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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 (21,418 Views)
skamy
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Elastic
24 Jul 2014, 12:24 PM
So the builders flooding Perth for the construction boom won't be able to build homes fast enough for the builders flooding Perth for the construction boom.

I'm not sure that's entirely a sustainable situation but thanks for clearing it up.
It is not sustainable, that is why the boom bust cycle exists. It is not a good thing.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Kulganis
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skamy
24 Jul 2014, 12:54 PM
You have not provided one piece of data proving me wrong - ie that the cost per sqm in Tokyo is more expensive that that of Sydney. This was my claim and you have totally failed to disprove this, despite all your cherry picking and huffing and puffing about individual properties. My claim is that use of the aggregate data is more useful than use of individual property prices

Tokyo may have a huge population but it is a shrinking with aging property stocks and and an aging population which adds downwards price pressure.

Now here are several sources that back up my statement on comparative house sizes between Tokyo and Sydney, so I do believe it is you who has made the error here not me.

You cannot compare two property markets by picking out selected houses for sale.
But you haven't used aggregate data, you've used cherry picked data from 14 areas within the very center of Tokyo, compared to 11 areas within the very center of Sydney. Your data is only useful when comparing those areas, it cannot be used to analyse the rest of either city. Let alone the rest of either nation.

And here is far more useful data:

Quote:
 
Tokyo Metropolitan Area

No. of sales in June 2014: 1,382
Remaining inventory: 17,331 apartments
Average sale price: 34,140,000 Yen (AU$356,003)
Average sale price per sqm: 563,100 Yen (AU$5871)
Average size: 60.62 sqm
Average building age: 18.36 yrs

Central Tokyo’s 3 wards
No. of sales in June 2014: 176
Remaining inventory: 1,968 apartments
Average sale price: 49,630,000 Yen (AU$517,579)
Average price per sqm: 869,400 Yen (AU$9066)
Average size: 57.09 sqm
Average building age: 17.45 yrs

http://japanpropertycentral.com/2014/07/secondhand-apartment-transactions-continue-to-decline
Edited by Kulganis, 24 Jul 2014, 01:25 PM.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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skamy
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Kulganis
24 Jul 2014, 01:04 PM
But you haven't used aggregate data, you've used cherry picked data from 14 areas within the very center of Tokyo, compared to 11 areas within the very center of Sydney. Your data is only useful when comparing those areas, it cannot be used to analyse the rest of either city. Let alone the rest of either nation.
Oh come on Kulganis, I did use aggregate data collected internationally by a well defined method and that was just one method used by one of my sources.

It can in fact be used and it is indeed quite a popular method and is widely used by investors to gauge and compare markets. You will find it is used regularly by the media also.

The fact is that if you take the two markets as a whole you get much more for your dollar in Sydney than in Tokyo, Sydney may catch up and overtake Tokyo some day for sure but Sydney still has some way to go before it reaches the heady heights of boomtime Tokyo.

IMHO, to use a shonky untrue comparison that Sydney is just like Tokyo at the peak of its boom to frighten people out of buying a home is unethical don't you agree?

What is your response to my data on comparative house sizes?
Edited by skamy, 24 Jul 2014, 06:20 PM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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John Frum
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Shadow
24 Jul 2014, 11:25 AM
Looks like you were wrong again.
Yes, it's spun off on a different tangent to your repetitive blather.
"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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Kulganis
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skamy
24 Jul 2014, 01:29 PM
Oh come on Kulganis, I did use aggregate data collected internationally by a well defined method and that was just one method used by one of my sources.
No, again, data from small portions of a market does not make aggregate data. At all. Ever.

Quote:
 
It can in fact be used and it is indeed quite a popular method and is widely used by investors to gauge and compare markets. You will find it is used regularly by the media also.
I'm not talking about your use of price per square metre, I'm talking about your use of a small segment of your selected markets, to come up with a figure that you've extrapolated to the rest of the nation:

Remember:
Quote:
 
Japan( $11,466 per sqm) is currently much more expensive than Australia ($7,626 per sqm) even after all the falls.
You used the data from small areas, within the most expensive suburbs of both cities, to extrapolate the figure for entire nations.

Quote:
 
The fact is that if you take the two markets as a whole you get much more for your dollar in Sydney than in Tokyo
The fact is, you can't, the Japanese people have a very different culture to us. And you haven't taken the markets as a whole, you've used 14 areas in Tokyo's most expensive suburbs and compared them to 11 areas in Sydney's most expensive suburbs. Hardly the whole market, they don't even use whole suburbs.

