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We Are Now Looking At A Very Different Market To What It Was Like During The Boom

A report from Nine News in Australia. “A new report by the Housing Industry Association revealed home affordability is at its best since 1999. However, Nine Finance Editor, Ross Greenwood, urges caution. ‘Bear in mind it’s the housing industry telling us this, they have a vested interest. They want you to buy a house, they want confidence to come back,’ Greenwood told Today.”

“‘House prices have come down in Melbourne and Sydney between 15 and 20 per cent and 25 per cent in some areas,’ he said. ‘If you go to Perth they are more than 25 per cent. In Darwin (prices are down) more than 30 per cent and then Brisbane and Adelaide are starting to fall. Canberra and Hobart are really the only ones holding up.'”

From News.com.au. “The sharp drop-off in investors purchasing properties dragged the national housing market to its heaviest losses this side of the Global Financial Crisis, experts say. ‘We are now looking at a very different property market to what it was like during the boom,’ realestate.com.au chief economist Nerida Conisbee said. ‘Over the past 12 months alone, property seekers from China have dropped by over 60 per cent to the lowest level we have ever recorded.'”

“CoreLogic head of research Cameron Kusher said investors abandoning the sector could be attributed to property policy as well as an oversupply of dwellings. Mr Kusher said investors account for about one-third of the market, therefore a dramatic pull back in purchases was always going to drag prices lower.”

“‘And now we’re also seeing the owner-occupier segment drop off as well,’ he said. ‘That’s a key contributor to why dwelling values are falling, when a third of the market starts to slow pretty rapidly, it does have an impact.'”

From Property Observer. “A one bedroom, one bathroom East Perth apartment has sold for $275,000, some $145,000 less than its $410,000 off the plan sale in 2012. The apartment at 13/35 Wellington Street in the 2015 built VIBE complex initially sought $315,000 before its asking price was reduced to $299,000.”

“The unlucky vendors sought to flip the apartment on its completion, listing it unsuccessfully in 2015 asking offers from $449,000. According to CoreLogic data, the change in East Perth’s median price over the past 5 years is -23.7%.”

From Domain News. “Sydney tenants are enjoying the biggest annual fall in rents in at least 15 years amid a continuing market correction that began last year, new figures show. Prices began to fall last year and the latest data means they are still at 2016 levels, according to the Domain Rental Report for the June quarter.”

“The Agency national director of property management Maria Carlino said Sydney’s huge construction pipeline had finally had an impact. ‘It’s definitely a tenants’ market, they haven’t been silly in relation to offers,’ Ms Carlino said. ‘They’ll come in with [an offer] 10 per cent cheaper and negotiate from there.'”

“She had noticed a glut of one-bedroom apartments on the north shore, while two-bedroom units and new builds leased quicker.
Landlords unwilling to negotiate asking rents or spend on a renovation to spruce up their investment property risked losing income while it remained vacant, Ms Carlino said.”

This Post Has 55 Comments
  1. ‘Canberra and Hobart are really the only ones holding up’

    Hobart is sinking like a turd in a well.

  2. ‘Over the past 12 months alone, property seekers from China have dropped by over 60 per cent to the lowest level we have ever recorded’

    Same thing happened in Canada. Remember the expert in money laundering there saying the Chinese government is handing out life sentences for taking too much cash out?

    DONG!

    1. Just like with little children, consequences have a profound way of reducing or eliminating “negative” behavior. Pity that consequences weren’t around for the banksters after the GFC. TBTF is socialism for the 1%. Soon we’ll get another “opportunity to relive that whole mess, since “no consequences” yet. Still waiting, but not holding my breath. When pigs can fly or something.

      Foot stamping is only about a 3 on the Richter Scale so far.

      “You can ignore reality, but you can’t ignore the consequences of reality.” – Ayn Rand

      “There are no rewards or punishments — only consequences.” – W. R. [William Ralph] Inge

      “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.” – Sir Josiah Stamp

      1. Ayn Rand never actually said or wrote that, although it is often attributed to her. It paraphrases something she, as well as others, wrote and stated.

    1. Swill-ow was projecting a 12% increase in San Jose earlier in the year. Now they are predicting a 7% decrease. Looks like the standard deviation for these predictions is at least +/- 20% of the property value. The accuracy of their pricing model augurs well for the future returns on their flipping business.

