The Housing Market overview - Australia

Tuesday Reserve bank will probably cut the official interest rate by 0.5 basis pt. And you will hear many agents trying to hard sell the property and say that the boom is here soon. Having been to so many display homes and open houses. One of my pet peeve is agents telling me that the market is picking up and the property market have bottom out and prices will start rising soon.

9 out of 10, the agents don't really know what they are saying and 10 out of 10 it is because they are just out to make some commissions. The truth is no one can predict how low the market will sink. But there are some data which might prove useful in the long run. The worse thing an agent can do it to try and convince me about their economic data.

One of the craziest newspaper report i read, i think in the West Australian or The Australian where someone wrote that share market tumble will send house price soaring because people will take their money from share and park their cash in brick and mortar. What the so-called journalist don't realize that if you already invest heavily in shares, then its pure insanity to withdraw the money... a paper loss is only a paper loss until you sell your share. And if you invest $100K and now your share is worth less, would you hold or sell it for less and invest in housing or keep in the bank ? I wonder what will you choose.

If you want to play shares, learn from Mr Warren Buffet, the "bill gates" of the share market world. We buy stocks to keep long term. The only losers are those people who speculate in the short term.

So will house price rise or fall ??? Actually it will all depends. Common sense will dictate that its about real income. If Australia job market worsens then probably we will face big problem. What i will do is look at both the pro and cons. Work out which has more.

Looking at housing affordability compared to real income will give us an indication of the market. There are also the economic state of different states, the key reason besides interest. Finally select some key indicators. Of course i can't tell much, so at least if my data analysis is correct. I can be the first to benefit. If it works i will share it in the future.

Well if you are house hunting - Good luck and be bold try your luck its a buyers market. Just throw in a figure you like and see what happens. Lets just say my colleague bought a house for 400K whose asking price was 549K . A whopping 150K from the asking price. Hey ! there is no harm to keep prices low. You never know you might find a bargain