Never fear, Tanya is here:

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Thank g*d that the ALP is here to help.

salad in wrote on Jan 24^th, 2011 at 7:13am:


Tanya Plibersek should get the vote for being the most useless politician ever !!

Reading The Age reporting on the housing market over the last couple of weeks has been like watching the Comedy Channel.

At any point we expect Jon Stewart or Stephen Colbert to fly out of the page to tweak our nose and give us a cheeky wink.

First we had, “Land sales plummet, adding to price squeeze”.

Fairfax reporter Chris Zappone wrote:

“Land sales have dropped to decade lows, further eroding the nation’s housing affordability as prices continue to rise, according to RPData and the Housing Industry Association…

“Even as the pace of sales slows, Australia faces a roughly 200,000-unit housing shortage, HIA estimates, driven by complicated planning processes, a tax policy that encourages buyers to hold multiple homes, and the slow release of suitable land by real estate developers and governments.”

So what we have is falling demand equalling a housing shortage.

How does that work then?

Surely, if the bulls were right and there is a housing shortage, buyers would be ripping the arms off real estate developers to get land at any price.

Yet as The Age reports:

“Land sales in the city [Melbourne] staged an even bigger retreat, falling 74.2 per cent in the year to September, to about 1500, the lowest since the March quarter of 1991.”

Cameron Kusher from RPData is quoted saying:

“Undoubtedly something needs to be done to address affordability constraints and governments at all levels need to realise that it is a serious problem.”

Turn the numbers around and what you’ve got are buyers saying they won’t pay stupid prices.  Prices are too high.  And they need to fall.  But the mainstream doesn’t look at it like that.

As far as the mainstream is concerned, a lack of demand equals a lack of supply.  Therefore prices are bound to go higher… because there’s a housing shortage.

Of course, as you should know, the so-called housing shortage doesn’t exist.  What you’ve got in most cases is over-the-top expectations of sellers.

I can give you a good example… about two years ago, a house in the Sayce family’s street sold for around $750,000.  That was roughly 60% more than houses in the same street were going for three years earlier.

Today, two homes in the same street are on the market in the mid to high $600,000s.  One of these homes has been on the market for over a year.  By our estimate, they’re dreaming if they reckon they’ll get anything close to what they’re after.

If they knock 10—20% off the price they might be in with a chance… More likely they’ll have to lop 30% off the reduced price to have a chance of selling.

And based on letters we’ve received from Money Morning readers, it’s a similar story elsewhere in suburbia.  Prices on decent, relatively modern homes are 30% lower than similar homes were two years ago.

Trouble is, they’re still overpriced!

Yet so far, this familiar story has failed to show up in the dodgy housing index numbers.  We doubt that will be the case for long.  In fact, based on the comical analysis of the housing market by ANZ Bank [ASX: ANZ], we’ll bet the numbers will start showing up before this year is out.

According to reporting of the ANZ report – which we haven’t got our hands on yet:

“The bank estimates that house prices will plateau this year, at a little more than $550,000, on average.”

Well, that’s something.  At least it’s better than the ‘house prices will double’ rubbish we’re used to reading.

Even so, the banks still can’t admit it.  They haven’t got the balls to say house prices have and will fall.  They’ve always got to put a spin on it.  In their world house prices either go up, plateau or become more affordable… but they never go down.

Of course, the simple reason for that is the banks don’t live in the real world.  They live in the crazy banking world where house prices must go up.

You and I know why the banks have to push house prices higher – because the banks’ balance sheets are so leveraged to the housing market.

It’s similar to if you have a margin loan on a share portfolio.  While share prices go up you’re laughing.  You’re getting a lovely return on your capital.  But as soon as prices fall, unless you’ve reduced your exposure, you’re going to be in a bunch of trouble.

And that’s exactly what the banks are exposed to… falling house prices.

But as we say, even with price expectations falling by 30%, Aussie homes are still way overpriced.  Yesterday the 7th Annual Demographia International Housing Affordability Survey was released.

It shows that housing in every Australian town and city surveyed is either ‘Seriously Unaffordable’ or ‘Severely Unaffordable’.

For example, in Sydney the median house price is 9.6-times the median household income.

In Melbourne the median house price is 9-times the median household income.

And on the Sunshine Coast the median house price is 8.4-times the median household income.

But we thought it would be fun to see how the ratios had changed since the Commonwealth Bank of Australia [ASX: CBA] published its misleading figures a few months ago.

