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Mortgage war erupts as CBA, NAB, Westpac slash interest rates; CBA cuts 70bp from its five-year fixed mortgage rate to 4.99%
Topic Started: 23 Jul 2014, 01:45 PM (10,161 Views)
o2sd
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Shadow
24 Jul 2014, 09:49 PM
People. During the last Sydney downturn, which ran from 2004 through to 2007, there were about 30,000 sales in Sydney during the first year of that downturn.
Thanks for that, much appreciated.

According to the ABS, there was also a Sydney downturn from March 2008 to March 2009 and another from September 2010 to December 2011. Did you sell at the beginning of those periods, or did your metrics indicate that neither March 2008 nor September 2010 were the beginning of a multi-year downturn?
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And even in the first few months of the downturn there were thousands of people selling each month. They were the ones who sold early before prices had fallen much.

I am fairly sure some of those people were selling because they were moving or they got a promotion or they were executing a will.

I guess I am wondering how you know how many of those people were selling because they thought it was the beginning of a multi-year downturn, rather than they just wanted/needed to sell, for whatever reason.

And also, what was different in the first quarter of 2004 that wasn't apparent in March 2008 or September 2010? To summarise, how will you know it is the beginning of the downturn if you have gone through two already without hitting your 'downturn start' criteria? You mentioned clearance rates and interest rates earlier, are those the only two indicators you use or do you balance it with other factors?
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MMM
Unregistered

Shadow
24 Jul 2014, 09:55 PM
Sydney house prices are up 25% since you sold your home thinking prices were about to crash. So I have called house prices a lot better than you, or any of the bears.

Your bad call on Sydney house prices, and then compounding that mistake by piling into gold just before it crashed, has caused you quite a lot of financial damage.

My call that interest rates would rise sooner than they have done has cost me nothing. In fact I have benefited from getting that one wrong, since lower interest rates mean stronger house price growth, and more money in my pocket.
You just keep jibbering the same rubbish over and over regarding everything and are unable to answer any bodies questions while steering well clear of reality.

The facts are these.

I am a about three or four years older than you, if what you have told us is true.

I have owned multiple Sydney property since the early 90s, and have now almost paid off my second Sydney property . You did not enter the market until you bought hour ip in 2005, and then purchased an ip in 2009. And since then you ha e been payimg interest only loans. I have far more wealth you you, are financially about twenty or more years ahead and yet am only a few years older. As you can see I have benefitted from multiple property over the best years of property rises. You came to the party too late and then to pay interest only loans.

Can I ask why you were so late to the property market shadow, what were you doing all those years I was paying off multiple properties ?

And just like when sydney prices started decling in over 2012, and this was pointed out to you at the time, you denied it, posted your bs graphs . but now you come out and say they declined back then, but refused to acknowledge it at the time.

I am diversifyimg before its too late, I still have my house proceeds and my ip will be paid off by october, so another paid outright. How many properties have you paid off or actually own outright. :bye:

Not to mention I have probably 5 times more cash than you have equity, that's not including my almost paid off IP. :bye:

You did not have a clue about interest rates back then over the longer term just as you have no clue of house prices over the longer term. You were unable to see the obvious.

You did jot answer my other questions, were you unable too , just like always. ;)
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Shadow
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o2sd
24 Jul 2014, 10:12 PM
there was also a Sydney downturn from March 2008 to March 2009 and another from September 2010 to December 2011. Did you sell at the beginning of those periods, or did your metrics indicate that neither March 2008 nor September 2010 were the beginning of a multi-year downturn?
Those were very minor downturns. It would have been pointless to sell during either of them - prices didn't even fall by enough to cover the cost of the stamp duty to buy back in again. There's no point selling unless a substantial downturn is likely. In 2003 it was obvious a fairly substantial downturn was coming. House prices had been growing at close to 20% per annum for several years, and there had been a construction boom leading to an over-supply and a rental vacancy rate close to 5%. None of those conditions was present in the lead up to the minor 2008 and 2011 downturns, which is why they were so mild.

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I am fairly sure some of those people were selling because they were moving or they got a promotion or they were executing a will.
Yes, and some would just have been selling and buying because they wanted to upsize or downsize or just move to a different area. Life goes on, people keep buying and selling in downturns. There is always a fairly liquid market out there. That's why it's possible to sell, even in a downturn, because there are always people looking to buy for the reasons mentioned.

