Ominous signs in Australia

london_irish · **Posted:** Sun Jul 08, 2012 6:08 am

Anco_reeves wrote:

The reserves for those 4 The Blocks houses were set ridiculously low it seems, the range in that suburb is between 1m and 2.5m apparently. There's been a lot of stories that while it was great for TV ratings, they final sale prices probably don't even cover the cost of purchase and renovation. But it is a TV show, so to be fair I'm Channel 9 don't care.

Meanwhile in outer Melbourne, "NOTHING TO SEE HERE!"

Says Housing Industry of Australia's economist:
http://www.theage.com.au/victoria/housing-glut-hits-suburbs-20120707-21o6k.html

Quote:

''There's no reason for concern. The stock on the market tells you nothing about the fundamentals. It's underlying demand that matters. Melbourne's new homes market is in good shape,'' said HIA economist Andrew Harvey.

I think they didn't want a repeat of what happened last year. Car crash TV. Here is one of the 4 auctions: http://www.youtube.com/watch?v=idyZwNub9UE

Start from 4 mins in.

EDIT: Only 1 of the 4 reached reserve that night. Lots of pissed off people among the couples: http://www.youtube.com/watch?v=pyAAYGalW_o - five mins in for post auction reactions...

ysenrab · **Joined:** Mar 12, 2010 **Posts:** 49

MANY people who bought houses on Melbourne's fringes in recent years could be facing financial ruin after a slump in prices has left them owing more to the bank than their homes are worth, experts have warned.

Read more: http://www.theage.com.au/victoria/home- ... z2034fN0nl

Larry · **Joined:** Jun 28, 2008 **Posts:** 4428

ysenrab wrote:

MANY people who bought houses on Melbourne's fringes in recent years could be facing financial ruin after a slump in prices has left them owing more to the bank than their homes are worth, experts have warned.

Read more: http://www.theage.com.au/victoria/home- ... z2034fN0nl

Very strange. By the sounds of things, the equity these people had in their properties has been eaten away by price falls, so that if they were to sell today they couldn't cover the outstanding mortgage.

Crazy stuff. It's almost what you'd call, I don't know, "negative equity" or something. Remarkable. Not surprised it needed "experts" to explain it to us.

xman · **Joined:** Sep 18, 2007 **Posts:** 5536

At current exchange rates $1=€.83

600ml Plastic Bottle of Coke 7-11 Convenience Store Melbourne CBD $4.20 = €3.50

285ml Glass of Asahi (Japanese lager - on tap) Riverland Bar Melbourne $9 = €7.50

http://www.riverlandbar.com/docs/drinks.pdf

johnnyone234 · **Posted:** Sun Jul 08, 2012 9:13 pm

Quote:

In case you missed it, The Sunday Age yesterday ran a great article on the epic housing supply glut that is affecting Melbourne where, according to SQM research, the number of homes for sale has hit a record high, around double 2008 levels:

http://www.macrobusiness.com.au/2012/07 ... sing-doom/

Quote:

As demand has fallen over the past year, the number of outer suburban homes with ”For Sale” signs has jumped by almost 40 per cent…

”We’re just not seeing any end in sight to this glut of new supply coming into the market,” said SQM Research managing director Louis Christopher. ”It seems obvious there is only one direction for prices. That’s a frightening possibility if you’re a property owner”…

”It’s like a ghost town in the new developments. Nothing has moved for the past three, four, five, six months,” said Hocking Stuart agent John Halkidis, who works in northern suburbs including Bundoora and Epping.

The tough market conditions are expected to deteriorate even further, with research showing developers are poised to release another 75,000 new home sites at 126 existing housing estates in the city’s growth areas.

http://www.theage.com.au/victoria/home- ... 21pkl.html

johnnyone234 · **Posted:** Tue Jul 17, 2012 12:31 pm

Quote:

OECD deputy director Adrian Blundell-Wignall has warned that Australia is vulnerable to a rise in unemployment and further fall in house prices, if Europe doesn’t fix its banks and China maintains an artificially low currency.

…“The world is so globalised and interconnected that if it goes down, things will get much worse for Australia,” Dr Blundell-Wignall said on the sidelines of The Economist magazine’s The Bellwether Series conference in Sydney.

“The biggest problem for Australia that worries me personally is house prices.

“The first time unemployment starts to rise, house prices are going to be falling.”

http://www.macrobusiness.com.au/2012/07 ... se-prices/

johnnyone234 · **Posted:** Sat Jul 28, 2012 11:35 am

Quote:

IT'S a buyer's market and anyone looking for a house in the next few months is likely to find a bargain.

Lacklustre sale prices, an enormous stockpile of listed homes to choose from, weak auction clearance rates and interest rate cuts have combined to create perfect conditions for home buyers.

Although there have been improvements in property values during the past quarter, they are only modest gains and not enough to flip the market the other way, according to the latest Commonwealth Bank Home Buyer Index.

