Since you seem to know so much would you care to enlighten us all on how
much it would be worth?>
We bought a house in Melbourne for $140k in '98
Now its worth about $300k in 2003.
You do the maths
"Phil Herring" <phil_herring@no-spam> wrote in message
news:3F08038E.BC46A02A@no-spam
> http://www.smh.com.au/articles/2003/07/05/1057179204746.html
>
> ...I think this shows how deluded people have become about property
> values. Fundamentals? The relationship between income, interest rates
> and mortgages? The utility value of property? They've all been swept
> away in a wave of speculative euphoria. Extrapolate price gains for the
> past two years and see where you end up; that's all the analysis you'll
> need.
>
> Mind you, it *is* the Sunday paper, so it's not serious journalism.
>
>
> -- Phil
>
"Stranger" <memberservices@no-spam> wrote in message news:<3f08bed4$0$30822$afc38c87@no-spam>...
> Since you seem to know so much would you care to enlighten us all on how
> much it would be worth?>
> We bought a house in Melbourne for $140k in '98
>
> Now its worth about $300k in 2003.
>
I'll tell you how much it will be worth. You're looking at around
$160-170K in a few years time. If you're lucky.
Try and sell your place for this much in 2-3 years time and see how
many offers you get. put a note in your diary and let us all know.
When the property crash comes it'll see investors pulling out faster
than when they got in, a vast majority will never return and this will
end with house prices lower than they would have been had there been
no bubble in the first place.
I wont even bother explaining why, Just go back read some of the good
posts of late, plus the links from BJ foster, read some unbiased (ie
not done by RE agencys) research reports, look at real earnings, look
at characteristics and consequences of past bubbles in history, then
for good measure read the latest from Ross Gittins
http://www.smh.com.au/articles/2003/07/01/1056825394151.html
Once you've done that you can tell me I'm crazy if you like.
Its not even a matter of trying to guess "if" it is not strictly a
question of "when and by how much" that we should all be debating.
The Australian property market is nothing more than dependant on the
overall world economy. Anyone with a large percentage of their own
wealth tied up in a bubble like asset class that makes up .0001% of
the worlds wealth is in big trouble.
Any small nudge could start this avalance - the recent increase in
unemployment (6.4% v expected 6.2%) in the weak looking US will go
further by reducing imports in a country thats already producing well
below capacity. The weaker US dollar will hit Australian exports hard
as they arent getting as much cash for the products that they are
already selling less of anyway.
This will affect company earnings and unemployment here will rise as
cos frantically try to reduce costs. Next thing you know we are in a
recession that low interest rates just wont stop. Japan gave us a
warning which is being ignored. Will it take the same thing happening
in the US to show us that lowering interest rates just aint going to
prevent it.
We all know that when the US sneezes the rest of the world catches a
cold. So what would happen to the rest of the world if the US were to
collapse in a crumpled heap.
edward von stroom <storminalong@no-spam> wrote in message news:97ecb322.0307070253.4e8a4f3c@no-spam
> Stranger <memberservices@no-spam> wrote
>> Since you seem to know so much would you care
>> to enlighten us all on how much it would be worth?
>> We bought a house in Melbourne for $140k in '98
>> Now its worth about $300k in 2003.
> I'll tell you how much it will be worth. You're looking at
> around $160-170K in a few years time. If you're lucky.
You're completely off with the fairys again.
If it is really worth $300K currently, the worst that might
happen is that it stays at about that for the next few years.
We have never ever seen drops like you are hyperventilating
about with normal owner occupied housing in Melburg.
> Try and sell your place for this much in 2-3 years time and see how
> many offers you get. put a note in your diary and let us all know.
Yeah, not a bad idea, and you'll look very silly indeed.
> When the property crash comes it'll see investors
> pulling out faster than when they got in,
Not with normal owner occupied housing they wont.
Even if your silly hyperventilating does eventuate,
why would he 'pull out faster' when the price he
can get is STILL better than what he paid for it and
he presumably still needs somewhere to live etc.
> a vast majority will never return and this will end
> with house prices lower than they would have
> been had there been no bubble in the first place.
It never happens like that here with normal owner
occupied housing. Because people always need
somewhere to live and there wouldnt be any point in
flogging the house in a market as depressed as that.
> I wont even bother explaining why,
You cant.
> Just go back read some of the good posts of late,
> plus the links from BJ foster, read some unbiased
> (ie not done by RE agencys) research reports,
Which dont say anything like that silly hyperventilating
you are doing with normal owner occupied housing.
> look at real earnings, look at characteristics
> and consequences of past bubbles in history,
Which have never produced anything like that silly hyperventilating
you are doing with normal owner occupied housing in this country.
> then for good measure read the latest from Ross Gittins
> http://www.smh.com.au/articles/2003/07/01/1056825394151.html
Which doesnt say anything like that silly hyperventilating
you are doing with normal owner occupied housing.
> Once you've done that you can tell me I'm crazy if you like.
Or we can rub your nose in the FACT that you cant even
manage to work out the difference between inner city
apartment development and normal owner occupied housing
> Its not even a matter of trying to guess "if" it is not strictly a
> question of "when and by how much" that we should all be debating.
Wrong. As always, with normal owner occupied housing
> The Australian property market is nothing more
> than dependant on the overall world economy.
Wrong. As always, with normal owner occupied housing
> Anyone with a large percentage of their own wealth
> tied up in a bubble like asset class that makes up
> .0001% of the worlds wealth is in big trouble.
Have fun explaining how thats been true for well over
half a century now and there has been no 'big trouble'
with normal owner occupied housing in this country.
> Any small nudge could start this avalance
Have fun explaining how that has NEVER happened
in well over half a century now with normal owner
occupied housing in this country.
