hehehe…i must have made a mistake, thought you were someone else…silly me, but whoever you are you sure got a handle on it.

(((which is why investors like Christopher Joye make a whole career out of spruiking it to others. )))

Yeah…those clapping seals in the front rowes just love those No-Joy high-priests who fill them full of false theories and cliches that last every bit of 5 minutes…agghh spare me.

And if you ever find yourself stuck at some airport again, just gimme a call and I will come and pick you up in my Leary…I be waiting for you in the cockpit out on the tarmac. You can bring a friend, but there’ll be no “Mile Highing” coz last time that happened we nearly hit the Blue mountains when the auto malfunction. It was nearly all over, but some would say not a bad way to go…but since my epiphany it’s a changed way of life for me.

Passive property investment and inflationary drivers have every appearance of creating wealth out of thin air, and the more the merrier, which is why investors like Christopher Joye make a whole career out of spruiking it to others. The whole economy gets a spending stimulus and the losers appears to be a relatively small sector, those currently hoping to buy a home.

But there are no free lunches and the wealth is sucked from the future in a gigantic but subtle form of borrowing that others repay. See http://www.themovechannel.com/news/fff11063-1106/

BTW who’s Edgar, and what was his article on 19-8-09?

Either side of politics would have done exactly the same things that have unfolded in terms of FHOG.

But it shows it’s CROC teeth by not means testing it, and that it was always meant to be a tool to keep house prices from falling rather than a just and righteous method of housing affordability for those who need it the most….low income earners.

Again, if i missed something…talk to me like a baby.

Yeah, right Edgar.

Did n’t catch your article 19-8-09 but maybe should have.

Reading from the Govt of the day’s reply to the Productivity Commission recommendations that the FHOG should be heavily waited to low income earners, was rejected.

If the Govt of the day had not rejected the Productivity Commissions recommendation then the FHOG would have been limited to a much smaller section of the community and therefor far less inflationary than the broad-brush of atificially propping up house prices.

If I got this wrong please lemme know.

It’s easy to see developers as the bad guys of the market because the papers are full of corruption stories and most new buildings we see are cheap and ugly. But these may be the results of an industry squeezed so hard that it can no longer be done cleanly and responsibly. And I’ve seen some items in the paper (can’t find any examples now) where development companies have wholeheartedly endorsed bans on political donations, because it’s nothing more than a shakedown of them.

“the government is in effect transferring cash from taxpayers to property developers”

“High property prices actually prevent developers from undertaking projects due to prohibitively high cost of land preventing developers from earning a reasonable risk-adjusted return.”

To argue that high property prices prevent developers for undertaking projects is misleading. NEW properties get the higher bonus. Properties developers are either purchasing undeveloped land - which does not have any grant-inflation - or older properties which only attract the lower ‘existing’ grant-inflation.

New home: $300,000 + $30,000 - $7000 = 323,000
Old homes: $300,000 - $7000 = $293,000

That’s not all that pushed new home development to rates not seen since the war. Land infrastructure levies, planning approval costs, and associated delays and risks, have added significant premiums, with some estimates going as high as 40 per cent of the total cost of new homes in NSW.

Check out Peter Costello’s response when the Productivity Commission tried to point out how poorly the FHOG was targeted: http://treasurer.gov.au/DisplayDocs.aspx?pageID=010&doc=publications/firsthome.htm&min=phc

I hope you are right, but on talking with people in the industry they are all saying the majority of activity at the moment is in the 400K-500K range…that would be the FHOG would it not?

So, if there is little activity above this range, then what’s left after the FHOG?

To suggest that investors will pick up the slack is just typical Realestate Industy gobbledegook.

But, you have consistently been a pointer to the perils awaiting the final outcome of the Australian Housing Market this time around.

Accordingly, no ones blood will be on your head.

It reminds me of the Titanic. The people on board the ship were in disbelief that the ship could actually sink, believing they would be rescued and even the ships band kept playing while the ship was on a 30 degree tilt….the analogy and comparisons are stark.

Banks have throttled lending to a certain degree. There is only one lender that I know of at the moment who will write a true 95% loan. The others (banks, as referred to above) will write them but only for existing customers, which again, consolidates their hold on the market.

The first home owners grant is also not able to be used as a deposit by the majors. They require 3 months of genuine savings as well, so the funds cannot be a gift, or from the sale of an asset like a car, as this is unsustainable.

Price rises and this constriction of lending has made it very difficult to purchase a home for first home buyers, many of which I have personally seen give up. However this has taken it’s toll on demand for new dwellings, and total finance written, with both figures recently falling.

I don’t believe we will see significant price falls any time soon though Adam - demand for building services is likely to be taken up by the Government’s stimulus package for some time, taking away labour which would be used to build homes. In fact, approval for dwellings and housing finance have both fallen in recent figures, probably reflecting the bank’s tightened standards. Coupled with the shortfall already apparent, it’s likely to see house prices moderate once the grant falls away, not collapse.

well that’s not entirely correct….

Have you forgotten about stamp duty on existing properties? (about $40,000 dollars on a million dollar property in NSW).

Granted they could buy off-the-plan (though someone with a million bucks to spend probably wouldn’t) to avoid this. But then there’s still the Lenders Mortgage Insurance for any purchases over 80% LVR? Another $30,000 right there for the example above.

I mean, this is all a genuine issue, but from my reckoning, you’d need close to $100,000 in cash, including any grants, to get off the ground towards a million dollar property.

Disclaimer: i’m not involved in the real estate profession at all so i could be completely wrong