Housing Developments | Northern Suburbs

[AG]

House prices havent really been falling YET but we are yet to enter a RECESSION here and
the expected 200,000-400,000 job losses. So you can bet that there will be a house
price correction sometime next year and the year after. Australia was in a better
position than the others that the reason for it lagging behind, but it will not be
able to weather the storm of the global crisis. Even China is tipped to slow down....

I saw this thing on CNN for like 5 minutes last night about all the financial doom & gloom. The guy on screen was saying that the Chinese economy is expected to slow down to 9% growth p.a (outside double-digit figures), which apparently by their standards is a recession.

Should I start saving my money now to set up a deposit fund to purchase a house when the real estate market correction occurs? I know I'm only 19...

9% GDP growth is significantly slower than the in excess of 12% growth in previous years, but that is still significantly faster than most other nations outside of Asia which are growing between around 1-2%. No doubt that the credit crisis is affecting China.

[muzzamo]

But how does one actually "know" that there is currently a bubble? You won't know for sure until property prices have dramatically decreased, and that process could take months or years to occur. Property may be overpriced, but several bodies including the IMF recognise Australian property prices being overvalued by around 15%, hardly an amount to call a crash. And unlike the US, there hasn't been a huge increase in the number of borrowers defaulting on repayments that could result the excess dumping of property on the market to cause an oversupply.

To me its really bloody obvious. Similar level of mania to tulips, stocks prior to 1929, etc, general stupidity, the fact that "everybody is doing it" means that the greater fools have run out, etc.

But otherwise a graph or two might help

[pushbutton]

I think to be honest it is currently impossible to accurately predict what will happen to house prices in Australia in the next 5 years. However I certainly don't think they will fall, at least not significantly. If I had to guess I would say they will probably increase by about 5-10% per year for the next few years.

The housing market here is nothing like in the UK or USA so just because they have experienced major drops in price doesn't mean we will here. I think the worst case scenario is that prices might fall by 2 or 3% in one year but then go back up the following year.

[Adelarch]

I think to be honest it is currently impossible to accurately predict what will happen to house prices in Australia in the next 5 years. However I certainly don't think they will fall, at least not significantly. If I had to guess I would say they will probably increase by about 5-10% per year for the next few years.

The housing market here is nothing like in the UK or USA so just because they have experienced major drops in price doesn't mean we will here. I think the worst case scenario is that prices might fall by 2 or 3% in one year but then go back up the following year.

mmm... it seems to me unsustainable for house prices to grow at 5-10% per year when wage growth is 4% or less and people seem to have been hitting their mortgage repayment limits of late. Also I'm not quite sure why the Australian market is nothing like in the UK or USA. Remove negative gearing and methinks there would be a veritable stampede out of property - it''s no wonder no federal government dares touch it

[pushbutton]

The prices in real terms are far lower in Australia than in UK (in Adelaide prices are generally about half to a third of what you'd pay for a similar size (but generally not as nice) house in UK.

Therefore in the international market real estate in Australia (especially in the cheapest cities like Adelaide) are still considered highly attractive investments.

[muzzamo]

Therefore in the international market real estate in Australia (especially in the cheapest cities like Adelaide) are still considered highly attractive investments.

I'm sorry but this is complete and upper crap/bullshit/rubbish.
In terms of wage multiples Australian house prices are now up there as one of the most expensive in the world, if not the most expensive.

UK is sitting at around 5x income, wheras we are sitting at more like 6x income. The US is sitting at about 3 to 3.5 times income from memory, so ours are roughly twice as expensive as the US.
http://www.mortgageguideuk.co.uk/blog/h ... es-income/
http://www.news.com.au/business/story/0 ... 62,00.html

The housing market here is nothing like in the UK or USA so just because they have experienced major drops in price doesn't mean we will here. I think the worst case scenario is that prices might fall by 2 or 3% in one year but then go back up the following year.

Sometimes it amazes me that people think that its normal for house prices to double in real terms (when it normally tracks wage growth) in a few years due to a speculative mania driven bubble financed by unlimited easy credit, then think that its at a "permenantly high plataeu" and can fail to fall after that. If it can go up 100% in the space of a few years it can just easily drop a portion of that back. Look at the US/UK.. jeesus

[AtD]

For that to happen, though, there would have to be a considerable portion of vacant dwellings. While the US has a cronic oversupply, Australia does not.