      1. Maybe they hired the statisticians that had Hillary at 98% chance of victory to design their pricing models. BAAAAAAHH! Somethings are just irresistible.

  3. “The unlucky vendors sought to flip the apartment on its completion, listing it unsuccessfully in 2015 asking offers from $449,000. According to CoreLogic data, the change in East Perth’s median price over the past 5 years is -23.7%.”

    Die, speculator scum.

  4. “Sydney tenants are enjoying the biggest annual fall in rents in at least 15 years amid a continuing market correction that began last year, new figures show.

    Even better, we renters aren’t tied up in knots as our shacks shed thousands of dollars in value every month with no end in sight.

  5. Gosh.
    It wasn’t that long ago that everyone wanted to live in these places.
    And it was totally different there.
    And 13 year olds were buying and flipping houses.

    Good thing all these folks put down 20% and could afford to pay the mortgages. And there is not 40:1 leverage being used.

    #####

    ‘House prices have come down in Melbourne and Sydney between 15 and 20 per cent and 25 per cent in some areas,’ he said. ‘If you go to Perth they are more than 25 per cent. In Darwin (prices are down) more than 30 per cent and then Brisbane and Adelaide are starting to fall. Canberra and Hobart are really the only ones holding up.’

    1. Hobart, Tasmania. That playground of the rich and famous. There’s no place left now to financialize housing. Stick a fork in it.

  6. Nobody Rings A Bell

    Excerpt:
    Stocks and indexes that haven’t corrected in meaningful ways in a decade, but remain on a steady ascent as the size of the investable universe is shrinking.

    Fewer companies to invest in (over 40% fewer than 1990)
    with ever fewer shares to buy as the outstanding float keeps shrinking courtesy buybacks and splits (almost 10% fewer since 2010)

    Ever more passive investment money buying into an ever shrinking universe of shares and stocks all covered by an expanding universe of ETFs tracking the fewer available investable shares.

    Permanent levitation. Infinite growth in a no yield low growth world. Believe it to be true if you wish, just know nobody will ring a bell if it’s not.

    1. To give her some credit she did briefly address the areas with increasing supply like San Jose Ca. Her focus was definitely on the decreasing supply areas. One week we hear doom and the next all gloom, hard to take in any MSM news with a grain of salt.

      1. If supply is varying depending on region, it should be reported as such, and not by taking the worst possible data and painting with a broad brush over everywhere.

        It is also disingenuous to downplay pricing factors — if you’re going to talk about a shortage of affordable properties, then there needs to be a focus on why the market is still getting flooded with luxury housing few can afford. Why are businesses allowed to openly flout laws of supply and demand?

        1. +1

          If the MSM reported on factual news they would be reporting where the equity locusts and foreign money launderers that piggy bank in RE are going and attribute any areas with an “increase” in activity to those factors. RE is globally in crater mode, the MSM is full of misleading FOMO hype to lure in anyone they can into the dying mortgage industries meat blender. Those that fall for it will be the last of the herd. Diane is a puppet

          1. Black Families Build Wealth Through Homeownership Realtors Say

            ‘NASHVILLE, TN — The National Association of Realtors Board (NAREB) came to the Opryland Hotel as a part of the Full Gospel Baptist Church Fellowship International conference last week to explain all the ways people with modest but steady incomes can qualify for a mortgage for a home or investment property. Their message: owning real estate is how black families can build and pass on wealth.’

            “Homeownership is wealth building. The [national] rate of home ownership is 64.4 percent,” said Nadja Vital, Affordable Lending Regional Manager, for Freddie Mac.’

            ‘Rob Sergio Mack a real estate broker with ABL Realty Services said he hoped more black investors would join the market – particularly as areas like Bordeaux start to gentrify. “With a good positive influx of black investors, then that outcome will benefit even more people.”

            ‘Mack said he thought black investors would be more thoughtful about maintaining the character and culture of the neighborhoods they are investing in. “Especially the local investors – with the white investors – a lot of them aren’t local. We need more opportunity for local investors. I think right now is a good time to start pushing that agenda – let’s get this local pool of investors. “

            “I would like to see [people investing in property for] rental, for first time home owners. I really don’t want to see a lot of flipping. I think that ship has sailed,” said Rob Mack.’

