The future of Australian property prices

[numbercruncher]

Further evidence of years of fudged figures ...

Australia has almost 1 million fewer households than assumed in government forecasts of a housing shortage, raising doubts about a supply shortfall cited as the main reason the nation will avoid a U.S.-style crash.
The Pacific nation had 7.8 million households, data released yesterday from the 2011 Census showed.

That compared with estimates of 8.7 million as of June 2010, according to the latest figures used by the National Housing Supply Council, a group created by the government in May 2008 to monitor housing demand, supply and affordability. Australia’s population also grew by 300,000 less than previously estimated, to 21.5 million.

“Young adults have gone back home with mum and dad, or are sharing houses,” said Collyer, who argues that Australia has an oversupply of housing based on statistics showing water usage and new building data. “Household sizes have gone up even more than people think, and the oversupply of housing will be revealed to be even worse than we thought.”

As more Australians live with friends or parents to combat falling affordability, the number of vacant dwellings rose to 934,471 in the 2011 census from 830,376 in 2006.

While home prices across Australia’s eight state capitals fell for a fifth consecutive quarter in the three months through March, the longest stretch of losses on record

http://www.bloomberg.com/news/2012-06-21/vanishing-households-undercut-claim-of-australian-home-shortage.html

 

[im sparticus]

Ok just an update of the scm hypothetical short mel at 571 1-6-12 syd 626 perth 551 bris 429. As of today he is unprofitable with mel at 574, for info syd 526 and perth 550 bris 460 ad 424 all states showing steady increases accept perth with the biggest jump being bris. looking at the index today was fun all green. looks like the peanut gallery just might have nailed the bottom but we will have to wait and see.

 

[medicowallet]

Ok just an update of the scm hypothetical short mel at 571 1-6-12 syd 626 perth 551 bris 429. As of today he is unprofitable with mel at 574, for info syd 526 and perth 550 bris 460 ad 424 all states showing steady increases accept perth with the biggest jump being bris. looking at the index today was fun all green. looks like the peanut gallery just might have nailed the bottom but we will have to wait and see.

I never saw the original post,

What were your predictions? Or were you not game enough to make one for fear of it differing..

House prices to fall in real terms for some time.

MW

 

[young-gun]

Ok just an update of the scm hypothetical short mel at 571 1-6-12 syd 626 perth 551 bris 429. As of today he is unprofitable with mel at 574, for info syd 526 and perth 550 bris 460 ad 424 all states showing steady increases accept perth with the biggest jump being bris. looking at the index today was fun all green. looks like the peanut gallery just might have nailed the bottom but we will have to wait and see.

link?

or are you deciding to stay true to form and just making stats up?

 

[young-gun]

House prices to fall in real terms for some time.

+1, a long long time.

 

[numbercruncher]

Endless reports of whats happening in the real world ....

ONCE the booming engine room of growth, Australia's housing sector is now in a crumpled heap and is holding back the country's otherwise stellar economic performance.

New housing construction fell 12.6 per cent*in the first quarter of 2012 from the prior quarter and plunged 25 per cent*on year, the Australian Bureau of Statistics said today. It was the fourth consecutive quarterly fall and the biggest since September 2010.

Economists say housing construction is the worst performing sector of the economy, with conditions unlikely to improve in 2012, despite hefty interest rate cuts since November.

Stephen Walters, chief economist at JPMorgan, described the ongoing slide in housing construction as a "disaster", saying a number of factors are eroding demand and constraining housing supply.

With the world economy still weak, consumers were reluctant to jump into building a new home, especially when prices were still falling, he said. According to property research firm RP Data, house prices fell 5.3*per cent*in the year to May.

http://www.theaustralian.com.au/business/economics/housing-slump-drag-on-economy/story-e6frg926-1226403112643

With construction such a "disaster" you really have to wonder about these billionaire miners needing to import 457 contruction labour because of a "skills shortage" - so many absolute rorts in the country ...