You’ll recall the bank printed the following slide in a presentation it gave to international investors:

We remember seeing it for the first time and laughing heartily.  We picked these numbers apart over a year ago.  Yet still the mainstream peddles the myth.

The numbers to support the housing shortage are based on 9,000 homeless people sleeping rough, 35,000 families who live with friends and relatives, 13,000 families who live in caravan parks, and 26,000 people who… well, this one is really ridiculous.

These 26,000 people are imaginary.  They no more exist than the Loch Ness monster…

What it’s saying is that because the rental vacancy rate is, say 2%, another 26,000 homes are needed in order to get the vacancy rate up to 3%.  In other words, there isn’t a shortage of rental properties at all.  It’s just that the vacancy rate is lower than the long-term average.

What it’s saying is that to solve the so-called housing shortage the market needs more empty houses!

We liken it to a shop claiming there’s a milk shortage when they’ve got ten bottles of milk left over at the end of the day when they used to have fifteen left over.

It’s not a shortage.  It’s a surplus you clowns.

But even better than that, the NaHSC wasn’t happy to just add all the dodgy numbers together.  It had to round the number up to the nearest 5,000.  So even if we accepted their dodgy numbers – which we don’t – the number has been exaggerated by 2,000 dwellings that are merely the result of rounding-up!

What a joke.  But that’s the government for you.

Yet these are the numbers the banks and spruikers base their statistics on when they carp on about a housing shortage.

Make no mistake, all the evidence is pointing towards a massive drop in the price of Australian housing.  For many the drop has already happened.  Just look at the houses on the market in your area and you’ll see the asking price is well below the levels of two years ago – and still they aren’t selling.

The UK and US housing bubble made a loud pop when it burst.  It seems in contrast the Aussie market is suffering from a slow deflation as the air comes out of it.

Either way, it’s bad news for sellers right now. But a year from now it’ll be great news for buyers.  As I wrote a couple of weeks ago, keep your eye on the housing market… but don’t buy yet… your time will come.

http://www.moneymorning.com.au/20110125/aussie-house-prices-hit-the-tipping-point.html

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Good because I need to upgrade.

whatsforme wrote on Jan 25^th, 2011 at 10:28pm:


351 posts full of bullshit. Must be a record !!

From Money Morning

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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.

Now all the experts want to boost up immigration level as they have claimed to be skills shortaged .. this will just make housing more worst .. your children are in their dreams to purchase their own homes in the future ..

longweekend58 wrote on Jan 26^th, 2011 at 5:52pm:


you are a complete f.ckwit because it is now on record that NAB and Westpac among many other foreign banks that were in trouble, lined up for handouts from the Federal Reserve just after the GFC happened.

And what about the Government guarantee of depositors funds ?? What do you think that was all about moron ??

just look at the US the housing industries are crashing .. losing %60-%70 in value. all those counstruction workers are out of works and have no jobs since all have been shifted to Chiana by corporate greeds .. So it's no way can return to where it was before .. the unemployment just kept on climbing .. before they tried to boost up the migration and now they are trying to kick those migrants out expecially the Mexican so called illegal .. So I'm just wodering why don't our govt tries to help the US  by taking all those skilled Yankees here to fill out all those positions as those experts have always claimed as such skills shortaged ??? .. Those people have all the skills and speaking the same languages .. ?? what wrong of taking them instead of those from India, China or others ??

Ex Dame Pansi wrote on Jan 27^th, 2011 at 3:31pm:


He will even edit his old posts and change what he said. Make sure you keep a copy of it as a quote in your replies. He can't edit those can he

Sir lastnail wrote on Jan 28^th, 2011 at 11:58am:

Federal Reserve System - Wikipedia, the free encyclopediaThe Federal Reserve System (also known as the Federal Reserve, and informally as The Fed) is the central banking system of the United States. ...
en.wikipedia.org/wiki/Federal_Reserve_System 
  The feds the yanks you f u c k wit       Go SPAM SOME WERE ELSE

perceptions_now wrote on Jan 28^th, 2011 at 12:21pm:

I understand that but it got nothing to do with aust house prices

FRED. wrote on Jan 28^th, 2011 at 12:13pm:


No kidding moron and your point is ??

Sir lastnail wrote on Jan 27^th, 2011 at 2:27pm:

Now I know what you do for a crust, you're a COMEDIAN!

Most people did not see this GFC coming and there is zero chance you saw it coming, because it would be outside the range of your BLINKERS!

Verge wrote on Jan 24^th, 2011 at 4:43pm:


Well delete the AFL, and I'll agree with you Verge...