> - the recent increase in unemployment (6.4% v expected 6.2%)
> in the weak looking US will go further by reducing imports in a
> country thats already producing well below capacity.
Got SFA to do with the price of normal
owner occupied housing in this country.
> The weaker US dollar will hit Australian exports hard
> as they arent getting as much cash for the products
> that they are already selling less of anyway.
Got SFA to do with the price of normal
owner occupied housing in this country.
> This will affect company earnings
Only those exporting, stupid.
> and unemployment here will rise as cos frantically try to reduce costs.
Only those exporting, stupid. Even you must have noticed
that thats a tiny part of our total economy now.
> Next thing you know we are in a recession
> that low interest rates just wont stop.
We're actually booming along instead.
> Japan gave us a warning
Like hell it ever did. The problem with
their economy is NOTHING like ours.
> which is being ignored.
Because its irrelevant.
> Will it take the same thing happening in the US to show
> us that lowering interest rates just aint going to prevent it.
We aint even considering lowering our interest rates for that reason.
> We all know that when the US sneezes
> the rest of the world catches a cold.
Got SFA to do with the price of normal
owner occupied housing in this country.
> So what would happen to the rest of the world
> if the US were to collapse in a crumpled heap.
Taint gunna happen, you watch.
There were plenty hyperventilating just as mindlessly in the
last few decades. Boy did they look stupid with it didnt happen.
PRECISELY the same thing will happen now, you watch.
So property prices going down?
HAH!
According to what you are saying I could probably get a $500,000 apartment
in few years for $200-300k! :D
Remember when people come to Aus they also buy houses.
House prices dont go down, unless theres problems eg. Phone tower etc.
Even then it will be up or the same.
I agree with what Rod says, Your off with the fairies :)
"edward von stroom" <storminalong@no-spam> wrote in message
news:97ecb322.0307070253.4e8a4f3c@no-spam
> "Stranger" <memberservices@no-spam> wrote in message
news:<3f08bed4$0$30822$afc38c87@no-spam>...
> > Since you seem to know so much would you care to enlighten us all on how
> > much it would be worth?>
> > We bought a house in Melbourne for $140k in '98
> >
> > Now its worth about $300k in 2003.
> >
>
> I'll tell you how much it will be worth. You're looking at around
> $160-170K in a few years time. If you're lucky.
> Try and sell your place for this much in 2-3 years time and see how
> many offers you get. put a note in your diary and let us all know.
> When the property crash comes it'll see investors pulling out faster
> than when they got in, a vast majority will never return and this will
> end with house prices lower than they would have been had there been
> no bubble in the first place.
> I wont even bother explaining why, Just go back read some of the good
> posts of late, plus the links from BJ foster, read some unbiased (ie
> not done by RE agencys) research reports, look at real earnings, look
> at characteristics and consequences of past bubbles in history, then
> for good measure read the latest from Ross Gittins
> http://www.smh.com.au/articles/2003/07/01/1056825394151.html
>
> Once you've done that you can tell me I'm crazy if you like.
>
> Its not even a matter of trying to guess "if" it is not strictly a
> question of "when and by how much" that we should all be debating.
>
> The Australian property market is nothing more than dependant on the
> overall world economy. Anyone with a large percentage of their own
> wealth tied up in a bubble like asset class that makes up .0001% of
> the worlds wealth is in big trouble.
>
> Any small nudge could start this avalance - the recent increase in
> unemployment (6.4% v expected 6.2%) in the weak looking US will go
> further by reducing imports in a country thats already producing well
> below capacity. The weaker US dollar will hit Australian exports hard
> as they arent getting as much cash for the products that they are
> already selling less of anyway.
> This will affect company earnings and unemployment here will rise as
> cos frantically try to reduce costs. Next thing you know we are in a
> recession that low interest rates just wont stop. Japan gave us a
> warning which is being ignored. Will it take the same thing happening
> in the US to show us that lowering interest rates just aint going to
> prevent it.
>
> We all know that when the US sneezes the rest of the world catches a
> cold. So what would happen to the rest of the world if the US were to
> collapse in a crumpled heap.
Stranger wrote:
> According to what you are saying I could probably get a $500,000 apartment
> in few years for $200-300k! :D
That could well happen; it depends on how many people are around who can
afford $500K. If there's nobody buying, what do you think will happen to
prices? An economic downturn, followed by higher unemployment, could
easily acheive this. Currently, the world economy looks decidedly shaky;
as others have pointed out, if the big world economies go down, we
might, too.
> Remember when people come to Aus they also buy houses.
Actually, they usually rent; they don't have enough money to buy.
They'll buy eventually, but usually where prices are low. Migrants
aren't the richest people, as a rule.
However, while I agree that migration significantly impacts property
prices here, I don't think that it's been as significant as a long run
of falling interest rates, investment money flowing out of the stock
market, low unemployment and outright greed. Real (and rather obvious)
factors have driven property prices up; real forces can drive them down,
too.
> House prices dont go down, unless theres problems eg. Phone tower etc.
Actually, median Sydney prices fell in the recession of 1990/1991, right
after the boom of the late 1980s. They then didn't start rising above
inflation again until about 1995, or thereabouts. This meant falling
prices, in real terms, from 1990 to 1995; they didn't catch up, in real
terms, until the late 1990s. These facts are well documented, as five
minutes with Google will demonstrate.
-- Phil
On Tue, 8 Jul 2003 21:03:44 +1000, "Stranger"
<memberservices@no-spam> wrote:
>2) The surrounding area has new houses and new developments.
So as a consequence supply in the area is going up,
which can't be seen as a positive in this case.
regards Xylord