From previous post - "The GFC hit in 2008. Its almost 2013. So if the housing market was going to bust then it would have by now."
Property bulls amuse me. If you think the media is going to tell the truth about real property prices or demand your kidding yourself. Let's look at some facts:
The so called housing shortage is a fiction. To come up with the figures they included the following:
Homeless people People living rough ie: living back with parents or friends. People living in caravan parks People in shelters.
Now considering there is over 100,000 homeless people in Australia this makes up a large part of the equation. People do not end up homeless because there is not enough houses to buy. There is a bunch of reasons people end up homeless. Down on their luck, broke, mental illness, depression, unemployed, family breakups, drug addiction etc.
People living rough is usually because of relationship breakups or unemployed/broke. It is not because there is not enough houses for sale.
Caravan parks. Most people chose to live in a caravan park because they don't want the expense of owning or renting a house or simply can't afford to buy a house even if there were more for sale.
People in shelters. This goes without saying. They don't end up in shelters due to not enough houses for sale. They are usually broke, separated, substance abuse, unemployed or mentally ill.
Now for something to be in a shortage it means there aren't enough of them for sale whatever that product may be. Lack of available stock. How many real estates do you see with no houses for sale? There's always houses for sale. If I walked past a RE and only saw a few pictures in the window then I'd believe there is a shortage.
There is several reasons you won't hear the truth in the media. It's called vested interests. The newspapers rely on the RE section to earn up to half their profits. So of course they aren't going to tell you that prices are too high or that they are falling. If everyone thought prices were falling most people would hold off until the prices got cheaper. This would cause them to fall further. So they can't say that.
Also print media is often owned by the same owners of TV stations so you won't hear the bad news on TV. They cannot sabotage their own income source which is the RE lift out.
Banks won't tell you prices are falling because that would mean their encouraging their own loan/valuations to fall.
The Real Estate industry themselves won't tell you prices are falling and will continue to fall because people would stop buying and they'd stop earning money plus it would mean prices would fall further as everyone would hold off buying.
And last but not least, the government won't tell you prices are falling because they don't want voters to be losing money. They also don't want the poor suckers that have been won over with the first home owners bribe to end up in negative equity.
So the big 4 won't tell you the truth.
I know for a fact that RE prices (I live on the gold coast) have fallen between 20 and 60%. A good friend owns a RE and verifies across the board prices are down min 20% to 30% for average properties. The real top end properties are down around 50% from the peak.
An owner I know of a commercial block of land on the river at Coomera boat precinct turned down an offer of $7 million at the height of the boom and now cannot even get $2 million for it. It's still for sale.
I live at a marina and the waterfront properties were going for over a million. There is one for sale now for $550k and has been on the market for nearly a year.
To top that off if you think the GFC is over your dead wrong. The only reason Australia isn't as bad as other countries is that we just borrowed our way out of a recession. When labor took over we had $45 billion in the bank. We now owe over $230 billion and rising. That means we just spent $275 billion to stave off a recession.
Now we will go into a recession and have a foreign debt of over $550 billion when you include the state government debts. Private debt is the highest per head of population in the free world. It tops $4 trillion. We owe more money than any other country relative to our population.
The real global recession/depression hasn't even hit yet because bankrupt nations are simply borrowing more money just to pay the interest on the money they already owe. Their foreign debts are increasing, so how can things be getting better.
The major economies of the world, USA, half of Europe, Great Britain, Japan have descended to the lowest form of desperation and last vestige of staying afloat which is printing money just to survive. No nation in history has ever successfully printed it's way out of bankruptcy. And the worst part is they are all bankrupt at the same time.
We need to see massive defaults globally before this mess will be even close to being over. That is, entire nations going belly up and defaulting on their debts writing off trillions of dollars. To think this will not affect Australia is curious to say the least.
The IMF claims Australian house prices, which by the way were the highest in the developed world, are still 50% overvalued. So if you think things have bottomed out yet, sorry to be the bearer of bad news.
Many people refuse to accept house prices were in a bubble. A bubble is brought on by easy credit, a strong economy and govt policies encouraging the speculation in that asset. When a government has to give people the deposit just to buy the house because they can't afford to save it, and the banks need to give you 100% finance, that is an indication prices were way too high.
In Holland where the first price bubble in history occurred, the price of a Tulip bulb reached the equivalent of over $300,000 today. It was just a bulb.
The old "we are different" argument doesn't stack up. Don't you think the hundreds of million of home owners across the world ever thought their property would drop 50% or more in value? Don't you think they thought they were all different? It just hasn't fully happened here YET. It's started, but not finished. Take note of the picture below. (scroll sideways)
Look you just need to be careful thinking it's bottomed out or over. When the s..t does hit the fan here, no one will be buying a house. Prices could tumble. Ask yourself if the person or industry saying now is a good time to buy has a vested interest in RE somehow.
