It is not Dave. If you were a betting man you could use past data to estimate the odds of prices falling versus the odds of prices rising and clearly the longshot gamble is to bet on prices falling, Melbourne has posted annual price falls maybe 5 times over the past 30 years
Don't get too caught up with the cheap house dreamers on two bit internet forums that censure opposing views. I don't think Melbourne will go crazy price wise but I cannot see prices falling from here as they are just now reaching levels of prices a good few years ago.
Skamy - I read a post recently where you criticised bears like Perthite for being vultures descending on the poor unfortunate victims of Mandurah whose houses have lost money.
I really find it hard to take this stance when you repeatedly set these people up for the kill. If you advise people to lose money, then you can hardly be critical when others take that money off them.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
The best time to buy is when you am afford to and you find the right property.
Hmmm I beg to differ - let's wheel out an anecdote.
In 2007 my friend and his young wife in the UK could 'afford' £270k for a 1 bedroom shoebox in a not so salubrious part of London.
5 years and 1 baby later he's almost out of negative equity, so any day should find someone wielding a gov't guarantee who's willing to pay enough for him to move one rung up the elusive property ladder. Only his piddling little deposit is probably going to be worthless if a much touted property boom kicks off soon.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Skamy - I read a post recently where you criticised bears like Perthite for being vultures descending on the poor unfortunate victims of Mandurah whose houses have lost money.
I really find it hard to take this stance when you repeatedly set these people up for the kill. If you advise people to lose money, then you can hardly be critical when others take that money off them.
I am not advising, I am just calculating the odds for each scenario. I never advise people to lose money in fact the opposite. Anyone who believed me over a year ago when I said that it looked like Perth was no longer a buyers market would be up 11% by now. I simply told of the way I experienced the Perth market in June 2012.
I think it is dreadful that two bit internet doom and gloom sites tell kids of today that there is this big chance that house prices will fall, when it is a tiny risk that has happened less than a handful of times in the past 3 decades. It is much more risky to wait as there are much better odds that house prices will rise based of historical market behaviour.
It genuinely concerns me, I know in my heart that some of these young people will end up very bitter at the charlatans selling them this imaginary highly unlikely cheap house fantasy.
BTW I did say to Perthite that I had jumped the gun with my vulture diatribe as I had mistakenly thought he was celebrating this Mandura report.
Soul Torpor
6 Sep 2013, 05:47 PM
Hmmm I beg to differ - let's wheel out an anecdote.
In 2007 my friend and his young wife in the UK could 'afford' £270k for a 1 bedroom shoebox in a not so salubrious part of London.
5 years and 1 baby later he's almost out of negative equity, so any day should find someone wielding a gov't guarantee who's willing to pay enough for him to move one rung up the elusive property ladder. Only his piddling little deposit is probably going to be worthless if a much touted property boom kicks off soon.
We also lost half the paper value of our home in Essex during the early 1990s. But it all came back and we ended up with an average annual growth of almost 10% when we sold up. IMHO, your friend has done well to hold on during the downturn and I really hope his investment will now start to give him some good returns.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
I am not advising, I am just calculating the odds for each scenario. I never advise people to lose money in fact the opposite. Anyone who believed me over a year ago when I said that it looked like Perth was no longer a buyers market would be up 11% by now. I simply told of the way I experienced the Perth market in June 2012.
I think it is dreadful that two bit internet doom and gloom sites tell kids of today that there is this big chance that house prices will fall, when it is a tiny risk that has happened less than a handful of times in the past 3 decades. It is much more risky to wait as there are much better odds that house prices will rise based of historical market behaviour.
It genuinely concerns me, I know in my heart that some of these young people will end up very bitter at the charlatans selling them this imaginary highly unlikely cheap house fantasy.
BTW I did say to Perthite that I had jumped the gun with my vulture diatribe as I had mistakenly thought he was celebrating this Mandura report.
Skamy, I really hope you didn't give your Irish relative the kiss of death with the same hare brained advice.
