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Discussion Starter · #1 ·
House prices to boom
June 17, 2007 12:15am

HOUSE prices are set to jump up to 15 per cent – or an average $45,000 – in the next year, with real estate experts predicting a South Australian property boom.
After successive years of double digit property price growth in the early 2000s, Adelaide recorded a below-inflation increase of just 3.6 per cent last year, the smallest in a decade.

But the Real Estate Institute of SA said the market was now as strong as the boom year of 2003, which saw average house prices soar 16 per cent.

"The feedback I'm getting from institute members is the market is strong across all Adelaide suburbs, not just a number of pockets," REISA president Mark Sanderson said.

"The demand for property is brilliant and it's better than 2003, which was a boom year."

A surging economy, coupled with stable interest rates, would see increasing demand for SA houses, according to real estate analyst firm Australian Property Monitors.

This increasing demand would see Adelaide become the best performing state capital for average house price growth over the next year, APM operations manager Michael McNamara said.

"Adelaide will be the star performer of all the capital cities," he said.

"An increase in house prices anywhere between 10 per cent to 15 per cent in the next 12 months is more than likely.

"Auction clearance rates in Adelaide are the best in the nation and with continued wage growth and limited land release by the State Government, demand for housing will continue to be strong."

And the double digit price rises would not be confined to Adelaide.

"Towns such as Port Augusta, Port Pirie, Whyalla and Roxby Downs are well placed to realise price rises on the back of the resource boom, which will continue throughout 2007 and beyond," Mr McNamara said.

Demand for Adelaide houses, worth an average $300,000 according to the Valuer-General, was also being driven by interstate investors taking advantage of our relatively cheap prices, according to the REISA.

"Investors from Western Australia are buying properties, and we are also seeing greater numbers of migrants in the marketplace," Mr Sanderson said.
 

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Discussion Starter · #2 ·
I think Adelaide can soon kiss goodbye to the tag "Australias most affordable city" soon

It was going to happen, just hope we don't end up like Perth.
 

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I love these stupid "predictions"
They never turn out to be correct or anywhere near correct.
Yes let me look into my crystal ball.
 

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Discussion Starter · #4 ·
^^Oh really, wonder if you would say that if it was about NSW or any other state accept SA & VIC. :nuts:

Apartment prices lead the housing market recovery
Majella Corrigan July 07, 2007

NEWS that there is a residential recovery under way in most capital cities, with the exception of Perth, should pique investors' interest.

But figures released last week by RP Data and Rismark International for April and May also show an unexpected result.

The researchers found that the prices of apartments and units, which account for about 15 per cent of the Australian market, have rebounded more strongly than houses.

Between January and April house prices rose nearly 8 per cent in Brisbane, 5.7 per cent in Adelaide and 4.1 per cent in Darwin, while in Sydney and Canberra it was 1.4 and 1.2 per cent respectively.

With the exception of Perth all capitals experienced a faster pace of growth in unit prices for the same period. Darwin prices rose 13.5 per cent, followed by 10.5 per cent in Canberra, 9 per cent in Brisbane and 7.6 per cent in Adelaide. Melbourne prices rose 4.7 per cent and Sydney 1.3 per cent.

The reason for Darwin's price surge is most likely the resources boom; in Canberra it's commercial construction activity and the high number of public servants (the nation's capital is second only to Sydney in the cost of renting).

But one often-overlooked city may yet show some of the best growth of all, and at a lower entry price.

In Adelaide, there are significant resources projects planned and under way, and the city has had solid if unspectacular growth in its housing sector. For those struggling to find something they can afford it's the cheapest capital, with a median unit price of $245,000.

According to Macquarie Bank's latest Market Outlook, South Australia has seen exceptional improvement in migration, which has maintained the underlying demand for property. Adelaide's rental market is also tight.

The Real Estate Institute of South Australia recently reported that Adelaide's vacancy rate was 1.44 per cent - and that represented an increase.

"While anything below 2 per cent is extremely low, it is still a noticeable improvement on the conditions Adelaide has been experiencing for most of the year," REISA said in late June.

RP Data chief executive Graham Mirabito points out that while it's the cheapest, Adelaide also has the highest return for units at 5.3 per cent, slightly above Sydney, Brisbane and Canberra.

Another key figure RP Data calculates is the "days on the market" (how long a property takes to sell).

While for Adelaide this is 56 days, longer than other cities, Mirabito believes that's most likely to be just a symptom of Adelaide's smaller population.

If you're thinking these figures differ from those you've read elsewhere, it's because RP Data-Rismark interprets data on a like for like basis.

