Won,t burn but the house is a right off as the frame deforms under heat. 
An observation - as a pom, I have a lot of expat friends with good jobs (geologists, engineers, etc) for big firms in Perth, mostly in their early 30's. I'd say at least 70% of them are looking to leave in the next couple of years because although they'd love to stay, they're not willing to play in the Perth property market.
They're all looking at heading back to the UK, USA or Canada and putting down a big deposit, getting a small mortgage and living an easier life than trying to service a massive mortgage here.
We've also had friends from the UK come out (having got the visa) to sort out jobs and houses before bringing the family out.... and then decided that it's not worth it and stayed home.
Purely anecdotal observation with no meaningful stats, and I'm sure that for every one that leaves, another will arrive. But none of this lot are buying. Not one.
Well half my family lives in Australia so I have a bit of an idea what's going on.
I have read a lot of articles and the similarities are many.
Suit yourselves, let's see how it looks a year from now.
From what I've read on the net the only real thing that all housing bubbles have had in common, is that they are all different to the others and it won't happen here.
I don't know if that is true, I just read it on the net, but it makes a lot of sense to me. There are many vested interests out there at the moment, and a lot of people talking, talking yes talking things up. I always get suspicious when it's a hard sell.
WE ARE DIFFERENT WON"T HAPPEN HERE!!!! GOT IT???
with double population increase in the next few years the crash will never happen.
the only problem i see is all the ones who invested in wonky houses with no land in victoria ( including myself ) will wake up to the fact that when the mortgage pays off after 20-30 years, the new big mortgage will have to be taken to fix/rebuild or otherwise the asset will be worthless .
dammit, i should've moved to the double brick west when i was single.
dammit, i thought i would stop posting here after 69th post. i like that figure.
First if you own a home or are thinking of buying one you owe it to yourself to thoroughly investigate and try to understand the housing market indicators.
Understand that nearly the entire world went thru a housing bubble recently, North and South America, Europe, Asia, Middle East, South Africa etc...oh but Australia is different despite the charts and indicators.
Understand that the so called experts were mostly all wrong up till the bubble burst. The reason being that the so called experts are people in finance and building that stand to make a lot of money by pumping up the bubble, as prices and sales increase so do their bonuses.
Even people in the gov't have reason to pump up the bubble by making lending standards slacker and rates lower. (they are helping lower income people get into a house)
The economy is largely driven by sentiment, how people feel. When times are good people spend freely and drive the economy but when people are scared they stop spending and the economy collapses. No politician wants to be the one that upset the apple cart by warning about housing and causing it all to fall apart.
Supply is just one of many housing market indicators, such as affordability measures, debt measures, own vs. rent measures etc..
Many real estate bubbles did not have supply as a factor.
I don't think consumer 'confidence' very little impact to the housing market.
Currently 30% of homes being sold in Australia are 'forced' sales. It's not in the industries interest to advertise foreclosures or the amount being sold under duress.
The only way the housing market is going to crash (and I mean decently, not these little dips we've seen over the last 5 years) is 2 factors:
1. Increase in intrest rates
2. Collapse of mining
Dirt is keeping this country going at the moment. The mines do employ a heap of people however iIf you think about the massive amount of business's that supply to the mines and the companies that supply to these companies and so forth, it's huge. If the mines start slowing down the indirect supply chain will be the hardest hit, forcing a heap of unemployment driving the price of housing down.
Same if interest rates rise, everyone who has debt will have to find extra $$. Those that can't will have to sell things first.
If you want to see how well we're going, watch the second hand market for 'toys'.
People will sell the second car, boat, bikes etc.. before the house. If you notice a dramatic increase in sales of 'toys', especially through auction houses, then you know theres a sector out there that's on it's knees.
