Melbourne Property Market

[martyshire]

Occasionally I visit property blogs on topics like the outlook of the Melbourne/Australian Property market. After large increases in recent years, property prices have fallen in most parts of the city over 2011 and as a result these blogs seems to have gone a bit nuts.

IMO, whatever happens to property prices, it is going to have huge social implications, especially for those who own multiple properties and those who hope to buy a property one day. Sadly, people who have a vested interest in the market either going up or down seem to be responsible for writing most of the articles and a small but vocal sample of individuals on both sides of the bull/bear fence tend to post most of the comments on these blogs. So I was wondering what PREnders (normal people ) thought about the future of the Melbourne Property Market.

What do you think will happen? Also, if leaving a comment, what do you think is the ideal outcome for our country.

You can change your vote.

Rosy, feel free to move this to the politics forum if you think that's where it should be.

 

[Scoop]

Maybe price go at a steady climb but I just can't see things going backwards.

Property is still a solid investment. At the moment it's got my trust more then the stock market. With the population forecasts being what they are for Melbourne, I can't see a crash happening.

 

[evo]

track sideways to slightly up, I think. It needs to work off the excess stock which will probably take until Easter.

http://www.sqmresearch.com.au/graph_stock_on_market.php?region=vic%3A%3AMelbourne&type=c&t=1

Medium term I'm still bullish though. Interest rates are in a down trend again and there is still a lot of new population growth in Melbourne.

Property is an imperfect market, so with so much stock around there are quite few bargains if you put in the effort at the moment. good time to buy, IMO.

 

[martyshire]

Maybe price go at a steady climb but I just can't see things going backwards.

track sideways to slightly up, I think.

Neither of you think that banks will tighten lending then?...or think that this will make a difference?

 

[poppa x]

Methinx the market will dip a tad.
I see no significant gains until after the next federal election where I predict the home owners grant will be boosted causing another surge.
Ultimately the swings and roundabouts even out over time. Since 2000, the market has nearly tripled, so a period of sideways movement or a small negative was overdue.
Over time, stocks beat property. BUT - stocks lose out to property if the stocks are in a Super Fund with Management Fees. I think.

 

[evo]

Neither of you think that banks will tighten lending then?...or think that this will make a difference?

banks are keen to lend at the moment.

 

[ARCHYBOY]

After working in the real estate industry for over 7 years now, this is by far the toughest it has been. Deals still go together as people still need to sell and still need to buy but its at what level dollar wise. I dont work in an exspensive market, our average sale price would be around $330,000 but even we have seen the effects on property prices, especially over the last 6 months. A drop in interest rates wont correct the market for at least another 12 months because its not the mortgage that kills people, its the lifestyle they still want to live and that is usually well beyond their means. A perfect example is the mortgagee sales that take place, I know of one major bank that has about 8500 files australia wide that they need to activate, thats a massive flood of properties onto the market next year that have highly motivated vendors, if your cashed up, certainly look at buying something in the new year. The correction in property prices this last year had to happen as prior to that it was out of control, the correction couldnt be avioded especially after they made it alot more difficult for international buyers, the FIRB had to do something and they did.
In closing, my opinion is the market will stay steady or drop in 2012, I cant see any crashes happening (in my market, not sure about the more exspensive markets) and we wont see any improvement for at least another 2 years, a change of goverment would certainly help though.

 

[tigertim]

After working in the real estate industry for over 7 years now, this is by far the toughest it has been. Deals still go together as people still need to sell and still need to buy but its at what level dollar wise. I dont work in an exspensive market, our average sale price would be around $330,000 but even we have seen the effects on property prices, especially over the last 6 months. A drop in interest rates wont correct the market for at least another 12 months because its not the mortgage that kills people, its the lifestyle they still want to live and that is usually well beyond their means. A perfect example is the mortgagee sales that take place, I know of one major bank that has about 8500 files australia wide that they need to activate, thats a massive flood of properties onto the market next year that have highly motivated vendors, if your cashed up, certainly look at buying something in the new year. The correction in property prices this last year had to happen as prior to that it was out of control, the correction couldnt be avioded especially after they made it alot more difficult for international buyers, the FIRB had to do something and they did.
In closing, my opinion is the market will stay steady or drop in 2012, I cant see any crashes happening (in my market, not sure about the more exspensive markets) and we wont see any improvement for at least another 2 years, a change of goverment would certainly help though.