 

[young-gun]

Endless reports of whats happening in the real world ....



http://www.theaustralian.com.au/business/economics/housing-slump-drag-on-economy/story-e6frg926-1226403112643

With construction such a "disaster" you really have to wonder about these billionaire miners needing to import 457 contruction labour because of a "skills shortage" - so many absolute rorts in the country ...

RPData June report on youtube.

http://www.youtube.com/watch?v=wgqwDhETjVI

 

[Muschu]

+1, a long long time.

If +1 is an acceptable abbreviation for agreeing then where do +3 or -4 fit?

I gather the stats are, in given areas I assume, that first home buyers are re-entering the market.

On what evidence, not circumspection, do you base your "long long time" view? And how long is that?

Rick

 

[im sparticus]

He said long long which is obviously 2 orders of magnitude greater than long just remember some of these guys have been calling for a crash for 20 years or more ala scm (who is actually only 22years of age believe it or not).

 

[young-gun]

If +1 is an acceptable abbreviation for agreeing then where do +3 or -4 fit?

Is this really something you need explained to you?

I gather the stats are, in given areas I assume, that first home buyers are re-entering the market.

If you are referring to sparticus' stats then who would know, he has never provided evidence of anything that he says, which as far as I'm aware has proven to be incorrect almost every time.

On what evidence, not circumspection, do you base your "long long time" view? And how long is that?

The evidence is in 99% of every other developed nations housing bubble burst. Japan is in something like a 20 decade property bear market. The US is 5 or so years into it's crash and still going down. It's been said a billion times before, we are no different here, and although we didn't engage in sub-prime lending to the extent of the US, it has become evident in the past 2 weeks that similar practices were carried out.

Population growth has nothing to do with it, as I am fairly sure there hasn't been mass amounts of people dying in the US and Japan or Spain to trigger their crashes. As seen in the RPData clip i posted above, prices are still falling despite heavy interest rate cuts.

If you can find me a hockey stick graph of housing, that then plateaus and then shoots off in another hockey stick formation I would love to see it. Bubbles ALWAYS end up back where they started. Failure to acknowledge a bubble is ignorant.

The only thing that will sustain or cause 'minimal' increases to current prices is as you said stimulus. However, even if the gov embarks on a similar amount to last time, it will have a less desired affects, and prices will continue to fall sooner than previous.

To answer your question, if house prices 'crash' a long long time for me would be a minimum of 10 years, pushing out to possibly 20. Not falling the entire time, but falling and remaining stagnant, perhaps with the occasional blip of increases. People seem to underestimate the magnitude of what is occurring on a global scale.

I think that when mums and dads that have no idea what they are actually doing can buy a house, and sit back and watch it increase exponentially without doing anything, it is a sign that something isn't quite right.

Debt is bad.

 

[im sparticus]

Do you really need to be shown where the rpdata daily house price index is found? Its almost as bad as someone quoting a price of a stock and then needing to show evidence, as always rebuke me if you can otherwise it is you who is breeding missinformation. hockey sticks do not signal the end of the world or anything unsustainable just how poorly linear scale is at plotting compound growt some people are silly enouth think thwt because linear scale can no longer fit this growth it musnt fit in real life set your charts to a log scale remove the tinfoil hat and rejoin reality . exponential growth always looks unsustainable on linear just because it cant fit the chart does not mean we are done in real life the present always looks like the peak on those charts weather its now 200 years from now or 200 years ago anyone who understands graphs understands this where the graph runs out of resolution does not signal the end or anywhere near

 

[young-gun]

Do you really need to be shown where the rpdata daily house price index is found? Its almost as bad as someone quoting a price of a stock and then needing to show evidence, as always rebuke me if you can otherwise it is you who is breeding missinformation. hockey sticks do not signal the end of the world or anything unsustainable just how poorly linear scale is at plotting compound growt some people are silly enouth think thwt because linear scale can no longer fit this growth it musnt fit in real life set your charts to a log scale remove the tinfoil hat and rejoin reality . exponential growth always looks unsustainable on linear just because it cant fit the chart does not mean we are done in real life the present always looks like the peak on those charts weather its now 200 years from now or 200 years ago anyone who understands graphs understands this where the graph runs out of resolution does not signal the end or anywhere near

it really is a very simple process, im sure if you try really really hard, even you can achieve it! simply link-your-info when quoting figures. go and adjust all your graphs(if you actually view data?) to give yourself peace of mind. i now remember why i stopped dealing with you.

