Expect the property gurus, spruikers and mainstream press to keep banging on about the resilience of the Aussie housing market… right until it crashes around their ankles.

longweekend58 wrote on Jan 26^th, 2011 at 4:13pm:



I would have been right if the government hadn't have given the first home owners grant, and bailed out the failed banks.

No grant now and no money left for bank bailouts. Lets see what happens when there's no intervention to prop up the failing real estate market.

Ex Dame Pansi wrote on Jan 26^th, 2011 at 4:46pm:


nobody bailed out the banks. our banks were rock solid or did you miss that? the FHG had a moderate impact but if you think about it (yeah right!!!) the FHG doesnt apply to subsequent purchases which stil form the significant majority of the market. you fail to realise - and accept - the significant difference between the australian and USA market. their home values crashed as a result of a failing ecnomy, astonishingly bad lending practices and the flow on affect of bank colapes. none of these things apply here.

longweekend58 wrote on Jan 26^th, 2011 at 5:54pm:


Likewise, saying that a prediction was incorrect without specifying a time frame is pretty disingenuous on your part isn't it !

And I'm glad I am still renting and not one of the gullible lemmings that took your crapola financial advice and bought at the top of the bubble

There is an old saying. Free financial advice is worth what you pay for it

nails....lw is like the economists in America, they didn't see the gfc coming, because they didn't want to. Or too scared of the consequences, so turned a blind eye.

Sir lastnail wrote on Jan 26^th, 2011 at 10:24pm:


you are so easily sucked in!  the guarantee was to stop a run on the banks caused by panic from people just like you. no matter HOW healthy a bank is, a run will cause it to collapse.

But as the years go on, house prices rise and you fall further behind because you believe the crap you spruik.

The truth is that over the past 20 years Sydney residential property prices as reported by the Australian Bureau of Statistics have increased by a compounded rate of 5.2per cent per annum, which effectively means property prices double on average every 14 years.

That's right, folks, not seven years but 14 years.

Sure, there are times when the rate of growth will be more than this, when property might double within a seven-year period.


That certainly happened with Sydney real estate prices in the 1980s and between 1998 and 2003.

However, the periods when Sydney house prices were either flat or falling more than make up for the infrequent booms.

We can see this quite clearly when we consider the long term the very long term.

In 1890, the median house price in Sydney was £723. If property really does double every seven years then, in 2009, the average Sydney home would be worth $189,530,112.

Or working it back, halving Sydney's current median house price of $530,000 each seven years back to 1890, produces a ridiculous median house price of £3 which was the cost of a bicycle in those days.

As you can see, the seven-year claim (or even the 10-year claim) is ridiculous. It is just not backed by long-term or even relatively short-term historical evidence. However, there is a possible silver lining. Given that house prices in Sydney are now lower than they were in 2003, they are now more affordable and, importantly, have returned to the longer-term growth rate of nominal incomes and profits; which, in this country has also grown for the past 20 years at 5.2 per cent per annum.

http://theage.domain.com.au/beware-spruikers-on-house-prices-20100429-tuor.html

It's just not backed by long term evidence. I hate property spruikers, they'd rob their own grannie of her last dollar.

Ex Dame Pansi wrote on Jan 27^th, 2011 at 10:36am:


I think the stat gets blown out of proportion by things like waterfront (touchy subject at the moment I know).

We used to holiday in a place called Mulwala.  20 years ago you could buy a block of land on the water for about $85k.

Now you wont get one under $800k.

The same proportionate growth hasnt occurred over the rest of the town.