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Good news on Canberra house prices

By banco 14 September 2012 22

According to the (real estate industry friendly) Real Estate Institute of Australia Canberra house prices fell 5% from April to June.

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Good news on Canberra house prices
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milkman 2:09 pm 16 Sep 12

Holden Caulfield said :

Watson said :

futto said :

Good news depending on your point of view.

I feel a little poorer now since reading this news so might not upgrade my 50 inch plasma tv in the spare room to 55 inch this month!

Just kidding…i’m buying a 60 inch.

Yep, count on the house prices going down when I’ve just finally bought my first house (yet to be built) after waiting for years for the bubble to burst.

Though according to the bank valuer my property had gone up 15% in value between in the year before June 2012. And the land had not even been released then. So it must very much depend on where and what, I assume.

As a very broad sweeping statement that may have little basis in fact I tend to think buying off plan is a good way to give yourself a small head start. In effect both you and the builder are speculating.

It stands to reason (to me at least) that the realised bricks and mortar will be worth more than the potential held by a patch of dirt and some lines on a page.

Buying off the plan is fine in a strongly rising market, but any other time you are just paying extra to cover the builders profit.

milkman 2:08 pm 16 Sep 12

drfelonious said :

justin heywood said :

With many people so heavily leveraged, everyone better hope that house prices don’t drop by too much.

With so many people so heavily leveraged into multiple investment properties, in my opinion, it is almost inevitable that house prices will drop by “much” and more.

About a third of Australians live in a rental property. Of people who are investors, about 70% own only one IP, and about 28% own 2 IPs. So of all the people who own IPs about 2% of them own 3 or more, so it’s really not correct to say ‘so many people leveraged into multiple investment properties’.

Also, the average LVR of property in Australia is not high (less than 50%), so there’s not much imminent pressure for people to dump their properties.

Yes, the market is soft, and will be soft for some time to come, but it won’t be getting back to 2000 prices. People have more disposable income now, and thus there is a lot more price support.

Building of new homes is slowing, but population is still growing. The real kicker will be to see what happens after the next federal election.

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