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Home sales sink to lowest since 1994; SMH
Topic Started: 30 Apr 2012, 12:35 PM (1,280 Views)
muzza
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Home sales sink to lowest since 1994
April 30, 2012 - 11:22AM



Housing construction is at a low ebb as worries about the economy's health persist. Photo: Glenn Hunt

New home sales have plunged to their lowest since May 1994 in the latest sign of Australia's struggling real estate sector.

Sales of new homes sank 9.4 per cent in March to 5443 homes nationwide, following a 3 per cent rise in February, according to the Housing Industry Association. Monthly sales were in excess of 7500 homes as recently as May.

* Inflation drop adds to rate cut hopes

“Leading housing indicators such as new home sales are pointing to on-going deterioration in already very weak new home building conditions," said HIA chief economist Dr Harley Dale. "That situation is in turn having a major negative impact on manufacturing and services sectors."

Read more: http://www.smh.com.au/business/home-sales-sink-to-lowest-since-1994-20120430-1xtur.html#ixzz1tU2L3T1o
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hoofarted
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Tent up demand?
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TED BULLPIT
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Wheres my violin ;)
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peter fraser
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muzza
30 Apr 2012, 12:35 PM
Housing construction is at a low ebb as worries about the economy's health persist. Photo: Glenn Hunt

Ah - construction, not overall sales.

Any expressed market opinion is my own and is not to be taken as financial advice
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stinkbug
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There seem to be some recurring themes recently:

1) New building starts are very low
2) Population is increasing (the rate of which may be debatable)
3) Credit is harder to get than at some times past, but is still available
4) Incomes are increasing, but not rapidly
5) Interest rates are likely to fall, but not by much

It seems to me that we've already had certain parts of the market have their falls, but many parts have simply stopped (or slowed) growing. Based on the factors above, it appears that the wildcard may be unemployment. If unemployment is kept under control, I see no reason for major falls, but if unemployment suddenly skyrockets, we'll almost certainly see further falls.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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audas
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stinkbug
30 Apr 2012, 02:33 PM
There seem to be some recurring themes recently:

1) New building starts are very low
2) Population is increasing (the rate of which may be debatable)
3) Credit is harder to get than at some times past, but is still available
4) Incomes are increasing, but not rapidly
5) Interest rates are likely to fall, but not by much

It seems to me that we've already had certain parts of the market have their falls, but many parts have simply stopped (or slowed) growing. Based on the factors above, it appears that the wildcard may be unemployment. If unemployment is kept under control, I see no reason for major falls, but if unemployment suddenly skyrockets, we'll almost certainly see further falls.
And looking at every single factor outside of simply looking at the realestate market then the economy is screwed, ergo realestate.

Not hard really.
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Sweetdish
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audas
30 Apr 2012, 03:49 PM
And looking at every single factor outside of simply looking at the realestate market then the economy is screwed, ergo realestate.

Not hard really.
I dont agree with that.
Some sectors of retail is screwed but I think thats more to do with a structural shift in consumer behaviours (online) rather than a sign of a slowing economy.
Employment overall is still holding up reasonably well.

In my opinion its Europe that would brake the camels back.
I'll give it a 50/50
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WestAussie
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Its great how you can see how it all works thanks to computers!

Posted Image

Its funny how you can see the fhb grant pulling income out of future markets causing prices to rise in the short term and setting themselves up for a massive fall in the future with a reduction of affordability in 04-08. Once the true base supply and income from first home owners is sucked dry expect a collapse with no way to avoid it because you have tapped future incomes dry. I fully expect govt to bring in a triple, or quadruple increase in the grant mid year to keep the big guys up by propping up more little guys. Just to keep it a float for 2 more years since the driving force behind property is first home owners not speculators. You could do it forever if you had infinite money ;-) Inflation anyone? Lets see rates double and watch the market flood and strangle itself no matter which measure govt and investors try to adopt. That's what you get for being greedy and trying to make a market that shouldn't be available for speculators throw its doors wide open.
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davel
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Thing is slowing housing and slowing credit growth will themselves bring about UE. Given the proportion of the Aussie workforce in construction and RE-related sectors, I'm susprised this hasnt already prompted an increase in UE. But it would be logical to think thats coming pretty soon.

Then of course that will make things worse for housing and credit-dependant parts of the market. Thats the problem with RE-driven economies such as US, Ireland, Spain. Aus is not as bad as these, but the same factors are there. Expect lots of infrastructure projects to get kicked off to try to soak up some of this excess labour.
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raveswei
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Population growth, construction and new home sale slow down while credit is still available could only mean one thing – there is a huge oversupply of homes out there that is not attractive to property speculators anymore.
http://popping-bubble.blogspot.com/

Thinking of an Australian property speculator (PI):
Inaction = missing opportunities.
Missing opportunities = losing.
Too much thinking = inaction.
Thinking = missing opportunities.
Therefore thinking = losing.

disgraceful little man Frank Castle owes a house to Salvation Army

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