More bargain suburbs are emerging throughout Australia, particularly in Queensland and Tasmania during the May quarter, according to the figures prepared in conjunction with RP Data.

RP Data national research director Tim Lawless said there are more than 300,000 properties listed for sale in Australia and as a result more areas had become ''buyer's markets''.

http://www.perthnow.com.au/news/more-pr ... 6437523565

Quote:

The Reserve Bank of Australia’s 125 basis points of interest rate cuts since November have failed to spur demand for mortgages, deepening concern one of the world’s costliest housing markets will extend its record decline.

The annual growth of outstanding home loans has slowed to the weakest pace since at least 1977 as Australians repay loans and boost savings instead of borrow for housing. Home prices are down 6.1 percent from their mid-2010 peak and have slumped for a record five-straight quarters.

http://www.bloomberg.com/news/2012-07-2 ... -sags.html

Barney Gumble · **Joined:** Feb 9, 2010 **Posts:** 4725

Quote:

Although there have been improvements in property values during the past quarter

I love the way we are all supposed to understand that 'improvements in property value' means 'higher prices'.

Anco_reeves · **Joined:** Jan 13, 2012 **Posts:** 57

The real story in Melbourne is that house prices rose last quarter.

Except, maybe they didn't and kept falling.

Or maybe they rose but only because the previous quarter's figures were actually wrong.

Alternatively, they fell over the quarter but actually rose in the last month of the quarter:

http://smh.domain.com.au/real-estate-news/clashing-data-overshadows-positive-news-20120728-233b2.html

catbear · **Posted:** Wed Aug 01, 2012 11:25 am

Quote:

Most of the expansion work on the design and execution side would have been carried out by contractors and there have been unconfirmed reports that contractors have begun laying off staff after being told by BHP that expansion work was officially on hold.

http://au.news.yahoo.com/thewest/a/-/ne ... loss-talk/
This is big news here.

Anco_reeves · **Joined:** Jan 13, 2012 **Posts:** 57

The Australian Bureau of Statistics shows national house prices are actually up since the start of 2012.

http://www.afr.com/f/free/blogs/christopher_joye/abs_numbers_final_nail_in_doomsayers_iqs0fuArcZtbAnsF5XqhxI

johnnyone234 · **Posted:** Wed Aug 01, 2012 2:14 pm

Anco_reeves wrote:

The Australian Bureau of Statistics shows national house prices are actually up since the start of 2012.

http://www.afr.com/f/free/blogs/christopher_joye/abs_numbers_final_nail_in_doomsayers_iqs0fuArcZtbAnsF5XqhxI

Schrodingers Cat makes another appearance
How much of a lag is there between all the indices??
Whats going on in Darwin?

Rick Flair · **Posted:** Thu Aug 02, 2012 5:17 am

Its clear now that Australia is effectively a group of markets operating quite independently from each other.

WA is not going to falter not is the NT. VIc and NSW will.

Blindjustice BATONEFFECT · **Posted:** Thu Aug 02, 2012 10:28 am

Very complex group of markets. The mining town I am in is increasing the workforce yet rents are pretty nuts. Looking 700 a week or 2,800 a month to rent a half decent house. Plenty of real bad junk in the 500 - 700 range too. Run down dumps to be honest.

Yet there is no construction work out here/ The local idiot politicians do not allow moveable housing or flat pack housing out here, they stipulate that you must build to set criteria and that means concrete block housing. Seriously in the topics block housing is insane. They hold the heat all night long in summer - if you touch a wall it is hot and I am talking about cavity block - the cavity doesnt insulate from the heat because the heat comes in through the ground. I am currently in an apartment complex that runs the air con 24/7 in summer to try keep the place bearable - it never gets it cool.

So we have a market where you can`t get builders because there is such a shortage of accommodation and they want to be paid huge money to work out here in the middle of nowhere so building a half decent 3 bed house runs into huge money. You have a workforce and mine paying workers massive amounts of money that is simply being poured down the drain in the form of huge rents instead of the money being put into something more productive.

It isnt just mining towns either. Lots of small outback towns and small coastal towns have similar problems. I would say that the NT is a bubble. It can only see it growing economically in the future though it would be open to a property crash that would set it back.

A low cost of living is key to success in any economy. Anything else is a waste that will come back and bite you.

DSE3Br · **Joined:** Feb 24, 2008 **Posts:** 1328

Blindjustice BATONEFFECT wrote:

Very complex group of markets. The mining town I am in is increasing the workforce yet rents are pretty nuts. Looking 700 a week or 2,800 a month to rent a half decent house. Plenty of real bad junk in the 500 - 700 range too. Run down dumps to be honest.

What size house are you talking? That is comparable to a three bed house within 30 mins walk of Brisbane CBD. The salaries where you are probably dwarf Brisbane salaries though.

Ominous signs in Australia

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