In the last 100 years i know Australia has gone through many booms.many busts,recessions,depression,war,oil scares,stock market crash,s. interest rate rises and falls, government changes,inflation changes etc etc. While all this has been going on house prices have rolled along in a general upward direction.My question is does a graph exist showing mediam house prices over say the last 100 years and also on this graph indicate the major influences on prices like the ones mentioned above and when they happened. I know the info is out there but would be nice to see it all put together just to have a look.Does something like that exist or do i have to gather the info my self.
The RBA or ABS would be a good place to start, although median house prices don't really tell you much, in a similar way to the stockmarket in general (ASX 200 or All Ords), unless you are buying an index fund, but you can't do that with property. What matters is the property or share that you buy and it's growth, because as with all investments, a positive for one is negative for another.
I saw I large poster on the wall of a CBA bank manager's office showing a 100 year graph of the stock market pionting out that despite all the booms and busts, over the long term the share market always headed in a constant up trend.
You would be able to get a graph on house prices and might need to insert your various events in it. Possibly one that's adjusted for inflation might be more meaningful.
devo76 wrote:My question is does a graph exist showing mediam house prices over say the last 100 years and also on this graph indicate the major influences on prices like the ones mentioned above and when they happened.No it doesn't. All our current house price indices date back to the early 1970s at best, or the mid 80s. This coincides with an unprecedented (and ultimately unsustainable) period of monetary inflation which is still continuing today as credit rises in the mid-teen percentages.
I've been gathering data for exactly the kind of thing you describe, beginning with the very first sales of land in Melbourne in the 1830s and adding bits and pieces of historical price data from news stories, land registry documents and so-on. This is time consuming, as these data have not been comprehensively digitised – I have to track them down and record them myself.
More recently I've realised that I can simply take every property from 2 or 3 old streets and research every transaction of every property on those streets to derive a repeat-sales index. It's still time consuming and I'm going to need to take time off my day job to get it finished, but it's interesting. Another less accurate method is to transcribe shire rate-books, but these values tend to be conservative and are rarely adjusted down (for obvious reasons). If you want to have a shot, check out your State public records/archives office.
Cheers, F. [cowboy2]
Actually, I do have something that might help satisfy your curiosity. CommSec produced the following chart a few years back (it's a little outdated):
You can derive the rest of your data from this. I actually have this one pinned above my desk with comments all-over it (WW1, roaring 20s, great depression, WW2, diggers return, BBs born, golder era, BBs buying, high inflation, sharemarket crashes, interest rate peak, disinflation, tech boom/bust, the great housing bubble etcetera). And I've scrawled the ratio of debt to income over the top as it is closely correlated to the house price to income ratio.
You can get a high-res version from the source here:
http://www.abe.org.au/papers/David~Rees~Presentation.pptCheers, F. [cowboy2]
Thanks Foundation,
Great link, just reading through it now, very helpful.Cheers
Hutch"does a graph exist showing mediam house prices over say the last 100 years and also on this graph indicate the major influences on prices like the ones mentioned above and when they happened"
I've got another one for you – one of my own. As far as I'm concerned, this shows clearly the primary driver of house prices, and the primary driver of the boom/bust cycle. Try working out where the booms and busts would sit on this chart. Then where history's great house price booms occurred.
Thats the sought of thing im looking for although i dont like what i see. Thanks foundation. Any other interesting graphs ??
devo76 wrote:Thats the sought of thing im looking for although i dont like what i see. Thanks foundation. Any other interesting graphs ??Yeah he has heaps of heaps of other graphs and he posts them on a dumb forum called Global House Price Crash and bags out investors from her and somersoft and complain and talk about rubbish!
Ya, like they now it all. Check it out http://forum.globalhousepricecrash.com/index.php?showforum=9
Just has a different opinion to the majority of people. Why get into people about there opinion, is it really effecting you at all???
scum wrote:scum is right. I do discuss economics, housing, finance, debt, shares, statistics, and occasionally topical threads from here and somersoft. And yes, I do this on a forum called GlobalHousePriceCrash. Perhaps posting about threads from here is a bit duplicitous. I guess now that the secret (no, not that 'The Secret'!) is out I'll be a bit more conscious of the potential to cause upset. I'll be more careful.
The history of the ragtag bunch of ex-pirates who post on GHPC (AU) is diverse, but many posters, including myself, moved there when the Cracker.com.au Housing Forum (http://cracker.com.au/threads.aspx?categoryid=11061) became unusable due to technical problems. If you went there and looked back to the pre-March/April threads you'd find it was busy with many of the same posters. In the early days of GHPC (AU), some of us even considered looking for an alternative forum, as we didn't want to be marginalised as fringe-loonies (price crash zealots), based on the forum name alone. But we've mostly hung in there and now have a busy forum where almost every news article about housing is posted and commented on, as well as the various other topics I mentioned earlier.