 

[im sparticus]

it really is a very simple process, im sure if you try really really hard, even you can achieve it! simply link-your-info when quoting figures. go and adjust all your graphs(if you actually view data?) to give yourself peace of mind. i now remember why i stopped dealing with you.

Lol you actually dont know where the indexs are quoted do you?? Oh well thats to bad for you. why dont you ask scm even he didnt need verification for that one. come to think of it knowone else has either good luck it really is a useful tool anyone who is anyone will have it as for the uninformed well they will just have to be content with whatever picture there 100 year old chart on linear is painting them.

Scm further in the red today by a whole 1% with mel at 576 for info syd also gained at 631.

 

[young-gun]

Lol you actually dont know where the indexs are quoted do you?? Oh well thats to bad for you. why dont you ask scm even he didnt need verification for that one. come to think of it knowone else has either good luck it really is a useful tool anyone who is anyone will have it as for the uninformed well they will just have to be content with whatever picture there 100 year old chart on linear is painting them.

Scm further in the red today by a whole 1% with mel at 576 for info syd also gained at 631.

Haha, if i recall correctly your gold position was closed in a matter of hours, from the start point of your hypothetical.

And you're absolutely right, i have no idea how to google stats Its a matter of principal, one that you seem to find very hard to grasp. Given your views on the economy I guess I can only expect as much. But if clutching at a few daily positive figures is helping you sleep at night then that's good. If you can(as I don't know how to view this amazing index of yours) please quote the year on year change for any capital of your choosing? In fact, make it 3?

 

[im sparticus]

Thanks i forgot we were also monitoring gold im sparticus gold hypothetical is currently in the green think it was short @ 1577. Its a hypothetical why would it have been closed the whole point was to monitor gold vs housing and atm housing is winning. even melbourne housing lol.

 

[young-gun]

Thanks i forgot we were also monitoring gold im sparticus gold hypothetical is currently in the green think it was short @ 1577. Its a hypothetical why would it have been closed the whole point was to monitor gold vs housing and atm housing is winning. even melbourne housing lol.

Ah ok so both are still in play? Good to hear. I look forward to you posting year on year figures from your index of 3 capital cities.

 

[Ves]

Thanks i forgot we were also monitoring gold im sparticus gold hypothetical is currently in the green think it was short @ 1577. Its a hypothetical why would it have been closed the whole point was to monitor gold vs housing and atm housing is winning. even melbourne housing lol.

What about the interest charges for when you were down on the gold short? You can't short gold without leverage as far I recall, so you'd be underwater as things stand.

 

[im sparticus]

Guys the trades arnt real its to compare different assets from a actual point in time ie without hindsight. Interest can be hedged so its irrelevant. Ie i just put whatever my exposure is into an interest earning account the only person to mension leverage was scm who wanted as much as he could get 1% of whatever the hell he had in mind is probably quiet a substancial loss ontop of his having to pay dividends while short (i wont have to pay any dividends lol but the point wasnt to get technical) but good point we will have to add an automatic 3.8%pa loss to scms short to account for rent.

Me im just looking at percentage diffs between the two. if i recall for all you caught up in the ego side of it rules were scm calls the exit maybe when he does you can get him to post up the sort of exposure he had in mind and work out profitability.

 

[village idiot]

can I play?

put me down for Long XJO , Short all the property indexes except Perth. $1m per side

hypothetically.

 

[im sparticus]

can I play?

put me down for Long XJO , Short all the property indexes except Perth. $1m per side

hypothetically.

Sure remember to keep us posted of your progress starting from today