Geez Archy, what suburb is the ave $330k? Even Frankston is higher than that. Cranbourne? Melton?

 

[BustinDustin]

lI'll have a go. I'm a normal person I think the future of prices will depend on what happens with the European financial crisis this will have a tsumani impact on everything if things go pear shaped. People are banking their money in record numbers, what are they *smile* scared off? Are they waiting for a further correction in prices to jump on the band wagon? It's really hard to predict, I think prices will be further impacted by a further 5-10% and rates between .25-.50 of a percent over the next 12-18 months. The introduction of the carbon tax will effect everybody and every household budget, if you are lucky you still have full time employment and got money then this will then be the time to buy real estate.

The ideal outcome for this country will be a Liberal government in control.

 

[Scoop]

Geez Archy, what suburb is the ave $330k? Even Frankston is higher than that.

I used to think that but a lot of smart money is going into Frankston, Seaford, Carrum, Chelsea. The thought process is that the price rises have moved as far as Mentone and that it will continue along the beach line. I have family in Mt Eliza and Mornington and have passed through Frankston numerous times and I can vouch it is vastly improved. According to local real estate agents, the price rise has already pushed most of the lower income out into areas like Cranbourne & even as far as Warragul. When you look across the bay at the beachside suburbs in the West, the same thing happened in the late 90's.

 

[ARCHYBOY]

Geez Archy, what suburb is the ave $330k? Even Frankston is higher than that. Cranbourne? Melton?

Werribee area mate, sell shyt pads to the ducks

 

[Lidsand]

I used to think that but a lot of smart money is going into Frankston, Seaford, Carrum, Chelsea. The thought process is that the price rises have moved as far as Mentone and that it will continue along the beach line. I have family in Mt Eliza and Mornington and have passed through Frankston numerous times and I can vouch it is vastly improved. According to local real estate agents, the price rise has already pushed most of the lower income out into areas like Cranbourne & even as far as Warragul. When you look across the bay at the beachside suburbs in the West, the same thing happened in the late 90's.

the price rises have moved well past mentone. mordialloc aspendale edithvale chelsea and carrum are all desirable addresses and have been for a while. i also agree frankston is a very smart investment at early threes and seaford is also, even with the commission housing

 

[Freezer]

The correction in property prices this last year had to happen as prior to that it was out of control, the correction couldnt be avioded especially after they made it alot more difficult for international buyers, the FIRB had to do something and they did.

Can you expand on the international buyers bit Archy? Exactly what did they do?

 

[tigersnake]

Crabbing for the next 10 years nationally, maybe CPI or a bit below.

Bottom quarter of market doing better than CPI in pockets nationally.

Thats about it. Back to the broad 100 year trend after 15-20 year boom.

 

[Rosy]

...

The introduction of the carbon tax will effect everybody and every household budget, if you are lucky you still have full time employment and got money then this will then be the time to buy real estate.

The ideal outcome for this country will be a Liberal government in control.

How will the carbon tax influence the real estate market? Does anybody know whether they'll be better or worse off yet?

Did work choices affect the real estate situation?

 

[tigersnake]

How will the carbon tax influence the real estate market? Does anybody know whether they'll be better or worse off yet?

Did work choices affect the real estate situation?

Bustin's post is incorrect. Anyone earning the average wage or lower will actually be better off finacially, thats the vast majority. Those above the av wage will be a few bucks worse off, it won't affect their house-buying decisions. Also there will be a net job increase. Work choices had no effect, nor did the GST nor did native title.

 

[Rosy]

That's what I thought the carbon tax situation will be but I guess, like a lot of things, time will tell.