The researcher has used a "hedonic method" for its index, which breaks down the information about properties - most importantly, the number of bedrooms, bathrooms and land size - gives them a value and then puts them back together. This allows a comparison between, say, a five-bedroom and a two-bedroom house, or a house with a pool against one without. Whatever method used, apartment prices have finally bottomed and are showing growth and better returns, particularly in Adelaide.

Source: The Australian
 

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I love these stupid "predictions"
They never turn out to be correct or anywhere near correct.
Yes let me look into my crystal ball.
Indeed, the whole financial services industry is a whole lot of hot air.
 

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Anyone who believes that property should on average achieve returns in excess of 5% above CPI have rocks in their head - however, for premium property then its a little different.

The reason why western countries have had phenomenal growth in the past 10 years is because of the "Greenspan Conundrum" - excessively low interest rates (i.e. too much liquidity).

Property growing excessively above the average wage growth rate is unsustainable.

One could also suggest that property will get hammered once the baby-boomer's start retiring and selling off their investment properties and their place of residence.

Indeed, the whole financial services industry is a whole lot of hot air.
I wouldn't go that far. However, any type of "prediction" or "forecast" in the industry is generally a load of shit. Especially when its done by groups like Real Estate Institute of SA (for the above article) - let me think.. do they have an agenda?
 

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I think i will be renting and sharing for a very long time :lol:
I'd rather live in a nice modern high rise apartment in the city where i can pay reasonably cheap rent if i share a 3 bedroom place with my friends
rather than buying a property in some forgotten suburb like Werribee just because that's where houses are cheaper.
 

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Discussion Starter · #9 ·
zach24 said:
I wouldn't go that far. However, any type of "prediction" or "forecast" in the industry is generally a load of shit. Especially when its done by groups like Real Estate Institute of SA (for the above article) - let me think.. do they have an agenda?
Well cmon on think about, Adelaide prices are dirt cheap compared to interstate at the moment and its not going to be long before Adelaide and much of SA has a property boom. Which is mostly going to be boasted by the growing resources and defense sector, plus better population growth (recently overtook NSW in population growth).

It happened to Perth, and its surely going to happen to Adelaide.
 

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Anyone who believes that property should on average achieve returns in excess of 5% above CPI have rocks in their head - however, for premium property then its a little different.
Growth in the premium property market has been amazing, Id suggest that if you know you're stuff there is alot "Booming" areas that will move into the premium market. This is true in Perth were alot of inner city areas are still undervalued.

Property growing excessively above the average wage growth rate is unsustainable.
Amen.


I wouldn't go that far. However, any type of "prediction" or "forecast" in the industry is generally a load of shit. Especially when its done by groups like Real Estate Institute of SA (for the above article) - let me think.. do they have an agenda?
Never more true words said. REIWA in WA only report when there is good news to report as soon as the market slows or starts going backwards then they hide from giving out data. Not that i would listen anyway, i have a brother who works for CBRE who has access to expensive property data.

People who want good returns should look at Hevy retial or industrial (Light).
 

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Well cmon on think about, Adelaide prices are dirt cheap compared to interstate at the moment and its not going to be long before Adelaide and much of SA has a property boom. Which is mostly going to be boasted by the growing resources and defense sector, plus better population growth (recently overtook NSW in population growth).

It happened to Perth, and its surely going to happen to Adelaide.
Cities live of hype when it comes to property prices and speculation, desirablity does not come hand in hand with value.
 

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Sydney's property prices are on the verge of another strong run - properties in the inner city / east and north shore are already close to booming while it's a different story west of Concord ( over 2 million people live out there) where prices are still flat or falling.
Sydney's house price record of $28m is set to be fucking obliterated soon also - maybe a sale of atleast double that !!!!! SHEEEESH.

Buy your house for $55m? No thanks
Jonathan Chancellor
August 1, 2007
Sydney Morning Herald

Sydney's priciest property market, Point Piper, has been paralysed. Not for want of big-pocketed buyers, but by sellers fearful of selling too cheaply.

As no sales have exceeded Altona's $28 million record price, set in March 2002, prospective sellers on the peninsula have lacked a reliable guide to top-end values for five years.

A $55 million offer by the shopping centre scion David Lowy and his wife, Margo, for Altona was rejected this month.

The Vaucluse couple made the offer in the belief that that was the asking price for the property in Wunulla Road, which has been listed through the Cassim Woollahra agent Bill Bridges. Its vendor, the magazine publisher Deke Miskin, who lives at Wategos Beach, near Byron Bay, has subsequently indicated $60 million would trigger his sale.


The Lowys first inspected the property last month, shortly after the actor Russell Crowe.

On nearby Wolseley Road a $25 million sale went close to exchange, only for its price to be adjusted to $30 million.

Agents have identified more than a dozen Point Piper houses that, if listed, could set the record, including the most expensive sale since 2002, the so-called Bang & Olufsen house, which changed hands for $24 million last year.