            ‘His advice to people who would like to invest in real estate: “Don’t be scared. Knowledge is power. Contact a realtor. Know what your debt to income ratio is. And become a home owner because that’s how we pass wealth as a people. We all pass wealth from one generation to the next.”

            https://tntribune.com/lifestyle/business/finance/black-families-build-wealth-through-homeownership-realtors-say/

          2. A commonly used phrase on investing prospectuses comes to mind: “Past results are not indicative of future performance.”

          3. Black Families Build Wealth Through Homeownership Realtors Say

            You would think that trying to get black people to sign up for slavery to make old white people rich would be politically delicate.

    2. The real shortage is a shortage of excuses for creating housing markets where the median house price is ten times the median income.

    3. She’s just parroting lines from David Lereah 2.0, Danielle Hale, who said prices were never coming back down.

    4. I couldn’t take it anymore and jettisoned my TV ten years ago. Every time you turn it on, your brain walks onto a battlefield in a mind war. Land mines of lies, propaganda grenades, and disinformation cannons are going off everywhere. If you work with data for a living, you realize that data is expensive and good data is very expensive. No one is going to materialize on the screen of an electronic box and for free deliver us the information we need to critically evaluate the world around us while we eat Cheetos and drink Pepsi. But what they will do is bombard us with lies, propaganda, and filth until we are so mind f#ck*d and morally bankrupt that we will be. compliant oblivious drones. If they lie this egregiously about something relatively innocuous like the housing market, imagine the scale of the lies they are going to tell you about more serious issues.

      1. “I couldn’t take it anymore and jettisoned my TV ten years ago.”

        +1 Ditto back in the 80’s.

      2. filth

        It’s not just TV. When I dropped my son off at summer school this morning, one of his 9-10yo autistic classmates was talking to another classmate about Pennywise from It and about decapitating someone with a chainsaw. WTF! The other classmate was talking about going to see Paddington 2 tomorrow.

        1. “We’ll know our disinformation program is complete when everything the American public believes is false.”
          —CIA Director William Casey at an early February 1981 meeting of newly elected President Reagan
          https://amallulla.org/casey/

    1. This society is crazy. I have never seen so much cheering for prices to go higher.

      If people cheered for food prices to go up you would think they were nuts, yet people being priced out of shelter on overpriced shacks is considered to be something to be propped up by any means.

      Don’t create fake prices on food, shelter, health care,or education for starters.

      1. Read Ben’s story. Anyone pushing Blacks to buy houses at high levels to reduce the wealth gap is doing more damage to them than the worse racists. With friends like that no one needs enemies. I may not be as bearish as most on this board but now is not the time to go all in either the housing or the stock market.

  7. Sesame Street’s “The Count’s” … Thee number of the day!:
    “But vait, there’$ more!” 11, 12, 13

    Busines$

    Here Come the Earning$ Disappointment$coin

    Weak result$ from industrial bellwether Fastenal suggest investors may not be cautious enough on coming results.

    By Brooke Sutherland |July 11, 2019, Bloomberg

    There’s no denying the slowdown in U.$. manufacturing now.

    Fastenal Co., a di$tributor of factory odds and ends, reported second-quarter results that di$)(appointed on almost every level, even in a market that was primed for disappointments. Earnings per share missed analysts’ estimates; it was the biggest quarterly gross margin shortfall in more than five years; and daily sales growth for the quarter was the weakest since the first period in 2017. Analysts had hoped that a slower April was just a temporary blip, and they were encouraged in that thinking by a rebound in Fastenal’s May sales data. It now appears the downward trend is more permanent and marked.

  8. ‘Bear in mind it’s the housing industry telling us this, they have a vested interest. They want you to buy a house…’

    That’s right. It’s different this time. 😁😁😁 Buy buy buy!

  9. Hyundai Mobis and Yandex reveal 2020 Sonata self-driving prototype
    CNET
    11 July 2019

    “Russian internet giant Yandex and Hyundai Mobis on Thursday debuted their jointly developed 2020 Hyundai Sonata self-driving development prototype. Based on a regular ol’ next-generation Sonata, the vehicle has been fitted with the hardware and software necessary to enable autonomy and continue development on the technology. The two companies signed a memorandum of understanding to create Level 4 and Level 5 autonomous vehicles, and this is the first step towards that end goal.”