Quote:
 
IMHO, to use a shonky untrue comparison that Sydney is just like Japan at the peak of its boom to frighten people out of buying a home is unethical don't you agree?
Scaring people for any reason is unethical (unless they want to be frightened, of course). Whether the comparison is untrue or not is yet to be seen IMHO.

Quote:
 
What is your response to my data on comparative house sizes?
That your data takes a cold surgical look at house sizes, whereas people are different. I for one, have no problems living in an apartment less than 40sqm, I don't need a backyard.

People may wish for a larger house in Tokyo, but it isn't going to happen, they have a population of ~127,000,000 people in Japan, and they have a density of about 330 people/Km2. Whereas in Australia, our population density is less than 3 people/Km2
Edited by Kulganis, 24 Jul 2014, 02:02 PM.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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miw
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Some clarifications
23 Jul 2014, 04:19 PM
Sorry, I wasn't clear on that. The point I was making is that if the seller of the asset is highly leveraged (and one would assume that as total household debt increases, the seller's leverage will also on average increase), that it becomes increasingly difficult to create new money in the economy through the creation of new credit. So as the total debt grows larger, the banking system finds it increasingly difficult to expand their balance sheet, so interest rates are sent lower to counteract this.
Why would you assume that average leverage would increase as household debt increases?

Financial Leverage = assets/(assets - liabilities) = assets/equity

This is impacted by asset values as well as by amount of debt.

Note also that someone who has a $500k house, $400k debt and $300k in an offset account has a lot more debt and is more highly levered than someone who has a $500k house and $100k debt, even though the overall financial positions are identical and the former has significantly more financial flexibility.

Leverage is not independent of overall debt, but on the other hand it is most certainly not determined by it.

Nor can you say that the amount of leverage or indeed the overall amount of debt has any particular impact on the difficulty or otherwise of creating new money. That is purely determined by the availability of creditworthy borrowers who want to borrow.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Shadow
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Evil Mouzealot Specufestor

John Frum
24 Jul 2014, 01:51 PM
Yes, it's spun off on a different tangent to your repetitive blather.
You should put me on ignore if my posts get under your skin so much. Why torture yourself?
Kulganis
24 Jul 2014, 11:51 AM
Greater Tokyo has a population of ~35,000,000 people. That is more than the entire population of Australia, in an area about the same size as Sydney. I'm not in the slightest surprised that they find space at a premium, but they have a totally different culture to us, they don't have the expectations that we do.
Japan's housing is a lot more expensive than ours when dwelling size is taken into consideration...

Posted Image
Edited by Shadow, 24 Jul 2014, 04:05 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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Kulganis
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Shadow
24 Jul 2014, 04:01 PM
Japan's housing is a lot more expensive than ours when dwelling size is taken into consideration...
Ah, more goal post shifting.

The original premise was:
Quote:
 
Japan( $11,466 per sqm) is currently much more expensive than Australia ($7,626 per sqm) even after all the falls.
Which is false, they used cherry picked data to come up with figures that have no meaning outside of the areas they studied.

This changed to:
Quote:
 
The indisputable fact remains that Japan has significantly higher prices per sqm than Sydney.
Apparently, the entire nation of Japan, is more expensive than Sydney.

Which was then reworded as:
Quote:
 
the cost per sqm in Tokyo is more expensive that that of Sydney.
And now we have "Price to income, adjusted for house size" which has nothing to do with the original price per square metre.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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Shadow
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Evil Mouzealot Specufestor

Kulganis
24 Jul 2014, 04:43 PM
Ah, more goal post shifting.
I hadn't established any goal posts in the first place - I'm just pointing out that you get a lot more house for your money in Australia than just about any other country in the world.
Edited by Shadow, 24 Jul 2014, 04:58 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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Ex BP Golly
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Kulganis
24 Jul 2014, 04:43 PM
Ah, more goal post shifting.

The original premise was:
Which is false, they used cherry picked data to come up with figures that have no meaning outside of the areas they studied.

This changed to:

Apparently, the entire nation of Japan, is more expensive than Sydney.

Which was then reworded as:

And now we have "Price to income, adjusted for house size" which has nothing to do with the original price per square metre.
It has been an awe inspiring exchange for sure.

Im just waiting for penis length: income ratio.

I do note that at the height of their boom, Japan was so overvalued, its property values could buy all USA houses 7 times over.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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