Ireland 2007
Quote:
SO THE sky is falling in again. The Irish stock market is apparently in meltdown, because of the housing market, which is also apparently in meltdown. The level of property horror stories is at an all-time high and everyone is tripping over each other to predict even greater gloom than the next guy.
Tell you what, I think I know what I'd be doing if I had money, and if I wasn't already massively over-exposed to the property market by virtue of owning a reasonable home. I'd be buying property. In fact, I might do it anyway. You don't even need money to buy property these days. Imagine if you walked into the bank and said, "Listen, guys. I want to gamble a million on the stock market. I have 100 grand myself, will you guys lend me 900 grand at really low rates and I'll pay you back over 40 years? In fact I won't even pay off the principal, I'll just pay off the interest." They'd laugh you out of it. But substitute gambling on the property market for gambling on the stock market and they'll fall over themselves to give it to you.So why would I be buying property right now if I could? Well, for starters, property is good value these days. It's certainly cheaper than it was six months ago. While the official figures on aggregate surveys are talking about drops of two to three per cent in property prices, anyone who is out there in the jungle will tell you that it is a buyer's market bigtime.
If you're smart and you have balls and you're dealing with the right buyer you can knock 10 per cent or more off the price of a house these days. And that could well be a house that has already been reduced in price by 10 per cent or more in the last six months. Because while the big picture suggests a 3 per cent drop, the big picture is made up of lots of little pictures and you don't knock 3 per cent off the price of your house if you can't sell it. Individual house prices fall in substantial chunks.
John D Rockefeller famously said that the way to make money is to buy when blood is running in the streets. Buying into a boom is kind of a mug's game, and, as we know, anyone can do it. The really smart and ballsy guys are the guys who are buying when no one else is. The guys who made real money on property in Ireland were the ones who bought property before everyone else, when it was unfashionable. They were in a minority. Most people who bought property bought it recently, in a seller's market, for top dollar. Which makes no sense when you think about it. When you think about it, it makes sense to buy property now. Though of course some people say it always makes sense to buy property. There is no such thing as a good or a bad time to buy. It's always a good time to buy.
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
Skamy, I really hope you didn't give your Irish relative the kiss of death with the same hare brained advice.
Don't be silly Veritas, just because markets do crash once in a while does not mean you should overestimate the odds of it happening again. Dublin is growing nicely again now. Didn't prices rise 8% last year.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Skamy, I really hope you didn't give your Irish relative the kiss of death with the same hare brained advice.
Don't be silly Veritas, just because markets do crash once in a while does not mean you should overestimate the odds of it happening again. Dublin is growing nicely again now. Didn't prices rise 8% last year.
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
Skamy, I really hope you didn't give your Irish relative the kiss of death with the same hare brained advice.
I think that Skamy is just pointing out that although there is downside risk for buyers, there is upside risk as well.
If only her brain farts were so reasonable Peter.
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
I know Veritas it is so sad that you show yourself up like this.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Monique Sasson Wakelin | Tired and worn arguments are once again being trotted out to suggest regional weaknesses in the residential property market.
Last week, Angie Zigomanis of research house BIS Shrapnel told property investors to steer clear of the Melbourne market, saying, “There are more estates coming onto the market so there’s not as likely to be as much pressure on prices from a supply perspective.”
It was following on from another expert, wHeregroup buyer’s agent Todd Hunter, claiming low Melbourne yields made the Victorian capital a poor investment proposition.
“Properties are only achieving 3 per cent to 5 per cent yield and that’s terrible. You may as well have your money in the bank in a cash account.”
These are tired and worn arguments that once again are being trotted out to suggest a regional weakness.
Now I’m a Melbourne girl, but I don’t protest because of some parochial self-interest. I take issue with this forecast because the reality is that we are likely to see some reasonable capital growth in Melbourne over the next year.
There are indeed some oversupply issues in the high-rise inner city apartment market and in housing estates in fringe suburbs of Melbourne, but they are localised problems and not major factors for the whole market.
And anyone who focuses on yield as the yardstick of whether property is a worthy asset class to invest in has got it seriously wrong. Investing in property should primarily be about capital growth, not earning an acceptable percentage yield.
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