    “So far, testing has been limited to Yandex’s testing grounds, but according to the company, it’s been operating completely autonomously in that closed environment, coming up against things like simulated weather and traffic. Yandex said its prototype will start operating on public roads in Moscow “shortly.””

    “This is just the beginning for their partnership. Eventually, Yandex wants to have a fleet of 100 development vehicles, a feat it hopes to achieve by the end of 2019. Future prototypes won’t just be based on the Sonata, either. To prove its flexibility, Yandex wants to add its hardware and software to a multitude of Hyundai and Kia vehicles, although it declined to say which ones.”

    1. Yandex

      “It’s the former’s first OEM partnership and comes immediately after Hyundai’s substantial investment on Tuesday in India-based ride-hailing company Ola.” [$300 million]

      “A similar deal by Uber and Toyota was accompanied by a $500 million investment.”

      A lot of money going toward solutions to problems we don’t have.

      1. “I think there is a world market for maybe five computers.” – Thomas Watson, president of IBM, 1943

        1. He was probably quite correct considering it would have been pre-Hollerith computers. You couldn’t sell even one of them today.

          1. I’ll try again:

            “If I had asked people what they wanted, they would have said faster horses.” – Henry Ford

            If you can’t see how radically different society would be (including housing) with level 4/level 5 autonomous vehicles, you’re not using your imagination enough.

          2. you can’t see

            Your slogans are excellent.

            I’ve made a career of doing what others couldn’t imagine.

            What I’m imagining now is that we are in an age of malinvestment, and one in which people offer more expensive ways of doing things as a solution to people being bankrupt. I don’t imagine a world where people drive several hours to work while they are sleeping in their business suits in a car that costs more than their house. I imagined a different kind of life and have made it happen, for me anyway.

            Did you catch the link I gave you to the guy building a tiny log house?

          3. I’ve made a career of doing what others couldn’t imagine.

            Are you an inventor, BlueSkye?

          4. Did you catch the link I gave you to the guy building a tiny log house?

            I missed that one, please resend. I am pretty familiar with the tiny house movement. I can tell you almost everything that, I believe, is wrong with it too.

            Don’t get me wrong Blue, I greatly admire many things about your out-of-the-box thinking. And your ability to clearly see the folly of debt is a breath of fresh air.

            The most obvious problem I see with the tiny house movement that zoning won’t allow for it and it doesn’t scale. But here is my other side project I’ve been consulting on the past few months (new RV cabin/loft resort close to Jackson Hole, WY):

            https://tetonvalleyresort.com/

            It’s truly a marvelous resort with very small, livable cabins.

          5. This is up where I take my boys fishing every summer in the Canadian wilderness. My grandfather and his friend wrote two books on how to do this 80 years ago. I learned but never got there. The boat captured me first.

            Wow, that is so impressive! That man obviously has a lot of talent in the trades and construction. I could never do something like that, though I do have the same penchant for the wilderness.

            Why no power tools though? I mean, is it to prove a point? Imagine how much quicker he could have done this with modern technology.

            I’ll never build a cabin by myself in the Canadian wilderness. But I still love the outdoors all the same. Hiking, biking, running, etc. But I’m not an outdoors man. I’m an urban guy that loves the nature but wants to come back to creature comforts, soak in a hot tub, and watch a basketball game. It may sound weird, but the freedom to explore is exactly why I purchased my Tesla model 3. I was never going to buy a truck or and RV, but I turn my model 3 into a mobile hotel and explore all over the US. I wanted the ability to basically take a make-shift every day vehicle and turn it into something I could camp out in and then wake up and run in the mountains. Kind of like this:

            https://www.youtube.com/watch?v=Y_3xfMYGzbg

  10. “tenants are enjoying the biggest annual fall in rents in at least 15 years amid a continuing market correction that began last year.”

    . . .but, but, I thought if they bought up all the properties, then renters would have no choice but to pay more??? I mean, why would these “investors” allow the gravy train to get off track?

  11. NYC-canadah-austrailia
    boring
    I’m thinking the 2020 downturn for RE will be like the 90’s very uneven and for total gdp, not that big a deal.
    More a Japanification than a full on VZ,Brazilian

    With 22151 feeling the least effect. As always

    pile on

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