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And also, what was different in the first quarter of 2004 that wasn't apparent in March 2008 or September 2010? To summarise, how will you know it is the beginning of the downturn if you have gone through two already without hitting your 'downturn start' criteria? You mentioned clearance rates and interest rates earlier, are those the only two indicators you use or do you balance it with other factors?
I think I covered some of it above, but yes, rental vacancy rates are a good sign of over/under supply, and we can also look at how fast prices have risen in the lead up years - i.e. have prices risen faster than incomes for a long time? By 2003 the answer was yes - Sydney house prices had been rising much faster than incomes right through the late nineties and early 2000s, and had been rising by 20% a year in the 2000s.

Completely different story in 2008 and 2011. Rental vacancy rates were still very tight, and house prices had barely risen during the preceding several years (in fact incomes had risen faster than house prices).

So over the next few years, keep an eye on auction clearance rates, rental vacancy rates, new supply coming onto the market, and how fast the price/income ratio increases. Those indicators will help to tell us when it might be a good time to sell.
Edited by Shadow, 24 Jul 2014, 10:31 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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skamy
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Massive
24 Jul 2014, 08:45 PM
i still believe in any asset class, pick a price target or a timeframe - dont get too greedy... and execute...... rinse and repeat every cycle...

picking tops and bottoms and trying to undercut the market is risky stuff...
Yes I agree. It is too hard to pick the cycle. IMHO -Housing should always be bought on a long term basis.


Here is the data on Sydney prices after the 1990 crash
Posted Image

from http://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf

This lateline report from 2002 http://www.abc.net.au/lateline/stories/s501310.htm it shows that all the signs were present for a bust- yet the market went on to grow by almost 37% before a small correction of a few % was finally made in 2004. That added value has never gone backward.

In Dubai they were quite validly calling the bust for 6 years, during which many folk made millions on property transactions, before the bust came.



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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o2sd
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Shadow
24 Jul 2014, 10:25 PM
I think I covered some of it above, but yes, rental vacancy rates are a good sign of over/under supply, and we can also look at how fast prices have risen in the lead up years - i.e. have prices risen faster than incomes for a long time? By 2003 the answer was yes - Sydney house prices had been rising much faster than incomes right through the late nineties and early 2000s, and had been rising by 20% a year in the 2000s.

Completely different story in 2008 and 2011. Rental vacancy rates were still very tight, and house prices had barely risen during the preceding several years (in fact incomes had risen faster than house prices).

So over the next few years, keep an eye on auction clearance rates, rental vacancy rates, new supply coming onto the market, and how fast the price/income ratio increases. Those indicators will help to tell us when it might be a good time to sell.
Very interesting, thanks for your detailed reply.

A couple of clarifications if you don't mind.

Looking at the ABS figures (series 6202001), it appears there wasn't really a downturn in employment between 2004 and 2007, and AWE (series 63020010) seems to have actually increased faster in that period than in the previous three year period of 2000-2003. So, would you say that in the period from 2000-2003 that prices overshot incomes by quite a significant amount that led to the price/income ratio being 'frothy'?

Is there are reliable source for new supply coming on to the market? I know there is housing starts, but there seems to be quite a lot of variance in time to deliver, the shortest being 18 months and some apartment blocks seems to take up to 4.5 years to come on to the market. Is there a metric for new stock on market?

skamy
24 Jul 2014, 11:22 PM
Here is the data on Sydney prices after the 1990 crash
Posted Image
Ahhhh .... look at all those Hong Kong Chinese looking for a bolt hole in 1997. :D
Edited by o2sd, 24 Jul 2014, 11:27 PM.
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Shadow
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Evil Mouzealot Specufestor

MMM
24 Jul 2014, 10:15 PM
:bye:
:bye:
;)
The more smileys you use the less I believe you. We can all invent stuff on the internet, and retrospectively tell each other how great we're doing, but none of it is verifiable.

The only things we can really be called on are the predictions we put down in writing.

In 2012 you said you sold your Sydney home and were loading up on gold because Sydney was going to crash and gold was going to $2000 in 2012 and $5000 in 2014. That's what you wrote, and you literally could not have been more wrong. If you did what you said you were doing, sold your home and piled into gold, you would now be financially down by a huge amount compared to if you had just kept your home.

