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Christopher Joye turns bear - Australian housing bubble is now here; House prices have inflated at a 9.5% annualised pace (triple wages growth)
Topic Started: 19 Jul 2014, 01:12 PM (21,426 Views)
Drgonzo
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Sydneyite
21 Jul 2014, 07:38 PM
Everything, basically! What work have you done to produce the stats that you are looking for? You snipe Shadow's efforts but provide nothing yourself? Makes it look like you are just clutching at straws after losing the argument.
Statistics, charts, the only ones I have time for are the ones Alan Kohler comes up with on the ABC, anything else is manipulation to support am agenda.
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Shadow
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Drgonzo
21 Jul 2014, 07:49 PM
Statistics, charts, the only ones I have time for are the ones Alan Kohler comes up with on the ABC, anything else is manipulation to support am agenda.
The paranoia is strong with these bears! :lol
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Drgonzo
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Shadow
21 Jul 2014, 07:51 PM
The paranoia is strong with these bears! :lol
Come on , you know it's true, it's why you typically show data over a convenient time frame because it supports your argument
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Shadow
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Drgonzo
21 Jul 2014, 08:10 PM
you typically show data over a convenient time frame because it supports your argument
Which argument? Give me an example.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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John Frum
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Veritas
21 Jul 2014, 02:05 PM


Ergo, where price/income ratio was 10 years ago is some kind of sweet spot flowing from the "structural shift"?

Seeing as we have been shuttling up and down from that spot (with some considerable volatility)

From that, we must conclude that you expect that the fundamental/supply and demand factors that have given rise to this sweet spot of price/income ratio will also remain in place.

For you to be right then, economic fundamentals, investor sentiment, Government policy much pretty much remain the same.

That is a huge call.

Take WA for example, only a fool would argue that the prevailing economic conditions of the last ten years will continue over the next ten.

It would be extraordinary.



Reading the macro data isn't shadow's bag.

Cherry picking a specific date range of data and conjecturing/extrapolating to an outcome that justifies his investment decisions is more his style.

The irony in the economist chart that I posted is it actually makes a mockery of Shadow's theory, by showing more stability for japan. For them you see just a couple of significant leg-ups in the decade preceding the pop, whereas Australia's line clearly shows a phenomenal rise in 2003, followed by a decade of desperately trying to keep all the plates spinning through stimulus and grants as it lurches up and down.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Drgonzo
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John Frum
21 Jul 2014, 08:30 PM
Reading the macro data isn't shadow's bag.

Cherry picking a specific date range of data and conjecturing/extrapolating to an outcome that justifies his investment decisions is more his style.

The irony in the economist chart that I posted is it actually makes a mockery of Shadow's theory, by showing more stability for japan. For them you see just a couple of significant leg-ups in the decade preceding the pop, whereas Australia's line clearly shows a phenomenal rise in 2003, followed by a decade of desperately trying to keep all the plates spinning through stimulus and grants as it lurches up and down.
Well said
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Shadow
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John Frum
21 Jul 2014, 08:30 PM
The irony in the economist chart that I posted is it actually makes a mockery of Shadow's theory, by showing more stability for japan
Incorrect. It shows the Japan price/income ratio trending up for a decade prior to their crash (right before the crash, the ratio was higher than it was a decade prior).

But the Australia chart shows our current ratio to be roughly the same at it was a decade ago. There has been no recent price rise in Australia taking prices to a level that can't be sustained by incomes. In fact the current price/income ratio has been sustained close to present levels for over a decade so far.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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John Frum
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Shadow
21 Jul 2014, 08:58 PM
Incorrect. It shows the Japan price/income ratio trending up for a decade prior to their crash (right before the crash, the ratio was higher than it was a decade prior).

But the Australia chart shows our current ratio to be roughly the same at it was a decade ago. There has been no recent price rise in Australia taking prices to a level that can't be sustained by incomes. In fact the current price/income ratio has been sustained close to present levels for over a decade so far.
Japan shows a reasonably steady rise. It doesn't even come close in magnitude to Australia's phenomenal rise.

Australia's last decade has not been anything close to stable. It has experienced major volatility, corresponding to natural movements to revert to mean being scuppered by government stimulus, facilitated by overflowing treasury coffers. Coffers that are now drying up faster than a nun's nasty on convent.

You need to learn to read charts.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Shadow
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John Frum
21 Jul 2014, 09:28 PM
Japan shows a reasonably steady rise. It doesn't even come close in magnitude to Australia's phenomenal rise.
There was no bubble in Japan outside the major cities, so the chart for all of Japan understates the magnitude of the bubble in the major cities since it includes the rest of the country where prices barely moved. But still, Japan's decade-long rise in price/income ratios did take prices to an unsustainable level, from which prices crashed.

Australia's rise in price/income ratios ended over a decade ago and took Australian prices to a level that has now been sustained for more than a decade.

That's the difference.

There has never been a crash anywhere, in any asset class, immediately after a decade of relatively stable price/income ratios.

But let's wait and see who is right... either house prices will crash from current levels or they will not.

My money is on prices not crashing from current levels.

In fact, I expect Chris Joye may be right and we could instead see a surge in price/income ratios from this point, rather than a crash. And then the surge will be followed by another cyclical correction in prices while incomes catch up for a few years. And in another ten years from now we'll still have a similar price/income ratio to 2003.

And the bears will still be renting and raging against 'The Bubble'.
Edited by Shadow, 21 Jul 2014, 09:49 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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John Frum
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Shadow
21 Jul 2014, 09:35 PM
Australia's rise in price/income ratios ended over a decade ago and took Australian prices to a level that has now been sustained for more than a decade.
Still can't come to grips with the volatility I see.

That's understandable. like catweasel says in his own opaque way, the white shoe puppet masters would prefer it that way
Edited by John Frum, 21 Jul 2014, 09:57 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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