An industry that has been quietly growing in Australia is the 'My budget' financial services and reposssetion industry. A freind had a furniture removal business running 2 trucks. Moved into repossetion and now has 5 trucks and 2 wharehouses, 1 with a holding yard for vehicles and watercraft. At the moment he's pushing back work. He's already working 6 - 7 days a week with little to no time off. People say it's a low down job however he's point of veiw is people get greedy with credit and enjoy a lifestyle they can't afford. He's there when they can't pay and the banks or whichever credit business needs to recoup at least some of their losses. There's none of the American agro that you see on TV. Most of the people are embarrased and don't want the street to know who you are. All his vehicles plain with no sign writing. He has a job to do and they have enough warning that they're coming.
echunda imo and many others your wrong, there is way too much focus on the mining, while massively significant(espec. WA) it only makes up 9-10% GDP(correct me if i am wrong but i read this a few months ago). + alot of the money goes oversees.
Your right in the fact that if mining dropped of WA would suffer, but Perth and surrounding suburbs would survive. But the 90% other business is also keeping the country afloat.
Sentiment is huge that is why it surveyed if every different industry. Up until the last few months housing/building sentiment both media and business has been very negative pushing against sales and investment but despite that house price rose. Demand.
Unemployment is only 5.6%, i would love to know how many of the 30% "forced" sales are people who have just borrowed to much and hangovers from when money was so easy to borrow. Sad all the same.
An example of how easy money was to get back in 2004 someone very close to me who earned $50k self employed a year signed 2 documents and borrowed $1mil to buy 2 houses, borrowing almost enough enough to pay all the repayments for a year as well. Luckily got out before the poo hit fan. Dangerous game to play even if you know what your doing and no one saw the GFC coming.
One significant thing that is different is the lending practices, reportedly in the American housing markets unemployed people who had no hope of repaying loans were being advanced money.
still on the fence though.
Somethings got to give soon with rental yields at all time highs
Lets take that 9 - 10% direct contribution as being correct for the moment.
That is a massive contribtion straight away.
Now consider the indirect industry that support this activity. As a general rule from my uni days, 30% off all spend is supplied to indirects.. so 3% of their spend is to supply to the mines.
Now take into consideration how much they spend to keep the mines going and you can see that it's quite significant.
You can see where I'm going here.
If mining in Australia drops, the Big ones will move to another accomidating country and dig there. All the business's that were built on supplying that mine will suffer leading to my previous point.
If the U.S stockmarket were to crash say 50 percent,the Oz stockmarket would likely follow. Lots of folks would lose half their retirement funds.
With the U.S losing much of it's industry to Asia,the U.S stockmarket should not be peaking,the opposite should be true,a correction is ineviteable.
If they stop printing the notes we will have deflation,resulting in everything including property dropping in value.
With deflation the folks in debt will have less capacity to pay loans back.The folks with savings will be better off.....till hyperinflation makes them poor too.
LOW income earners in Perth are battling harder to find homes to rent, new research by Anglicare shows.
The median price of a rental property in Perth has jumped 16 per cent to $520 per week, up from $450 per week in 2012.
Anglicare's Rental Affordability Snapshot 2013, released today, shows only five per cent of Perth's rental market is affordable for people on the minimum wage.
Couples on the minimum wage with children can only afford 2.6 per cent of rental properties, down from 7.8 per cent last year.
The situation is even worse for people on benefits or pensions, who can access less than one per cent of the city's rentals.
For young people trying to move out of home, it's particularly tough, chief executive Ian Carter says.
''Whether they are studying, on a benefit or a minimum wage entry level job, the market is far beyond their price range,'' Mr Carter said.
At 520 a week. This is showing a real lack of housing availible. This is not speculation in my opinion.
Yes Perth is over priced in our/my eyes, but in the eyes of the free market. This is equitable.
The greens wanting to grant assistance while I'm sure this is built on great intentions, giving free money away will only allow people to bid higher, much like the FHOG.
The yield returns on low priced property are looking attractive. Hopefully this motivate investors to build negative geared properties.
Give it 2 years, add 150k onto your house. Thinking about my future kids, that's not a good thing.
Won,t burn but the house is a right off as the frame deforms under heat.
