Australian property 'calamity' is coming

Discussion in 'Australia, NZ, Pacific' started by scarlet witch, May 30, 2017.

  1. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    Australian's have experienced their property values booming... and booming...for a long time now. Are we due a correction? Personally I've been waiting for a correction for the past couple of years, the government also hinted they wanted to do away with the negative gearing scheme, but obviously changed their mind as they'll be blamed for a property market crash, which would undoubtedly follow the scaling down or abolishment of the negative gearing scheme.

     
  2. crank

    crank Well-Known Member

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    Hope so. I'm looking to buy.
     
  3. Bowerbird

    Bowerbird Well-Known Member

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    So would I - which makes three of us ready to invest so - no the property market will be buoyed somewhat. Brisbane rents have plummeted. So flat rental market which means Brisbane might see some fall

    There are a lot of overseas investors in our property markets though
     
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  4. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    Interesting is that the inflated Chinese property market is causing a second bubble in Australia. Young Chinese priced out of the Chinese property market find our prices more than affordable. If Trump starts a war in North Korea, we may see the whole house of cards come tumbling down (pun intended)

    How China's real estate bubble pushes up prices in Australia

    http://www.smh.com.au/comment/how-c...shes-up-prices-in-sydney-20170522-gwa9w7.html



    And how much are they buying...

    regulations to protect Australia not enough

     
    Last edited: May 30, 2017
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  5. robot

    robot Active Member

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    I think part of the problem is that population is going up faster than new land is being released. Ending -ve gearing would help but is not the whole answer. I think the expenses of buying and selling land should be less. For example stamp duty should be removed for everyone. That way when children move out of home it is worthwhile to sell the big house and buy a small apartment. It should also be easier to build a second (or even a third) house on a large block. That way two families can live where only one used to live. Two stories should be standard.
     
  6. Sallyally

    Sallyally Well-Known Member Donor

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  7. slipperyfish

    slipperyfish Well-Known Member

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    The Chinese have moved from commercial bricks and mortar into domestic bricks and mortar for two reasons.

    1. It has become affordable for high middle class Chinese to afford in solo terms, broadening the consumer base in the median price bracket in the three major cities, and perhaps you could include Canberra, Newcastle, Wollongong to be fair. Chinese love to accumulate property wealth. They wont stop until we change the rules.

    2. The oversupply of both commercial and apartment developments have narrowed both the market and the profit of such ventures. In regards to commercial. The commercial scene in Australia is starting to shift to suit the changing retail and manufacturing scene locally. Bricks and mortar retail seem to be on the nose as the younger generations are drawn deeper into cyber shopping. This in turn is devaluing showroom real estate, but in some ways is enhancing back street warehousing.

    For what it is worth, the real estate bubble isn't Australia wide, and never has been. The experts in this field are born with blinkers on and to them the market stops at Penrith, Footscray, and Gold Coast. I can tell you that most of the markets are average to poor outside of the golden 100km band around the major cities. The bubble has certainly burst for most regional areas, if it had actually inflated at all. This is the issue with broad spectrum median prices. They tend to differ greatly to the more localised versions. But then that would not make newsworthy stories would it?

    BB if you have property in the Isa or are looking to invest there, think carefully about your next move, it will be very important.

    For what it is worth I think we will see property prices stagnate for some time in most regional areas, but we may see a bigger fall in the cities as rates increase and foreclosures, fire sales, and the burgeoning Baby Boomer Downsizing epidemic take hold of the more lucrative markets. Better times for buyers ahead in those markets, no real change for rest.
     
  8. Sallyally

    Sallyally Well-Known Member Donor

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    I'm not sure about increasing housing density. I'm a NIMBY and I like
    My roomy block with its garden. I will be sad if our street turns into a dual or triple occ area with increased noise and traffic.
     
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  9. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    That's good news, their properties are so expensive in China they can do real damage in Australia. I really think the government need to do more for first home buyers.
     
    Last edited: May 30, 2017
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  10. Sallyally

    Sallyally Well-Known Member Donor

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    Are there any bargains to be had in Perth since the mining downturn?
     
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  11. slipperyfish

    slipperyfish Well-Known Member

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    Perth is the ultimate investor conundrum.

    There are a few views on this and very little iron clad consensus among many of the experts. Perth, is the biggest loser in the mining boom real estate debacle. This is mainly due to the fact it is Australia's fourth largest city and houses well over a million citizens, so the impact has been dramatic. This is mainly due to job losses and high mortgage pressure leading to an above average foreclosure percentage. Townsville in North Queensland has seen a similar effect, although the average mortgage was substantially lower.

    One advantage that Perth has is the amount of people it has. This in fact aids in localised economic recovery believe it or not. When a city becomes a certain size it has the ability to in fact feed itself economically to a point.

    I think Perth is at the bottom of its cycle with the median house price at around $560K, it is comparable to Brisbane. You might see another one or two percent decrease, but in my opinion a stagnation for a period looks more likely, as the mass foreclosures will be starting to peter out. The big unknown is foreign investment and what part it will play in the major cities, Perth being one.

