Sound familiar
(12 posts) (5 voices)-
Anonymous
Unregisteredwhat caused the bubble in AU? foreign investment?
Posted 1 year ago # -
CanuckDownUnder
MemberThe same reasons are paraded out here: real estate is a can't lose investment, there's not enough land, lots of rich foreigners moving in, renting is throwing away money, etc, etc,...
Real reason: cheap money, interest rates were lowered to an all time low of 3% (currently rate is 4.5%), and lost of government incentives - reduced stamp duties and at one point home owner's grants of $21,000.
As an idea of the market here I went to an auction last weekend near the in-laws. This was a reasonably nice but small two bedroom house with a decent size yard, the problem was that it's a 15 minute walk to the train station (and another 30 minutes into the city) and it borders a busy street. Traffic was so loud I could barely hear the auctioneer. And steady.
Managed to sell for $648,000 Australian, roughly $585,000 Canadian.
http://www.realestate.com.au/property-house-nsw-penshurst-106565931
Posted 1 year ago # -
CanuckDownUnder
MemberJesse: The market here has weakened recently.
Auction clearance rates, which have been between 70-80% for most of the boom, have fallen into the 60s. Home loan approvals, which lead prices by about six months, have plummeted to nine-year lows in the past six months so things should start to get really interesting.
Interest rates might seem really high but they are traditionally higher here, 3% was the lowest they had ever been. Banks are desperate for domestic funds so savings rates are over 6% right now. We're certainly not complaining since we earn about twice our rent in interest income. It helps counter the stigma from being lowly renters.
Posted 1 year ago # -
@CanuckDownUnder: "We're certainly not complaining since we earn about twice our rent in interest income."
Ahh yes I guess it is somewhat relative from that POV. 60% clearing implies lower sales. I assume there are more houses for tender as well. Thanks for the perspective. It's interesting the metrics used are different due to the auctioning process.
Posted 1 year ago # -
CanuckDownUnder
MemberDespite the drop in clearance rates sales are still high since auction numbers are at all-time highs. Auctions are much more common here, especially on mid- to high-end properties.
http://smh.domain.com.au/real-estate-news/supply-surges-as-demand-weakens-20100622-yt9b.html
Posted 1 year ago # -
CanuckDownUnder
MemberJesse, I'm not sure of anything Australian property specific but a lot of people enjoy Steve Keen's blog. He "lost" a bet that housing would fall 40% from the peak but I think he'll be proven right in the end. If I find anything good I will let you know.
I enjoy this site a lot since I agree that Canada and Australia have similar markets, and Sydney and Vancouver are often ranked as the two least affordable markets in the world.
Amazing, a story in the paper today about a "correction to come":
Posted 1 year ago # -
CanuckDownUnder
MemberSpeaking of sounding familiar, how does record high listings and dwindling buyers sound? Auction clearance rates dipped below 50% in Sydney this weekend:
Despite the Economist suggesting that Australian real estate is overpriced by 61%, we have been assured today by JP Morgan that "house prices will not fall given the chronic shortage of housing supply and healthy labour market."
Posted 1 year ago #
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