I also post on Steve Keens Debt Deflation Blog (http://debtdeflation.com/blogs/) as foundation. And on Michael McNamara of APM's blog (http://blogs.domain.com.au/) as foundation.
Scum, if you or anybody else wishes to visit GHPC (AU) to discuss any of our "rubbish" thoughts, you're more than welcome to. You'll find there are a few die-hard housing bulls there, including posters from the somersoft.com and propertyinvesting.com forums.
Cheers, F. [cowboy2]
Good decision foundation. I was doing some googling a few months back for some house foundations and cracking and I came across some interesting comments….
Erm.
Was I making fun of you or just being a knob generally?
Maybe when I post there about a thread here, I should add this to the thread under discussion:
???
Someone was congratulating you for stirring us forumites up. Your first few posts to me offended me but now I see the funny side of it and i have to agree you do crack me up sometimes too. Each to their own. I think we're the same age so it's interesting to see we have totally different views on most things but sometimes I find your comments very grounding and useful. (Definately not the comments about having the one boarded up house though) Cheers.
devo76 wrote:In the last 100 years i know Australia has gone through many booms.many busts,recessions,depression,war,oil scares,stock market crash,s. interest rate rises and falls, government changes,inflation changes etc etc. While all this has been going on house prices have rolled along in a general upward direction.My question is does a graph exist showing mediam house prices over say the last 100 yearsHowdy Devo. I've just got my hands on a chart of a chart of Australian average house prices over the last (nearly) 150 years. Thought you'd be interested. You might have to vary your original view that "house prices have rolled along in a general upward direction". As I've pointed out repeatedly before – that's a relatively new phenomenon that has coincided (duh!) with a period of unusually high inflation followed by unusually high (unsustainably so) credit growth.
It's a bit hard to see at this scale, but the declines in house prices in the period following 1890, 1910 and 1930 (all coinciding with credit growth falling below GDP growth) all exceeded 30%. They look like little bumps in an eternal upward trend at the broad scale, but they were in fact very significant. Also worth noting that prices in 1950 (inflation adjusted) were at a level first reached in the mid 1880s. No real growth for 65 years.
Of course things are a little different today, what with a Reserve Bank that believes it has the power to keep inflation constantly growing at its target rate. We'll see.
Cheers, F. [cowboy2]
So Foundation,
based on your posts before mine, does this mean you are not buying any property, or selling what you've got, or holding on, or buying more, liquidating and putting it into cash (everyone seems to be doing that). What about shares and/or businesses?
What are you doing, man?Mind you; I tend to half agree with you; I think there will be a slowing down of sorts, but as I've posted previously, housing is a life necessity, so I think that there will be pockets of good news scattered everywhere amongst the predicted downturns.
My big concern with statistics is that they can encompass all housing, including the dramatic declines in the speculative end and the top end of the market, and these sorts of movements can skew the results, while the middle-ground where 90% of the population sits, buying as mom and pop families, plods along, going up a few per cent every year because at the end of the day, they need a roof and they will pay.
L.A Aussie wrote:So Foundation,based on your posts before mine, does this mean you are not buying any property, or selling what you've got, or holding on, or buying more, liquidating and putting it into cash (everyone seems to be doing that). What about shares and/or businesses?
What are you doing, man?I'll tell you but you wouldn't want to copy me! I sold off all my direct share investments in November last year (now cash) and adjusted my super to a very conservative stance – around 50% cash, 20% Aus shares, 10% global shares and the rest a grab-bag of fixed interest (oops) and property. I only have two houses, and yes, I did/do plan on selling one during the summer if I can get a price above the value I place on it as a holiday destination.
I'll gradually be adjusting my super to a more aggressive stance as the sharemarket falls, depending on the depth of the current correction. It's worth noting that even after the 13.5% correction of the All Ords we've seen (so far), it's still got around 4% to go before it reaches the level it was at when I cashed out last year! Might never get there, though I suspect it will.
I'll be holding a fair amount of cash for quite some time to come I think. I also have a collection of gold and silver, but I haven't bought any for almost 2 years and don't plan to any time soon.
It's all very unexciting isn't it? But I play for keeps.
Cheers, F. [cowboy2]
Foundation,
Does the 4% that the stock market has to drop before its back to the level that you sold out at include the dividends you have possible missed out on.
No.
So maybe 6% all told.
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