Its great how you can see how it all works thanks to computers!
[chart snipped]
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.
Your chart is nearly 18 months out of date. FHB proportion is back up to ~20% now. The pull forward effect of the FHBG boost has run it's course.
PS: Collapsing new house construction in the fact of 1.5% pa population growth and an economy with growing GDP is not good news for housing bears, especially in Sydney. It means the costs of development are too high vs the risk / return for developers, and/or there is simply not enough land available to build where the demand lies - the opposite of what you would expect if we are in the midst of a great housing bubble. This will continue to put upward pressure on rents, which create a floor under and will flow through ultimately to dwelling prices in a number of ways. Ie no investor rush for the exits, upsurge in PI demand as / when confidence ticks up, and ongoing pressure in the FHB segment forced by rising rental costs while there is a relatively flat market for buying.
PS: Collapsing new house construction in the fact of 1.5% pa population growth and an economy with growing GDP is not good news for housing bears, especially in Sydney.
Collapsing new house construction in the fact of 1.5% pa population growth and an economy with growing GDP is not good news for anybody but it still means that housing bubble popped and bears were right.
Same thing was going on in California, Arizona, Ireland, Florida, Spain and many other places in 2006 and 2007 or Japan in mid 80s. It only means there is a huge oversupply of homes out there that nobody wants to buy.
Quote:
It means the costs of development are too high vs the risk / return for developers, and/or there is simply not enough land available to build where the demand lies - the opposite of what you would expect if we are in the midst of a great housing bubble. This will continue to put upward pressure on rents, which create a floor under and will flow through ultimately to dwelling prices in a number of ways. Ie no investor rush for the exits, upsurge in PI demand as / when confidence ticks up, and ongoing pressure in the FHB segment forced by rising rental costs while there is a relatively flat market for buying.
All this is just whish list of an average overleveraged property fool. This never happened anywhere in the world so it will not happen here.
Your chart is nearly 18 months out of date. FHB proportion is back up to ~20% now. The pull forward effect of the FHBG boost has run it's course.
PS: Collapsing new house construction in the fact of 1.5% pa population growth and an economy with growing GDP is not good news for housing bears, especially in Sydney. It means the costs of development are too high vs the risk / return for developers, and/or there is simply not enough land available to build where the demand lies - the opposite of what you would expect if we are in the midst of a great housing bubble. This will continue to put upward pressure on rents, which create a floor under and will flow through ultimately to dwelling prices in a number of ways. Ie no investor rush for the exits, upsurge in PI demand as / when confidence ticks up, and ongoing pressure in the FHB segment forced by rising rental costs while there is a relatively flat market for buying.
Just interesting to see how it appears to pull money out of future markets man. Take a chill pill. They Govt will get right back in there in July to buy votes and give you a triple FHB boost don't worry as well as a dozen other schemes and tax changes to promote new housing instead of investment in existing housing.
Ummm... doesn't new house construction provide a mechanism for passing the debt load to the next generation? population growth lol.
Really.... really? Still? Still with the 'Australia is different we have population growth'
Ireland 2.4% pop growth - crash US 1% - crash Spain 1.71% - crash
If population growth was a measure of anything besides productive capacity of an economy (someone mentioned this in a topic dam wish I remembered which), I would agree with you. Its not. Allow your mind to expand man.
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."
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