Dealing with real estate agents

[Larryp (Laurie)]

Originally Posted by csb

Yep, politicians! The initial surge in house prices was due to John Howard bringing in the $7000 first home buyers grant.

There have been first home buyers grants for yonks!
I had one for $2000 way back in 1980, so I don't think you can blame it for the current spike in house prices.

[casstony]

First home buyer grants, low interest rates, easy loan terms (eg. low deposit loan), negative gearing all combine to push up housing prices.

Offering first home buyer grants with current excessive house prices simply creates new debt slaves; in future the house will likely be worth less than it is today but the buyer will be stuck with a large loan and be very vulnerable to rising interest rates. Most people have never experienced anything other than rising house prices and they can't imagine crashing house prices, even though there are examples in other western countries.

[xelasnave]

Sydney prices are crazy.
A mate from Ryde showed me a photo of a small house sold near his place, pvc clad I think, 600 sq mt? Sold for 1 - 8 million.
Alex

[Larryp (Laurie)]

Originally Posted by casstony

First home buyer grants, low interest rates, easy loan terms (eg. low deposit loan), negative gearing all combine to push up housing prices.

Offering first home buyer grants with current excessive house prices simply creates new debt slaves; in future the house will likely be worth less than it is today but the buyer will be stuck with a large loan and be very vulnerable to rising interest rates. Most people have never experienced anything other than rising house prices and they can't imagine crashing house prices, even though there are examples in other western countries.

Essentially I agree with you, but when I received a $2000 grant, the price of my house and land was $55000. So the $2000 was a much greater contribution than $7000 is now.
As you say, there are many contributing factors, but it is a bit ridiculous for someone to blame just one factor and one politician.

[casstony]

Helping first home buyers get an affordable house is a good thing; helping them into the market now just invites them into debt slavery.

Ultimately the origin of booms in a variety of markets (shares, real estate, commodities) around the world can be traced back to financial engineering (securitization, repackaging, and selling of loans) on Wall St, sinking the whole world into debt and putting downward pressure on interest rates in order to make the debt mountain affordable.

Banks and politicians in the US started the process and our greedy banks and dumb politicians tagged along.

[Astrophe (John)]

When dealing with RE agents, the first thing to remember is that they are working for themselves, not for you. Sure, they need to sell property to make a buck, but, in the end, they couldn't give a bugger about you or your circumstances....they only care about themselves. I'm sure there are some who have even convinced themselves that they are in it for the vendor, as well, but, alas, these are not likely to stay in RE for very long.....they burnout quickly. It is a sh*t of an industry and most of those who are in it are....well, I won't say it.

Of course, there are always exceptions. Good Luck.

[csb (Craig)]

You are right, the agent is supposed to work for the client but ultimately does serve himself. My agent has been contacting his network of developers (house flippers). I started to realise he will work for them also, to get return business from them.

Anyway i think an agent is a must for selling. They know the ins'n'outs. For example; if a buyers offer is accepted and has a subject to finance clause, my agent will contact their bank to verify that sum is already approved to that person and then contract can be signed. This stops me signing a contract which will fail because the buyer may not actually be able to get that sum of money. Great piece of mind. Apparently this scenario rarely occurs.

No homeowner grants available to me in 1995 when I bought this place, my first house purchase. I certainly remember hearing about them in the 80's.

[AussieTrooper (Ben)]

Originally Posted by casstony

First home buyer grants, low interest rates, easy loan terms (eg. low deposit loan), negative gearing all combine to push up housing prices.

In my neck of the woods, it's none of these things. The big prices are being paid by Chinese. They are buying their way into a good school and permanent residency. There are very few rentals/investors around.
It's a supply/demand thing. Melbourne is adding something like 2,000 people every week, and it's mostly either flats in the inner suburbs, or houses 50km+ from the CBD. So the remaining inner/middle suburb houses are dwindling in number and increasing in demand.

The only three things that would stop the price rises are:
1) A big spike in interest rates (suicide for the ruling political party if it happens, but the most likely of the three)
2) A major economic crash. (possible, but not looking likely)
3) A major cut to immigration (very unlikely)

[casstony]

Originally Posted by AussieTrooper

In my neck of the woods, it's none of these things. The big prices are being paid by Chinese.

Chinese investment is a recent phenomenon and one that the government could control if they chose to (why shouldn't we stop foreign investors from pushing up our prices?) but the boom has been going since about 1990.

When there is a downturn I'm curious to see if the Chinese keep buying or flee a falling market. If they keep buying they'll slow the fall, if they flee they'll accelerate the crash.

[AussieTrooper (Ben)]

Originally Posted by casstony

Chinese investment is a recent phenomenon and one that the government could control if they chose to (why shouldn't we stop foreign investors from pushing up our prices?) but the boom has been going since about 1990.

When there is a downturn I'm curious to see if the Chinese keep buying or flee a falling market. If they keep buying they'll slow the fall, if they flee they'll accelerate the crash.

My area has been a target for Chinese buyers for a long time. The local selective high school is now over 90% Chinese. The boom here started in about 2000.
We will know the effect on prices shortly. The Chinese government clampdown comes into effect in July.
I doubt that any price drop would cause them to flee. If they can get what they wanted cheaper than before, if anything it would increase the drivers for them to buy, not decrease it.

[xelasnave]

The suburb next has a 20 storey block on the market.
I saw someone selling the units next suburb down where I seem to be the only non Chinese or Korean that visits.
All the blurb was about proximity to schools and the University which is a big part of the buyer motivation no mention of number of bedrooms.
And there is at least another block going up maybe more.
Alex

[AussieTrooper (Ben)]

Originally Posted by xelasnave

The suburb next has a 20 storey block on the market.
I saw someone selling the units next suburb down where I seem to be the only non Chinese or Korean that visits.
All the blurb was about proximity to schools and the University which is a big part of the buyer motivation no mention of number of bedrooms.
And there is at least another block going up maybe more.
Alex

This is why I do not buy the political spin that it's negative gearing, or local investors to blame.
You can get minor distortions in the price of any commodity due to local regulations, but in the end it is always driven by supply and demand.
No centrist politician wants to mention, let alone actually do anything about the primary driver of the surging prices.
There are a few on the right, and even the odd Green (albeit for different reasons) who want the numbers brought down, but it's not even close to becoming a reality.

[Astrophe (John)]

Originally Posted by AussieTrooper

This is why I do not buy the political spin that it's negative gearing, or local investors to blame.
You can get minor distortions in the price of any commodity due to local regulations, but in the end it is always driven by supply and demand.
No centrist politician wants to mention, let alone actually do anything about the primary driver of the surging prices.
There are a few on the right, and even the odd Green (albeit for different reasons) who want the numbers brought down, but it's not even close to becoming a reality.

We can't be seen to be upsetting the Chinese.....they might play the racist card. No one wants to be labelled as a racist.

Housing is an essential service and non-residents shouldn't be allowed to own residential property here. We can't buy property in China.....what's good for the goose....

[JA]

^^^SPAM Reported

[AussieTrooper (Ben)]

Originally Posted by Astrophe

Housing is an essential service and non-residents shouldn't be allowed to own residential property here. We can't buy property in China.....what's good for the goose....

Many people hold that same opinion. The current rules are a terrible deal for Australians. Any fair trade deal would involve reciprocal rights or none at all.
The US prez seems to have no trouble calling out a bad deal with China when he sees it, so why can't Mr Turnbull?