Aus: property down 1.8pc, total wealth down 8pc this year

Household net worth declined about 8 per cent since the start of the year:

RBA Minutes of the Monetary Policy Meeting of the Board - 04Nov08
rba.gov.au/MonetaryPolicy/RB … 12008.html

Domestic Economic Conditions (excerpt from RBA Minutes)

“Turning to the housing sector, nationwide house prices fell by 1.8 per cent in the September quarter, according to ABS figures.
The recent falls in house prices and on equity markets had led to a decline in household net worth of about 8 per cent since the start of the year.
The falls in equity prices thus far in the December quarter meant the fall was now larger.
Members noted that there were few precedents for the current developments in household wealth.”

The majority of the decrease in wealth is due to the stock market.

The ASX is down 50% since November 2007.

business.theage.com.au/business/ … e=fullpage

I also found a bit of patriotic “Don’t be talking us down now” bollocks :unamused:

theage.com.au/national/austr … ml?page=-1

We sold there in Brisbane in April. Pulled it from the auction with a week to go and sold by private treaty a few weeks later for about $30K less than the asking which was up to 20% less than some of the inflated estimates we got from agents. I reckon we got away lightly. Thanks Pinsters. 8DD Only for you I’d probably have held out for ‘what it was worth’ as many did early this year when auction % clearance rates went from 70% to 30% overnight.

They’re in the middle of a serious ‘correction’ there now. The father-in-law was offered a house by his neighbour for $1m a few weeks back. They genuinely thought they were doing him a favour at that price and 12 months ago it would have been less than ‘market value’ for the place (nice house in good location etc.). It went to auction last week and sold for $770K! Still a long way to go with the commodities boom well and truely over.

There is something puzzling me ( It doesn’t take much) but you economist egg heads might be able to help out.

Traditionally, the way you know demand is not reflective of “market fundamentals” is if property prices rise exponentially but rents stay relatively stable ala Ireland.

However, cities in Australia have had massive price appreciation but rents have risen steadily too. Perth is the best example of this.

How is this possible?

I’ll have a go, genuine supply/demand imbalance, rising population caused by inward skilled migration and interstate migration due to the mining/commodities boom, full employment and rising incomes due to mining boom, market playing a bit of catchup after many years of sub par growth.

In saying all that Perth prices went a bit loopy with Perth overtaking Sydney for the highest national median at one stage, which is frankly ridiculous.

Even with rising rents, yields on real estate in australia are very low, partly because of the negative gearing subsidy.

But we had a massive inflow of immigrants too caused by our own boom. Given that rents didn’t rise significantly we must have had the rental stock to cope?

BTW, Perth has a fair few empties too.

bubblepedia.net.au/tiki-index.ph … ByLocation

And they have stopped building. (no link to hand for that) House prices are already coming down but we are not at capitulation stage yet. Perth prices are totally loopy but I don’t know how much they are going to fall and how long it will take. With commodities looking very shaky it may be quick enough.

Maybe, but nothing on the scale of Ireland. There are no ghost estates in Perth. There aren’t hundreds of empty/half empty/mothballed apartment blocks. There were no queues of greedy specuvestors queuing up for days to buy shoeboxes off the plans that they’re now trying to run a mile from.

I think there was just too much mining/commodity boom money chasing a fairly small stock of housing for a few years there, and prices went mental as a result.

The housing bubble arrived in Perth fairly late and when it arrived it hit hard. I don’t know if prices will collapse (depends on the unemployment rate), but I would see a long period of stagnation.

I’d add that Australia charges rates annually based on the market value of residential property, so at least the owners of any empty properties are paying their fair share towards the provision of local services, unlike Ireland. Charging rates at least discourages people who own property from leaving it lying around bone idle.

news.com.au/business/money/s … 51,00.html

Brisbane is full of empties. I look at them every day.

Sydney too is full of empties. The complex I used to live in was like a ghost town.

The spin is very strong in Australia though. I’ve found that investors might have had a few months empty in FY09 and were happy to be sticky on their prices becaue they could write of the loss. We’re in FY10 now and they’ve had no rental income all year so they can’t write off losses. The discounts are starting to be substantial. Still though the discounts are in the form of free rent periods rather than discounted rates. The investors feel that by maintaining the high headline rate they can maintain the value of the property.