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StingrayBirke
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@stingraybirke
Join Date: 2010
Post Count: 11
January 8, 2012 - 12:27 pm
Corie wrote:
I remember Western Sydney associate professor of economics and finance Steve Keen bet Margaret Lomas that house prices would fall by 40% after the global financial crisis. After he lost the bet he amended his comment to say that the predicted 40 per cent housing price drop would occur over 10 to 15 years.
Good point on Steve Keen. Here's an interesting discussion about Keen and his predictions……
Associate Professor Steve Keen did NOT predict the GFC
Not sure if I agree with everything there but it's interesting nonetheless.
StingrayBirke
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@stingraybirke
Join Date: 2010
Post Count: 11
January 8, 2012 - 12:18 pm
I think you should study these charts very closely…….
http://www.australianpropertyportal.com/Gallery
And then decide whether you think property is in a bubble!
StingrayBirke
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@stingraybirke
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January 8, 2012 - 12:16 pm
And furthermore, evidence of Astroturfing from this blogger
http://www.bullionbaron.com/2012/01/strindberg-identified-as-apfghpc.html
StingrayBirke
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March 11, 2011 - 4:58 am
I'm deleveraging, big time, the crash is on our doorstep and I wouldn't want to be left holding the bag!
Link – Australian House Price Crash
It's a long way dooooowwwnnnn…….
StingrayBirke
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March 11, 2011 - 4:43 am
Rich in five years? If what I read here is true more likely bankrupt in five years!
Link ….. Australia's Debt Driven Housing Bubble
"…..data clearly shows that there was unusual and disproportional increase of house prices relative to any other leading economic indicator. House price increase cannot be justified by wage growth, CPI, interest rate changes, wealth increase, spending habit changes or any other economic indicator but the debt growth. Using any definition of housing bubble available, it is very likely that Australia is in the middle of the debt driven housing bubble, where house prices increased at least 60% more than any other leading economic indicator….."
Don't say you weren't warned!
StingrayBirke
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Post Count: 11
November 25, 2010 - 1:49 am
casanovawa wrote:
After a property bust initially more tenants might be selling up homes and looking for rentals perhaps pushing up rents, but then depending on how much prices dropped, if rents were still sky high and houses/mortgages became much more affordable, i imagine it would drive people back into house ownership which would then probably drive rents down somewhat to attract/keep tenants… although people probably wouldn't start buying homes again until they thought the market had hit bottom and also when the banks were prepared to lend (which would probably be influenced by how hard the financial system had been hit by the downturn and whether the banks also thought the market was reaching bottom and didn't have further to drop) really depends on how long and severe the bust was as well as levels of unemployment to pay sky high rents….
I agree with that, but house prices will fall much further than rents will go up. Anyone holding highly leveraged property is in for a world of pain! The OPs article makes is very clear that prices are extremely overvalued – up to 60% overvalued according to reputable sources.
TKline wrote:
Are Australian House Prices Overvalued?
The question of whether Australian house prices are overvalued has been an extremely polarising issue for some time. Many observers believe property values in Australia are severely overpriced relative to other countries, relative to historic trends, relative to incomes, and relative to rental yields. Such observations have led some people to believe that a speculative housing bubble may be growing in Australia…….
Australian Property Bubble
StingrayBirke
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Post Count: 11
November 25, 2010 - 1:31 am
NoCredit wrote:
Worth a read:
Full article is here: Australia's Property Bubble?
Quite a balanced article. The author presents a good case for and against. I'm leaning towards an extended period of flat house prices (down a bit in real terms). If the government intervenes again it could easily go the other way.
Excellent article! Spot on!
StingrayBirke
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Join Date: 2010
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November 14, 2010 - 1:43 pm
Not a bad write-up on the bubble. I like where he said…..
"Sadly, the exponential growth of property related debt in Australia has created nothing positive for most Australians. While the explosion in property credit may have boosted GDP figures, it has not manifested in any real production or productivity gains. Instead, it indicates wasteful consumption, as the vast majority of property related debt is funneled into the trading of existing dwellings, rather than the development of new housing stock. Apart from providing basic shelter, housing offers little of benefit to an economy (beyond the initial construction boost). On the other hand, business investment, which furthers technological advancement and creates
employment, does provide long lasting economic benefits. The vast capital flows that are currently directed towards the trading of existing dwellings in Australia could be allocated much more productively to other sectors of the economy."
That nails it for me. Can anyone write for the Associated Press or is this bloke a known journalist???
Daniel.
TKline wrote:
Excellent article about the Australian Property Bubble
This does pours cold water on most spruiker claims about how it's supposedly different here — reading this article shows how much Australia has similar to every other bubble, and they've all burst, all but one! Tick tock tick tock…….
Will the 'greater fools' listen or ignore the advice? Public sentiment is turning. As more people see the wisdom behind these theories, it's a matter of time, that's all!
Quote:
Are Australian House Prices Overvalued?
The question of whether Australian house prices are overvalued has been an extremely polarising issue for some time. Many observers believe property values in Australia are severely overpriced relative to other countries, relative to historic trends, relative to incomes, and relative to rental yields. Such observations have led some people to believe that a speculative housing bubble may be growing in Australia…….
Australian Property Bubble
All the best,
Tom Kline.