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Supply and demand. Sorry to repeat myself.
Topic Started: 4 Aug 2013, 11:13 AM (17,684 Views)
Foxy
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Zero is coming...

If someone has the money to have 10 houses and 9 of them are empty at any one time, who's business is it anyway.
Their money, their houses.
Go build or buy your own.
Australia is a huge by any standards country.

Peter from Perth
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Veritas
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Shadow
20 Aug 2013, 09:48 AM
Sober
20 Aug 2013, 06:05 AM
Your assertion appears at odds with your quoted sources:

- your second source gives a 14.5% all-Ireland vacancy rate, yet only "one in ten dwellings was vacant" (i.e. 10%) for Dublin.

- the map in your third source shows the satellite counties for Dublin to be even less affected than Dublin itself, and far less affected than the red-coloured counties that are rather distant from Dublin (and from which a Dublin commute would be decidedly impractical)
I don't see any conflict. There was overbuilding in Dublin and the satellite towns around Dublin. 10% vacant dwellings is historically high for Dublin. Dublin is not a place where many people have holiday homes or that has historically had such a high vacancy rate. The south and west of Ireland are sparsely populated and that's where most people have their holiday homes. These areas historically do have high vacancy rates for this reason (but also now exacerbated by the construction boom).
Point is this: Why did places which definitely didn't have an oversupply ( Dublin proper) have a massive housing bust?
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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Shadow
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Evil Mouzealot Specufestor

Veritas
20 Aug 2013, 12:11 PM
Why did places which definitely didn't have an oversupply ( Dublin proper) have a massive housing bust?
Supply and demand. The construction boom resulted in an oversupply in Dublin and Dublin's commuter towns. The oversupply in commuter towns had a big impact. If there is an empty housing estate half an hour drive from Dublin where houses are going for half price then this is going to have a big impact on demand in Dublin itself. Don't forget how small Ireland is. You can drive half way across Ireland in an hour. You can't even drive from one end of Sydney to the other in an hour. Ireland is about the same size as Tasmania.

Posted Image
Edited by Shadow, 20 Aug 2013, 12:37 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Foxy
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Zero is coming...

Shadow
20 Aug 2013, 12:23 PM
Supply and demand. The construction boom resulted in an oversupply in Dublin and Dublin's commuter towns. The oversupply in commuter towns had a big impact. If there is an empty housing estate half an hour drive from Dublin where houses are going for half price then this is going to have a big impact on demand in Dublin itself. Don't forget how small Ireland is. You can drive half way across Ireland in an hour. You can't even drive from one end of Sydney to the other in an hour. Ireland is about the same size as Tasmania.

Posted Image
I think we may need another city in Australia.
A Utopia.
And only first home buyers can buy there.
Get a China solution.
Give the younger generation a go.
Peter from Perth
Think of it as an area where the young people can get first go at a unit or house of their own.
Not have to go through someone else to get it.
Socialist utopia.
Maybe not. ;)
If only we could.
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Admin
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Quote:
 
The most overlooked factor of property investing: Supply

By Terry Ryder
Monday, 09 December 2013

Supply is the factor most over-looked by property investors.

Those who take the time to do some research before tossing a few hundred thousand at an investment property tend to focus on demand, with scant regard for the flipside of the growth equation.

Some organisations that purport to advise investors preach a simplistic follow-the-population-growth strategy.

If high population growth was the core element in a good locational choice, the leading capital growth performers in the past five years would have been the Gold Coast and Wyndham City in the south-west of Melbourne. Gladstone, boosted by massive new demand from the influx of tens of thousands of gas project employees, would have soaring prices right now.

The opposite is true in those markets. The too-often forgotten factor is supply.

The Gold Coast has had five years of falling property values because of too much supply, which overpowered the impact of high population growth. Wyndham City, which overtook the Gold Coast as the municipality with the greatest annual additions to its population, has recorded no growth in prices in the past three years, because of an excess of house-and-land packages – ultimately flogged off to distant investors by dodgy marketing companies on behalf of desperate developers.

Gladstone, after recording high growth in rentals and prices in 2011 and 2012, has seen rising vacancies and sharp downturn in prices because developers went overboard yet again.

So there are two key pieces of information investors must examine before committing to a target location: vacancy rates and building approvals.

The rapidly-growing location of Gracemere is a good case study. Gracemere is about 10 kilometres west of Rockhampton, one of our favoured regional centres because of its growth factors and affordability. The population of Gracemere was around 5,000 at the 2006 Census and 8,400 five years later.

Earlier this year senior Hotspotting writer Bob Wilson visited Gracemere as part of a research safari through Queensland and the Northern Territory. He commented about Gracemere: “What was once a sleepy country town surrounded by grazing paddocks has become a development free-for-all as investors buy up those paddocks and built houses on them.”

The problem is that they’ve built too many. Way too many. One of our clients phoned last week to tell us: “Gracemere has just been smashed by developers. There’s a massive oversupply.”

He said there were hundreds of empty rental properties and rents have dropped sharply. A quick check with SQM Research shows that the vacancy rate in the Gracemere postcode has risen from around 2% late last year to 9% now. Australian Property Monitors data shows that median price growth has stalled recently and is starting to go into reverse.

In a recent update of our research on Rockhampton, we noted that residential building approvals in the Rockhampton Regional Council, which includes Gracemere, in the 2012-13 financial year were almost double the year before.

Some would see that as an attraction, being indicative of a growth centre. I saw it as a warning signal, that developers might be making the same mistake they made in Mackay and Gladstone, generating over-supply.

Gracemere is increasingly an outlying suburb of Rockhampton so its over-supply issues are likely to impact the wider region. Investors would be wise to keep on eye on vacancies there.

Read more: http://www.propertyobserver.com.au/hotspots/the-most-overlooked-factor-of-property-investing-supply/2013120966844
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mel
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^^ fantastic article by Terry Ryder. Well deserving of serious discussion on a thread of its own in my opinion. If Leith and Shazza had their way, people who live on the city fringe with existing mortgages, because they can't afford prime locations would get shafted all the more.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
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Count du Monet
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foxbat101
20 Aug 2013, 10:46 AM
If someone has the money to have 10 houses and 9 of them are empty at any one time, who's business is it anyway.
Their money, their houses.
Go build or buy your own.
Australia is a huge by any standards country.

Peter from Perth
The empty quarter of Saudi Arabia looks good as well, the population can be counted on fingers and toes.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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Foxy
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Zero is coming...

it is all just supply and demand.
Peter from Mount Lawley
:pop:
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Foxy
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Zero is coming...

please watch this clip,
it is so simple.
Supply and demand.


http://www.youtube.com/watch?v=0uLz8o41mUg

Peter
http://www.youtube.com/watch?v=_eayXd8ZFH8
Edited by Foxy, 17 Dec 2013, 04:30 AM.
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