Australian Politics Forum - Housing market a 'time bomb', says investment guru

freediver

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Re: Housing market a 'time bomb', says investment guru
Reply #15 - Jun 23^rd, 2010 at 6:35pm

Ex Dame Pansi wrote on Jun 20^th, 2010 at 5:01pm:

perceptions_now wrote on Jun 20^th, 2010 at 1:45pm:

Sir lastnail wrote on Jun 20^th, 2010 at 1:38pm:

Bobby. wrote on Jun 20^th, 2010 at 1:33pm:

Hi Nail,
Economics was never my strong area.
Those graphs do seem to say that it's better to wait if you want to buy.

It's also saying that the Government has used tax payers money against the general public by creating a property bubble and inflated house prices with its first home buyers grant.

No wonder Kevin Dudd is on the nose.

He has been talking to too many Economists!

Not the right ones obviously.

No, he has been listening to the polls - to the people like Soren who don't pay attention to the details. This is a classic, textbook, first year economic problem. Any economist would have told him that it will push prices up. They all did. It was all over the papers. I said so here, but the Howard supporters insisted it must still be a good idea.

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hawil Gold Member Offline Australian Politics Posts: 1345	Re: Housing market a 'time bomb', says investment guru Reply #16 - Aug 21^st, 2010 at 6:29pm There is one problem with the whole theory, Australia does not build enough accomodation to house the great number of immigrants, and that will prop up the market for some time yet, because people need a roof over their head, even if they have to pay nearly twice the average earnings.
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Sir lastnail

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Re: Housing market a 'time bomb', says investment guru
Reply #17 - Aug 21^st, 2010 at 10:31pm

hawil wrote on Aug 21^st, 2010 at 6:29pm:

There is one problem with the whole theory, Australia does not build enough accomodation to house the great number of immigrants, and that will prop up the market for some time yet, because people need a roof over their head, even if they have to pay nearly twice the average earnings.

There was a shortage of housing in Hong Kong, Japan and California but their housing market still crashed. A shortage of housing cannot sustain a property bubble indefinitely. Something will give and the banks are now talking about raising interest rates independently of the reserver bank. This will definitely prick the bubble irrespective of the shortage. The people renting out their investment properties cannot afford to keep offloading the rising interest rates onto the tenants with higher rents. Something has to give. To many suckers got into to much debt believing the bubble would never crash in Australia. That's what people say about every bubble before it crashes Wink

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freediver

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Re: Housing market a 'time bomb', says investment guru
Reply #18 - Aug 22^nd, 2010 at 8:09am

Actually, our population is not going up that fast. However there is another trend that is compounding the population growth - people living in smaller groups and larger houses. Young people moving out of home earlier. People getting richer. Plus the housing handouts from Labor and Liberal, etc

The most important figure seems to be the ratio of house price to annual income, which I believe is pointing to a bubble of about 40% overprice.

That being said, I have heard this bubble talk for years now. It lasted through high interest rates and through the bursting of foreign housing bubbles and the GFC. I guess it will deflate eventually, but don't expect it to happen soon.

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hawil

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Tim bomb
Reply #19 - Aug 22^nd, 2010 at 12:08pm

There was a shortage of housing in Hong Kong, Japan and California but their housing market still crashed. A shortage of housing cannot sustain a property bubble indefinitely. Something will give and the banks are now talking about raising interest rates independently of the reserver bank. This will definitely prick the bubble irrespective of the shortage. The people renting out their investment properties cannot afford to keep offloading the rising interest rates onto the tenants with higher rents. Something has to give. To many suckers got into to much debt believing the bubble would never crash in Australia. That's what people say about every bubble before it crashes

You could be right, but the banks have recently reported big increases in profits and their provisions for risky loans has also gone down, there is a contradiction there.
Japan is a very unusual case, their share market has plummeted enormously and has stayed down.
I think another time bomb is the compulsory super, which will one day implode and lose the workers small super holdings, because the $1.3 trillion super holdings now equals the GDP and the funds will have trouble where to invest the money.

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Sir lastnail

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Re: Housing market a 'time bomb', says investment guru
Reply #20 - Aug 22^nd, 2010 at 1:05pm

I noticed the Real Estate Institute of Victoria is up to its old tricks again writing full page spreads in the Herald Sun on the weekend talking about record median house prices in suburb X. Get in before you miss out Wink

One of their gurus is saying that we are not experiencing a property bubble. Of course they would say that. Bad for business to say that Wink

Why the Herald Sun keeps giving those clowns a platform to spruik their crap is beyond me, but then it has probably got more to do with advertising revenue for the paper Wink

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Sir lastnail

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Re: Housing market a 'time bomb', says investment guru
Reply #21 - Aug 22^nd, 2010 at 1:14pm

freediver wrote on Aug 22^nd, 2010 at 8:09am:

Actually, our population is not going up that fast. However there is another trend that is compounding the population growth - people living in smaller groups and larger houses. Young people moving out of home earlier. People getting richer. Plus the housing handouts from Labor and Liberal, etc

The most important figure seems to be the ratio of house price to annual income, which I believe is pointing to a bubble of about 40% overprice.

That being said, I have heard this bubble talk for years now. It lasted through high interest rates and through the bursting of foreign housing bubbles and the GFC. I guess it will deflate eventually, but don't expect it to happen soon.

If it's not a bubble and the housing market is healthy then why the Government intervention with its first home buyers scam which just serves to force up prices rather than help first home buyers Sad

According to Steve Keen rapid increases in house prices have coincided with the Governments introduction of the first home buyers scam.

http://www.debtdeflation.com/blogs/2010/06/17/grantham-on-the-australian-housing...

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"If you take out Saddam, I guarantee you that it will have enormous positive reverberations on the region..." - Benjamin Netanyahu in 1995

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bridonta Gold Member Offline Australian Politics Posts: 522	Re: Housing market a 'time bomb', says investment guru Reply #22 - Aug 24^th, 2010 at 1:22pm when you inflate house prices .. mean you are inflating all cost of living .. in the long run this will cripple entire economy .. that's the time the bubbles bust .. the more you blow the bigger bust it will be ..
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hawil Gold Member Offline Australian Politics Posts: 1345	Re: Housing market a 'time bomb', says investment guru Reply #23 - Sep 21^st, 2010 at 4:14pm The article in the AFR 21 Sept 2010 "Country pubs feeling the pinch" could be the harbinger of what can happen in the housing market. A Queensland pub sold for $900,000 which was bought for $2millions before; that is a big loss.
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