    Sallyally, now is a time to be prudent in real estate. With APRA tightening lending criteria and the inevitable increase in variable rates, investing will be a mine field. Due diligence has become your most important tool. Also keep in mind as the interest rates move up and over the 5% mark, and rental yields dropping because of surplus stock on market, the overall potential for positively geared real estate investment becomes more difficult, and better avenues for economic investment may be found outside of real estate.

    If you are hell bent on real estate in Perth, look at future infrastructure development and the surrounding suburbs. Public transport, community green spaces, health and medical, and social scene are all desires for potential buyers/renters. Keep in mind what kind of investment you want, as Principle Place of Residence is a different kettle of fish to rental or capital investments.

    Good Luck and enjoy the journey
     
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  12. garry17

    garry17 Well-Known Member

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    So many are talking about housing booms and busts while trying in their own way to join the rabble. Even here you see some comments suggesting the fall in house prices are welcome to those who want to invest on their own behalf let alone how prices affect others areas such as rents.


    However, in the considerable rumblings of the self-interested one thing has to be tantamount. That is all this upheaval is based entirely on an over bloated housing market in Sydney. populist policy on the run by all politicians to make there self-important rantings appealing to the Coogee bay warriors in a hope of Re-election while ignoring the impacts of poorly thought out housing policy which is noted by many as NOT being the portfolio of the Federal government but of states. While many complain the costs of housing in major cities are too great policy which assists rural Australia to survive is being torn apart killing many rural sectors and destroying the Australian base of economies, FOOD.

    While they wish to complain about the mining boom and how they are missing out, they are willing to destroy the farming sector to appease their own hatred.


    Well, it is clear the people who live in the cities dominate the political will; however, sooner or later that ignorance of rural sector and hatred of anything they cannot have will stop any investment in the nation. This will of course destroy the opportunity of everyday Australian's to better themselves which I am sure will appease the elitist attitudes and giving them their security. Of course there are measures to address the issues such as foreign ownership and the like but the populist economic branding is to destroy the opportunity of all Australian’s from the short sighted and remove the very policies which promote Australian ownership. After all who do these people think are negative gearing??? That Chinese corporation investing in a housing market ??? IF and I say IF these people actually knew what negative gearing was, they would realise that this policy has absolutely no effect on foreign ownership. To put is simply, cutting tax incentives to Australian investors and home owners has no effect on Chinese investment but does MUCH to reduce Australian investment.


    Isn’t it about time Australian’s actually stood up for Australians and not dither against those who grasp opportunities to better themselves and those around them??? I am guessing they will continue to be led by the nose until their elitist ways drags the nation do the depths of world despair.
     
  13. Sallyally

    Sallyally Well-Known Member Donor

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    Ok, I'm rebuked. I'm not planning on buying in Perth.
    I thought the negative gearing issue was with SFRs who buy a house so they have rental income?
    I agree that urban sprawl is a problem, with housing being built on arable land on the peripheries,(Esp. Melb), but increasing density has its own problems.
    Decentralisation needs to be encouraged but there doesn't seem to be the political will for this.
    What are your thoughts?
     
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  14. slipperyfish

    slipperyfish Well-Known Member

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    Yes Foreign ownership and negative gearing are two very different beasts and only associated by the industry in which they operate. Foreign investors do not necessarily use the Australian financial system for their investments.

    Negative gearing is an intricate web that runs deeper in the Australian investor market than most would know.

    A bulk of the negative gearing is and has been done by Mums and Dads on middle income wages, housing children during uni years, making a pre retirement decision, or simply trying to provide a cash cow for later and patiently waiting capital gain on that investment. Most high paying miners reduced their tax using negative gearing, and a lot of teachers and other $60K to $150K wage earners have taken their accountants advice and negatively geared their real estate investments. I have never prescribed to this kind of investing, going by the adage that if you are paying tax you are making money, so all my investments have been either positively geared or flips for immediate capital gain, thus growing and reducing my portfolios as I went. I have been lucky and unlucky, but that is the game.

    Negative gearing isn't really the beast it has been made out to be. Remember you still have to pay the bills as they come in, only to claim them back later. It can be a double edge sword.

    I can remember my grand father lamenting the price of real estate in Sydney thirty years ago, saying people have to move out to Blacktown to get ahead. Go figure. The argument for city prices isn't new.

    Making other regional centres more attractive by insuring infrastructure, job opportunities, and decentralising government services will all aid in the regulation of city housing prices by reducing the demand placed upon the localised market. The decentralisation of the population makes sense if you wish to redistribute the costs of living, making metropolises more affordable and more functional.

    But hey what do I know? The governments of the past have spent decades centralising the wealth and infrastructure of this nation.

    Australia has to try and take the emphasis off housing as a our staple to economic success and diversify into other areas. As you say Garry, food is one area we have the capability to invest and prosper in as we had done years ago. I am currently looking to invest in primary production at the moment.
     
