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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 (21,417 Views)
Massive
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there's always this to consider:
Posted Image

japan population:
127.6 million
australia population:
22.68 million

and before you say "but most of australia is uninhabitable desert" .... japan has about 25% habitable area on its land mass.
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Because
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miw
24 Jul 2014, 02:31 PM
Why would you assume that average leverage would increase as household debt increases?

Financial Leverage = assets/(assets - liabilities) = assets/equity
Because household debt is increasing faster than households. Between 1992 and 2012, household debt as a percentage of income increased 300%, household debt as a percentage of GDP increased 400%.As the population did not increase 300% in the same period, I assumed that leverage had increased. You seem to be implying that you can take on more debt on the same income without increasing leverage. Can you expand on how this is done?
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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.

That still doesn't explain how the household debt to income ratio expanded 300% without any increase in leverage.
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Leverage is not independent of overall debt, but on the other hand it is most certainly not determined by it.

In the abstract that is true, but in the particular instance of Australia it is not (I think, but I will hold off judgement until I read your response).
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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.

I can and I did.
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That is purely determined by the availability of creditworthy borrowers who want to borrow

No, it isn't. When a borrower borrows money to buy an asset, the net credit is a function of the credit created and the credit extinguished in the sale of that asset. If borrower A borrows $100 and purchases asset X from seller B, who has $100 outstanding principal that he/she promptly pays off once the sale is concluded, the net money created is zero.
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skamy
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Kulganis
24 Jul 2014, 01:56 PM
No, again, data from small portions of a market does not make aggregate data. At all. Ever.


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:

You used the data from small areas, within the most expensive suburbs of both cities, to extrapolate the figure for entire nations.


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.


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.


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


I never extrapolated for nations you made that up, I showed you two sources of data on property prices and several more on property sizes in Tokyo and Sydney. I knew the data was for Sydney and Tokyo and I presented it as such.

You told me I was not correct on house size comparisons. I have shown you several sources that prove I was right but you have not corrected your error.

My point remains uncontested that today's Sydney housing market is nothing like pre-crash Tokyo. People who tell young people like yourself this are charlatans IMHO.

I have just checked back and I did indeed use Japan instead of Tokyo a few times, I will go and correct this. Ok hopefully that is better and I do apologise for the confusion.

Edited by skamy, 24 Jul 2014, 06:21 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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Kulganis
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skamy
24 Jul 2014, 06:09 PM
I never extrapolated for nations you made that up, I showed you two sources of data on property prices and several more on property sizes in Tokyo and Sydney. I knew the data was for Sydney and Tokyo and I presented it as such.
I didn't make anything up...

You said:
Quote:
 
Japan( $11,466 per sqm) is currently much more expensive than Australia ($7,626 per sqm) even after all the falls
Japan and Australia, not Tokyo and Sydney. And you certainly didn't go into detail that the figure was based on top end data in the most expensive areas of those cities.

Quote:
 
You told me I was not correct on house size comparisons. I have shown you several sources that prove I was right but you have not corrected your error.
I told you that you were not correct to use the price per square metre figure of cherry picked local markets, as though they were the figures for the entire cities, or even the nations. I have shown you several properties, around Japan, that cost less than a car parking spot in Sydney. And when presented with such properties, you tried to obfuscate, using a 2 year old news report of radioactive material found in a suburb to try to explain away the outliers.

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My point remains uncontested that today's Sydney housing market is nothing like pre-crash Tokyo. People who tell young people like yourself this are charlatans IMHO.
Only because you keep changing your point.


On another side of this argument, cost of living. Did you know that you would need around AU$5,649.43 in Tokyo to maintain the same standard of life that you can have with AU$7,100.00 in Sydney? http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Australia&country2=Japan&city1=Sydney&city2=Tokyo

So not only are dwellings less expensive in Tokyo (except in your top end cherry picked areas), but you can get by with less money too... How interesting.
"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, 06:23 PM
I didn't make anything up...

You said:

Japan and Australia, not Tokyo and Sydney. And you certainly didn't go into detail that the figure was based on top end data in the most expensive areas of those cities.


I told you that you were not correct to use the price per square metre figure of cherry picked local markets, as though they were the figures for the entire cities, or even the nations. I have shown you several properties, around Japan, that cost less than a car parking spot in Sydney. And when presented with such properties, you tried to obfuscate, using a 2 year old news report of radioactive material found in a suburb to try to explain away the outliers.


Only because you keep changing your point.


On another side of this argument, cost of living. Did you know that you would need around AU$5,649.43 in Tokyo to maintain the same standard of life that you can have with AU$7,100.00 in Sydney? http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Australia&country2=Japan&city1=Sydney&city2=Tokyo

So not only are dwellings less expensive in Tokyo (except in your top end cherry picked areas), but you can get by with less money too... How interesting.
Tokyo is more expensive than Sydney by the sqm that is undisputable.

GPC present their data the was they present it - it is clearly described and I fully disclosed the source - you cannot claim a higher ground just because you disagree with a data collection method.

Besides, there are plenty of other sources backing up the fact that Tokyo is more expensive by the sqm.
I did not discuss the cost of living. I discussed whether or not Sydney was about to crash like Tokyo did a decade or so ago.

I said that was highly unlikely when Sydney is still cheaper than post crash Tokyo.