I wondered about work choices because there wasn't a lot of security for workers then. I thought the risk of not having a job to go to if they didn't bow to every demand, and the chance of being sacked, to might have had a flow on effect.

We paid for our house as we built it so never had to consider the real estate market. I've only started to take a bit of notice now due to someone close to me about to buy their first house. Glad it's not me.

 

[ARCHYBOY]

Can you expand on the international buyers bit Archy? Exactly what did they do?

Basically they relaxed the laws for international buyers, they came in and bought properties which drove prices up and some of those properties sat vacant collecting dust. I have personally changed the locks on behalf of some banks when the owners have been internationals and never made one mortgage repayment since they owned it, they have then forwarded money to their contact in australia so they can fix the shortfall with the bank and keep the property, smart money says I will be back around to those properties to change the locks again.

Bustin's post is incorrect. Anyone earning the average wage or lower will actually be better off finacially, thats the vast majority. Those above the av wage will be a few bucks worse off, it won't affect their house-buying decisions. Also there will be a net job increase. Work choices had no effect, nor did the GST nor did native title.

Have to disagree slightly mate, those changes came in when the market was flying and an atom bomb wouldve been the only thing to stop the price surge, a new tax like this one creates to much uncertainity which is the last thing all industires need right now.

That's what I thought the carbon tax situation will be but I guess, like a lot of things, time will tell.

I wondered about work choices because there wasn't a lot of security for workers then. I thought the risk of not having a job to go to if they didn't bow to every demand, and the chance of being sacked, to might have had a flow on effect.

We paid for our house as we built it so never had to consider the real estate market. I've only started to take a bit of notice now due to someone close to me about to buy their first house. Glad it's not me.

Rosy, if the people that you know that are about to buy their first home need a hand with anything, I'm more than happy to help or answer questions.

 

[tigersnake]

.Have to disagree slightly mate, those changes came in when the market was flying and an atom bomb wouldve been the only thing to stop the price surge, a new tax like this one creates to much uncertainity which is the last thing all industires need right now.

Not true. The Native Title act came in in 1994. Market flat as a pancake or rising 5-10% inner city. The press then was very similar to the press now, the NTA would destroy the mining and agriculture industries and create uncertainty over all land tenures and thus destroy our economy. Seems silly now doesn't it? Re the GST came in in 2000. I'm disagreeing with you in that that market wasn't booming then. It boomed 96-99, then took a breather and boomed again 2001-2004. But I'm also disagreeing with my earlier post, the GST did have an effect for a couple of months. People didn't yet know what it applied to regarding rent, renos, purchasing new or est houses etc. I know all this because I swooped on a bargain in 2000 and sold it in 2003.

The uncertainty of the CT is grossly overstated, but it might have an effect on some sections of the market for a few months. Which isn't a big deal. Real estate agents may say it is, but it isn't.

 

[ARCHYBOY]

Not true. The Native Title act came in in 1994. Market flat as a pancake or rising 5-10% inner city. The press then was very similar to the press now, the NTA would destroy the mining and agriculture industries and create uncertainty over all land tenures and thus destroy our economy. Seems silly now doesn't it? Re the GST came in in 2000. I'm disagreeing with you in that that market wasn't booming then. It boomed 96-99, then took a breather and boomed again 2001-2004. But I'm also disagreeing with my earlier post, the GST did have an effect for a couple of months. People didn't yet know what it applied to regarding rent, renos, purchasing new or est houses etc. I know all this because I swooped on a bargain in 2000 and sold it in 2003.

The uncertainty of the CT is grossly overstated, but it might have an effect on some sections of the market for a few months. Which isn't a big deal. Real estate agents may say it is, but it isn't.

You may be right, I might be right, who really knows. Until it actually kicks in and we see some results, its all speculation. Evaryone thought the first home owners grant would really kick start the market and make it affordable for first home buyers but all sellers did was up their price and builders just added it to the bill, out of pocket expenses for the buyer was practically the same, if anything it went up as they then had to pay higher stamp duties.