Confidence in property market at 40 year low

Confidence in housing collapses to lowest level in 40 years: survey

Interesting read. It seems 2017 will be an interesting year for the housing market. It looks like banks will be raising rates independent of the RBA, unemployment is up slightly and confidence in the market it at a 40 year low. Having said that, the May budget is likely to bring some "affordability" measures that may encourage more FHBs into the market and the Vic Govt decision to axe stamp duty for FHB buyers will definitely encourage some more buyers...

So a mixed bag. My gut feeling is telling me to sell this year in Vic (Frankston).

 

We can see this just the posts/new threads on PC, times are a changing.

Also, property investors seem to be diversifying from property to shares, property yields are perhaps 3% very low returns and many predicting close to peak.

If RBA puts up rates its game over, even the noise will change the market sentiment, already happening on PC

MTR

 

If its anything like what Morrison repackaged and relaunched as "new" with Lucy Turnbull in Sydney last Xmas, it will be mutton dressed as lamb. A complete flop. Zero, or near zero, success.

These guys are pinning all their hopes to "inclusionary zoning" and "affordable housing " legislation , to encourage developers to build sites where 20 or 30% of the site is set aside for low /moderate income earners. The carott is supposed to be faster apprvals by council, and extra floor space ratios for the developers

Heres the problem. It's already existed in NSW for a decade- its called the NSW AHSEPP . developers havent embraced it previously - and thats when sites had more margin in them, commercial funding was readily available, and prices were lower. What do you think the chances areof developers embracing it now that funding is almost impossible to get for developers - unless they are willing to pay 12% for private funding , and now that supply is abundant and there's no margin in development sites? The answer is - buckleys and none.

Its NRAS without the NRAS tax credits. Even in the USA, where affordable housing is entrenched now - they pay developers a low income housing tax credit . Introduced in the 80's by the most right wing, red tied, republican of them all - Reagan. Pure, capitalist privatisation of affordable housing, at 1/10th of the cost of the public funding it. 120K drip fed over 10 years using tax credits... half of which they get back from GST and stamp duties anyway, versus hundreds of thousands spent up front per dwelling , using their current methods. And the wealth created leads to more self funding retirees and less demand for pensions in the future....In other words- its literally a win for Govt, a win for investors and a win for tenants.... so reinstate NRAS, or some form of NRAS 2.0. These guys could hardly be any dumber than they are. You just want to slap Morrison - very hard!

If they want more affordable housing for FHB's - address CGT and NG . remove stamp duty and institute a broad based land tax. Cease PPOR CGT exemptions from pension asset tests ( maybe at $1 Million and above) . Quick smart you'll see thousands of multi bedroom dwellings being sold off and balance will be restored within 5-10 years. At the same time, build the high speed rail and develop other cities and make them viable. Goulburn. Wagga. Albury. Shepparton.You'll see tens of thousands of familes move there and find affordable lifetsyles and still commute to work within 90 minutes. The answer to what Im suggesting is of course, also buckleys and none.

So around and around we will go - tinkering at the edges and getting nothing done , until the debt bubble bursts and we have a correction /recession of a scale that forces political change to these imbalances. It beggars belief what a bunch of incompetents we have at the adults table... and in the end it will cost all of us dearly if that implosion happens.

1. CGT and NG - including CGT exemptions from pension tests
2. NRAS
3. HIgh Speed Rail with 4 key cities between Sydney and Melbourne - Goulburn, Wagga, Albury/Wodonga , Shepparton Later, you can go inland from Sydney to Bathurst, Orange, Dubbo, . And then later, North to Newcastle, Port Mac, Coffs Harbour, Brisbane

 

I wish someone would tell the 30-40 groups of buyers that I have to cope with at each Open home I attend.

 

tell them what? Are you coping/contending with FHB's or with upgraders and downsizers? Im at 6-7 opens per week...have been for many months... its almost all upgraders. No FHB's at all.

 

More clever work to address affordability, this time from mental giants of the state variety, south of the border...

Owners who leave homes vacant will face a tax slug as Victoria acts to increase housing affordability

Owners will tenant them for a minimum term to avoid the "tax" ... then claim neg gearing and the Govt will end up paying them money. Not only will it do diddly for affordabilty, it will cost the State money. Geniuses, this entire generation of pollies! Absolute geniuses.