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  15. garry17

    garry17 Well-Known Member

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    The problem is not the political will as that only pertains to the popular theory. Again, Howard's changing of the purpose of government can be held to account here. As said before, since people are looking to government to make profitable decisions when that is not the purpose has made the closure of many services to the rural sector. latest is the centralisation of the CSIRO make one wonder how they can research the many different areas for their work. But hey they have to provide government with a return so cutting expenses, even though it is a reduction of ability is fine to meet the new government needs to appear good business.

    Abbott might have been on the nose but all we see now from all parties is the constant need for popular approval rather than decent policy.
     
  16. garry17

    garry17 Well-Known Member

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    Unfortunately the entire housing affordability issue has been driven once again by those who either do not see the impact of their demands or will not be affected by such. This is not an argument that is new and the truth is that housing affordability is much better than it was 50years ago.


    Sure if you look at the North Shore in Sydney or the beach front in Coogee and the pricing is crazy. People want to buy NEW and large with an eye on capital gain with an inability to visualise the areas which will increase or the will to buy outside of their comfort zone. So they make the government change things in a hope to gain.

    Decentralisation has been an ever increasing demand yet governments and oppositions continue to ignore the benefits of the rural for the purpose of appeasing those ignorant Coogee bay dwellers who still believe their groceries come from the back of the store rather than the regions they continue to demand be destroyed for their ideals.

    I take my hat off to your efforts to join the food production areas in Australia, I just hope this continued attacks from the ignorance do not deter you from your efforts…
     
  17. m2catter

    m2catter Well-Known Member

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    Rural Australia (here in the West) has one big problem, not enough workers for the seasonal harvest. Seen it multiple times.
    A good friend of ours has an avocado farm, he is heavily relying on foreign travelers, and these are visiting Australia in declining numbers. At least in our region.
    Plenty of avocados cannot be picked. This is not information, but knowledge....But hey, this would make a own thread....

    Yes Perth is certainly a place, where most rules don't apply. One day people talk it up, the next day down. We have seen a downward trend for quite some time, but it appears to have stabilized again. What happens next week who knows....Fact is that jobs in/around Perth are very hard to find, again knowledge, not information. We have relied to heavily on mining and mining only.

    Still missing those visionary politicians, where are they?
    Regards
     
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  18. slipperyfish

    slipperyfish Well-Known Member

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    Hang in there Cats, Perth will hold its own. It's greatest hurdle is also it's greatest asset, Isolation. As far a cities go you do not have a lot of competition over there. Problem is that successive governments in the west tied themselves tightly to the mineral boom, and developed localised economies based upon them. Perths transition phase will take a little longer than say Brisbane, but it will come good.

    The regional areas of WA are not unlike most regional areas in Australia. They are suffering population loss due to migration to larger centres, whether it be for work or for lifestyle( God only knows why you would want to live in a city when you could live in the bush). Workwise, we Australians have been told we are too good for such menial jobs such as fruit picking, much better to wait for our dream job, what ever the F that is?????
     
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  19. truthvigilante

    truthvigilante Well-Known Member Past Donor

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    You are dead set spot on Slippery, young people and silly parents do not want there child working in hot sun. Wait for a plumbing, electrical apprenticeships...forget carpentry and brick laying as well, it is too much hard work etc etc. Talk about a privileged generation of parents!
     
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  20. truthvigilante

    truthvigilante Well-Known Member Past Donor

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    They've been saying it for years upon years. It'll come true some day and whoever is lucky enough to hit on the prediction will become a guru.
     
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  21. Sallyally

    Sallyally Well-Known Member Donor

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    Paul Keating isn't in the game any more.
     
  22. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    I think we've come a long way from just letting the bottom drop out of the property market, government knows it can stop a total collapse by providing opportunities for new home buyers and looks like they acknowledge the slowdown and have introduced new grants.
    The biggest concerns I have is a potential conflict with China, Turnbull has been shooting his mouth off recently against N Norea and China and the last thing we need is for them to punish us economically, like they're doing with South Korea over Thaad. Also a war may cause a downturn in China and hurt us economically, potentially causing many of those with large mortgages to default.

    http://www.9news.com.au/national/2017/06/01/06/23/nsw-housing-tax-rises-for-overseas-buyers
     
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  23. m2catter

    m2catter Well-Known Member

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    That best thing since Keating was Gillard, although not in his league.
    Now the world has to deal with freaks like Trump, Erdogan, Putin and so on......
    Disgusting.....
    Regards
     
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  24. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    I wasn't a big fan of Gillard, she hijacked the PM job just when Rudd wanted to tax the mining companies, left a bad taste in my mouth.

    But Keating, I am a big fan and his determination for Australia to find it's own foreign policy sits very well with me. He's a visionary and I wish Turnbull and Bishop could gain just a fraction of his foresight. They keep blindly pandering to the Americans while they drag us down with them. They need to stop provoking and criticising our neighbours because America says so.
     
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  25. truthvigilante

    truthvigilante Well-Known Member Past Donor

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    What you have stated seems to be the most logical outcome. There is too much at stake. Was it the Secretary of State trying to flatter Australia by saying how great we are today? Turnbull thinks that is all kudos for him, but many Aussies are getting sick of the brown nosing!
     
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