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  1. #1
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    Default Aus Property Market

    Anyone following the AUS property market at the moment?

    Things are starting to look a bit serious for our cousins across the ditch. I note the royal banking commission has put the breaks on a lot of new lending and getting reports of re-mortgage requests are being rejected. Hearing some scary reports about those in debts of millions and the local market has crashed [Specific towns with economies based on a single employer ].

    Hearing that some Interest only loans are also being rejected. Which to me signals that the banks no longer see capitol gains as a sure thing anymore. Seems like that is just the tip of the iceberg.

    Thoughts?

  2. #2
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    For some biased (negative) coverage, (it does contain some good stats between the spin) http://www.digitalfinanceanalytics.com/ and his youtube channel "Walk the world". There is no doubt that market in Sydney and Melbourne is having a bit of a pullback, just a question of how far and how fast it will go.

    As for small/regional towns having property booms and busts when the large single employer/industry in that town/area has good times or bad.. whats new?

  3. #3
    An Awesome Cool Cat winner69's Avatar
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    I found this an interesting insight


    Melbourne & Sydney house prices currently undergoing the largest fall since 1992. For an 80% service based economy with close to 40% part time workforce with record household debt, the unprecedented run is on the clock.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  4. #4
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    Anyone interested in this should do some reading on the results of this enquiry .
    https://en.wikipedia.org/wiki/Royal_...vices_Industry

    Its probably been a generation since anyone in Aussie saw the property market go backwards by a decent magnitude. It used to scare me a few years ago those property programs when you saw an auction .The parents go along with the kids , their limit is 600K , they pull out of the bidding and the father goes and pays 700K for a 2 bedroom concrete unit ....
    " son you've just got to get into the market it only goes up " ...Never any worry about how they would pay the increased debt ..... The review above found at one bank something like 40 % of all loan applications did not have the expenses section filled in ....There is a huge amount of interest only debt rolling off the next 2 years that has to goto P&I , that could be the catalyst for selling now as presumably some of those million dollar mortgages on P&I are not affordable .
    If you want a good book on what can go wrong when property turns sour "The bank that broke the bank " about Westpac in the late 1980"s and the period Kerry Packer took a 10 % stake in the bank , not a bad read.

    https://www.abc.net.au/news/2018-06-...terest/9886430
    Got a long way to play out yet this property cycle .....
    Last edited by stoploss; 16-12-2018 at 04:58 PM. Reason: add link

  5. #5
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    So I'm looking at Australian commercial property at the fund or ETF route.

    I want to avoid retail if I can, as I'm pretty sure that online shopping is going to lead to a shake-out there.

    Similarly Office - I Can see continued offshoring and machine-learning AI cramping demand there.

    Which leaves industrial/logistics.

    Anyone got anywhere beyond Goodman and Industria in that space?

  6. #6
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    CIP (was TIX , see that thread)is the only pure play listed Industrial/ logistics listed stock . Ive just verrry reluctantly sold cum div as its pretty defensive well managed and growing, just done a cap raise to buy more buildings but i want more cash on the side in this volatility/correction/crash.
    Last edited by Joshuatree; 24-12-2018 at 11:35 AM.

  7. #7
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    Thanks, Joshuatree.

  8. #8
    FEAR n GREED JBmurc's Avatar
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    Already some big falls in some suburbs over 2018

    https://au.finance.yahoo.com/news/13...030145928.html

    More DOOM for the big cities
    https://www.news.com.au/finance/econ...b13c77629f060a

    As we know household debt to income in Aus is around 200% here is NZ 160% so we are far from protected if the neighbors property market crashesit will affect the same banks that lead to the bulk of kiwis ... we could well see rates forced up into a weakening market
    People don't have ideas, ideas have people

  9. #9
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    Quote Originally Posted by GTM 3442 View Post
    So I'm looking at Australian commercial property at the fund or ETF route.

    I want to avoid retail if I can, as I'm pretty sure that online shopping is going to lead to a shake-out there.

    Similarly Office - I Can see continued offshoring and machine-learning AI cramping demand there.

    Which leaves industrial/logistics.

    Anyone got anywhere beyond Goodman and Industria in that space?
    https://australianinvestment.co.nz/

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