All that other stuff in your post about your huge savings and wealth, and how you didn't actually end up buying all the gold you planned to buy etc... none of that is verifiable. Maybe it's true, but I think you're probably making it up. All we know for certain is that you posted on this forum in 2012 to say you had just sold your Sydney home because of the coming property crash, and you were piling the proceeds into gold.

You can continue to tell me about your vast wealth if you wish, but your calls on gold and property were still disastrous for you financially.
Edited by Shadow, 24 Jul 2014, 11:29 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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skamy
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Shadow
24 Jul 2014, 09:55 PM
----

Actually, Skamy often spots his new socks before I do.
Miles has quite a distinctive style of writing and posting, he is a stalwart of the forum. So his socks are easy to spot. He just tries to catch us all out every now and again I think :)
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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Shadow
Member Avatar
Evil Mouzealot Specufestor

o2sd
24 Jul 2014, 11:26 PM
would you say that in the period from 2000-2003 that prices overshot incomes by quite a significant amount that led to the price/income ratio being 'frothy'?
In Sydney, yes, and then the ratio fell back down to a more sustainable level...

Posted Image

Quote:
 
Is there are reliable source for new supply coming on to the market?
ABS Dwelling Approvals, ABS Building Activity, and ABS Construction Work Done.
Edited by Shadow, 24 Jul 2014, 11:48 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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MMM
Unregistered

Shadow
24 Jul 2014, 11:27 PM
The more smileys you use the less I believe you. We can all invent stuff on the internet, and retrospectively tell each other how great we're doing, but none of it is verifiable.

The only things we can really be called on are the predictions we put down in writing.

In 2012 you said you sold your Sydney home and were loading up on gold because Sydney was going to crash and gold was going to $2000 in 2012 and $5000 in 2014. That's what you wrote, and you literally could not have been more wrong. If you did what you said you were doing, sold your home and piled into gold, you would now be financially down by a huge amount compared to if you had just kept your home.

All that other stuff in your post about your huge savings and wealth, and how you didn't actually end up buying all the gold you planned to buy etc... none of that is verifiable. Maybe it's true, but I think you're probably making it up. All we know for certain is that you posted on this forum in 2012 to say you had just sold your Sydney home because of the coming property crash, and you were piling the proceeds into gold.

You can continue to tell me about your vast wealth if you wish, but your calls on gold and property were still disastrous for you financially.
So what now you don't believe me. EVERYTHING has been mentioned over the years and YOU have seen it ALL and now it all.

You make out like you have all these properties, you only entered the market by buying you ppor in 2005 and then an IP in 2009 and paid interest only ever since.

And you saw in skamys chart, how much my Sydney properties were rising from the early 90s.

See all the rises you missed out on, you are too late, left your run too late in life and still pay interest only

So what are you saying shadow, now you dont believe me , nothing but a compliment as usual.

And what exactly is so unbelievable shadow. :bye:

You left it too late in life, clearly shown in skamys chart, oh deer , what were you doing all those years :bye:

And just look how you've changed your tune on property shadow, now talking about bubbles and that vacancies and rents might drop and then to sell out before the herd. When your previous stance was that there is no bubble and that the economy is running along smoothly and that rents will not fall and is susyainable by growing wages . And that the rent return is what yoi rely on and rents only ever go up and that you wont ever be selling property because it goes up over the long term and rents just keep increasing.

And history has shown this to be the case, but even you now realize this ain't no history lesson we have lived through.

So your stance on property has had a very quick turnaround from years prior shadow.

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MMM
Unregistered

Shadow
24 Jul 2014, 11:47 PM
In Sydney, yes, and then the ratio fell back down to a more sustainable level...

Posted Image


ABS Dwelling Approvals, ABS Building Activity, and ABS Construction Work Done.
Can you fix your cherry picked graph so it goes back to 2000, so we can all see the real picture you like to hide from everybody. It blows your income price bullshit out of the water.

It also shows how much my multiple Sydney properties were increasing , while you were still years from enterimg the market to then pay interest only. It also shows just how much you missed out on but coming late to the party shadow. Bummer eh :)
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