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Beware Mining Town Bulls - Perth and Darwin Housing Bubbles Ready To Burst!; Entire generation of speculators needs to be wiped out and made an example of
Topic Started: 30 Jul 2014, 04:19 PM (14,991 Views)
Mike
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skamy
31 Jul 2014, 03:23 PM
That is a hugely positive article, it is very buoyant indeed on Perth as it winds down from the investment stage and into the export stage of the mining boom.



I really do see heaps of opportunity here in this city compared to Sydney. There are loads of FHB opportunities close to the city, loads of waterfronts under $1.5m etc.


My many years of experience of property markets and my habit of obsessive researching tell me a good story for Perth.

I like all this talk of the Boom, mining boom, investment and on and on it goes.

So why did we have a boom (increase in demand and prices for what we sell) mostly due to China, South Korea, Japan and a lesser extent India. Japan provided growth over previous decades to raise Australias living standard, Australia did not go backwards because Japan slowed down, instead we continued to grow, same for South Korea. It continues today with China and exports to India are our fastest growing market and could well move into 2nd place pushing Japan to 3rd within 10 years.

During each growth phase Australia provided different types of resources as each of these Nations economic development progressed. Demand increased from these nations as they developed providing a permanent increase in demand from a richer population.

The increased demand for our resources may ebb and flow as it always does but it has moved up due to 1,300 million Chinese wanting a richer life. This is a permanent increase in demand, meaning we will export higher and higher volumes. so what some call a boom, I call the new normal demand and supply. The reason Australia does well is because we are on the door step of 3 billion people wanting lives like we have, we have the resources to help them reach this goal.

China is only the start, another 800 million in ASEAN are also on the march and our markets grow each year to all of them.

Our trade and exports to India are growing faster then our trade with China, India is playing catch-up. Keep in mind in 1990 China and India had roughly the same size economies. With the right policies India can unlock huge potential which the new government seems intent on doing.

So for those of you who think this is a once off boom you are misreading history. Australia is likely to ride a resource and export boom for decades as Asia develops and demand will rise to new levels of normal as we add billions of people to the consumer list.

It will not only be resources but energy, agriculture and services are all likely to see large and sustained export growth and booms in prices over periods.

You need to look at the bigger picture. For those who say this is a once of boom, I say you are wrong. 3 billion people cannot be stoped, they may stumble along the way, it may take longer then expected but they want and need what we have to develop and live a richer life.

This will be the new normal and nothing bears or anyone else says will change this huge development in the human species. The largest migration to cities in human history along with billions of people lifted out of the slums and into jobs and cities. We this is complete in 50 years or so the world will be massively different.

Our grand children will live in a world of 4-5 billion educated, prosperous people in developed nations. Developing nations will become a minority. This is our future.
Edited by Mike, 31 Jul 2014, 03:48 PM.
http://mike-globaleconomy.blogspot.com.au/
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Massive
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skamy
31 Jul 2014, 03:23 PM
What fundamentals do you think are bad in Perth, unemployment is great, participation rate is great, wealth is great, savings are high, mortgage default is ridiculously low. Building starts are high, land prices are booming, FHBs are buying away no bother.
on property

http://www.propertyobserver.com.au/finding/location/wa/33870-perth-update-prices-first-time-buyers-and-rental-market.html
Quote:
 
TURNOVER AND STOCK

Sales for Western Australia down 6% over the quarter

Landgate estimated 11,900 dwellings transacted

Downward trend continuing since March quarter 2013

June quarter results will but sales 5% below 15 year average in Perth

June quarter results will but sales up to 22% below 15 year average in regional Western Australia

Stock on market lifts to 8% to 10,872 properties

Land listing jumps 12% to 1,449 lots

Increase in listings now up almost 25% since last year


Quote:
 
DAYS ON MARKET AND DISCOUNTING

“As a consequence, the number of sellers reducing their asking price grew further to almost half, although the variance between asking prices and selling prices tightened a little to just over 5% in favour of the buyer,” Airey said.

And yet it’s the rental accommodation market that has seen the most changes and is worthy of a closer look.

RENTAL MARKET

The vacancy rate has increased to 4.2%

Median rent drops $10 to $450 per week

Number of rental listings grew by 858 properties over the quarter to 5,824 total
“This is a significant increase of 43% on the same time last year, while more current REIWA data shows this has since grown further to more than 6,000 properties by the middle of July,” said Airey.


on employment
http://www.perthnow.com.au/business/breaking-news/jobs-inadequate-growth-looms/story-fnhrvfsf-1226980713539
Quote:
 
MOST economists would rightly view the official employment figures each month as something of a lottery, but what lies ahead is a fairly safe bet: inadequate jobs growth


still up in the air.. but thikn would wait on definite signs on the fundamentals before saying that perth is gearing up on a 'recovery' directly after a boom..
Edited by Massive, 31 Jul 2014, 03:50 PM.
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Veritas
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skamy
31 Jul 2014, 03:23 PM
That is a hugely positive article, it is very buoyant indeed on Perth as it winds down from the investment stage and into the export stage of the mining boom.



I really do see heaps of opportunity here in this city compared to Sydney. There are loads of FHB opportunities close to the city, loads of waterfronts under $1.5m etc.


My many years of experience of property markets and my habit of obsessive researching tell me a good story for Perth.





AHA you resorted to name calling I win again :)

You are silly sometimes Veritas , prices are not falling they rose by 7% according to the latest ABS stats.
You gotta stop jumping around on these weekly figures.

What fundamentals do you think are bad in Perth, unemployment is great, participation rate is great, wealth is great, savings are high, mortgage default is ridiculously low. Building starts are high, land prices are booming, FHBs are buying away no bother.

