2002?
I don't think so.
Probably 2005 were the early property bears.
Been ten years since this crash was suppose to happen good luck waiting on the next ten. GFC was suppose to bring it and still nothing to write home about, in fact they went up some more.
For prices to crash their needs to be a trigger that hits wages imo.
Rents are still sky high as well.
There is. We are one country, if prices differ significantly in one city to another, then people will relocate there, thus lowering the prices from where they came, and equilibrium will be reached.
Housing bubble mechanics 101 pal:
[snip some naive youtube economics type drivel]
This happens everyone in Australia - in all cities, not just Melbourne. It has happened more in Melbourne than Sydney sure, but it absolutely happens in Sydney.
Rents in Sydney are not going up - nor are they anywhere else.
Only ONCE have sales volumes moved so low on that graph - in 1994, only ONCE - apart from the GFC. And as you already pointed out, we have had quite a lot of population growth since then!
Past performance is not an indication of future performance... You need to understand all factorors which led to those results - which you clearly do not, you just stick your head in the sand yelling "lalalala" and claim that because it happened once before it must happen now.
Because we are one country, the the housing markets in our states are more or less identical, they work in an identical way and are regulated the same. This is in sharp contrast to somewhere like USA where you can indeed look at states as separate markets since there are such vast differences between their markets and regulations.
And secondly for the point which you allouded to - because it is possible for me to move from one city to another which has cheaper property, thereby balancing the situation out.
Stamp duties are state revenue, FHOB was a federal program. Also it is an incorrect statement to make as you cannot know exactly how many more sales were generated as a result, so you cannot know what proportion of that money wound back up in state government coffers.
Can you cite me any example since the RBA was created, when it monetised debt? Are you aware that our federal government has spoken openly critisisng such behaviour?
It is not a couple of thousand, the develops there are easily good for tens of thousnads of units a year. And not everyone wants to live close to the CBD - not to mention not everyone needs to.
No it isn't, and no they don't. I suggest you learn about our banking system.
First of all, not it has not. Second of all, the point is that it has gotten much much larger since the housing bubble began. And most of all, you fail to understand how bad of a thing that is.
Residex is well-known to be very unreliable and false. RP Data-Rismark is the only reputable housing data provider in Australia.
Problem with stagnation is that anyone leveraged will bleed money. Every year that passes where the home does not go up in value while they are paying interest = a loss, and a big loss. Most people cant deal with ongoing loss and will want out, especially once they see no signs of improvement for 5-10 years.
Nah - rising rents fixes that issue. We saw this scenario play out from 2003-2007 in Sydney already; there was no rush for the exits. We can see this happening right now as rents are rising strongly just about everywhere while property prices fall a bit or stagnate.
That's fine for those still working. Once people start moving into retirement they need income from their property, no doubt in many cases the rents are only break even once the tax deductible loan interest has been taken into account..
That's fine for those still working. Once people start moving into retirement they need income from their property, no doubt in many cases the rents are only break even once the tax deductible loan interest has been taken into account..
Hi robz, I am one of those guys who has moved into retirement and I live off my IP rental income. ]
commercial industrial however is another matter, volatile like shares in a way.
I have a few questions for the property bears on this thread.
1. In percentage terms what do you guys define a crash as?
2. Where have the property bears got their money invested now?
3. How long are you prepared to wait for this property crash to happen?
Look forward to hearing your responses.
I have a few questions for the property bears on this thread.
1. In percentage terms what do you guys define a crash as?
2. Where have the property bears got their money invested now?
3. How long are you prepared to wait for this property crash to happen?
Look forward to hearing your responses.
You are very naive! It simply doesn't work that way, at least not in the short / medium term. If what you say is true then house prices should be roughly the same across all Australia's capital cities! Are they?? Have they ever been?? There goes that whacky theory.......
Again complete rubbish. The building rates in various cities at any point in time prove your theory to be bollocks.
Ok now you are just trying to be funny???
Well there goes your 20 year comment....... and did prices crash after 1994?
How about after 2008? Wake me if sales volumes fall say 30% or more lower than the 2011 level and you will sway me to the bearish side - as that would be virtually unprecedented, and would prove to me that things are "different this time".
Ok so you ARE basically arguing "it's different this time" - but isn't that what the bubble deniers are meant to argue??? (Confused?).
More evidence of your naivity with regards to how the residential property market in Australia and various cities actually DOES work. If you invest in other assets I sure hope you have a better understanding of market mechanics and history than shown with these comments about housing!
FHBGs are administered by the states as well
The bottom line is that the government does not actually stimulate housing - they suck revenue out of it and thus suppress the market. All FHB grants etc do is offset this a little for FHBs.
Do you understand the difference between fiscal and monetary actions? My comment was about potential FISCAL actions by the government - you are talking about MONETARY actions. Please ready my comment again. The only constraints on fiscal action by government are political.
Ummm - I don't think so. I'd check your facts if I were you. Regardless, just think for a second about how much new housing is needed with a population growing by 50,000-60,000 people every year?
I understand the banking system and the monetary system extremely well thanks. If you think you are so smart on this one then tell me - what happens to funds paid to overseas investors in Australian assets exactly? Do you think the $AU just disappears out of the system and country? Do you actually know how foreign exchange works?