"There's no first-seller advantage," one would-be buyer said yesterday of the stand-off.

"It's highly likely the first sale might simply be the springboard to unparalleled new price benchmarks from pent-up demand."

The horse breeder Warwick Miller has decided to test the market by listing Routala for sale.

Its LJ Hooker Double Bay agent, Bill Malouf, expects it to break the record.
 

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for Melbourne articles - same trend

http://www.theage.com.au/news/national/big-surge-in-house-values/2007/07/27/1185339260581.html
Big surge in house values

Ben Schneiders
July 28, 2007
AdvertisementAdvertisement
IT IS great news for home owners but not so good for first-time buyers and renters.
Property values have surged in the past three months, with Melbourne's median house price hitting a record high of $420,000 at the end of June, Real Estate Institute of Victoria data shows.

That is an increase of 11.7 per cent on a year ago and a whopping 10.2 per cent rise on the previous quarter, confirming anecdotal evidence that the market has picked up strongly since the start of the year.

The quarterly data — which tends to be more volatile than the annual changes — was the strongest since the end of 2000.
After a surprise fall in the March quarter, median prices have now risen about 7 per cent this year, adding to concerns that many people are being priced out of the housing market.

ANZ chief economist Saul Eslake said Melbourne prices were being pushed upwards by a growing population and healthy economic conditions.

In areas such as inner Melbourne — where demand was high and supply limited — the market was at its strongest as wealthy buyers ploughed profits from the booming sharemarket or from their businesses into property, he said.

"Prestige or premium property is attracting increased interest and since there isn't an increasing supply of it … basically people are willing to pay whatever it takes to get into it," he said.

But in areas where there is plenty of supply, such as in the outer suburbs, the pressure is far less intense. That is reflected in REIV data showing prices in the bottom quarter of the market grew 5.7 per cent in a year; the top quarter jumped 16.4 per cent.

Mr Eslake said the current housing affordability problem differed from the late 1980s, when a similar lack of affordability was caused by high interest rates. Then the solution was lower interest rates. This time, he said, it was caused by high property prices. This meant it would be harder to solve, as lowering house prices would upset many people.

"There's not a lot of votes in that," he said.
REIV chief executive Enzo Raimondo said growth in prices in the inner and middle suburbs had probably contributed to most of the increase. "It's a very, very strong market, probably the strongest I've seen since the beginning of the decade," he said.

Mr Raimondo expected prices in the inner and middle suburbs of Melbourne to continue to rise for the rest of the year, regardless of any interest rate rise.

Marshall White's John Bongiorno said the market for expensive property had been "incredibly strong" this year.
The Armadale-based auctioneer said conditions were not as strong as in the crazy days of the 1980s but he felt they were far more sustainable. He had not noticed an increase in houses coming onto the market, confirming REIV data that shows turnover had increased just 5 per cent.

Highlighting the strength of the top end, the median price in Toorak is now $2.7 million while Canterbury and Brighton both exceed $1.5 million.

http://www.theage.com.au/news/NATIO...elbourne-420000/2007/07/28/1185339296467.html
Median house price in Melbourne $420,000

July 28, 2007 - 7:39AM
Housing affordability is slipping further out of reach in Melbourne as demand for homes continues to outpace supply.
The REIV June quarter median prices released on Saturday show that high demand, spurred by an increasing population, has pushed the Melbourne median house price to a new high of $420,000, up 10.2 per cent in the last three months.

The median price has been calculated from almost 12,000 houses and 6000 units and apartment transactions conducted in April, May and June.

REIV chief executive Enzo Raimondo said the combination of strong demand, a shortage of properties for sale and stable economic conditions are driving price growth.

"Market activity over the last three months has resulted in the largest quarterly increase in the Melbourne property market since the December quarter of 2000," Mr Raimondo said.

"Even with a five per cent increase in available homes demand is still outstripping supply."

He said Melbourne's population is growing by 1,000 people a month and more housing stock was needed to cater for the demand, especially in the inner and middle suburbs.
 

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With the stockmarket turmoil esp in the US atm prices could actually fall in the future!
 

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sounds like the property industry is trying desperately to talk up the market. it's all going to come crashing down very soon, just like it has in the US. it's just unsustainable, there will be tears!!!
 

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I hope so, I am sick to death of our ridiculously overpriced markets, greedy buyers and noone doing enough to make decent sydney housing even remotely affordable. Most of the prices should be slashed in half. I hope the bottom does fall out of the market and investors and buyers are forced to sell. The entire Australian thing is way out of control.
 

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sounds like the property industry is trying desperately to talk up the market. it's all going to come crashing down very soon, just like it has in the US. it's just unsustainable, there will be tears!!!
And bargins.
 
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