It's not just 888 visas, but they certainly tipped the balance at the right time. There is a lot of ammunition, fiscal and monetary, to drive house prices up, so it is almost impossible to make bearish predictions when the government/RBA still have unspent stimulus tools.
Seriously 188/888 visas have had no impact on the residential property market and never will except perhaps at the $2M+ bracket.
So far they have issued, what, 5x188 visas? and gotten what? a few hundred expressions of interest?
Direct ownership of Real Estate is not even a qualifying investment for 188/888 visas. (Investment in an ASIC-registered private Management Investment Scheme (MIS) is compliant, and the MIS can invest in real estate, but all the RE interest seems to be in commercial property.)
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Seriously 188/888 visas have had no impact on the residential property market and never will except perhaps at the $2M+ bracket.
So far they have issued, what, 5x188 visas? and gotten what? a few hundred expressions of interest?
Direct ownership of Real Estate is not even a qualifying investment for 188/888 visas. (Investment in an ASIC-registered private Management Investment Scheme (MIS) is compliant, and the MIS can invest in real estate, but all the RE interest seems to be in commercial property.)
Curse your facts and figures getting in the way of my story. :P
Foreign investment and 188/888 visas are two different things. There are other ways the Chines can (and probably are) having an impact on the residential real estate market. They can, after all, buy OTP without any problem - presuming they can get their money out of China.
Aside: We keep hearing about the rate of export of gold from HKG to China mainland. I often wonder what percentage gets walked straight back across the border into Hong Kong and sold for HKD or USD.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
But two years ago you were saying house prices were unaffordable and couldn't get any higher,
They haven't got any higher, not unless you want to ignore 2 years of inflation. Your current dollar value view of asset rises may appear good on a virtual internet forum but it wont help you in the real world where people have to pay insurance and rates.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
They haven't got any higher, not unless you want to ignore 2 years of inflation. Your current dollar value view of asset rises may appear good on a virtual internet forum but it wont help you in the real world where people have to pay insurance and rates.
Again you are ignoring the debt, and the effect of inflation on the debt. You also calculate the return on the price paid for the house, when the initial investment was the deposit plus costs.
If you buy a house for $500K and pay $15k in costs then your investment with a 10% deposit is $65K. If the value of the house rises to $600K over 4 years, then your $65K is now worth $150K. That's a gain of $85K in 4 years on an outlay of $65K. How does that compare with gold?
If you need a house anyway and the repayments and holding costs are similar to a market rent, then that $85K is a pretty good return on the initial investment. It's even better when you factor in the natural increase in market rentals, wages increases, and diminishing debt. This is the area seldom discussed by housing bears. Home buyers don't need high price inflation to build wealth. Periods of modest growth are fine.
Any expressed market opinion is my own and is not to be taken as financial advice
Again you are ignoring the debt, and the effect of inflation on the debt. You also calculate the return on the price paid for the house, when the initial investment was the deposit plus costs.
If you buy a house for $500K and pay $15k in costs then your investment with a 10% deposit is $65K. If the value of the house rises to $600K over 4 years, then your $65K is now worth $150K. That's a gain of $85K in 4 years on an outlay of $65K. How does that compare with gold?
If you need a house anyway and the repayments and holding costs are similar to a market rent, then that $85K is a pretty good return on the initial investment. It's even better when you factor in the natural increase in market rentals, wages increases, and diminishing debt. This is the area seldom discussed by housing bears. Home buyers don't need high price inflation to build wealth. Periods of modest growth are fine.
Catweasel say whew.
That a compelling the narrative,
for a mouse ears,
especially when it hear about a "natural the increases,"
because it a money for the nothing,
and it a "time in a market,"
and give mouse future the options.
And should be the fine and the dandy,
because that a how a economics the work,
until system break under pressure for master to the provide.
It's not just Chinese buyers in Sydney. I've never been busier writing business for people buying in country NSW and Victoria. Even in Qld it's starting to get hot although I've not seen any crazy prices here yet.
It's convenient to blame it all on the Chinese, but they aren't the only ones buying.
Places are selling in my area of Brisbane better than a year ago. Haven't noticed any large asking price increases but those sold 2-6 months ago are at slightly better prices.
Anecdotally, I can also speak for the craziness of Sydney's south east (Maroubra). I've been to several auctions of the last few months in my local area. However the last month has had frenzied bidding. Quick opening bids at high prices and en continuing to high final prices. We've had friends who have thought they were certain to get places and then the opening bid has been beyond their maximum.
The truth is that nobody can comprehend whether a price over a million pounds is good value or not. They can, however, compare their current rent, with the interest on a mortgage right now. I believe the price is of low importance but the monthly payments give people confidence and ammunition.
Behavioural economics really.
Collecting desperation. Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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Only improvement was ducted air-con said the article....