Here's a chart plotting the CAD as % of GDP since 1980:
Add to all this the fact that in recent times due to much improved terms of trade and trade surpluses etc the CAD has been trending lower in nominal terms and even moreso in % of GDP terms:
Of you are funny! Residex data doesn't say what you believe so it must be false? By the way RP-Data shows rising rents pretty much across the board as well.
1. In percentage terms what do you guys define a crash as?
2. Where have the property bears got their money invested now?
3. How long are you prepared to wait for this property crash to happen?
I have a few questions for the property bears on this thread.
1. In percentage terms what do you guys define a crash as?
2. Where have the property bears got their money invested now?
3. How long are you prepared to wait for this property crash to happen?
Look forward to hearing your responses.
Yes it does, it's called labour mobility. And yes, they are roughly the same. The price to income ratios are extremely high in all major cities in Australia. Look at Germany and they are literally 3-4 times cheaper. Now that's a difference in prices which does not exist in Australia.
Maybe you should stop making stupid comments and pay attention to the evidence. Like those rent graphs I produced.
But I already went over this - it didn't work, and house prices have now fallen even further than during the GFC while the government is significantly indebted.
This time has never come before, so I don't know what you are talking about.
This time is not different - because this time has never occurred in the past.
You show that you do not understand what you are talking about. Our government does not have a reserve currency like the US or Japan. It cannot borrow whatever it wants - it would require the RBA to monetise it's debt - and that is indeed monetary policy. Our reserve ban is unlikely to ever do that.
Wow, you really know nothing do you? "Ummm I dont think so check your facts, regardless" - just listen to yourself. Maybe you should go down there and talk to the developers to see just how much capacity they are building.
As for 50-60k people per year, that is absolute nonsense.
......
It's obvious that births do not amount to housing demand for a very long period of time
......
For all intents and purposes, Sydney's population growth is fairly flat.
You are delusional! So you think that houses in Hobart are just as expensive as houses in Sydney do you??
Here's the chart on rental growth again for you:
There is so much data showing rising rents over the past few years it is not funny. You are in complete denial if you think rents have not been rising.
Fact - the Australian government has the LOWEST public debt relative to GDP of every country in the G20. You need to take your brown coloured glasses off!
Yep, so "it's different this time" - got it. I'll talk to you in 12-18 months if you are still around, and you will be proven wrong just like all the posters in 2008 who spouted the exact same stuff back then.
Complete bollocks - and since when does Japan have a "reserve" currency?
Only the $US is considered reserve
because world commodities are priced in and traded in $US.
What Australia DOES have (as does US, Japan, UK etc, but Greece and Ireland do not) is our own SOVEREIGN currency. Australia can borrow / create as much of its sovereign currency as it sees fit.
No - I KNOW you are wrong. I notice you can produce nothing to back your claim of "tens of thousands of new units in Zetland over the next few years"?
You are so demonstrably wrong on all counts here it is getting beyond a joke! This article (http://www.smh.com.au/national/sydney-drags-the-chain-on-growth-20120330-1w3lr.html) bemoaning the "slowdown" of Sydney population growth because it's population grew by "only" 60,000 last year, and 75,000 the year before is wrong is it? Really Sydney's population is flat is it?
As for babies and housing demand, you are probably too young and wet behind the ears to realise, but when people have kids, they usually want to move to a bigger house! Natural population growth creates HUGE housing demand!
Anyway enough arguing with you - I know I will not change your mind and you will maintain your extreme views spread by reading to much Steve Keen and other rubbish like on Macrobusiness etc. It's just that someone has to point out the huge factual errors in half the stuff you post. Will see who is right in 12-18 months from here, assuming you are still on this site with that handle. If you really want some interesting reading go back through the archives here and read the housing threads from 2008/2009.
I have a few questions for the property bears on this thread.
1. In percentage terms what do you guys define a crash as?
2. Where have the property bears got their money invested now?
3. How long are you prepared to wait for this property crash to happen?
Look forward to hearing your responses.
There is but only one trigger. and that trigger is demographics. the fact that we are the last bubble to pop merely shows that our boomer generation were born a bit later than all other nations.
As it has been said sooo many times, it is as simple as supply and demand. what causes demand? NOT sentiment, NOT confidence. 80% of the home owners dont have an effing idea whats going on in the global economy, nor do they care. no, what causes demand is whether people(an entire generation of people) need/want to buy a house or not. and the fact is they simply dont need or want too anymore.
so the trigger that you're looking for, is your next door neighbour, your independent grocery store owner, your friends, possibly even yourself if youre a boomer, who simply ahve no need, want or desire to purchase a house anymore, and its happening right now.
rising unemployment and falling wages are a bi-product of a slowing economy, not a cause. simply because people are not spending at the dizzying heights that they were in the boom times.
some may say that the slowdown is caused by too much debt. this is incorrect. the slowdown is caused by demographics, the intensity of it is caused by how much everyone is leveraged.
Recent research by Comsec economist Craig James has found that Generation Y is now Australia's largest demographic. How are you keeping up with this changing world?
Based on population data from around Australia, Gen Y has emerged as Australia's largest demographic with 4.67 million people. Generation X has also grown to 4.6 million. And, the Baby Boomer demographic is shrinking, falling by 6,000 to just 4.11 million people.
To clarify who's who:
Gen Y are those people born 1976 to 1991
Gen X are those people bord 1961 to 1976
Baby Boomers are those borm between 1946 and 1961
Howard was pouring people into this country through immigration and not much has changed with labor. Remember the 'Big Australia' plan of doubling the population.
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