[muzzamo]

For that to happen, though, there would have to be a considerable portion of vacant dwellings. While the US has a cronic oversupply, Australia does not.

The UK supposedly had a shortage too:
http://www.aboutproperty.co.uk/news/new ... 482547.htm (the first article that came up when i googled "UK housing shortage" but there were plenty written)

The traditional "supply and demand" goes out the window in a bubble/mania situation. It becomes about speculation of easy money and expectation of future capital gain along with fear of "missing out".

[pushbutton]

Ok calm down people!

House prices always increase well above inflation in the long term. They always have.

All I know is I bought a block of land for $76000 in June (here in Adelaide) and I sold it in September for $87500. That's a good 15% increase in just over 3 months. Not too bad really!

[AG]

For that to happen, though, there would have to be a considerable portion of vacant dwellings. While the US has a cronic oversupply, Australia does not.

The UK supposedly had a shortage too:
http://www.aboutproperty.co.uk/news/new ... 482547.htm (the first article that came up when i googled "UK housing shortage" but there were plenty written)

The traditional "supply and demand" goes out the window in a bubble/mania situation. It becomes about speculation of easy money and expectation of future capital gain along with fear of "missing out".

The shortage of housing in the UK did exist until about a year or 2 ago. If you look up the Barker Report, you'll see that the UK reported a housing shortage earlier this decade (as you've already stated). That shortage is practically non-existant since the private sector construction of new housing ramped up significantly, in some parts there is now an oversupply. The "demand and supply" model is simplistic, but it still plays a fundamental role in prices even during so-called real estate bubbles. The fall in prices across the US was still the result largely due to oversupply, which came about when many borrowers defaulted and left many empty properties on the market, not some manic decision by a huge number of US residents to suddenly decide to sell their properties. And unlike the US where the incentive for borrowing with unworthy credit ratings existed, Australian banks have recourse to those who default on loans whereas borrowers don't have to pay a single cent more in the US if they default.

[muzzamo]

So what you are suggesting is that real estate bubbles are bursting world wide but its not going to happen because "its different here"?

Also can you explain why we have already seen a 10% drop in prices in Perth so far when there was also a housing shortage there? Supply and demand does not justify purchasing at any cost. Only speculative mania and fear of missing out will do that.

Pushbutton: Sometimes it amazes me that there are still people that still believe the "house prices always go up". One would think that lessons overseas would prove how foolish that assumption is.

[bm7500]

Looks like this one will soon be underway

Baulderstone wins $409m contract at Edinburgh

ADELAIDE-based Baulderstone will be on site next week to start its $409 million Edinburgh defence construction projects.

The Department of Defence yesterday announced the company had successfully tendered for the two top contracts for the new army facilities. Baulderstone will undertake the accommodation, training and civil works package for $285 million and the community and mess facilities, valued at $124 million.

Baulderstone SA general manager Derek Hough said the company will be on site next week to prepare the site for a November construction start.

"It means our business in South Australia is in a good position for the next three years, it really underpins out operations here,'' he said. "In the present climate, that sort of contract is great.''

Baulderstone will employ 450 people on the site at its peak, and will aim to deliver the facilities in time for the 7th Battalion's arrival from Darwin in January 2011.

Federal Defence Minister Joel Fitzgibbon said the Hardened and Networked Army's Adelaide base would have broad benefits.

"The HNA Project will provide a very important military capability as well as a very popular posting location for Service families,'' he said.

"The construction project will deliver significant economic benefits to South Australia over the next three years and the relocation of 1200 personnel and their families will have a similar effect over the long term.''

RUSSELL EMMERSON
October 21, 2008 11:30pm http://www.adelaidenow.com.au

[rogue]

Minister's release here... http://www.minister.defence.gov.au/Fitz ... entId=8333

[pushbutton]

You're entitled to whatever opinion you like but I am still 100% convinced that the property market in Australia will remain basically sound.

[skyliner]

From the current news guys. A rebound in prices would at least appear shortlived due to the onflow of the effect of the housing grants and a possible lowering in migration intakes (now 200000 PA). This too because of lower requirement for houses in the longer run from the economic squeeze leading to lower demand for materials and more employment.

Hence they need to get on with the project and all ALL consultation etc to gain the best returns.

ADELAIDE - TOWARDS A GREATER CITY SKYLINE