Listen Mr and Mrs politcian of all persuasions ( local, state and federal) ...my phone is always on, if you ever decide you'd like sensible ideas from people who know what they are talking about, that will actually deliver the outcomes you say (but dont mean) you want .

 

Take a number and grab another for Turnbull while you're at it!

 

I have to say, I dont actually consider him to be responsible. He made a deal with the right wing devil and is a toothless tiger. In another era, perhaps he could have been a very different man as PM. The one we all hoped he'd be. Sadly, he will go down in history as an ink smudge.

anyway...Westpac just hammered investors 5 minutes ago.... perhaps APRA has been far more active behind the scenes than we thought

CBA - no OFI I/O refi's @ 3 weeks back
NAB - hiked investors by 25bpts yesterday
WBC - 23-28 bpts today
Only a matter of time until everyone goes @ 25bpts

I called it early. Its happening a little faster than I had expected- I though second half 2017 ... but there absolutely will be more to come. I wonder whether this will trigger a real slowdown in Sydney, or whether another 25bpts is required to do that?

 

How would you find tenants for a "minimum term"? The vacancy tax should be the equivalent of market rent for the property IMO. And get rid of SMSF investment in residential property. Either everyone can buy property with super or no one can.

 

Not a very well thought argument @Cimbom

Every investor with even one day of vacancy would be paying 1/365th of the annual tax ( whatever the tax ends up being) if your suggestion were adopted. The state would need thousands of staff just to audit it all.

Short term letting, to answer your question. Furnish it and sign it up for Air BnB for example, and make it available for short term letting.

Your SMSF idea is also not very good. Thats the point of the SM in SMSF. ie Self Managed. Everyone can buy property - resi or commercial- using super. They simply need to set up an SMSF and bare trust and make a purchase.

 

Tell them that they should not be at an Open home trying to compete with me , but instead should, according to the article posted by the OP, recognise: Confidence in the housing market has collapsed, with the number of Australians describing property as the wisest place to put their savings falling to its lowest level in more than 40 years

I'm competing with about 60% investors and 40% owner occupiers of which only a minority would be FHB.

 

Me thinks more. Another one straight after this hike to get the message across would be nice.

Might be wrong, but even if it's available for rent and it's not leased, you can claim the losses. Easy to get around it as you say.

 

Mate you have been reading to much doom & gloom lately, I'm happy to take advantage of your scenario. Message me and I'll take the house off ya privately for a cheaper price.
Seriously though, if your not over leveraged what's the stress?

 

And... I'm still waiting for this....

Australia six weeks from a housing collapse, US report warns

Seriously, the government has an incentive for seeing house prices to keep going up... it makes home owners feel richer, so they'll be positive and spend. No home owners likes to see property prices going down. The government would rather appease people already in the market, because there are many of them who get to vote and play a big part in spending and confidence too... somewhat to the detrement to people who aren't yet on the ladder.

 

haha well you may be right about that. I probably need to read something other than property news.

 

According to Roger Montgomery the sky has already fallen... Hold on tight: the great property sell-off has begun ... he's an interesting guy, very respected but he turned very bearish on property last year. He's a bit light on evidence to show why he thinks the collapse has started - and really peaks are very hard to spot unless you're well past them, so I'd hesitate to believe anyone saying this so decisively. However - AFR's sounding decidedly bearish too today saying it's time to invest elsewhere. Time to look at property alternatives. Either way the media's gone gloomer mad.

 

Hah you can buy Telstra shares at 6.6% fully franked dividends. Come on who wants to own properties at 2.8% gross yield?

I was just looking at a 100sqm terrace house in Little Lonsdale St in Melb CBD. They want $4m+. Rents for probably $2k per week. I guess that's cheap for Sydney.

 

Of course it has to make sense otherwise what it the point. Been looking and I don't see anything that makes any sense in Perth.

 

He was done as soon as the support fell away, if there was more support at election time he could have lead, instead of following .....

Anyway, it makes you wonder what sort of person he really is, he has enough money, why stay if you can't make changes, maybe he is sick of business, but he could get a good gig you would think.

Maybe easier to see when your on the outside, but I agree, over time will be seen as a flop I believe.

 

I think the media will need to be talking about it and people letting go of the RBA cut thoughts.