential.
Edited by Chris, 19 Aug 2015, 10:56 AM.
Profile "REPLY WITH QUOTE" Go to top
 
Perthite
Member Avatar


Chris
19 Aug 2015, 10:55 AM
Not true at all Matthew, starts were at record high during 2013 into 2014, a period where sentiment was still unexplainable high

http://m.perthnow.com.au/realestate/news/residential-building-starts-in-wa-at-record-highs-according-to-abs-data/story-fnhlgriw-1227091731413

The climate now is catastrophic in comparison

https://sourceable.net/residential-construction-in-perth-hits-a-brick-wall/

For you to pretend, or worse, believe that housing in Perth is not in dire straights you are embarrassing yourself. The writing is on the wall, Perth is in crisis and it has the very real prospect of collapsing in spectacular fashion, it may not but unfortunately it has the potential.
That is why stimulus talk is already out in the open.

https://au.news.yahoo.com/thewest/wa/a/29256416/new-projects-shot-in-arm-for-economy/

Matt. Does a 300k house and land package cost the same if you get 20k cash back?
Edited by Perthite, 19 Aug 2015, 11:39 AM.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Jimbo
19 Aug 2015, 07:27 AM
I don't think he said that. I think he was trying to say that when you give something away (like a free fence or carpets), you reduce your margin but keep the price the same.

What he didn't say was what happens to the 50% of current builders who don't manage to tempt a buyer with a trinket or two?

What happens to them? And their employees? And the money they would have spent in the shops if they weren't on the dole?

What happens?

Simple.
Sure?

1) This is just a fight for market share on reduced land sales that will drive prices up not down

Looks like that's what he said to me
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


Matthew
19 Aug 2015, 01:00 AM
1) This is just a fight for market share on reduced land sales that will drive prices up not down

2) If you think any bonuses aren't priced in, you are every bit the greater fool.
Lol.
It’s a fight for market share in a collapsing market.
Everyone in the supply chain is coming under pressure.
Fact is the that it wont be a war of attrition as Jimbo suggests. Wages are sticky and supplier prices will be fairly sticky too. I expect to see mass redundancies and supplier closures or mothballing with those with the healthiest reserves to weather the storm left standing.
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
Profile "REPLY WITH QUOTE" Go to top
 
Matthew
Default APF Avatar


newjez
19 Aug 2015, 12:29 PM
Sure?

1) This is just a fight for market share on reduced land sales that will drive prices up not down

Looks like that's what he said to me
falling demand for new builds will increase pressure on remaining stock within the overall market, inevitably leading to increased property prices. Economics 101 - when demand exceed supply prices rise.
Veritas
19 Aug 2015, 01:17 PM
Lol.
It’s a fight for market share in a collapsing market.
Everyone in the supply chain is coming under pressure.
Fact is the that it wont be a war of attrition as Jimbo suggests. Wages are sticky and supplier prices will be fairly sticky too. I expect to see mass redundancies and supplier closures or mothballing with those with the healthiest reserves to weather the storm left standing.
everyone in the supply chain will come under some pressure, then there will be the hidden savings (reduced selection allowance for tiles, cheaper light fittings, cheaper doors, cheaper roofing selection, cheaper paving selection cheaper drawer slides and hinges etc) and things that used to be includes become options attracting the builders mark-up.

It is possible for builders to deliver $30,000 of "savings" without costing themselves a cent.
Perthite
19 Aug 2015, 11:35 AM
That is why stimulus talk is already out in the open.

https://au.news.yahoo.com/thewest/wa/a/29256416/new-projects-shot-in-arm-for-economy/

Matt. Does a 300k house and land package cost the same if you get 20k cash back?
Is that a rhetorical question? If you pay $300,000 and get $20,00 of "inclusions" then the house costs $300k. If the house costs $300,000 and you get $20,000 back in cash, then the house costs $280k. However don't confuse yourself into thinking the builder loses money on the deal.
Edited by Matthew, 19 Aug 2015, 03:46 PM.
My only hope for my three boys is that they turn out nothing at all like Chris.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Create your own social network with a free forum.
Learn More · Sign-up for Free
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 2
  • 15



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy