Friday, April 22, 2011
Does the RBA think there is a bubble in the housing market in Australia?
Saturday, March 5, 2011
Reaction to The Economist article
Tuesday, August 24, 2010
Ponzi Borrowers
In a bearish note to clients this morning, Morgan Stanley strategist chief strategist Gerard Minack warned Australia's housing "bubble" could be pricked should banks tighten credit or "loss-making" middle-class landlords start to sell.
He argues owner-occupiers are in too much debt and investors are riskily relying on capital gains to repay their loans and interest repayments.
Compounding the problem is "ill-advised policy", such as the government's first home-buyers grant, which has combined to make Australian houses "40 per cent above fair value", Mr Minack says.
"Buying an asset that's over-priced never ends well," he said. "The real return on residential property over the next decade is likely to be negative, in my view."
Friday, July 30, 2010
Australian House Prices Fall
"Aussie Dwelling Values Fall After 17 Consecutive Monthly Gains |
30 July 2010 RP Data – Rismark Home Value Index Release
"Despite the recent moderation in capital gains, the risk of a dramatic decline in Australian dwelling values remains remote. According to Mr Lawless, “As the RBA has independently confirmed, arguments in favour of house price “bubbles” remain, in my opinion, overstated. Australia’s housing market has a structural shortage of roughly 200,000 homes, which has been substantiated by the National Housing Supply Council. While the inventory of unsold homes has risen of late, our Market Activity Index suggests that new listings activity will slow over the coming months. And although average time on market and vendor discounting have also expanded with the weaker conditions, these remain in line with historically reasonable levels.” “If we saw blow-outs in average time on market, re-listings, and vendor discounting, it would set off a few alarm bells. This, however, is not currently the case” Mr Lawless said." Brisbane apartment prices did ok. Brisbane Apartments - medium prices Month of June (indicative) - up 1.2% Quarter - up 1.9% Year to Date - up 5.7% Year on Year - up 5.9% Medium price over quarter - settled sales - $380,000 Brisbane Apartments - medium prices Month of May - up 0.9% Quarter - up 1.6% Year to Date - up 4.5% Year on Year - up 7.9% |
Tuesday, July 20, 2010
Negative Views
"For the first time this year, most investors surveyed are expecting house prices to remain flat or fall.
SENTIMENT among Australian property investors is turning increasingly bearish, according to the latest Investor Pulse poll of investors conducted by Colmar Brunton and BusinessDay.
For the first time this year, the number of investors expecting house prices to remain flat or fall outweighs those who see prices rising. The fundamental reason for the shift in sentiment is a dawning belief that Australian housing is in a ''bubble'' that at some point will burst and return to historic levels of affordability.
When asked about recent comments by famed US fund manager and property bubble expert Jeremy Grantham - who described Australian and British property as the only two of 34 bubbles he had studied that had not yet burst - 43 per cent of investors agreed that reversion to the mean would involve considerable pain. Only 25 per cent of investors disagreed with the bubble diagnosis and 32 per cent were undecided."
For Full Story and Chart, see Domain
Thursday, July 8, 2010
How many bubbles?
Tuesday, June 29, 2010
Bubble?
"There are fewer buyers out there. When houses are selling the best way to sell is at auction. But in a slower market, that's not the best way because you're not going to get as good a result."
"There are listings everywhere. We're in a situation now where buyers are backing away, but there are still people trying to sell. They're not going to get the prices they had hoped for, and it's going to be disappointing for them."
Christopher says that over the rest of the year, there will be an oversupply of stock in the market, which will put downward pressure on prices.
Additionally, he says property investors wanting to sell should have made their move in the first four months of the year. Now, he warns, they may have missed their chance."
See Property Market Has Cooled from SmartCompany