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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MMM
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Massive
24 Jul 2014, 05:06 PM
there's always this to consider:
Posted Image

japan population:
127.6 million
australia population:
22.68 million

and before you say "but most of australia is uninhabitable desert" .... japan has about 25% habitable area on its land mass.
Look at Japan, about 5% the size of Australia, if that, and with 6 times as many people, yet it did not stop prices falling for the last twenty years. ;)
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Massive
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comparing sq/m rate between japan and australia is a means of saying australian prices are not high is just..... wrong....

unless you think it is reasonable australian property should assume speculative land value per m2 of a country with significantly higher density and highly limited amount of habitable land area for affordable expansion.
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Kulganis
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skamy
24 Jul 2014, 06:34 PM
Tokyo is more expensive than Sydney by the sqm that is undisputable.
And yet, I'm disputing it.

In fact, you can buy entire apartment buildings in Tokyo for less than you can buy individual apartments in Sydney.

Quote:
 
GPC present their data the was they present it - it is clearly described and I fully disclosed the source - you cannot claim a higher ground just because you disagree with a data collection method.
I can, they have hoodwinked you into saying something stupid, namely, that:
Quote:
 
Japan( $11,466 per sqm) is currently much more expensive than Australia ($7,626 per sqm) even after all the falls


Quote:
 
Besides, there are plenty of other sources backing up the fact that Tokyo is more expensive by the sqm.
Here's another, but alas, it does not agree with you...

Quote:
 
Buy Apartment PriceSydneyTokyoDifference
Price per Square Meter to Buy Apartment in City CentreAU$9,645.58AU$6,197.86-35.74%
Price per Square Meter to Buy Apartment Outside of CentreAU$6,516.43AU$4,635.50-28.86%

http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Australia&city1=Sydney&country2=Japan&city2=Tokyo

Quote:
 
I did not discuss the cost of living. I discussed whether or not Sydney was about to crash like Tokyo did a decade or so ago.

I said that was highly unlikely when Sydney is still cheaper than post crash Tokyo.
Which is why I brought it up as an afterthought. And since Sydney isn't cheaper than Tokyo, I don't know if I should really trust your judgment.
Edited by Kulganis, 24 Jul 2014, 06:58 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
Member Avatar


Kulganis
24 Jul 2014, 06:57 PM
And yet, I'm disputing it.

In fact, you can buy entire apartment buildings in Tokyo for less than you can buy individual apartments in Sydney.


I can, they have hoodwinked you into saying something stupid, namely, that:



Here's another, but alas, it does not agree with you...




Which is why I brought it up as an afterthought. And since Sydney isn't cheaper than Tokyo, I don't know if I should really trust your judgment.
I reported the dats in the way the source I linked did, you and I have argued this one before and you are well aware of the way GPG do things.

Now you are just comparing apartment prices and ignoring the fact that Sydney has an abundance of large family homes. It is you who is changing the goal posts. I still have no admission from you on the fact that you were in error when you disputed the relative home sizes.

If you want to convince yourself that Tokyo is some nirvana of cheap homes and that Sydney is just like pre crash Tokyo go ahead., so be it.
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
Member Avatar


skamy
24 Jul 2014, 07:34 PM
I reported the dats in the way the source I linked did, you and I have argued this one before and you are well aware of the way GPG do things.
Yes, you did, but you didn't check the veracity of the source, or how they came about their data, you simply parroted it.

And then you went on to say:
Quote:
 
I never extrapolated for nations you made that up, I showed you two sources of data on property prices and several more on property sizes in Tokyo and Sydney. I knew the data was for Sydney and Tokyo and I presented it as such.
Except you didn't present it as such, you presented it this way:
Quote:
 
Japan( $11,466 per sqm) is currently much more expensive than Australia ($7,626 per sqm) even after all the falls. Why should a country with an inflated price and a falling population be so much more expensive than Australia with its vibrant growing cities?
Yes, I am well aware of how GPG do things, I disagree that the way they've done things is useful in any way.
Quote:
 
Now you are just comparing apartment prices and ignoring the fact that Sydney has an abundance of large family homes. It is you who is changing the goal posts.
GPG themselves, don't look at houses, only apartments (and not even new builds, or OTP, just resales), I was trying to be consistent with your line of reasoning. And thus it is actually you who is changing goal posts, you've started with data, and when you were shown that the data is wrong, simply amended that data with your own interpretations by saying that I'm not including houses, when your original data doesn't include houses.
Quote:
 
I still have no admission from you on the fact that you were in error when you disputed the relative home sizes.
Yes, Japanese houses are smaller, but that doesn't change the price to square metre metric simply in and of itself. In fact, the first apartment I showed you, the one that is $40,000 comes to a price of about $2,700/m2, it was less than 10km to the centre of Tokyo, and 14.62m2. If we went by your figure, it should be much closer to $170,000.
Quote:
 
If you want to convince yourself that Tokyo is some nirvana of cheap homes and that Sydney is just like pre crash Tokyo go ahead., so be it.
I'm not trying to convince myself of anything, I'm trying to show you that your assertion that Sydney is cheaper than Tokyo is incorrect.
Edited by Kulganis, 24 Jul 2014, 08:05 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
Profile "REPLY WITH QUOTE" Go to top
 
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