Where are these bad fundamentals of yours? in your macrobusiness fairy tales most likely.
Price are falling Skamy.

Check the data.

REIWA, RPDATA.

I'm not going to argue facts with you.

Why has the rental vacancy rate risen over 30% this year Skamy?
Edited by Veritas, 31 Jul 2014, 04:22 PM.
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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straya
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@ Mike

China's boom was due to Western investment. How is the whole of Asia going to "Boom" without the investment from Wealthier Countries ?
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doubleview
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Anyone still spruiking Perth property is the ultimate piece of vested interest Human garbage.

Just one of the multiple articles that could be posted:

http://www.theaustralian.com.au/business/companies/woodside-looks-to-cut-800-jobs/story-fn91v9q3-1226953891753
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herbie
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Mike
31 Jul 2014, 03:45 PM
... 3 billion people cannot be stoped, they may stumble along the way, it may take longer then expected but they want and need what we have to develop and live a richer life ...
Bugger me - Something that Mike and I actually agree on ... :)
Blondie girl
31 Jul 2014, 02:42 PM
... I just watch, wait, & pounce when it's appropriate ...

Careful Blondie - You're getting perilously close to being labelled a shark cum vulture by the highly indebted bulls.

'Course meself, I incline to the view that both sharks 'n vultures serve a most useful purpose in ecology ...
Edited by herbie, 31 Jul 2014, 06:02 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Perthite
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http://news.smh.com.au/breaking-news-national/hastings-deering-cuts-400-jobs-20140731-3cw0x.html

Ouch.
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skamy
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Massive
31 Jul 2014, 03:47 PM
on property

http://www.propertyobserver.com.au/finding/location/wa/33870-perth-update-prices-first-time-buyers-and-rental-market.html






on employment
http://www.perthnow.com.au/business/breaking-news/jobs-inadequate-growth-looms/story-fnhrvfsf-1226980713539



still up in the air.. but thikn would wait on definite signs on the fundamentals before saying that perth is gearing up on a 'recovery' directly after a boom..
Price growth of 10% and 7 % is not a boom in my opinion.

Property ie number of sales etc are not fundamentals, things like unemployment, wealth, mortgage default rates, retail etc etc are fundamentals. (as I understand it anyway)

Property is a mixed bag as more property comes on the market and the old backlogs of unsold homes from the downturn get cleared. It is definitely not in a downturn at the moment, most homes under $800k in the areas I check regularly sell within a couple of weeks and the prices seem to be solid.

Land sales and new build sales are extremely positive and are held back only by the lack of lots and delays getting land to the market. Land prices have increased for 10 months due to this shortage and it looks like that will see about a 20% increase in prices. (That land listing claim seems to be in error check out here https://reiwa.com.au/Research/Pages/Perth-quarterly-market-charts.aspx)

The weekly stats go up and down and winter is generally slow but to claim an imminent downturn is on the way seems completely way out there when all the fundamentals are so good. I am with Mike all the way on this. Perth has got a great economic future
Perthite
31 Jul 2014, 06:35 PM
It is OK Perthite there are still lotsa jobs look here:


29301 jobs in Perth
http://www.jobseeker.com.au/jobs-in-Perth-WA


:D :lol :dry:

Edited by skamy, 31 Jul 2014, 10:53 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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newjez
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skamy
31 Jul 2014, 10:36 PM
Price growth of 10% and 7 % is not a boom in my opinion.

Property ie number of sales etc are not fundamentals, things like unemployment, wealth, mortgage default rates, retail etc etc are fundamentals. (as I understand it anyway)

Property is a mixed bag as more property comes on the market and the old backlogs of unsold homes from the downturn get cleared. It is definitely not in a downturn at the moment, most homes under $800k in the areas I check regularly sell within a couple of weeks and the prices seem to be solid.

Land sales and new build sales are extremely positive and are held back only by the lack of lots and delays getting land to the market. Land prices have increased for 10 months due to this shortage and it looks like that will see about a 20% increase in prices. (That land listing claim seems to be in error check out here https://reiwa.com.au/Research/Pages/Perth-quarterly-market-charts.aspx)

The weekly stats go up and down and winter is generally slow but to claim an imminent downturn is on the way seems completely way out there when all the fundamentals are so good. I am with Mike all the way on this. Perth has got a great economic future

It is OK Perthite there are still lotsa jobs look here:


29301 jobs in Perth
http://www.jobseeker.com.au/jobs-in-Perth-WA


:D :lol :dry:
Have you got anymore of that magic land for sale skamy? Put me down for ten blocks please!
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Sober
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peter fraser
31 Jul 2014, 09:15 AM
Yep the silly high rents will fall but house prices are sticky. There will be some good buys for those brave enough to buy in this market, and that's usually cashed up investors. FTB's certainly don't buy in down markets, and that's why they are down markets.

On the median house price index for Gladstone, Perth and Darwin this will be but a small blip.
Oh, I'm not sure about Gladstone. Once the gas "train" construction is over, there will be some residual longterm wage income flow from maintaining export operations. But similar production incomes from the its traditional export industry (coal) are static to declining. And Gladstone is not (also) a "retirement lifestyle" destination in the same way that Mackay, Cairns, or Port Douglas are. The recent harbour pollution debacle has put paid to that.

By contrast, Perth is vastly larger, and has a much more broadly based income stream from mining services, and mining head office functions, as well as being the established population centre for all of Western Australia (which carries innate locus-of-state-government-income streams).

Darwin is more Gladstone-sized, but is again more broadly based, boasting national defence as well as Territory government functions to broaden its longterm economic potential.

Gladstone will thwart decline if the coal price does; quite possible, but still an uncertain bet.
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