Posted to The Age (2/4/2013) on 2/4/2013 at 3:37 PM
Commenting on "Home prices rising as rate cuts fuel confidence"
http://www.theage.com.au/business/home-prices-rising-as-rate-cuts-fuel-confidence-20130402-2h3wl.html
I posted a comment to the article "Feeling Weak" (The Age, 15/4/2012) with the starting sentence "I have written on many occasions, and still believe firmly that the real estate market will not see an upswing until March/April 2013". In fact, the original prediction was conveyed to a local paper as a Letter to Editor in 2010. It was not published.
There are several reasons for the rise, but what some readers said about the Chinese buyers are back is not one of them. These buyers are big time buyers, not in residential properties but large commercial, industrial and rural properties.
The new broom in China is a tough one. There will be a great outflow of money to many countries including Australia. The regime is more concerned about what is going to happen rather than what has happened. Those who have made millions or billions will need to channel the money out of China for safe keeping.
Many buyers have been waiting for house prices to slide further, and many more are saving up to pay for a larger deposit in future purchase. Shortage of buyers unfortunately backfires, and results in vendors not prepare to let go of their properties unless they face with financial disaster. There are not enough properties in the market for sale. According to the supply and demand theory, the property price will have to go up. Low interest rate, willingness for bank to lend money again, and buyers' patience starting to run out are contributory factors for the rise.
Just words of advice - those who can afford to buy when interest rate is high are winners. Those who buy when interest rate is low will be doomed if they have no reserved fund.
Commenting on "Home prices rising as rate cuts fuel confidence"
http://www.theage.com.au/business/home-prices-rising-as-rate-cuts-fuel-confidence-20130402-2h3wl.html
I posted a comment to the article "Feeling Weak" (The Age, 15/4/2012) with the starting sentence "I have written on many occasions, and still believe firmly that the real estate market will not see an upswing until March/April 2013". In fact, the original prediction was conveyed to a local paper as a Letter to Editor in 2010. It was not published.
There are several reasons for the rise, but what some readers said about the Chinese buyers are back is not one of them. These buyers are big time buyers, not in residential properties but large commercial, industrial and rural properties.
The new broom in China is a tough one. There will be a great outflow of money to many countries including Australia. The regime is more concerned about what is going to happen rather than what has happened. Those who have made millions or billions will need to channel the money out of China for safe keeping.
Many buyers have been waiting for house prices to slide further, and many more are saving up to pay for a larger deposit in future purchase. Shortage of buyers unfortunately backfires, and results in vendors not prepare to let go of their properties unless they face with financial disaster. There are not enough properties in the market for sale. According to the supply and demand theory, the property price will have to go up. Low interest rate, willingness for bank to lend money again, and buyers' patience starting to run out are contributory factors for the rise.
Just words of advice - those who can afford to buy when interest rate is high are winners. Those who buy when interest rate is low will be doomed if they have no reserved fund.
