During the previous growth phase the stimulus was sizable grants, as well as low interest rates.
Where is your chart showing us that we don't have low interest rates?
Which is it Shadow? Low interest rates or not?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Okay, what part of the following statement from AHURI do you disagree with. ( Remember I could go hunting for sources from the RBA or any other authority that would say pretty much exactly the same thing)
More twisting and turning - and I don't disagree with any of those points. In fact they reflect the major thrust of what Shadow and others (including myself) have been trying to get through to you for a long time re the structural changes that occurred in the 90s that spurred the "once off" adjustment to real prices we saw then.
But to get back to the point, read what I wrote again - to paraphrase once more, credit conditions will have no impact if there is no fundamental, pent-up demand, present in the market, from credit-worthy borrowers. I would add that this demand must be high relative to available supply, for prices to end up rising significantly.
But to get back to the point, read what I wrote again - to paraphrase once more, credit conditions will have no impact if there is no fundamental, pent-up demand, present in the market, from credit-worthy borrowers.
Agreed, if there is no demand for houses there is no demand for credit.
Any other statements of the blindingly obvious?
Quote:
More twisting and turning - and I don't disagree with any of those points. In fact they reflect the major thrust of what Shadow and others (including myself) have been trying to get through to you for a long time re the structural changes that occurred in the 90s that spurred the "once off" adjustment to real prices we saw then.
Except it was a one off adjustment in other countries too ( Ireland, Spain, USA) until it wasn't.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
I thought interest rates were at historical norms.
They are low by modern Australian standards (i.e. compared to the 70s, 80s and 90s), but they are still at levels consistent with most of the past 160+ years.
Quote:
I thought you would have your own definition of stimulus
I'm using the standard dictionary definition, and gave several examples at the beginning of our discussion.
I'm not sure why you ended up getting so lost and asking me what I meant by stimulus when I had already explained.
They are low by modern Australian standards (i.e. compared to the 70s, 80s and 90s), but they are still at levels consistent with most of the past 160+ years.
I'm using the standard dictionary definition, and gave several examples at the beginning of our discussion.
I'm not sure why you ended up getting so lost and asking me what I meant by stimulus when I had already explained.
— n , pl -li 1. something that stimulates or acts as an incentive
So the cycle of its "all part of the cycle" fame, is really at the whim of
1. The RBA 2. State and Federal Government attitudes towards giving hand outs to people who want to buy houses.
Good to know that the institutions of Government's primary economic policy is to rescue house prices whenever they look like declining.
And of course, underlying all of this has to be pretty decent fundamentals.
Its like the first risk free investment known to man. HUZZAH!
Shadow
14 Jul 2014, 07:46 PM
They are low by modern Australian standards (i.e. compared to the 70s, 80s and 90s), but they are still at levels consistent with most of the past 160+ years.
I'm using the standard dictionary definition, and gave several examples at the beginning of our discussion.
I'm not sure why you ended up getting so lost and asking me what I meant by stimulus when I had already explained.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
They are low by modern Australian standards (i.e. compared to the 70s, 80s and 90s), but they are still at levels consistent with most of the past 160+ years.
Empires have come and gone over the last 160+ years.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Just as low as they have been in about 50 years. But what's 5 decades of social and economic development between friends? I'm sure not much has really changed on planet earth in that time.
Over two thirds of voting households own their own home.
Are you only now realising that governments will try to please the majority of voters?
What do you think would happen to the first government who said they didn't care if house prices crash?
So it is a risk free investment?
no matter what, Government will shore up your investments.
That sounds like a recipe for all sorts of moral hazard to me.
Like people leveraging into multiple IPs base don this belief and what not.
Oh wait, that's already happened.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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